PID GRANT NUMBER TF0C4878
Partnership for Infrastructure
Development in the West Bank and Gaza
Multi-Donor Trust Fund
Project Agreement
(Additional Financing for the Resilient Municipal Services Project)
between
INTERNATIONAL DEVELOPMENT ASSOCIATION
(acting as administrator of the acting as administrator of the Partnership for
Infrastructure Development Multi-Donor Trust Fund)
and
THE MUNICIPAL DEVELOPMENT AND LENDING FUND
Dated_________________, 2024
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PID GRANT NUMBER TF0C4878
PROJECT AGREEMENT
AGREEMENT dated as of the Signature Date (the “Project Agreement”), entered
into between the INTERNATIONAL DEVELOPMENT ASSOCIATION (“Bank”), acting
as administrator of the Partnership for Infrastructure Development Multi-Donor Trust Fund
(PID-MDTF), and the MUNICIPAL DEVELOPMENT AND LENDING FUND
established pursuant to the Law on Municipal Development and Lending Fund for Local
Government Units, dated November 10, 2016 (the “Project Implementing Entity” or
“MDLF”) in connection with the PID-MDTF Grant Agreement of same date between the
Palestine Liberation Organization (for the benefit of the Palestinian Authority) (the
“Recipient”) and the Bank (the “Grant Agreement”) for the provision of additional
financing to the Resilient Municipal Services Project (the “Additional Financing”). The
Bank and the Project Implementing Entity hereby agree as follows:
ARTICLE I - GENERAL CONDITIONS; DEFINITIONS
1.01. The Standard Conditions (as defined in the Appendix to the Grant Agreement)
constitute an integral 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 Grant Agreement or the Standard
Conditions.
ARTICLE II - PROJECT
2.01. The Project Implementing Entity declares its commitment to the objectives of the
Project. To this end, MDLF shall carry out the Project in accordance with the
provisions of Article II of the Standard Conditions, and shall provide promptly as
needed, the funds, facilities, services and other resources required for the Project.
2.02. Without limitation upon the provisions of Section 2.01 of this Agreement, and
except as the Bank and the Project Implementing Entity shall otherwise agree, the
Project Implementing Entity shall carry out the Project in accordance with the
provisions of the Schedule to this Agreement.
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ARTICLE III - TERMINATION
3.01. This Agreement and all obligations of the parties under it shall terminate on the
date on which the Grant Agreement terminates in accordance with the provisions
of its terms and the Standard Conditions.
ARTICLE IV - REPRESENTATIVE; ADDRESSES
4.01. The Project Implementing Entity’s Representative is its Director General.
4.02. The Association’s Address is:
International Development Association
1818 H Street, NW
Washington, DC 20433
United States of America
Cable: Telex: Facsimile:
INDEVAS 248423(MCI) 1-202-477-6391
Washington, D.C.
4.03. The Project Implementing Entity’s Address is:
Municipal Development and Lending Fund (MDLF)
Al-Amal Building, Mecca Street,
Albalou’, Al-Bireh,
West Bank, Palestine
Telephone: Facsimile:
972-2-296-6610 972-2-295-0685
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AGREED at the West Bank as of the day and year first above written.
INTERNATIONAL DEVELOPMENT ASSOCIATION
(acting as administrator of the Partnership for Infrastructure
Development Multi-Donor Trust Fund)
By
_____________________________________/s1/
Authorized Representative
Stefan Emblad
Name: __________________________/n1/
Country Director West Bank & Gaza
Title: ________________________/t1/
02-Jul-2024
Date: __________________________/d1/
MUNICIPAL DEVELOPMENT AND LENDING FUND
By
_____________________________________/s1/
Authorized Representative
Mr. Mohammad Ramahi
Name: __________________________/n1/
MDLF Director General /t1/
Title: ________________________
03-Jul-2024
Date: __________________________/d1/
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SCHEDULE
Execution of the Project
Section I. Institutional and Other Arrangements
A. Project Implementing Entity
1. The Project Implementing Entity shall maintain overall responsibility for the
Project including preparation of the Annual Work Plans and Budgets and adequate
compliance with the Bank’s fiduciary requirements and shall maintain for the
duration of the Project adequate capability, form and functions, staffing and
resources satisfactory to the Bank.
2. The Project Implementing Entity shall (a) carry out the Project in accordance with
the Grant Agreement, this Agreement, the Project Operational Manual, and the
On-Granting Agreement; (b) take all action, including the provision of funds,
facilities, services and other resources, necessary or appropriate for the carrying
out of the Project; (c) not take or permit to be taken any action which would prevent
or interfere with the carrying out of the Project; and (d) not amend, suspend,
abrogate, repeal, waive or assign any provision of this Agreement, the On-Granting
Agreement, the Project Operational Manual without prior approval of the Bank.
3. The Project Implementing Entity shall:
(a) exercise its rights under the On-Granting Agreement in such manner as to
protect the interests of the Recipient, the Bank and the Project
Implementing Entity and to accomplish the purposes of the Grant; and
(b) not assign, amend, abrogate or waive the On-Granting Agreement or any
of their respective provisions, except as the Recipient and the Bank shall
otherwise agree.
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B. Project Operational Manual
1. MDLF shall continue to implement the Project in accordance with the Project
Operational Manual approved for the Original Project and shall, no later than 45
days after the Effective Date, update the POM to include the new activities under
the Additional Financing, in a manner satisfactory to the Bank, which shall include
the rules, methods, guidelines, standard documents and procedures for the carrying
out of the Project, including the following: (a) the detailed description of Project
implementation activities and the detailed institutional arrangements of the
Project; (b) monitoring, evaluation, reporting and governance procedures for the
Project; (c) budget preparation and execution; (d) accounting and reporting; (e)
Personal Data collection and processing in accordance with good international
practice, including to ensure legitimate, appropriate, and proportionate treatment
of such data; (f) Minimum Conditions for Participating Municipalities to become
eligible to receive PBSD Subgrants; (g) Performance Measures to be used to
determine PBSD Subgrant amounts; (h) selection criteria for the NHCC Subgrants;
(i) selection criteria and description of Recurrent O&M Expenditures under Part
6(a) of the Project [and C4W Subgrants under Part 6(b)] of the Project; and (j)
overall Project administrative, accounting, auditing, reporting, financial,
environmental and social, procurement and disbursement procedures;
2. In the event that any provision of the POM conflicts with this Agreement or the
Grant Agreement, the terms of this Agreement shall prevail. MDLF, shall ensure
that the POM is not amended without the prior written agreement of the Bank.
C. Performance-Based Service Delivery Subgrants under Part 1 of the Project
1. MDLF shall award subgrants to Participating Municipalities (“PBSD Subgrants”)
in accordance with the Minimum Conditions set forth in the POM and to review,
appraise and select Subprojects (“PBSD Subprojects”), all in accordance with the
Project Operational Manual, the ESCP, and the respective PBSD Grant
Agreement.
2. Each PBSD Subgrant shall be awarded under a legally binding grant agreement to
be entered with each Participating Municipality (“PBSD Grant Agreement”),
under terms and conditions approved by the Bank, which shall include the
obligation of MDLF to obtain rights adequate to protect its interests and those of
the Recipient and the Bank, including the right to: (a) suspend or terminate the
right of a Participating Municipality to benefit from the proceeds of the PBSD
Subgrant, or obtain a refund of all or any part of the amount of the PBSD Subgrant
then disbursed upon the Participating Municipality’s failure to perform any of its
obligations under the PBSD Grant Agreement; and (b) require each respective
Participating Municipality to: (i) carry out the PBSD Subproject with due
diligence and efficiency and in accordance with sound technical, economic,
financial, managerial, environmental and social standards and practices
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satisfactory to the Bank, including in accordance with the provisions of the Project
Operational Manual and the provisions of the Anti-Corruption Guidelines; (ii)
provide promptly as needed, the resources required for the purpose; (iii) procure
the goods, works and services to be financed out of the PBSD Subgrant in
accordance with the provisions of this Agreement; (iv) maintain policies and
procedures adequate to enable it to monitor and evaluate in accordance with the
indicators acceptable to the Bank, the progress of the PBSD Subgrant and the
achievement of its objectives; (v) enable MDLF, the Recipient and the Bank to
inspect the respective PBSD Subproject, its operation and any relevant records and
documents; and (vi) prepare and furnish to the Recipient and the Bank all such
information as the Recipient or the Bank shall reasonably request.
D. Subgrants for Natural Hazard and Climate Change Resilience under Part
3(b) of the Project
1. For the purposes of implementing Part 3(b) of the Project, MDLF shall award
subgrants (“NHCC Subgrants”) to Participating Municipalities for the purposes of
financing the NHCC Subprojects, all in accordance with eligibility criteria and
procedures set forth in the POM and in a manner acceptable to the Bank.
2. MDLF shall award each subgrant under a legally binding grant agreement (“NHCC
Subgrant Agreement”) with the respective Participating Municipality on terms and
conditions approved by the Bank, which shall include the following: (a) the Grant
shall be made on a non-reimbursable grant basis and (b) ensure that the MDLF
shall obtain rights adequate to protect its interests and those of the Bank.
3. MDLF shall exercise its rights and carry out its obligations under each NHCC
Subgrant Agreement in such manner as to protect the interests of MDLF, the
Recipient and the Bank and to accomplish the purposes of the Grant.
4. Except as the Bank shall otherwise agree MDLF shall not assign, amend, abrogate
or waive any NHCC Subgrant Agreement or any of its provisions.
E. Performance Assessments
For the purposes of implementing Part 1 of the Project, MDLF shall maintain the
independent third-party verification agency hired under the Original Project, under
terms of reference acceptable to the Bank and included in the POM, for the
purposes of carrying out assessments of the performance of Participating
Municipalities in accordance with the frequency, content and procedures set forth
in the POM.
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F. Intergovernmental Fiscal Transfer System Operational Manual
1. For the purposes of implementing Part 2(b)(ii) of the Project, the Recipient shall
cause MDLF, through the Project Agreement, to:
(a) not later than 18 months after the Effective Date, or any other date agreed
with the Bank, prepare a national operational manual for the IGFT (“IGFT
Operational Manual”), in a manner acceptable to the Bank. Said manual
shall include the procedures, roles and functions of entities involved in the
sector, allocation formula for fiscal transfers, timetable and calendar for
financial flow transactions, and annual reporting, including annual report
format for the IGFT to improve transparency and accountability;
(b) in the process of preparing the IGFT Operational Manual, work alongside
the SCRNL and shall agree on the content of said manual; and
(c) a year after the IGFT Operational Manual is approved, shall prepare the
first-year annual report to detail the IGFT sources of funds and their
allocations to LGUs from the previous calendar year, all in accordance
with the guidance and procedures set forth in the IGFT Operational
Manual.
3. The Recipient through the SCRNL shall, not later than 90 days after the final draft
of the IGFT Operational Manual is received by the SCRNL adopt said manual in
a manner acceptable to the Bank.
4. The Recipient shall ensure that the SCRNL remains in place and active during
Project implementation in a manner acceptable to the Bank.
G. Subgrants for the C4W Program under Part 6(b) of the Project
1. MLDF shall award C4W Subgrants to Participating Municipalities for the
implementation of the C4W Program, all in accordance with the criteria and
procedures set forth in the POM, and to review, appraise and select proposals and
supervise implementation, all in accordance with the POM, the ESCP, and the
respective C4W Subgrant Agreements.
2. MDLF shall award each subgrant under a legally binding grant agreement (“C4W
Subgrant Agreement”) with the respective Participating Municipality on terms and
conditions approved by the Bank.
3. MDLF shall exercise its rights and carry out its obligations under each C4W
Subgrant Agreement in such manner as to protect the interests of the Recipient and
the Bank and to accomplish the purposes of the Grant.
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4. Except as the Bank shall otherwise agree, MDLF shall not assign, amend, abrogate
or waive any C4W Subgrant Agreement or any of its provisions.
H. Annual Work Plans and Budgets
1. Not later than November 30 in each calendar year, the Project Implementing
Entity, for the purpose of forwarding to the Bank, shall submit an annual work plan
and budget for the Project for the subsequent calendar year of the Project, of such
scope and detail as the Bank shall have reasonably requested.
2. The Project Implementing Entity shall afford the Bank a reasonable opportunity to
review such draft annual work plan and budget, and thereafter shall carry out such
annual work plan and budget during such subsequent calendar year as shall have
been approved by the Bank (“Annual Work Plan and Budget”). Only those
activities that are included in a Biennial Work Plan and Budget shall be eligible
for financing out of the proceeds of the Grant.
3. The Project Implementing Entity shall ensure that the Project is carried out in
accordance with the Annual Work Plans and Budgets.
4. Annual Work Plans and Budgets may be revised as needed during Project
implementation subject to the Bank’s prior written approval.
I. Environmental and Social Standards
1. MDLF shall ensure that the Project is carried out in accordance with the
Environmental and Social Standards, in a manner acceptable to the Bank.
2. Without limitation upon paragraph 1 above, MDLF shall ensure that the Project is
implemented in accordance with the Environmental and Social Commitment Plan
(“ESCP”), in a manner acceptable to the Bank. To this end, MDLF shall ensure
that:
(a) the measures and actions specified in the ESCP are implemented with due
diligence and efficiency, and as further specified in the ESCP;
(b) sufficient funds (from the Recipient, the Project and non-government
beneficiaries’ sources), are available to cover the costs of implementing
the ESCP;
(c) policies, procedures and qualified staff are maintained to enable it to
implement the ESCP, as further specified in the ESCP; and
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(d) the ESCP or any provision thereof, is not amended, revised or waived,
except as the Bank shall otherwise agree in writing and the Recipient has,
thereafter, disclosed the revised ESCP.
In case of any inconsistencies between the ESCP and the provisions of this
Agreement, the provisions of this Agreement shall prevail.
3. MDLF shall:
(a) take all measures necessary on its part to collect, compile, and furnish to
the Bank through regular reports, with the frequency specified in the
ESCP, and promptly in a separate report or reports, if so requested by the
Bank, information on the status of compliance with the ESCP and the
management tools and instruments referred to therein, all such reports in
form and substance acceptable to the Bank, 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) promptly notify the Bank 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 without limitation any potential Project-related
occupational health and safety accidents and incidents or Project-related
allegations of GBV or Project-related child labor, in accordance with the
ESCP, the instruments referenced therein and the Environmental and
Social Standards.
4. MDLF shall maintain and publicize the availability of a Grievance Redress
Mechanism (“GRM”), in form and substance satisfactory to the Bank, to hear and
determine fairly and in good faith all complaints raised in relation to the Project
and take all measures necessary to implement the determinations made by such
mechanism in a manner satisfactory to the Bank.
Section II. Project Monitoring, Reporting and Evaluation
A. Project Reports; Annual Work Plan; Completion Report
1. The Project Implementing Entity shall monitor and evaluate the progress of the
Project and prepare Project Reports in accordance with the provisions of Section
2.06 of the Standard Conditions and on the basis of indicators agreed with the
Bank. Each interim Project Report shall cover the period of the first six (6)
calendar months of each calendar year and shall be furnished to the Bank not later
than forty-five (45) days after the end of the period covered by such report.
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2. In addition to the interim Project Reports referred to in paragraph 1 above:
(a) the Project Implementing Entity shall prepare cumulative annual Project
Reports at the end of each calendar year. Such cumulative annual Project
Reports should be prepared in accordance with the provisions of Section
2.06 of the Standard Conditions and on the basis of indicators agreed with
the Bank and shall include a report on the performance of the Annual Work
Plan for the preceding calendar year. Each such cumulative annual Project
Report shall cover the period of the preceding twelve (12) months and
shall be furnished to the Bank not later than sixty (60) days after the end
of the period covered by such report; and
(b) the cumulative annual Project Reports referred to in paragraph (a) above
shall include the relevant part of the Annual Work Plan for review and
approval by the Bank, including indicative amounts needed to implement
the activities under the respective Annual Work Plan, prepared in
accordance with the format included in the Project Operational Manual,
and the Project Implementing Entity shall agree with the Bank on steps to
be taken in the following calendar year.
3. The Project Implementing Entity shall jointly undertake with the Bank a review of
the Project activities based on the report referred to in paragraph 2 above.
4. The Project Implementing Entity shall prepare the Completion Report in
accordance with the provisions of Section 2.06 of the Standard Conditions. The
Completion Report shall be furnished to the Bank not later than six (6) months
after the Closing Date.
B. Financial Management; Financial Reports; Audits
1. The Project Implementing Entity shall maintain a financial management system in
accordance with the provisions of Section 2.07 of the Standard Conditions.
2. The Project Implementing Entity shall ensure that interim unaudited financial
reports for the Project are prepared and furnished to the Bank not later than forty-
five (45) days after the end of each calendar semester, covering the semester, in
form and substance satisfactory to the Bank. The unaudited financial reports shall
be reviewed by an independent auditor, acceptable to the Bank, prior to submission
to the Bank.
3. The Project Implementing Entity shall have its Financial Statements, as well as the
Project’s financial statements, audited in accordance with the provisions of Section
2.07 (b) of the Standard Conditions. Each such audit of the Financial Statements
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shall cover the period of one fiscal year of the Project Implementing Entity. The
audited Financial Statements for each such period shall be furnished to the Bank
not later than six (6) months after the end of such period.