LOAN NUMBER 9213-CN LOAN NUMBER 9214-CN LOAN NUMBER 9215-CN Project Agreement (China Food Safety Improvement Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and GUANGDONG PROVINCE PROJECT AGREEMENT AGREEMENT between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (“Bank”) and GUANGDONG PROVINCE (“Project Implementing Entity”) (“Project Agreement”) in connection with the Loan Agreement (“Loan Agreement”) of the Signature Date between PEOPLE’S REPUBLIC OF CHINA (“Borrower”) and the Bank, concerning Loan Nos. 9213-CN, 9214-CN and 9215-CN. The Bank and the Project Implementing Entity hereby agree as follows: ARTICLE I — GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to the Loan Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Loan Agreement or the General Conditions. ARTICLE II — PROJECT 2.01. The Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out its Respective Parts of the Project in accordance with the provisions of Article V of the General Conditions and the Schedule to this Agreement, and shall provide, promptly as needed, the funds, facilities, services and other resources required for its Respective Parts of the Project. ARTICLE III — REPRESENTATIVE; ADDRESSES 3.01. The Project Implementing Entity’s Representative is its Governor or Vice-Governor. 3.02. For purposes of Section 10.01 of the General Conditions: (a) the Bank’s address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank’s Electronic Address is: Facsimile: 1-202-477-6391 3.03. For purposes of Section 10.01 of the General Conditions: (a) the Project Implementing Entity’s address is: No. 376 Beijing Road Yuexiu District Guangzhou Guangdong Province; and (b) the Project Implementing Entity’s Electronic Address is: Facsimile: E-mail: 020-83330007 czt_tanxiaofeng@gd.gov.cn AGREED as of the later of the two dates written below. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By _____________________________________/ps1/ Authorized Representative Mara Warwick Name: __________________________/pn1/ Country Director. Title: __________________________ /pt1/ 07-Mar-2024 Date: __________________________/pd1/ GUANGDONG PROVINCE By _____________________________________/ps2/ Authorized Representative Chen Guohuang Name: __________________________/pn2/ Deputy Director General of Guangdong DOF Title: __________________________ /pt2/ 12-Mar-2024 Date: __________________________/pd2/ 2 SCHEDULE Execution of the Project Implementing Entity’s Respective Parts of the Project Section I. Implementation Arrangements A. Institutional Arrangements 1. For the purpose of carrying out its Respective Parts of the Project, the Project Implementing Entity shall, and cause to be maintained, the following entities with composition, powers, functions, staffing, facilities and other resources acceptable to the Bank: (a) a steering group at the provincial level supported by DARA, responsible for overall direction, coordination and policy dialogue among relevant provincial agencies; (b) the Provincial Project Leading Group responsible for providing overall policy, financial, and institutional guidance on Project implementation and facilitating coordination among different implementing agencies within its jurisdiction; (c) the Provincial Project Management Office responsible for implementation, coordination, reporting, management, and monitoring and evaluation of the activities under its Respective Parts of the Project, including the preparation of the Project Annual Work Plans and semi-annual progress and financial reports for submission to the Borrower and the Bank; (d) the Provincial Project Implementation Units responsible for supporting the Provincial Project Management Office for the implementation coordination, reporting, management, and monitoring and evaluation of selected activities under its Respective Parts of the Project, including procurement and financial management, monitoring and evaluation; and (e) such other implementation units or entities as may be agreed from time to time with the Bank, subject to arrangements acceptable to the Bank and set out in the Project Operations Manual. B. Annual Work Plans and Project Operations Manual 1. The Project Implementing Entity shall: (a) prepare and furnish to the Bank by October 31 in each year, beginning in 2024, a draft Annual Work Plan for review and comment, summarizing the implementation progress of the Project for the said year and the activities under its Respective Parts of the Project to be undertaken in the following calendar year, including the proposed annual budget for its Respective Parts of the Project; (b) taking into account the Bank’s comments, finalize and furnish to the Bank no later than December 31 in each year, beginning in 2024, the Annual Work Plan, acceptable to the Bank; and (c) thereafter ensure the implementation of the Project during the following calendar year in accordance with the Annual Work Plan agreed with the Bank and in a manner acceptable to the Bank. The Project Implementing Entity shall not amend, suspend, abrogate, or waive said Annual Work Plans or any provision thereof without the prior written agreement of the Bank. 2. Throughout the implementation of its Respective Parts of the Project, the Project Implementing Entity shall apply the Project Operations Manual in a timely and efficient 3 manner acceptable to the Bank. The Project Implementing Entity shall not amend, suspend, or waive said Project Operations Manual or any provision or schedule thereof, without the prior written agreement of the Bank. In the event of any inconsistency between the provisions of the Project Operations Manual and those of this Agreement or the Loan Agreement, the provisions of this Agreement and the Loan Agreement shall prevail. C. Safeguards 1. In carrying out its Respective Parts of the Project, the Project Implementing Entity shall: (a) take all necessary actions to minimize to the extent possible any involuntary loss by persons of shelter, productive assets or access to productive assets or income or means of livelihood, temporarily or permanently, and the displacement of said people in the carrying out of the Project or any part thereof; (b) where the acquisition of land or assets or the displacement of people is unavoidable, before initiating the implementation of any works which would result in such acquisition or displacement, make available to such people compensation and, as applicable, relocate and rehabilitate the Displaced Persons in accordance with the RPF and any RAP prepared thereunder and in a manner acceptable to the Bank; and (c) whenever required in terms of the RPF, and prior to the commencement of any works, proceed to have a RAP or RAPs: (i) prepared in form and substance acceptable to the Bank; (ii) except as otherwise agreed with the Bank, submitted to the Bank for review and approval; (iii) thereafter, adopted and publicly disclosed; and (iv) thereafter, implemented, or cause to be implemented, in accordance with their terms and in a manner acceptable to the Bank. 2. The Project Implementing Entity shall implement the Safeguards Instruments in a manner and substance acceptable to the Bank. Without limitation on the foregoing, the Project Implementing Entity shall ensure that each contract for works financed under the Project includes the obligations of the work contractors and any sub-contractor to comply with the relevant provisions of the Safeguards Instruments, as the case may be. 3. The Project Implementing Entity shall ensure that all studies and technical assistance to be supported under the Project are carried out under terms of reference acceptable to the Bank, and that such terms of reference are consistent with, and pay due attention to, the Bank’s Safeguards Policies. 4. The Project Implementing Entity shall not to amend, suspend, or waive the Safeguards Instruments applicable to its Respective Parts of the Project, or any provision thereof, without the prior written concurrence of the Bank. 5. The Project Implementing Entity shall maintain policies and procedures adequate to enable them to monitor and evaluate, in accordance with guidelines acceptable to the Bank, the implementation of the Safeguards Instruments applicable to its Respective Parts of the Project. 6. Without limitation to the provisions of paragraphs 1 through 5 of this Section I.C, or the provisions of Section II.1 below, the Project Implementing Entity shall take, all measures necessary on their part to regularly collect, compile, and submit to the Bank, as part of the 4 Project Reports, and promptly in a separate report whenever the circumstances warrant, information on the status of compliance with the Safeguards Instruments applicable to its Respective Parts of the Project, giving details of: (a) measures taken in furtherance thereof; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation thereof; and (c) remedial measures taken or required to be taken to address such conditions. 7. In the event of any inconsistency between the provisions of the Safeguards Instruments and the provisions of this Agreement or the Loan Agreement, the provisions of this Agreement and the Loan Agreement shall prevail. D. Risk Sharing Facility For purposes of carrying out Part 3.1 (b) of the Project, the Project Implementing Entity shall: (a) select PFIs to participate in the RSF under Part 3.1 (b) of the Project, in accordance with eligibility criteria acceptable to the Bank and set forth in the RSF Manual; (b) enter into a Risk Sharing Agreement, in form and substance acceptable to the Bank, with each PFI; exercise its rights under every Risk Sharing Agreement in such manner as to protect the interests of the Borrower, the Bank and the Project Implementing Entity, and to accomplish the purposes of the Loan; and, except as the Bank shall otherwise agree, not assign, amend, abrogate or waive any such agreement(s) or any provision thereof; (c) ensure that: (i) the RSF Account is established and managed in accordance with the provisions of Annex 1 to this Schedule; (ii) proposals for partial credit guarantees under the RSF submitted by PFIs for loans (on a portfolio or individual basis, as the case may be) for Food Safety Sub-projects are reviewed and appraised in accordance with the provisions of this Section I.D, the RSF Manual and the ESMF; and (iii) the portfolio of loans of each PFI covered by the Risk Sharing Agreement is periodically assessed, monitored and evaluated in accordance with the RSF Manual. (d) ensure that under each Risk Sharing Agreement each PFI is required to: (i) follow sound commercial practices in making loans to Eligible Beneficiaries solely for Food Safety Sub-projects and that such loans will at all times be underwritten, priced, signed, documented, monitored and serviced in accordance with the relevant PFI’s credit guidelines and using its standard documentation; 5 (ii) review and appraise proposals for loans for Food Safety Sub-projects, and thereafter monitor and evaluate Food Safety Sub-projects, on behalf of the Project Implementing Entity, in accordance with the provisions of this Section I.D, the RSF Manual, the ESMF, the ESMS, and the Safeguards Assessments and Plans; and (iii) maintain records and accounts adequate to reflect, in accordance with sound accounting practices, its operations and financial condition; (iv) prepare and furnish to the Project Implementing Entity or the Bank, all such information that the Project Implementing Entity or the Bank shall reasonably request in relation to the Food Safety Sub-projects; and (v) at the Bank’s or the Borrower’s or the Project Implementing Entity’s request, have its financial statements reflecting the operations, resources and expenditures related to the supported activities audited by independent auditors acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank, and promptly furnish the statements as so audited to the Borrower, the Bank and the Project Implementing Entity; and (e) ensure for its own account and for each PFI that Part 3.1 (b) of the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. E. Food Safety Insurance The Project Implementing Entity shall ensure that Food Safety Insurance Beneficiaries be provided with insurance coverage in respect of selected production, business continuity, and consumer liability risks, in accordance with eligibility criteria and procedures acceptable to the Bank and further elaborated in the Insurance Manual. Section II. Project Monitoring, Reporting and Evaluation 1. The Project Implementing Entity shall monitor and evaluate the progress of its Respective Parts of the Project and prepare Project Reports for its Respective Parts of the Project in accordance with the provisions of Section 5.08 (b) of the General Conditions and on the basis of indicators acceptable to the Bank. Each such Project Report shall cover the period of one calendar semester, and shall be furnished to the Borrower and the Bank not later than sixty (60) days after the end of the period covered by such report. 2. Without limitation to the provisions of paragraph 1 above, the Project Implementing Entity shall prepare, under terms of reference acceptable to the Bank, and furnish to the Bank no later than April 1, 2026, a consolidated mid-term review report for its Respective Parts of the Project, summarizing the results of the monitoring and evaluation activities carried out from the inception of its Respective Parts of the Project, and setting out the measures recommended to ensure the efficient completion of its Respective Parts of the Project and to further the objectives thereof. 3. The Project Implementing Entity shall provide to the Borrower not later than three (3) months prior to the Closing Date, for incorporation in the report referred to in Section 5.08 (c) of the General Conditions all such information as the Borrower or the Bank shall reasonably request for the purposes of that Section. 6 ANNEX 1 TO SCHEDULE RSF Account 1. The Project Implementing Entity shall, for the purposes of the Risk Sharing Facility, establish and maintain, in a financial institution acceptable to the Bank, on terms and conditions acceptable to the Bank, the RSF Account. 2. Deposits into, and payments out of, the RSF Account shall be made in accordance with the terms and conditions set forth in the Loan Agreement, this Agreement and the RSF Manual. 3. The proceeds of the Loan deposited in the RSF Account shall be used exclusively for Loss Coverage in accordance with the terms of the Loan Agreement, this Agreement and the RSF Manual. 4. The Project Implementing Entity may refund to the Bank any amount on deposit in the RSF Account which the Project Implementing Entity shall have determined, after consultation with Bank, will not be required to be used for Loss Coverage. 5. The Project Implementing Entity shall promptly refund to the Bank any balance in the RSF Account remaining as of the Closing Date. 6. Refunds to the Bank made pursuant to paragraph 4 or 5 of this Annex shall be credited to the Loan Account for subsequent withdrawal or cancellation in accordance with the relevant provisions of the Loan Agreement and this Agreement. 7. (a) If the Bank determines that an amount of the proceeds of the Loan deposited in the RSF Account has been used in a manner inconsistent with the provisions of this Agreement or the General Conditions, the Project Implementing Entity shall, upon notice by the Bank to the Project Implementing Entity, promptly refund such amount to the Bank. Such inconsistent use shall include, without limitation, use of such amount to make a payment for an expenditure that is not an eligible expenditure in accordance with the terms of the Loan Agreement and this Agreement. (b) Except as the Bank may otherwise determine, the Bank shall cancel all amounts refunded pursuant to subparagraph (a) above. 8. In order to ensure continued management of the Risk Sharing Facility, the Project Implementing Entity shall deposit in the RSF Account, such amount, to be agreed with the Bank, as shall be required to cover payments due under or in connection with Risk Sharing Agreements, prior to any refunds pursuant to paragraphs 4 or 5 of this Annex. 7