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The contracts for Nam Theun 2 will be financed by commercial banks and not by World Bank funds. The Bank’s involvement in the project financing would be limited to the extension of a partial loan guarantee.
Thus, the relevant provisions of the World Bank’s procurement guidelines are those which apply to guarantee operations (paragraphs 1.5 and 3.16 of the Guidelines for Procurement under IBRD Loans and IDA Credits, May 2004), and not those which apply to Bank loans or credits. The Bank’s procurement guidelines for guarantee operations require that the goods and works are procured with due attention to economy and efficiency, that they are of satisfactory quality and compatible with the balance of the project, that they are delivered or completed in a timely fashion, and that they are priced so as not to affect adversely the economic and financial viability of the project. The Bank has satisfied itself through a detailed procurement review conducted by an independent consultancy that the Nam Theun 2 Project meets these requirements of our procurement guidelines.
In the case of the proposed IDA grant, which has been requested to fund environmental and social aspects of the project as part of the Government’s equity contribution, World Bank procurement and consultant guidelines for credits would be applicable and the Bank will undertake its customary supervision of this grant, to ascertain that our guidelines are followed.
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