OFFICIAL DOCUMENTS CREDIT NUMBER 7300-BD Project Agreement (Sustainable Microenterprise and Resilient Transformation) between INTERNATIONAL DEVELOPMENT ASSOCIATION and PALLI KARMA-SAHAYAK FOUNDATION PROJECT AGREEMENT AGREEMENT between INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") and PALLI KARMA-SAHAYAK FOUNDATION ("Project Implementing Entity") ("Project Agreement") in connection with the Financing Agreement ("Financing Agreement") of the Signature Date between the PEOPLE'S REPUBLIC OF BANGLADESH ("Recipient) and the Association, concerning Credit No. 7300-BD. The Association 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 Financing 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 Financing 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 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 the Project. ARTICLE III - TERMINATION 3.01. For purposes of Section 10.05(c) of the General Conditions, the date on which the provisions of this Agreement shall terminate is twenty (20) years after the Signature Date. ARTICLE IV - REPRESENTATIVE; ADDRESSES 4.01. The Project Implementing Entity's Representative is its Managing Director, or any officer appointed by said Managing Director, 4.02. For purposes of Section 11.01 of the General Conditions: (a) the Association's address is: International Development Association 1818 H Street, NW Washington, DC 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423(MCI) or 1-202-477-6391 4.03. For purposes of Section 11.01 of the General Conditions: (a) the Project Implementing Entity's address is: E-4/B Agargaon Shere-e-Bangla Nagar Dhaka 1207, Bangladesh; and (b) the Project Implementing Entity's Electronic Address is: Telex: Facsimile: E-mail: 88-02222218210 88-02222218341 md@pk,sf.org.bd 2 AGREED as of the later of the two dates written below, INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: l kc Title: 0nr A onC Date: M¶ 1 0O23 PALLI KARMA-SAHAYAK FOUNDATION By Authorized Representative Name: t1trit Title: maqing Direch Date: , )0L 3 SCHEDULE Execution of the Project Section I. Implementation Arrangements A. Institutional Arrangements. 1. The Project Implementing Entity shall by no later than three (3) months after the Effective Date, establish and thereafter maintain throughout the course of Project implementation a Project management unit (PMU), with a mandate, functions and resources satisfactory to the Association, and with staff in adequate numbers and with qualifications, experience and terms of reference satisfactory to the Association. Without limitation on the foregoing, the PMU shall: (a) be headed by a Project coordinator, and (b) be staffed with technical experts and specialists in, inter alia, procurement, financial management, and monitoring and evaluation and reporting; and (c) be responsible for, inter alia, planning, coordination, implementation and monitoring and evaluation of Project activities, preparing annual work plans and budgets, procurement and financial management, social and environmental safeguards, and reporting on Project progress. 2. The Project Implementing Entity shall: (a) by no later than January 31St of each year during the period of implementation of the Project, furnish to the Association for its review and comments a proposed annual work plan and budget for the following fiscal year, giving details of the proposed work Project activities, cost estimates and budget proposals for the Project for the forthcoming fiscal year; and (b) proceed thereafter to implement such annual work plan and budget, taking into account such comments as may have been made thereon by the Association. B. Grants, Sub-loans and Lines of Credit. 1I The Project Implementing Entity shall invite, in accordance with the Project Operations Manual: (a) Partner Organizations to submit proposals for financing through Grants for purposes of Part 1.1, Part 1.2 and Part 1.3 of the Project; (b) Partner Organizations to submit proposals for financing, through Sub-loans for purposes of Part 2.1 and 2.2 of the Project. 2. The Project Implementing Entity shall ensure that the Grants and/or Sub-loans are made to selected POs (the "Participating POs") in accordance with the eligibility criteria and procedures set forth in the Project Operations Manual. 3. Upon selection of Participating POs and the award of a Grant or a Sub-loan, the Project Implementing Entity shall enter into a written agreement (the "Grant Agreement" or the "Sub-loan Agreement", as the case may be) with the Participating PO, under terms and conditions acceptable to the Association, as set forth in the Project Operations Manual, and 4 pursuant to the respective template agreements prescribed in the Project Operations Manual, which agreement shall provide, inter alia: (a) that the Participating PO shall carry out activities financed by the respective Grant or Sub-loan, as the case may be, with due diligence and efficiency and in accordance with sound technical, financial, environmental and managerial standards, including the provisions of the Project Operations Manual, the Procurement Regulations, the Anti-Corruption Guidelines, the ESCP and other applicable safeguards instruments; (b) the requirement that the Participating PO shall use the proceeds of the Grant and/or the Sub-loan to finance only the eligible expenditures set forth in the Project Operations Manual and the approved grant and/or sub-loan proposal; and maintain adequate records the reflect the proper administration and use of the resources awarded under the respective Grant and/or Sub-loan; (c) that the Participating PO shall establish by no later than three (3) month after the signature date of the Grant Agreement or the Sub-loan Agreement, as the case may be, and maintain an environment and climate change unit (ECCU), with at least one environmental and social officer, with a mandate, functions and resources satisfactory to the Project Implementing Entity and the Association and with staff with adequate qualifications and terms of reference satisfactory to the Project Implementing Entity and the Association; (d) that the Participating PO shall: (i) establish and/or maintain policies and procedures that would allow the Project Implementing Entity and/or the Recipient and/or the Association to carry out supervision and monitor the implementation of the Grant and/or the Sub-loan; (ii) prepare and furnish to the Project Implementing Entity and/or the Recipient and/or the Association, all such information that the Project Implementing Entity and/or the Recipient and/or the Association shall reasonably request in relation to the Grant and/or Sub-loan; and (iii) accept random and/or unannounced physical or documentary inspections by the Project Implementing Entity and/or the Recipient and/or the Association for the monitoring of, and in relation to, the carrying out of the Grant and/or Sub- loan; (e) that the Participating PO 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 respective Grant and/or Sub-loan; and (ii) whenever required by the Association or the Recipient or the Project Implementing Entity, have such records and accounts audited in accordance with appropriate auditing principles consistently applied by an independent auditor; (f) the right of the Project Implementing Entity to suspend or terminate the right of the Participating PO to withdraw and use the proceeds of the respective Grant and/or Sub-loan 5 (a) upon any failure of the Participating PO to perform its obligations under the Grant Agreement or the Sub-loan Agreement or the Line of Credit Agreements; or (b) upon the Association declaring the Participating PO ineligible under the Anti-Corruption Guidelines; (g) the Project Implementing Entity's right of restitution of any amounts disbursed to the Participating PO under the Grant, and the Project Implementing Entity's right of immediate reimbursement of any amounts disbursed to the Participating PO under, respectively, the Grant or the Sub-loan with respect to which fraud and corruption has occurred, or with which an ineligible expenditure has been paid; and (h) the closing date for each Grant and/or Sub-loan, which date shall fall on or before the date set forth in Section III.B.2 of Schedule 2 to the Financing Agreement. (i) that the Participating PO shall ensure that the Lines of Credit are made to selected MEs in accordance with the eligibility criteria and procedures set forth in the Project Operations Manual and that, upon selection of the MEs and the award of the Lines of Credit, the Participating PO shall enter into written Line of Credit Agreement with the selected MEs under terms and conditions acceptable to the Project Implementing Entity, as set forth in the Project Operations Manual, and pursuant to the template agreement prescribed in the Project Operations Manual, which agreement shall provide inter alia : (i) that the selected MEs shall carry out the activities financed by the Line of Credit with due diligence and efficiency and in accordance with sound technical, financial, environmental and managerial standards, including the provisions of the Project Operations Manual, the Procurement Regulations, the Anti-Corruption Guidelines, the ESCP and other applicable safeguards instruments; (ii) that the selected MEs shall use the proceeds of the Line of Credit to finance only the eligible expenditures set forth in the Project Operations Manual and the approved line of credit proposal; (iii) that the selected MEs shall maintain adequate records in a manner adequate to reflect the proper administration and use of the resources awarded under the Line of Credit; (iv) that the activities financed out of the proceeds of the Line of Credit shall be completed by the Closing Date; (v) that the selected ME shall accept random and/or unannounced physical or documentary inspections by the Project Implementing Entity and/or the relevant Participating PO and/or the Association for the monitoring of, and in relation to, the carrying out of the Line of Credit; 6 (vi) that the selected ME shall prepare and furnish to the Project implementing Entity and/or the Participating PO and/or the Association, all such information that the Project Implementing Entity and/or the Participating PO and/or the Association shall reasonably request in relation to the Line of Credit (including the activities financed out of the proceeds of the Line of Credit); and (vii) that the relevant Participating PO has the right to suspend or terminate the right of the selected ME to the use of the proceeds of the Line of Credit, or declare to be immediately due and payable all or any part of the amount of the Line of Credit then withdrawn, upon failure by such ME to perform its obligations under the Line of Credit Agreement. 4. The Project Implementing Entity shall exercise its rights under each Grant Agreement and each Sub-loan Agreement in such manner as to protect the interests of the Project Implementing Entity, the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Project Implementing Entity shall not assign, amend, abrogate or waive any of the Grant Agreements or the Sub- loan Agreements or any of their provisions. 5. The Project Implementing Entity shall cause the Participating POs to exercise their rights under each Line of Credit Agreement in such manner as to protect the interests of the Project Implementing Entity, the Participating PO and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Project Implementing Entity shall ensure that the Participating PO shall not assign, amend, abrogate or waive any of the Line of Credit Agreement or any of their provisions. C. Project Operations Manual. 1. The Project Implementing Entity shall: (a) prepare and promptly furnish to the Association for its review, and adopt, by no later than three (3) months after the Effective Date, a Project Operations Manual for the Project, in a manner and substance satisfactory to the Association, setting out detailed arrangements and procedures for implementation of the Project including inter alia: (i) detailed description of the Project activities; (ii) implementation arrangements including delineation of role and responsibility of various departments, entities and institutions involved in Project implementation and their coordination; (iii) the procurement procedures and standard procurement documentation; 7 (iv) the operational procedures, implementation modalities, monitoring arrangements and model templates for the Grant Agreements, for the Sub-loan Agreements and for Line of Credit Agreements; (v) the eligibility and selection criteria of the Partner Organizations and MEs; disbursement arrangements, arrangements for funds flow, financial management procedures and audit procedures; (vi) annual work plan and budget preparation and review procedures; (vii) the Project performance indicators and monitoring and evaluation arrangements; (viii) the List of Excluded Activities; (ix) requirements and procedures for collection, use and processing (including transfers to third parties) of any Personal Data collected under the Project to ensure legitimate, appropriate and proportionate treatment of such data; (x) arrangement and procedures for environment and social safeguard management including social monitoring and gender strategy; and (xi) administrative, financial, technical, and organizational arrangements and procedures as shall be required for the Project. (b) thereafter, implement the Project in accordance with the Project Operations Manual. 2. The Project Implementing Entity shall not amend, abrogate, or suspend, or permit to be amended, abrogated, or suspended any provision of the Project Operations Manual without the prior written agreement of the Association. 3. Notwithstanding the foregoing, if any provision of the Project Operations Manual is inconsistent with the provisions of this Agreement or the Financing, the provisions of this Agreement and of the Financing Agreement shall prevail, Subject to the prior written agreement of the Association, the Project Implementing Entity shall update the Project Operations Manual, as necessary, at all times ensuring compliance thereof with the terms of this Agreement and the Financing Agreement. 4. The Project Implementing Entity to ensure that collection, storage, usage, or processing of personal data are carried out with due regard to appropriate data protection and privacy standards and practices. C. Environmental and Social Standards. 1 . The Project Implementing Entity shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 8 2. Without limitation upon paragraph 1 above, the Project Implementing Entity shall 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 Project Implementing Entity shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, and 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 expeienced staff in 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 ensure that 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 Project Implementing Entity shall 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, inte, a/ia: (i) the status of implemnentation 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, in accordance with the ESCP, the environmental and social instruimnts referenced therein and the Environmental and Social Standards. 5. The Project Implementing Entity shall establish, publicize, 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 Project Implementing Entity shallI 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 9 and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, 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. D. Expenditures to be financed with counterpart funds The Project Implementing Entity shall: (a) provide, as needed, the funds, facilities, services and other resources required for the Project; (b) ensure that the following expenditures are financed exclusively out of its own resources or the Recipient's resources and not out of the proceeds of the Financing; and (c) 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, recurrent expenditures for the purpose of attending meetings, conferences, seminars, workshops and for all other purposes (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 the Financing. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports. The Project Implementing Entity shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08(b) of the General Conditions and on the basis of the indicators acceptable to the Association. Each such Project Report shall cover the period of one (1) calendar quarter, and shall be furnished to the Recipient not later than sixty (60) days after the end of the period covered by such report for incorporation and forwarding by the Recipient to the Association of the overall Project Report. 10