LOAN NUMBER 9554-MA Loan Agreement (Health Reform Program) between KINGDOM OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN AGREEMENT AGREEMENT dated as of the Signature Date between KINGDOM OF MOROCCO ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank 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- LOAN 2.01. The Bank agrees to lend to the Borrower the amount of four hundred nine million eight hundred thousand Euro (EUR409,800,000), as such amount may be converted from time to time through a Currency Conversion ("Loan"), to assist in financing the program described in Schedule 1 to this Agreement ("Program"). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. All withdrawals from the Loan Account shall be deposited by the Bank into an account specified by the Borrower and acceptable to the Bank. 2.03. The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount. 2.04. The Commitment Charge is one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2.05. The interest rate is the Reference Rate plus the Variable Spread; or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions. 2.06. The Payment Dates are January 15 and July 15in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement. ARTICLE III - PROGRAM 3.01. The Borrower declares its commitment to the objectives of the Program. To this end, the Borrower, through the Ministry of Health and Social Protection -2- ("MHSP"), shall ensure that the Program is carried out in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV - TERMINATION 4.01. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Borrower's Representative is the Minister in charge of finances. 5.02. For purposes of Section 10.01 of the General Conditions: (a) the Borrower's address is: Ministere de l'Economie et des Finances Quartier Administratif Avenue Mohammed V Rabat Kingdom of Morocco; and (b) the Borrower's Electronic Address is: Cable address: Facsimile: MINFIN +212-537-67-75-30/31 +212-537-76-40-81 5.03. 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: Telex: Facsimile: 248423(MCI) or +1-202-477-6391 64145(MCI) -3- AGREED as of the Signature Date. KINGDOM OF MOROCCO By Authorized Representativ Name: Title: Date: 0 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: Title: Date: I -4- SCHEDULE 1 Program Description The objective of the Program is to strengthen the Borrower's institutional capacity and governance for improved provision of quality public health services in the Program Area. The Program consists of the following activities: Result Area 1. Strengthened Organizational and Institutional Capacity for health System Governance Strengthening Borrower's governance in improving the quality and availability of health services through the following activities in the Program Area: (a) the implementation of the new deconcentrated government model through the establishment and operationalization of Territorial Health Groups ("GST"); (b) strengthening management capacity to enable proactive planning and reallocation of health sector resources through the development of regional medical programs and regional health maps with a focus on quality of care, as well as the development and implementation of a comprehensive training plan for administrative staff aimed at, inter alia, improving management capacity, financial management and gender approach (including GBV) and fostering the health system's adaptation to climate change; (c) the definition of a roadmap for the update of provider payment methods for GST and, inter alia, the implementation of a strategic purchasing system; (d) improving the content, quality, accessibility and utilization of health data through the roll-out of an integrated, digitalized health management information system at public primary health care (PHC) facilities; and (e) the establishment of a digitalized information and policy exchange and coordination platform between all relevant stakeholders in the health sector at the central and regional levels, including the measurement of patient satisfaction. Result Area 2. Improved Availability, Motivation and Competence of Human Resources for Health Improvement of the availability, motivation and competence of the health workforce through: (a) design and adoption of a special incentive system for health workers to improve the quality and availability of health service delivery; (b) the carrying out of an administrative reform through shifting to a paperless human resources information system to enable better allocation of the health workforce to under-resourced provinces; (c) the increase in the number of trained health workers at ISPITS (nurses and technical health workers) in the Program Area, including updates to the relevant training curricula, and (d) modifications to pre-service and in-service training curricula to reflect the health sector redesign program and priorities, including gender. -5- Result Area 3. Strengthened and reorganized health services Upgrading and reorganization of the Borrower's health service delivery in the Program Area through: (a) the rehabilitation of public PHC facilities to comply with energy and thermal efficiency standards to address climate vulnerabilities; (b) the institutionalization of evaluation of quality of care at GST, public hospitals and public PHC facilities for improvements; (c) strengthening of epidemiological surveillance capacity including for climate change related health issues; (d) the scale-up of the maternal and neonatal death surveillance, audit, and response system; (e) the implementation of the Borrower's health program treatment of GBV survivors; (f) the implementation monitoring of priority prevention strategies including for congenital hypothyroidism screening; and (g) provision of antenatal care and other relevant services to pregnant women. -6- SCHEDULE 2 Program Execution Section I. Implementation Arran2ements A. Program Institutions 1. The Borrower shall vest the overall responsibility for Program coordination, implementation, monitoring and evaluation on the MHSP; and to this end, shall, through the MHSP (through its Planning and Financial Resources Directorate ("DPRF"): (a) ensure that the Program is carried out as further set forth in the POM; (b) no later than four (4) months after the Effective Date, or such later date as agreed by the Bank, establish, and thereafter maintain throughout the implementation of the Program, a Steering Committee responsible for overall oversight and strategic guidance of the Program, with composition and roles and responsibilities as set forth in the POM; (c) no later than four (4) months after the Effective Date, or such later date as agreed by the Bank, establish, and thereafter maintain throughout the implementation of the Program, a Technical Committee responsible for assisting the MHSP on the technical aspects of the implementation of the Program, with composition and roles and responsibilities as set forth in the POM; and (d) ensure the coordination with other relevant MHSP Directorates and other relevant Borrower's entities and institutions at the central and regional levels, including the GSTs of the Program Area once established, all in accordance with the implementation arrangements as defined in the POM. 2. The Borrower shall, through the DPRF, not later than four (4) months after the Effective Date, prepare and adopt a Program operational manual, in form and substance acceptable to the Bank ("Program Operational Manual" or "POM"), and immediately thereafter, implement the Program in accordance with the POM. Except as the Bank shall otherwise agree, the Borrower shall not amend or waive any provision of the POM. In case of any conflict between the terms of the POM and those of this Agreement, the terms of this Agreement shall prevail. -7- B. Additional Program Implementation Arrangements Program Action Plan I. The Borrower shall, through the MHSP, carry out the Program Action Plan or cause the Program Action Plan to be carried out, in accordance with the schedule set out in the said Program Action Plan in a manner acceptable to the Bank. Verification Protocol 2. The Borrower shall, through the MHSP: (a) carry out verification missions through its General Inspectorate for the verification of achievement of DLRs which are set forth in the table in Section IV.A.2 of this Schedule in accordance with the Verification Protocol; and (b) furnish to the Bank not later than sixty (60) days after the verification of compliance of said DLRs, a report on the results of said verification of compliance process of such scope and in such detail as the Bank shall reasonably request. Section II. Excluded Activities The Borrower shall ensure that the Program excludes any activities which: A. in the opinion of the Bank, are likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people; or B. involve the procurement of: (1) works, estimated to cost $75,000,000 equivalent or more per contract; (2) goods, estimated to cost $50,000,000 equivalent or more per contract; (3) non-consulting services, estimated to cost $50,000,000 equivalent or more per contract; or (4) consulting services, estimated to cost $20,000,000 equivalent or more per contract. Section III. Program Monitoring, Reporting and Evaluation 1. The Borrower shall furnish to the Bank each Program Report not later than sixty (60) days after the end of each calendar semester, covering the calendar semester. Section IV. Withdrawal of Loan Proceeds A. General 1. Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Borrower may withdraw the proceeds of the Loan to: (a) finance Program Expenditures (inclusive of Taxes), on the basis of the results ("Disbursement Linked Results" or "DLRs") achieved by the Borrower, as measured against -8- specific indicators ("Disbursement Linked Indicators" or "DLIs") and (b) pay: (i) the Front-end Fee; and (ii) each Interest Rate Cap or Interest Rate Collar premium; all as set forth in the table in paragraph 2 of this Part A. 2. The following table specifies each category of withdrawal of the proceeds of the Loan (including the Disbursement Linked Indicators as applicable) ("Category"), the Disbursement Linked Results for each Category (as applicable), and the allocation of the amounts of the Loan to each Category: Category Disbursement Linked Result Amount of the (including Disbursement (as applicable) Loan Linked Indicator as applicable) Allocated (expressed in EUR) (1) DLI #1: Strengthened DLR#1.1: 100% GSTs in the DLR#1.1: institutional capacity through the Program Area have been 20,490,030 new deconcentrated governance established and have defined their 2,276,670 per 11% system governance framework consisting of GSTs in the of (i) an executive board; (ii) an Program Area organigram; (iii) the status of established. personnel; and (iv) internal regulations. DLR#1.2: Development of a training program by the MHSP for relevant GST staff in performance- DLR#1.2: based management, financial 13,660,000 management, gender approach (including GBV) and health sector resilience to climate change. DLR#1.3: 100% of GSTs in the Program Area have developed and DLR#1.3: 6,830,010 validated their regional medical 758,890 per 11% of program, with a focus on gender- GSTs in the sensitive service delivery,and Program Area. services for GBV survivors. DLR#1.4: 100% of GST in the Program Area have trained relevant DLR#1.4: staff in performance-based 20,490,030 management, financial 2,276,670 per 11% management, gender approach of GSTs in the (including GBV) and health sector Program Area with resilience to climate change. at least 50% of their relevant staff trained. -9- DLR#1.5: 100% of GST in the Program Area have established a DLR#1.5: 6,830,010 regional health map. 758,890 per 11% of GSTs in the Program Area. (2) DLI#2: Health financing DLR#2.1: Roadmap adopted by the DLR#2.1: 5,805,500 system reformed to reflect the MHSP for the progressive financing context of the reform and improve of GSTs by the Mandatory Health quality of service delivery Insurance ("AMO") payments, including the interoperability of the billing system with the CNSS, in the Program Area. DLR#2.2: Roadmap adopted by the DLR#2.2: 6,830,000 MHSP Minister on the financing modalities of public health facilities within each GST in the Program Area. DLR#2.3: 6,830,000 DLR#2.3: 40% of the total budget 170,750 per each of GSTs in the Program Area are percent point of total from AMO payments. budget of GSTs in the Program Area from AMO payments. DLR#2.4: 70% of the total budget DLR#2.4: 6,830,000 of GSTs in the Program Area are From a baseline of from AMO payments. 40%, 227,667 per each percent point of total budget of GSTs in the Program Area from AMO payments. (3) DLI#3: Improved content, DLR#3.1: 33% of GST in the DLR#3.1: quality, accessibility, and use of Program Area have deployed the 12,294,000 health data integrated and digitalized health 4,098,000 per 11% information system at public PHC of GSTs in the facilities. Program Area having deployed the integrated and digitalized health information system at public PHC facilities. DLR#3.2: 56% of GST in the DLR#3.2: 5,464,000 Program Area have deployed the - 10- integrated and digitalized health From a baseline of information system at public PHC 33%, 2,732,000 per facilities. 11% of GSTs in the Program Area having deployed the integrated and digitalized health information system at public PHC facilities. DLR#3.3: 78% of GST in the DLR#3.3: 5,464,000 Program Area have deployed the From a baseline of integrated and digitalized health 56%, 2,732,000 per information system at public PHC 11% of GSTs in the facilities. Program Area having deployed the integrated and digitalized health information system at public PHC facilities. DLR#3.4: 5,464,000 DLR#3.4: 100% of GST in the From a baseline of Program Area have deployed the 78%, 2,732,000 per integrated and digitalized health 11% of GSTs in the information system at public PHC Program Area facilities. having deployed the integrated and digitalized health information system at public PHC facilities. DLR#3.5: Publication of an annual DLR#3.5: 5,464,000 health sector report in the Program Area on the health programs, with an emphasis on quality indicators. (4) DLI#4: Exchange and DLR#4.1: The terms of reference DLR#4.1: 6,830,000 coordination platforms organized and deployment roadmap for the between central and regional exchange and coordination platform entities have been validated by the MIHSP. DLR#4.2. 33% of GSTs in the DLR#4.2: 8,196,000 Program Area have deployed the 2,732,000, per 11% exchange and coordination platform of GSTs having deployed the -ll- and published a report on lessons exchange and learned. coordination platform. DLR#4.3: 55% of GSTs in the DLR#4.3: 5,464,000 Program Area have deployed the From a baseline of exchange and coordination platform 33%, and published a report on lessons 2,732,000 per 11% learned. of GSTs in the Program Area having deployed the DLR#4.4:100% of GST in the exchange and Program Area have published a coordination report on key discussion areas from platform the exchange and coordination platform, and have incorporated DLR#4.4: 6 830 000 suggestions from the platform. 1 707 500 per 11% of GSTs in the Program Area. (5) DLI#5: Health service DLR#5.1: Adoption by decree of a DLR#5.1: 13 660 operationalized to define health financial incentive model for 000 worker entitlements and to human resources, including (i) improve the quality of service regional characteristics; (ii) delivery performance of health workers (including quality of care) DLR#5.2: 100% of GST in the Program Area have operationalized DLR#5.2: 10,244, the human resources for health 970 information system. 1 138 330 per 11% of GSTs in the Program Area. DLR#5.3: 100% of GST in the Program Area have implemented the financial incentive model for DLR#5.3: 6,147,000 human resources. 683,000 per 11% of GSTs in the DLR#5.4: 100 percent of GST in Program Area Program area have increased their human resource capacity by 50% DLR#5.4: relative to the gap identified in CY 10,927,980 2023 to ensure equitable 1,124,220 per 11% distribution, particularly for of GSTs in the understaffed provinces. Program Area which has closed more than 50% of the human resources gap - 12 - identified in CY 2023 (6) DLI#6: Improved training DLR#6: 11,600 openings for nurses DLR#6: 40,979,910 capacity at ISPITS and health technicians to enroll in From a baseline of ISPITS in the Program Area. 7,500 openings, 999,510 per each 100 additional openings for nurses/heath technicians to enroll in ISPITS in the Program Area. (7) DLI#7: Number of public PHC DLR#7: 395 public PHC facilities DLR#7: 68,300,000 facilities rehabilitated in Program rehabilitated to comply with with 172,911 per public Area to comply with energy and green building criteria to address PHC facility thermal efficiency standards to climate vulnerabilities rehabilitated. address climate vulnerabilities (8) Quality of care at public DLR#8.1: 100% of GST in Program DLR#8.1: hospitals and public PHC facilities area have established a quality 12,294,000 evaluated and improved management structure 1,366,000 per quality management structure established in each GST in the Program Area. DLR#8.2: Development and DLR#8.2: 8,196,030 adoption of quality evaluation tools for public PHC facilities. DLR#8.3: 100% of GST in the DLR#8.3: 8,196,030 Program Area have adopted a 910,670 per roadmap for quality evaluation and roadmap adopted by improvement. each GST in the Program Area. DLR#8.4: 100% of GST in the Program Area have produced a DLR#8.4: quality evaluation report and 12,294,000 adopted a quality improvement 1,366,000 per GST action plan for public hospitals and in the Program Area. public PHC facilities. (9) DLI#9: Strengthened DLR#9.1: Adoption by the MHSP DLR#9. 1: epidemiological surveillance of a roadmap for the restructuring of 12,294,000 - 13 - capacity including for climate epidemiological surveillance change related health issues capacity based on priority areas. DLR#9.2: Adoption by the MHSP DLR#9.2: of a new epidemiological 15,367,500 surveillance system. DLR#9.3: Adoption of updated DLR#9.3: epidemiological surveillance 15,367,500 regulations, and adoption of the updated list of notifiable diseases including those related to climate change, by MHSP. DLR#9.4: 100% of GSTs in the DLR#9.4: Program Area have published the 18,441,000 epidemiological bulletin based on 2,049,000 per each approved revised surveillance bulletin published regulations. by each GST in the Program Area. (10) Front-end Fee to be paid pursuant to Section 2.03 of this 1,024,500 Agreement in accordance with Section 2.05(b) of the General Conditions (11) Interest Rate Cap or Interest 0 Rate Collar premium to be paid pursuant to Section 4.05(c) of the General Conditions TOTAL AMOUNT 409,800,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) on the basis of DLRs achieved prior to the Signature Date; and (b) for any DLR under Categories (1) to (9) until and unless the Borrower has furnished evidence satisfactory to the Bank that said DLR has been achieved. 2. Notwithstanding the provisions of Part B. 1(b) of this Section, the Borrower may withdraw an amount not to exceed Eurol02,450,000 as an advance; provided, however, that if the DLRs in the opinion of the Bank, is/are not achieved (or only partially achieved) by the Closing Date, the Borrower shall refund such advance (or portion of such advance as determined by the Bank in accordance with the - 14 - calculation formula provisions set forth in the table immediately above) to the Bank promptly upon notice thereof by the Bank. Except as otherwise agreed with the Borrower, the Bank shall cancel the amount so refunded. Any further withdrawals requested as an advance under any Category shall be permitted only on such terms and conditions as the Bank shall specify by notice to the Borrower. 3. Notwithstanding the provisions of Part B.1(b) of this Section, if any of the DLRs under Categories (1) to (9) has not been achieved, the Bank may, by notice to the Borrower: (a) reallocate all or a portion of the proceeds of the Loan then allocated to said DLR to any other DLR; and/or (b) cancel all or a portion of the proceeds of the Loan then allocated to said DLR. 4. The Closing Date is September 30, 2028. - 15 - SCHEDULE 3 Amortization Schedule The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). Principal Payment Date Installment Share On each January 15 and July 15 Beginning July 15, 2028 through January 15, 2.50% 2048 - 16 - APPENDIX Definitions I. "Anti-corruption Guidelines" means, for purposes of paragraph 6 of the Appendix to the General Conditions, the Bank's "Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing," dated February 1, 2012, and revised July 10, 2015. 2. "Category" means a category set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 3. "CY" means Borrower's calendar year starting January I and ending December 31. 4. "Disbursement Linked Indicator" or "DLI" means in respect of a given Category, the indicator related to said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 5. "Disbursement Linked Result" or "DLR" means in respect of a given Category, the result under said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement, on the basis of the achievement of which, the amount of the Loan allocated to said result may be withdrawn in accordance with the provisions of said Section IV. 6. "GBV" means gender-based violence. 7. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for IBRD Financing, Program-for-Results Financing", dated December 14, 2018 (revised on August 1, 2020, December 21, 2020, April 1, 2021, and January 1, 2022). 8. "ISPITS" means Institut Superieur des Professions Infirmieres et Techniques de Sante, the Borrower's Higher Institutes of Nursing Professions and Health Techniques. 9. "Ministry of Health and Social Protection" or "MHSP" means the Borrower's ministry in charge of health and social protection, or any successor thereto. 10. "PHC" means primary health centers. 11. "Planning and Financial Resources Directorate" or "DPRF" means the Direction de la Planification et Des Ressources Financibres within the MHSP. - 17- 12. "Program Action Plan" means the Borrower's plan dated May 12, 2023 and referred to in Section I.B. 1 of Schedule 2 to this Agreement, as may be amended from time to time with the agreement of the Bank. 13. "Program Area" means the Borrower's regions and provinces listed in the POM. 14. "Program Operations Manual" or "POM" means the Borrower's manual for the Operation referred to in Section I.A.2 of Schedule 2 to this Agreement, which shall contain, inter alia: (i) administrative, and monitoring and evaluation procedures; (ii) environmental and social management systems and complaints and grievance redress mechanism; (iii) the Program Action Plan; (iv) details, required results and arrangements for verification of achievement of the DLRs (including the Verification Protocol); (v) Program Report templates; (vi) the protocol/arrangements for periodic reporting to the Bank on, and sharing the findings of, any case of fraud and corruption denounced and/or investigated under the Program, in accordance with the Anti-Corruption Guidelines (to be included as an attachment to the POM); and (vii) the list of Borrower's regions/provinces of the Program Area participating in the Program; as the same may be amended from time to time with the Bank's prior written consent. 15. "Signature Date" means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to "the date of the Loan Agreement" in the General Conditions. 16. "Steering Committee" means the committee referred to in Section I.A.1(b) of Schedule 2 to this Agreement. 17. "Technical Committee" means the committee referred to in Section I.A.1(c) of Schedule 2 to this Agreement. 18. "Territorial Health Groups" or "GST" means Groupeinent Sanitaire Territorial, the territorial health groups in the Program Area to be established pursuant to Framework Law 06-22 published on the Official Gazette No.7151 on December 9, 2022. 19. "Verification Protocol" means the protocol referred to in Section I.B.2 of Schedule 2 to this Agreement and included in the POM.