CREDIT NUMBER 7226-BD Financing Agreement (Bangladesh Environmental Sustainability and Transformation Project) between PEOPLE'S REPUBLIC OF BANGLADESH and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 7226-BD FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between PEOPLE'S REPUBLIC OF BANGLADESH ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this 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 General Conditions or in the Appendix to this Agreement. ARTICLE II FINANCING 2.01. The Association agrees to extend to the Recipient a credit, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to one hundred ninety-five million four hundred thousand Special Drawing Rights (SDR 195,400,000 (variously, "Credit" and "Financing"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1 %) per annum on the Unwithdrawn Financing Balance. 2.04. The Service Charge is three-fourths of one percent (3/4 of 1 %) per annum on the Withdrawn Credit Balance. 2.05 The Interest Charge is one and a quarter percent (1.25%) per annum on the Withdrawn Credit Balance. 2.06. The Payment Dates are May 15 and November 15 in each year. 2.07. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.08. The Payment Currency is Dollar. ARTICLE III P ROJECT 3.01. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall carry out Part 1 of the Project through DOE and cause Part 2 of the Project to be carried out by BB, Part 3 of the Project to be carried out by BRTA and Part 4 of the Project to be carried out by BHTPA, in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement and, with regards to BRTA and BHTPA, the respective Project Agreement. ARTICLE IV - REMEDIES OF THE BANK 4.01. The Co-financing Deadline for the effectiveness of the Co-financing Agreement is June 30, 2023. ARTICLE V-EFFECTIVENESS; TERMINATION 5.01 The Additional Conditions of Effectiveness consist of the following: (a) The POM, in form and substance satisfactory to the Association, has been adopted by the DOE, BB, BRTA and BHTPA. (b) The Subsidiary Agreement has been executed and delivered satisfactory to the Association. 5.02 The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 5.03 For purposes of Section 10.05(b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty years (20) after the Signature Date. ARTICLE VI-REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its Senior Secretary/Secretary or the Additional Secretary, or any Joint Secretary, Joint Chief, Deputy Secretary, Deputy Chief, 2 Senior Assistant Secretary, Senior Assistant Chief, Assistant Secretary or Assistant Chief of the Economic Relations Division of the Ministry of Finance. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Economic Relations Division Ministry of Finance Sher-e-Bangla Nagar Dhaka 1207 Bangladesh (b) the Recipient's Electronic Address is: Facsimile: E-mail: +88029180788 / +88029180671 secretary@erd.gov.bd 6.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 3 AGREED as of the Signature Date. PEOPLE'S REPUBLIC OF BANGLADESH By Authorized Representative Na. barf Khan ra.. rot'{ Economoie ions Pelo-l Di/isio • Date: 2.04.2020 INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: 4dog@ye feet, -" er oil • 26 203 4 SCHEDULE 1 Project Description The objective of the Project is to strengthen the capacity of the Government of Bangladesh in environmental management and to pilot new financing mechanisms to promote green investments in targeted sectors. The Project consists of the following parts: Part 1: Environmental Governance and Infrastructure 1.1. Regulatory development Supporting MOEFCC and DOE in carrying out regulatory and policy reforms to promote protection and improvement of environmental quality and sustainable development. 1.2. Institutional development (i) Supporting DOE in (i) increasing specialization in, inter alia, environmental quality monitoring, analysis, enforcement and environmental information and disclosure, and (ii) decentralizing its organization, including construction of office buildings and laboratories in district and divisional levels, all through financing of Underlying Expenditures. (ii) Supporting the establishment of an environmental training and research center to support DOE in policy research, identification and promotion of green technologies and technical training, including construction of building, provision of equipment, capacity building activities and operating costs. 1.3 Environment Fund Supporting the capitalization of the Environment Fund to provide grants to beneficiaries to carry out Sub-Projects involving, inter alia, municipal waste management; technical studies for industrial effluent treatment investments; R&D and green technology pilots; and environmental education and public awareness raising activities on environmental issues and sustainable development. 1.4 Environmental Infrastructure Strengthening DOE's environmental infrastructure, through, inter alia: 5 (i) construction/rehabilitation and operationalization of divisional and district office buildings and provision of monitoring, analytical and IT equipment and Environmental Monitoring Vehicles; (ii) construction/rehabilitation and operationalization of divisional and district laboratories for environmental analyses; (iii) establishment of surface water quality monitoring stations; and (iv) an environmental information system. 1.5 Capacity Building Supporting a program of activities aimed at strengthening the technical capacity of DOE' s staff and training activities for relevant stakeholders. 1.6 Project Management Supporting MOEFCC in the areas of Project coordination, supervision, financial management, implementation of environmental and social instruments, procurement, monitoring and evaluation, through financing of consultants and operating costs of the PSC and the DOE PIU, as needed for the required purposes. Part 2: Green Financing for Air Pollution Control 2.1 Green Credit Guarantee Fund Supporting the establishment of a credit guarantee fund to provide credit guarantees to PFis for credits for green investments in the Targeted Sectors. 2.2 Technical Assistance Provision of technical assistance to BB, PFis and selected beneficiaries on green technologies in Targeted Sectors. 2.3 Project Management Supporting BB in the areas of Project coordination, supervision, financial management, implementation of environmental and social instruments, procurement, monitoring and evaluation, through financing of consultants and operating costs for the BB PIU, as needed for the required purposes. Part 3: Vehicle Emission Control 3 .1. Vehicle Inspection 6 (i) Supporting the establishment of four new vehicle inspection centers and the operation of these. (ii) Provision of vehicle emission testing equipment for vehicle inspection centers. 3.2. Technical Assistance Provision of technical assistance to BRTA to enhance its capacity to manage vehicle inspections for safety and emission controls. 3.3. Project Management Supporting BRTA in the areas of Project coordination, supervision, financial management, implementation of environmental and social instruments, procurement, monitoring and evaluation, through financing consultants and operating costs for the BRTA PIU, as needed for the required purposes. Part 4: E-waste Management Infrastructure 4.1 Pilot E-waste Management Infrastructure Supporting the construction and operation of an e-waste management facility. 4.2. Technical Assistance Provision of technical assistance to support the development of: (a) an e-waste collection program; (b) a monitoring program for e-waste management infrastructure; and (c) a scheme for certification of recycled products. 4.3 Project Management Supporting BHTPA in the areas of Project coordination, supervision, financial management, implementation of environmental and social instruments, procurement, monitoring and evaluation, through financing of consultants and operating costs for the BHTPA PIU, as needed for the required purposes. 7 SCHEDULE2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements. 1. The Recipient, through MOEFCC, shall establish within two (2) months of the Effective Date, and thereafter maintain throughout the course of Project implementation, a Project steering committee ("PSC") with a mandate, functions and composition as described in the POM and resources satisfactory to the Association. Without limitation on the foregoing, said committee shall: (i) be chaired by the Secretary of MOEFCC; and (ii) be responsible for, inter alia, making policy-level decisions for the Project, review implementation progress and resolving coordination issues. 2. The Recipient shall establish and cause each of DOE, BB, BRTA and BHTPA to establish, within two (2) months of the Effective Date, and thereafter maintain throughout the course of Project implementation: (a) a Project implementation committee within the DOE, BB, BRTA and BHTPA, respectively, each such committee with a mandate, functions and resources and with staff in adequate numbers and with qualifications, experience and terms of reference, all satisfactory to the Association. Without limitation on the foregoing, each such committee shall: (a) be headed by the director general of the DOE, the executive director of BB, the chairman of BRTA and the managing director of BHTPA, respectively, and (b) be responsible for, inter alia, overseeing the implementation ofProject activities under its respective Part ofthe Project. (b) a Project Implementation Unit (PIU) within DOE, BB, BRTA and BHTPA, respectively, each such unit with a mandate, functions and resources and with staff in adequate numbers and with qualifications, experience and terms of reference, all satisfactory to the Association. Without limitation on the foregoing, each such PIU shall: (a) be headed by a Project director in respect of DOE and a deputy Project director in respect of each BB, BRTA and BHTPA, and include, inter alia, a financial management specialist, a monitoring and evaluation specialist, a procurement specialist, an environmental specialist and a social specialist, all with qualifications, experience and terms of reference satisfactory to the Association; and (b) be responsible for, inter alia: (i) planning, coordination, implementation and monitoring and evaluation of Project activities; (ii) procurement and financial management; (iii) social and environmental safeguards; (iv) reporting on Project progress, for its 8 respective part of the Project; and, with regards to the DOE PIU, preparation of consolidated progress reports. B. Subsidiary Agreements 1. To facilitate the carrying out of Part 2 of the Project, the Recipient shall make parts of the proceeds of the Financing available to BB under a subsidiary agreement between the Recipient and BB ("Subsidiary Agreement"), under terms and conditions acceptable to the Association, which shall include, inter alia, the obligations of the BB set out in Section F to this Schedule 2. 2. Except as the Association shall otherwise agree in writing, the Recipient shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. In the event of any conflict between the provisions of the Subsidiary Agreement and the provisions of this Agreement, the provisions ofthis Agreement shall prevail. C. Project Operations Manual 1. The Recipient shall carry out the Project and shall cause the DOE, BB, BRTA and BHTPA to carry out the Project in accordance with the Project Operations Manual, which shall include provisions on the following matters: (i) detailed description of Project activities; (ii) institutional arrangements for the oversight, coordination, management and day-to-day implementation of the Project; (iii) financial management; (iv) procurement; (v) arrangements for preventing, detecting, reporting, investigation, remediation and otherwise addressing fraud and corruption, including compliance with the Anti-Corruption Guidelines; (vi) environmental and social management systems, including on grievance redressal mechanism, gender-based violence and sexual exploitation and abuse (GBV/SEA); (vii) monitoring and evaluation, reporting and communication; (viii) disbursement and flow of funds arrangements; (ix) the PBC targets, verification protocols and verification arrangements for PBCs; 9 (x) personal data collection and processing in accordance with applicable national law and good international practice; (xi) the List of Excluded Activities; (xii) the EF Manual and CGF Manual shall, when adopted, be included in the POM as annexes; and (xiii) such other administrative, financial, technical and organizational arrangements and procedures as shall be required for the Project. 2. Except as the Association shall otherwise agree in writing, the Recipient shall not assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the Project Operations Manual and/or any provision thereof. 3. In the event of any inconsistency between the provisions of the Project Operations Manual and those of this Agreement, this Agreement shall govern. D. Annual Work Plans and Budgets 1. The Recipient shall prepare and furnish to the Association, by not later than February 28 of each year during the implementation of the Project (or such later interval or date as the Association may agree), for the Association's review and no-objection, an Annual Work Plan and Budget for the Project, which shall, inter alia: (a) list all activities proposed to be included in the Project for the following fiscal year of the Recipient; (b) provide a budget for their financing; and (c) describe the environmental and social measures taken or planned to be taken in accordance with the provisions of Section I.G of this Schedule 2. 2. The Recipient shall ensure and cause DOE, BB, BRTA and BHTPA to ensure that the Project is implemented in accordance with the Annual Work Plans and Budgets accepted by the Association for the respective fiscal year; provided, however, that in case of any conflict between the Annual Work Plans and Budgets and the provisions of this Agreement, the provisions of this Agreement shall prevail. 3. The Recipient shall not permit any change the Annual Work Plans and Budgets, unless the Association has provided its prior no-objection thereof in writing. E. The Environment Fund I. The Recipient shall: (a) establish and thereafter maintain throughout Project implementation the 10 Environment Fund ("EF") in form and with functions and management with qualifications, experience and terms of reference and resources satisfactory to the Association; (b) before carrying out any investment activities of the endowment funds of the EF; (i) without limitation to the generality of the obligation set out in section l(a), establish and thereafter maintain, throughout Project implementation, an independent investment team to be responsible for the management of investments of the endowment funds of the EF, with qualifications, experience and terms of reference and resources satisfactory to the Association, (ii) prepare and adopt an investment policy for the endowment fund of the EF acceptable to the Association and thereafter carry out any investment activities in accordance with such policy; (c) before carrying out any activities under Part 1.3 of the Project: (i) without limitation to the generality of the obligation set out in section l(a), establish and thereafter maintain, throughout Project implementation, a technical team to be responsible for the daily operation of the EF, with competencies, experience and terms of reference and resources satisfactory to the Association; (ii) prepare and adopt a manual for the EF ("EF Manual"), in form and substance satisfactory to the Association, which shall include, inter alia, eligibility and selection criteria and procedures for the selection of beneficiaries and Sub-Projects; and a template Sub- Grant Agreement, which shall include the provisions set out in Section I.E.1 (d) of this Schedule 2; and thereafter carry out Part 1.3 of the Project in accordance with the EF Manual and not assign, amend, abrogate or waive any provision of the EF Manual without prior approval of the Association; and (iii) implement and thereafter maintain an information management system acceptable to the Association for grant applications, payouts, portfolio monitoring and risks management. (d) provide sub-grants ("EF Grants") to beneficiaries for Sub-Projects selected in accordance with the eligibility and selection criteria and procedures set out in the EF Manual and make no payments of any EF Grant to any beneficiary unless and until the conditions for such payment, as set out in this agreement, the EF Manual and each respective Sub-Grant Agreement, are satisfied, under a Sub-Grant Agreement with the respective beneficiary on terms and conditions satisfactory to the 11 Association and based on the template agreement included in the EF Manual, which shall include, inter alia, the following: (i) the requirement that each beneficiary shall: (A) carry out the Sub- Project with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social standards and practices satisfactory to the· Association, including in accordance with the provisions of the environmental and social safeguard instruments (including the ESCP), the Anti- Corruption Guidelines applicable to recipients of loan proceeds other than the Recipient and the Procurement Regulations; (B) enable the Recipient and the Association to inspect the Sub- Project, its operation and any relevant records and documents; and (C) prepare and furnish to the Recipient and the Association all such information as the Recipient or the Association shall reasonably request relating to the foregoing; (ii) the requirement that the beneficiary shall use the proceeds of the EF Grant to finance only the eligible expenditures set forth in the EF Manual and the approved grant proposals; and maintain adequate records the reflect the proper administration and use of the resources awarded; (iii) that the beneficiary shall: (i) maintain records and accounts adequate to reflect, in accordance with sound accounting practices, the operations, resources and expenditures incurred in the implementation of the EF Grants; and (ii) whenever required by the Association, have such records and accounts audited in accordance with appropriate auditing principles consistently applied by an independent auditor; and (iv) the right of the Recipient or EF to suspend or terminate the right of the beneficiary to use the proceeds of the relevant EF Grant, or obtain a refund of all or any part of the amount of the relevant EF Grant then withdrawn, upon the beneficiary's failure to perform any of its obligations under the Sub-Grant Agreement or upon the Association declaring the beneficiary ineligible under the Anti- Corruption Guidelines. (e) ensure that the Sub-Projects do not involve any activities included in the List of Excluded Activities. (f) exercise its rights and carry out its obligations under the Sub-Grant Agreements in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. 12 (g) not assign, amend, terminate, abrogate, waive or fail to enforce the Sub- Grant Agreements or any oftheir provisions, except as the Association and the Recipient shall otherwise agree. 2. The Recipient shall ensure that, after the Closing Date, the EF shall use any remaining proceeds of the Financing for the purpose of providing EF Grants to finance for Subprojects in accordance with this Agreement and the EF Manual. F. The Credit Guarantee Fund 1. The Recipient shall ensure that BB shall: (a) establish and thereafter maintain throughout Project implementation the CGF in form and with functions and management with qualifications, experience and terms of reference and resources satisfactory to the Association; (b) through the CGF, before carrying out any investment activities of the funds of the CGF: (i) establish and thereafter maintain an independent team to be responsible for the management of investments of its funds, with qualifications, experience and terms of reference and resources satisfactory to the Association; and (ii) prepare and adopt an investment policy for the funds of CGF acceptable to the Association and thereafter carry out any investment activities in accordance with such policy; (c) through the CGF, before carrying out any activities under Part 2.1. of the Project: (i) without limitation to the generality of the obligation set out in section l(a), establish and thereafter maintain, throughout Project implementation, a technical team to be responsible for the daily operation of the CGF, with competencies, experience and terms of reference and resources satisfactory to the Association; (ii) prepare and adopt a manual for the CGF ("CGF Manual") in form and substance satisfactory to the Association, which shall include, inter alia: eligibility and selection criteria and procedures for the selection of PFis; selection criteria for the selection of credits for which a guarantee under the CGF will be provided; requirements on training of the PFis; a template PFI agreement; environmental and social screening, evaluation and supervision procedures, including the List of Excluded Activities; monitoring and evaluation arrangements; and thereafter carry out Part 2.1. of the Project in accordance with the CGF Manual and not assign, 13 amend, abrogate or waive any provision of the CGF Manual without prior approval of the Association; and (iii) implement and thereafter maintains an information management system acceptable to the Association for credit guarantee applications, payouts, portfolio monitoring and risks management; (d) through the CGF, provide credit guarantees to PFis, selected in accordance with the eligibility and selection criteria and procedures set out in the CGF Manual, for credits provided by the respective PFI selected in accordance with the selection criteria set out in the CGF Manual to finance eligible activities, on terms and conditions satisfactory to the Association and based on the template agreement included in the CGF Manual; (e) through the CGF, ensure that the activities financed by credits for which credit guarantees under the CGF are provided do not involve any activities included in the List of Excluded Activities; (f) through the CGF, carry out Part 2.1 of the Project with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social standards and practices satisfactory to the Association, including in accordance with the provisions of the environmental and social safeguard instruments (including the ESCP) and the Anti-Corruption Guidelines; and (g) through the CGF, maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association, both in a manner adequate to reflect the operations, resources and expenditures related to Part 2.1 of the Project; and, at the Association's or the Recipient's request, have such financial statements audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association, and promptly furnish the statements as so audited to the Recipient and the Association. 2. The Recipient shall cause BB to ensure that after the Closing Date, the CGF shall use any remaining proceeds of the Financing after any payments under credit guarantees under Part 2.1. of the Project for the purpose of providing credit guarantees to PFis to cover credits in accordance with this Agreement and the CGF Manual. G. Environmental and Social Standards 14 1. The Recipient shall, and shall cause DOE, BB, BRTA and BHTPA to, ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 2. Without limitation upon paragraph 1 above, the Recipient shall, and shall cause DOE, BB, BRTA and BHTPA to, ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan ("ESCP"), in a manner acceptable to the Association. To this end, the Recipient shall, and shall cause BB, BRTA and BHTPA to, ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies and procedures are maintained, and qualified and experienced staffin adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and the revised ESCP is disclosed promptly thereafter. 3. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 4. The Recipient shall, and shall cause DOE, BB, BRTA and BHTPA to, ensure that: (a) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, including, any labor dispute and any case of sexual exploitation, in accordance with the ESCP, the environmental and social 15 instruments referenced therein and the Environmental and Social Standards. 5. The Recipient shall, and shall cause DOE, BB, BRTA and BHTPA to, not later than two (2) months from the Effective Date establish and publicize and thereafter maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. 6. The Recipient shall, and shall cause DOE, BB, BRTA and BHTPA to, ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers as applicable under the ESSs, detailing measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts. H. Expenditures to be Financed with Counterpart Funds The Recipient shall: (a) ensure that the following expenditures are financed exclusively out of its own resources and not out of the proceeds of the Financing; and (b) provide, promptly as needed, the resources needed for this purpose: (i) all costs associated with land and land use rights required for the purposes of the Project; (ii) procurement of vehicles (other than Environmental Monitoring Vehicles), recurrent expenditures for the purpose of attending meetings, conferences, seminars, workshops and study visits (sitting allowances/ cash per diems / honoraria, notwithstanding eligible expenditures under Incremental Operating Costs and Training), and recurrent expenditures for fuel, under the Project; and (iii) taxes exceeding fifteen (15) percent of the total amount of Financing. Section II. Project Monitoring. Reporting and Evaluation 1. The Recipient shall furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. 16 2. Except as may otherwise be explicitly required or permitted under this Agreement, or as may be explicitly requested by the Association, in sharing any information, report or document related to the activities described in Schedule 1 to this Agreement, the Recipient shall ensure that such information, report or document does not include Personal Data. Section III. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Financing Percentage of Allocated (expressed in Expenditures to be SDR) Financed (inclusive of Taxes) (1) Goods (including 77,850,000 100% Environmental Monitoring Vehicles and excluding all other vehicles), works, non-consulting services, consulting services, Incremental Operating Costs and Training for Parts, 1.2(ii), 1.4, 1.5 and 1.6 of the Project (excluding expenditures set forth under Section I.H of this Schedule 2). (DOE) (2) Goods (excluding 21,950,000 100% vehicles), works, non- consulting services, consulting services, Incremental Operating Costs and Training for Part 3 of the Project (excluding expenditures set forth under Section I.H 17 of this Schedule 2). (BRTA) (3) Goods (excluding 24,950,000 100% vehicles), works, non- consulting services, consulting services, Incremental Operating Costs and Training for Part 4 of the Project (excluding expenditures set forth under Section I.H of this Schedule 2). (BHTPA) (4) Underlying 19,550,000 100% Expenditures for Part 1.2 (i) of the Project. (DOE) (5) Capitalization of the 39,050,000 100 % Environment Fund under Part 1.3 of the Project. (DOE) (6) Capitalization of 11,050,000 28.5% Credit Guarantee Fund under Part 2.l(i) of the Project. (BB) (7) Refund of Preparation 1,000,000 Amount payable Advance pursuant to Section 2.07(a) of the General Conditions TOTAL AMOUNT 195,400,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made: 18 (a) for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed five million Special Drawing Rights (SDR 5,000,000) may be made for payments made prior to this date but on or after January 1, 2022, for Eligible Expenditures under Category 4; or (b) under Category (4) unless and until the Recipient has (a) furnished to the Association evidence acceptable to the Association following the requirements set forth in the POM and the Disbursement and Financial Information Letter, confirming the achievement of the respective PBC/PBC Target; and (b) evidence, in form and content acceptable to the Association confirming that the Underlying Expenditures in an amount equal to at least the amount to be withdrawn under this Category in respect of each PBC/PBC Target, has been incurred; (c) under Category (5), until and unless the Association has received satisfactory evidence that: (i) the investment policy for the EF has been adopted pursuant to Section LE. I (b) of this Schedule 2; and (ii) the investment team for the EF has been established pursuant to Section LE. I (b) of this Schedule 2. (d) under Category (6), until and unless the Association has received satisfactory evidence that: investment policy for the CGF has been adopted pursuant to Section I.F. I (b) of this Schedule 2; and (ii) the investment team for the CGF has been established pursuant to Section LF. I (b) of this Schedule 2. 2. Notwithstanding the provisions of Parts A and B.1 (b) of this Section, the amount of the Credit to be withdrawn upon the verified achievement of any PBC/PBC Target shall correspond to the PBC Value of such PBC/PBC Target, as set forth in Schedule 4 to this Agreement. 3. Notwithstanding the provisions of Part B.l(b) of this Section, if any PBC/PBC Target has not been fully achieved by its PBC Achievement Date, the Association may, in its sole discretion, by notice to the Recipient: (i) withhold in whole or in part the amount of the Credit allocated to such PBC/PBC Target; (ii) disburse in whole or in part the withheld amount of the Credit allocated to such PBC/PBC Target at any later time prior to the Closing Date; (iii) upon consultation with the Recipient, reallocate in whole or in part any withheld amount of the Credit allocated to such PBC/PBC Target; and/or 19 (iv) cancel in whole or in part any withheld amount of the Credit allocated to such PBC/PBC Target. 4. The Closing Date is December 31, 2028. 20 SCHEDULE3 Repayment Schedule Principal Amount of the Credit Date Payment Due repayable (expressed as a percentage) On each May 15 and November 15: commencing May 15, 2028, to and including 1.65% November 15, 2047 commencing May 15, 2048, to and including 3.40% November 15, 2052 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.05(b) of the General Conditions. 21 SCHEDULE4 Performance-Based Conditions Parts of PBC PBC Target (cumulative) Amount of the Credit the Project and Allocated (expressed PBC Achievement date in SDR) (when applicable) Part 1.2 (i) PBC 1: Approval by the June 30, 2027 7,820,000 Parliament of ECA Amendment Part 1.2 (i) PBC 2: Approval by the Ministry June 30, 2025 3,910,000 of Public Administration of new DOE organogram Part 1.2 (i) PBC 3: Increase of total number Baseline: 480 of DOE staff June 30, 2025: 600 3,910,000 June 30, 2027: 900 3,910,000 22 APPENDIX Definitions 1. "Anti-Corruption Guidelines" means, for purposes ofparagraph 5 of the Appendix to the General Conditions, the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, and revised in January 2011 and as of July 1, 2016. 2. "BB" or "Bangladesh Bank" means the central bank of Bangladesh, established under the President's order No. 127 of 1972. 3. "BB PIU" means the Project implementation unit to be established and maintained within BB pursuant to Section I.A.2(b) of Schedule 2 to this Agreement. 4. "BHTPA" means the Bangladesh Hi Tech Park Authority, an agency established by the Bangladesh Hi-Tech Park Authority Act 2010 (Act No. VII of 2010) with the objective of creating an investment-friendly environment and creating employment through the development and growth of high-tech industries in the Bangladesh or any successor thereto. 5. "BHTPA PIU" means the Project implementation unit to be established and maintained within BHTPA pursuant to Section I.A.2(b) of Schedule 2 to this Agreement. 6. "BRTA" means Bangladesh Road Transport Authority, established under Bangladesh Road and Transport Authority Act, 2017 (Act No. 17 of 2017) or any successor thereto. 7. "BRTA PIU" means the Project implementation unit to be established and maintained within BRTA pursuant to Section I.A.2(b) of Schedule 2 to this Agreement. 8. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 9. "CGF" or "Credit Guarantee Fund" means the fund to be established under BB to provide credit guarantees to PFis for selected credits to investments in Targeted Sectors under Part 2.1 of the Project. 10. "CGF Manual" means the manual for the Credit Guarantee Fund referred to in Section I.F.1 (d) of Schedule 2 to this Agreement. 11. "Co-financier" means Agence Francaise de Developpement. 23 12. "Co-financing" means, for purposes of paragraph 17 of the Appendix to the General Conditions, an amount equivalent to forty million Dollars ($40,000,000) to be provided by the Co-financier to assist in financing the Project. 13. "Co-financing Agreement" means the agreement to be entered into between the Recipient and the Co-financier providing for the Co-financing. 14. "Disbursement Deadline Date" means the final date, established by the Association, for the receipt by the Association, of applications for withdrawals and supporting documentation. 15. "DOE" means the Department of Environment, responsible for environmental issues, within the MOEFCC or any successor thereto. 16. "DOE PIU" means the Project implementation unit to be established and maintained within DOE pursuant to Section I.A.2(b) of Schedule 2 to this Agreement 1 7. "EF Manual" means the manual for the Environment Fund referred to in Section I.E.l(c)(ii) of Schedule 2 to this Agreement. 18. "EF Grant" means a grant provided by the EF to a beneficiary, selected according to the criteria and procedures set out in the EF Manual to carry out a Sub-Project under Part 1.3 of the Project. 19. "Environment Fund" or "EF" means an endowment fund to be established under DOE to provide grants to beneficiaries to carry out Sub-Projects selected according to the criteria and procedures set out in the EF Manual and this Agreement under Part 1.2 (iii) of the Project. 20. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated October 26, 2022, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts ofthe Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. 21. "Environmental and Social Standards" or "ESSs" means, collectively: (i) "Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts"; (ii) "Environmental and Social Standard 2: Labor and Working Conditions"; (iii) "Environmental and Social 24 Standard 3: Resource Efficiency and Pollution Prevention and Management"; (iv) "Environmental and Social Standard 4: Community. Health and Safety"; (v) "Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement"; (vi) "Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources"; (vii) "Environmental and Social Standard 7: Indigenous Peoples/Sub- Saharan Historically Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; (ix) "Environmental and Social Standard 9: Financial Intermediaries"; (x) "Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure"; effective on October 1, 2018, as published by the Association. 22. "Environmental Monitoring Vehicles" means vehicles and vessels to be used by DOE for environmental monitoring under Part 1.4 of the Project. 23. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated January 1, 2022. 24. "Incremental Operating Costs" mean the reasonable costs required for the day-to- day coordination, administration and supervision of Project activities, for leasing and/or routine repair and maintenance of vehicles, equipment, facilities and office premises; office rent; office supplies; utilities; consumables; communication expenses; translation; printing, photocopying and postal expenses; bank charges; advertising expenses; insurance; costs of clearing, forwarding, inspection, survey and transportation of goods; Project-related meeting expenses; Project-related travel, subsistence and lodging expenses, provided that such Incremental Operating Costs are paid to the eligible recipient through the banking system (except for petty cash expenses following the Recipient's existing policy); and salaries and allowances of contractual staff (other than consultants) but excluding salaries and salary top ups of the Recipient's civil servants, workshop allowances, sitting allowances, cash per diems, honoraria, and fuel. 25. "MOEFCC" or "Ministry of Environment, Forest and Climate Change" means the Recipient's ministry responsible for environment, forest and climate change or any successor thereto. 26. "List of Excluded Activities" means the list of activities to be excluded from financing as set forth in the POM. 27. "PBC" means Performance Based Conditions, as referred to in Schedule 4 to this Agreement. 25 28. "PBC Target" means any of the targets under PBC 3 that are set out to be achieved by the Recipient up and until the Closing Date, as set forth in the table in Schedule 4 to this Agreement. 29. "PBC Achievement Date" means, with regard to each PBC/PBC Target, the date which the relevant PBC/PBC Target is set to be achieved as set forth in the table in Schedule 4 to this Agreement. 30. "PBC Value" means the total amount of the Credit allocated to each PBC/PBC Target as set forth in the table in Schedule 4 to this Agreement. 31. "Personal Data" means any information relating to an identified or identifiable individual. An identifiable individual is one who can be identified by reasonable means, directly or indirectly, by reference to an attribute or combination of attributes within the data, or combination of the data with other available information. Attributes that can be used to identify an identifiable individual include, but are not limited to, name, identification number, location data, online identifier, metadata and factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of an individual. 32. "PFI" means a financial institution selected in accordance with the criteria and procedures set out in the CGF Manual to receive a credit guarantee under the CGF. 33. "PFI Agreement" means an agreement entered into between the CGF and a PFI setting out the terms and conditions for the provision of a credit guarantee under the CGF. 34. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 35. "Project Agreement" means either of the agreements between the Association and BRTA and BHTPA, respectively, regarding the implementation of Part 3 and Part 4 of the Project, respectively. 36. "Project Operations Manual" or "POM" means the manual to be prepared, approved and adopted by the Recipient in accordance with Section LB of Schedule 2 to this Agreement. 3 7. "PSC" means the Project steering committee to be established under Section I.A.1 of Schedule 2 to this Agreement. 26 38. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to "the date of the Financing Agreement" in the General Conditions. 39. "Sub-Grant Agreement" means an agreement to be entered into between the EF and a beneficiary to receive an EF Grant, as further specified in Section I.E.l(e) of schedule 2 to this Agreement. 40. "Sub-Project" means a project involving (i) piloting and scaling up of green technologies; (ii) waste management infrastructure investments; or (iii) feasibility studies and technical for industrial effluent treatment investments, selected according to the criteria and procedures set out in this Agreement and the EF Manual to be financed by an EF Grant. 41. Subsidiary Agreement" means the agreement setting out the terms and conditions for the subsidiary loan between the Recipient and BB pursuant to Section LB of Schedule 2 to this Agreement. 42. "Targeted Sectors" means brick production, municipal waste recycling and composting, clean cookstove and rooftop solar systems sectors. 43. "Training" means the reasonable costs required for the participation of personnel involved in training activities, workshops, seminars, conferences and study tours under the Project, which have been approved by the Association in writing on a bi-annual basis, including: (a) travel, hotel, and subsistence costs associated to training, workshops, seminars, conferences and study tours provided that such costs are paid directly to the eligible recipient using the banking system; and (b) costs associated with rental of training and workshop facilities; preparation and reproduction of training, workshop, seminar and conference materials; and other costs directly related to preparation and implementation of any training course, workshop, seminar, conference or study tour; but excluding sitting allowances and honorarium of any nature. 44. "Underlying Expenditures" means the Recipient's staff costs and related operating costs for staff hired and deployed for strengthening the capacity of DOE in environmental management, as approved by the Association and as further specified in the POM, necessary to achieve the respective PBC and paid through the banking system (except for petty cash expenses following the Recipient's existing policy) (but excluding workshop allowances, sitting allowances, cash per diems, honoraria, and fuel), and included in the Recipient's budget lines, consisting ofthe following items and corresponding codes: (a) staff costs: 3111101, 3111201, 3111302, 3111310, 3111311, 3111314, 3111325, 3111335, 3111338, and (b) operating costs: 3211107, 3244101, 3244102, as such budget codes for the same expenditures may be revised from time to time with the prior written concurrence of the Association". 27