LOAN NUMBER 9499-CN Loan Agreement (Yangtze River Protection and Ecological Restoration Program for Results (Hubei)) between PEOPLE'S REPUBLIC OF CHINA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN AGREEMENT AGREEMENT dated as of the Signature Date between PEOPLE'S REPUBLIC OF CHINA ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: ARTICLE I G ENERAL 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 two hundred million Dollars ($200,000,000), 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 April 15 and October 15 in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement. ARTICLE III P ROGRAM 3.01. The Borrower declares its commitment to the objectives of the Program. To this end, the Borrower shall cause the Program to be carried out by the Program Implementing Entity in accordance with the provisions of Article V of the General Conditions and the Program Agreement. ARTICLE IV - REMEDIES OF THE BANK 4.01. The Additional Event of Suspension is that the Program Implementing Entity has adopted a successor program to the Hubei 14th Five-Year Plan for Yangtze River Economic Belt Green Development, which will materially and adversely affect its ability to achieve the objective of the Program and/or perform any of its obligations under the Program Agreement. 4.02. The Additional Event of Acceleration is that the event specified in Section 4.01 of this Agreement occurs and is continuing for a period of sixty (60) days after notice of the event has been given by the Bank to the Borrower. ARTICLE V-EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness is that the Program Implementing Entity has adopted the Program Implementation Plan in form and substance acceptable to the Bank. 5.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. ARTICLE VI REPRESENTATIVE; ADDRESSES 6.01. The Borrower's Representative is its Minister, or a Vice Minister, of Finance. 6.02. For purposes of Section 10.01 of the General Conditions: (a) the Borrower's address is: Ministry of Finance Sanlihe Xicheng District Beijing 100820 People's Republic of China; and (b) the Borrower's Electronic Address is: Facsimile: (86-10) 6855-2077 6.03. 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: Facsimile: 2 1-202-477-6391 AGREED as of the Signature Date. PEOPLE'S REPUBLIC OF CHINA By 8 ·d Authorized Representative woe 2g o g}' re.M Gee+ y L reef- _fer kjet4to f ta vl Bonk< on "jf Date: (-4,al'sty ef 'Face /Uorewlor 22, 223 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: /4a lo-roicl rue: _of4 Dre tor, Cl«a Dae -eg1],2s23 3 SCHEDULE 1 Program Description The objective of the Program is to improve institutional coordination, enhance ecological protection and reduce water pollution loads along the Yangtze River Basin in Hubei Province. The Program consists of the following activities, which are a subset ofthe Hubei 14th Five- year Plan for Yangtze River Economic Belt Green Development: l. Improving Institutions and Innovations. Supporting institutional coordination improvements for interjurisdictional cooperation and cross-sectoral coordination, through: (a) supporting Hubei Province's participation in a tri-provincial cooperation mechanism for water environment protection with focus on river/lake protection; (b) strengthening institutional coordination through data sharing on Yangtze River protection between the provincial river chief system information platform and relevant government agencies at national and provincial level, including CWRC; (c) developing provincial-level policies, regulations and guidelines on integrated water environment and ecological protection and management; and (d) public engagement in river and lake protection and management, through awareness campaigns, participatory approaches, and development of public engagement guidance for river/lake management, targeted at enhancing climate awareness and women's participation. 2. Advancing Ecological Protection through Integrated River/Lake Basin Management. Supporting ecological protection, biodiversity conservation and climate resilience of river and lake ecosystems in the Qing River basin and Hong Lake basin, through: (a) strengthening integrated water environment management systems, including integrated water environment protection planning; (b) connecting the Yangtze River water environment information platform with the provincial river chief system information platform; (c) improving water environment monitoring systems; (d) determining ecological flow and water depth requirements and incorporating them into county water allocations; and (e) carrying out sustainable soil and water conservation activities. 3. Reducing Water Pollution and Transmission of Plastic Waste. Supporting reduction of point and nonpoint-source pollution, including plastic debris, in the Demonstration Counties, through: (a) improving wastewater services in county seats and rural towns by integrating the operation and maintenance of treatment plants and collection networks and private sector participation; (b) preventing plastics from entering waterbodies through increased collection of agricultural plastic film and establishment of a related monitoring system; (c) reducing nutrient runoff through improved management and utilization of livestock/poultry manure; and (d) improving integrated urban-rural domestic solid waste collection and transportation systems and services. 4 SCHEDULE2 Program Execution Section I. Implementation Arrangements A. Financing Arrangements 1. For the purposes of carrying out the Program, the Borrower shall make available to the Program Implementing Entity the proceeds of the Loan, under terms and conditions acceptable to the Bank, including the following principal terms: (a) the principal amount shall be made available in Dollars, or any other Currency as the Loan may be converted from time to time through a Currency Conversion of the value of the currency or currencies so withdrawn (such principal amount determined on the date, or respective dates, of withdrawal from the Loan Account). (b) the principal amount so made available shall be recovered over a period of twenty- five (25) years, inclusive of a grace period of five (5) years. (c) interest shall be charged on such principal amount withdrawn and outstanding from time to time at a rate equal to the rate of interest applicable from time to time to the Loan pursuant to the provisions of Section 2.05 of this Agreement. (d) a Commitment Charge shall be charged equal to one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2. The Borrower shall cause the Program Implementing Entity to: (a) manage, operate, monitor, transfer and reconcile the proceeds of the Loan made available to it pursuant to paragraph 1 above in accordance with arrangements and procedures acceptable to the Bank; (b) take all required actions, including provision of timely consents and approvals as may be necessary, to facilitate the utilization of the proceeds of the said Loan and the implementation ofthe Program and, to enable the Program Implementing Entity to comply with its undertakings under the Program Agreement; and (c) maintain all relevant records and documents related to the Loan and the Program and provide promptly such documents and records, including all other information related to the Loan and the Program, as may be requested by the Borrower or the Bank from time to time. B. Program Action Plan The Borrower shall, and shall cause the Program Implementing Entity to take, all measures necessary to comply with, or all measures necessary to enable the Program Implementing Entity to comply with the provisions of Section I.B.2 of the Schedule to the Program Agreement. Section II. Excluded Activities The Borrower shall ensure that the Program excludes any activities which: 5 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 seventy-five million Dollars ($75,000,000) equivalent or more per contract; (2) goods, estimated to cost fifty million Dollars ($50,000,000) equivalent or more per contract; (3) non-consulting services, estimated to cost fifty million Dollars ($50,000,000) equivalent or more per contract; or (4) consulting services, estimated to cost twenty million Dollars ($20,000,000) equivalent or more per contract. Section III. Program Monitoring, Reporting and Evaluation The Borrower shall cause the Program Implementing Entity to 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 Program Implementing Entity, as measured against 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; 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 Disbursement (including (as applicable) the Loan Calculation Disbursement Allocated Formula (as Linked Indicator as (expressed applicable) applicable) in USD) (1) DLI #1: Improved DLR #1. 1: Hubei Province has 49,500,210 DLR #1.1: water environment approved an Integrated Water $9,500,042 management system in and Environment Management the demonstration sub- Plan covering the Qing River basins basin and the Hong Lake basin DLR #1.2: Hubei Province has DLR #1.2: operationalized a water $10,000,042 environment information 6 platform for the Yangtze River Basin in Hubei Province DLR #1.3: The Ecological Flow DLR #1.3: (a) Requirements and the Ecological $5,000,021 per CY Water Depth Requirements at for the Ecological approved control sections of the Flow Requirements Qing River and Hong Lake, complied with at respectively have been complied approved control with for at least 90% of the days sections of the Qing of the CY (excluding the days of River; and (b) Eligible Emergencies), starting $5,000,021 per CY in CY25 for Ecological Water Depth Requirements complied with at approved control sections of the Hong Lake (2) DLI #2: Land area DLR #2: 522 km2 of land area 49,999,770 DLR #2: $95,785 where Sustainable where Sustainable Land per km2 of land Land Management Management Practices with area where Practices with climate climate change considerations sustainable land change considerations have been implemented management have been practices with implemented climate change considerations have been implemented (3) DLI #3: Improved DLR #3.1: All Demonstration 60,000,030 DLR #3.1: township domestic Counties have issued an $773,730 per wastewater service Integrated Wastewater Demonstration systems Management Strategy County issuing an Integrated Wastewater Management Strategy DLR #3.2: All Demonstration DLR #3.2: County (except Xuan'en $773,730 per County) have established a Demonstration Wastewater Treatment Plant and County Network Integration establishing a Arrangement Wastewater Treatment Plant and Network Integration Arrangement DLR #3.3: 68,652 tons of COD DLR #3.3: $750 per have been reduced at township- ton of COD level wastewater treatment plants reduced in the Demonstration Counties 7 (4) DLI #4: DLR #4: All Demonstration 39,999,990 DLR #4: Demonstration Counties have met their $1,333,333 per Counties meeting the respective Annual Targets for Demonstration Annual Targets for Manure Utilization County meeting its Manure Utilization Annual Target for Manure Utilization (5) Front-end Fee to be 500,000 paid pursuant to Section 2.03 of this Agreement m accordance with Section 2.05(b) of the General Conditions (6) Interest Rate Cap or 0 Interest Rate Collar premmm to be paid pursuant to Section 4.05(c) of the General Conditions TOTAL AMOUNT 200,000,000 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; or (b) for any DLR under Categories (1) through (4), until the Program Implementing Entity has furnished evidence in accordance with the provisions of the Verification Protocol and acceptable to the Bank showing that the said DLR has been achieved. 2. Notwithstanding the provisions of Part B. l(b) of this Section, the Borrower may withdraw an amount not to exceed fifty million Dollars ($50,000,000) as an advance; provided, however, that if the DLRs in the opinion of the Bank, 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 Disbursement Calculation Formula to the Bank promptly upon notice thereofby 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 Category (1) through (4) has not been achieved by: (a) the date by which the said DLR is set to be achieved with respect to DLRs# 1.3 and 4; or (b) the Closing Date with respect to DLRs # 1.1, 1.2, 2 and 3; the Bank may, by notice to the Borrower: (a) authorize the withdrawal of such lesser amount of the unwithdrawn proceeds of the Loan then allocated to said Category which, in the opinion of the Bank, 8 corresponds to the extent of achievement of said DLR, said lesser amount to be calculated in accordance with the Disbursement Calculation Formula; (b) reallocate all or a portion of the proceeds of the Loan then allocated to said DLR to any other DLR; and/or (c) cancel all or a portion of the proceeds of the Loan then allocated to said DLR. 4. The Closing Date is December 31, 2028. 5. For purposes of, inter alia, Section 2.03 and 7.04 of the General Conditions, the term "Program Expenditures" means those expenditures incurred by the Program Implementing Entity under the budget codes and/or the accounts specified under selected fund programs as set forth in the Program Implementation Plan, and the expenditures financed out of the proceeds of the Loan, but excluding any expenditures associated with the Excluded Activities. 9 SCHEDULE3 Commitment-Linked Amortization Repayment 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"). •• IR epayments L eve IP rmc1pa Principal Payment Date Installment Share On each April 15 and October 15 Beginning April 15, 2028 through October 15, 2047 2.5% 10 APPENDIX Definitions 1. "Annual Targets for Manure Utilization" means the annual target ratio(%) of the amount (in tons) of livestock and poultry manure utilized (for organic fertilizer, biomass energy, or other means) by farms to the total amount (in tons) generated annually by large-scale pig, cow or chicken farms (or such other farms described in the Program Implementation Plan) in each Demonstration County, as set forth in the Program Implementation Plan. 2. "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. 3. "Category" means a category set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 4. "COD" means chemical oxygen demand. 5. "CY" means any calendar year starting on January 1 and ending December 31 within the period of Program implementation. 6. "CY25" means the calendar year starting on January 1, 2025 and ending December 31, 2025. 7. "CWRC" means the Yangtze River (Changjiang) Water Resources Commission established under the Ministry of Water Resources, or any successor thereto. 8. "Demonstration Counties" means the counties/cities of Badong, Enshi, Jianshi, Lichuan, Xuan'en in Enshi Prefecture and the city of Honghu in Jingzhou Municipality, and any successor thereto, or such other county as may be agreed between the Bank and the Program Implementing Entity. 9. "Disbursement Calculation Formula" means in respect of any DLR, the disbursement calculation formula set forth in the column entitled "Disbursement Calculation Formula (as applicable)" in the table in Section IV.A.2 of Schedule 2 to this Agreement. 10. "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. 11. "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. 12. "Ecological Flows Requirements" means the minimum and sensitive ecological flow targets set from time to time by the Program Implementing Entity in accordance with the 11 Borrower's prevailing technical standards and/or guidelines, including the targets for control sections in the Qing River, as set forth in the Integrated Water and Environment Management Plan. 13. "Ecological Water Depth Requirements" means the minimum water depth targets set from time to time by the Program Implementing Entity in accordance with the Borrower's prevailing technical standards and/or guidelines, including the targets for control sections in the Hong Lake, as set forth in the Integrated Water and Environment Management Plan. 14. "Eligible Emergencies" means emergencies duly declared by the Program Implementing Entity due to severe droughts, extreme water pollution events, or such other event specified in the Program Implementation Plan, all in accordance with the Borrower's and the Program Implementing Entity's prevailing laws and procedures, specified in the Program Implementation Plan. 15. "Enshi Prefecture" means Hubei Province's prefecture of the same name, or any successor thereto. 16. "Excluded Activities" means the activities that are referred to in Section II of Schedule 2 to this Agreement and Section II of the Schedule to the respective Program Agreement. 17. "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). 18. "Hubei 14th Five-Year Plan for Yangtze River Economic Belt Green Development" means Hubei Province's plan titled "Hubei Provincial 14 Five-Year Plan for Yangtze River Economic Belt Green Development" dated November 26. 2021, aimed at improving institutions and systems for green development, strengthening ecological environment protection, increasing resource use efficiency and promoting green lifestyle. 19. "Hubei Province" means the Borrower's province of the same name represented by its people's government, or any successor thereto. 20. "Hong Lake" means the lake of the same name located within Jingzhou Municipality. 21. "Integrated Wastewater Management Strategy" means a county-level strategy, acceptable to the Bank, to be issued by each of Demonstration Counties, setting out institutional arrangements, financial sustainability, performance-based measures for integrated operation and maintenance, including considerations on employment equity, a workforce roadmap for addressing gender gaps, and measures to increase climate resilience and promote low-carbon technologies. 22. "Integrated Water and Environment Management Plan" means a provincial plan, acceptable to the Bank, to be adopted by the Program Implementing Entity, setting out requirements on, inter alia, water quantity, water environment, water ecology, water security for a specific river/lake basin, incorporating the Ecological Flows Requirements and Ecological Water Depth Requirements based on a water balance analysis. 12 23. "Jingzhou Municipality" means Hubei Province's municipality of the same name, or any successor thereto. 24. "km?" means square kilometers. 25. "Ministry of Water Resources" means the Borrower's Ministry of Water Resources, or any successor thereto. 26. "Program Action Plan" means Program Implementing Entity's plan dated March 3, 2023 and referred to in Section LB of Schedule 2 to this Agreement and Section I.B.2 of the Schedule to the Program Agreement, as may be amended from time to time with the agreement of the Bank. 27. "Program Implementing Entity" means Hubei Province. 28. "Program Implementation Plan" means the plan, acceptable to the Bank, to be adopted by the Program Implementing Entity, setting forth, among other things: (a) guidelines, policies, procedures and requirements for the implementation of the Program, including the Program Action Plan, the Verification Protocol, and additional measures to strengthen the Program Implementing Entity's procurement, financial management, anti-corruption, environmental and social systems; (b) the institutional arrangements for the implementation of the Program, and the roles and responsibilities of the entities involved in Program implementation; and (c) monitoring and evaluation, reporting, auditing, and information disclosure arrangements, and the indicators and targets for purposes of monitoring and evaluation of the progress of the Program. 29. "Provincial Program Management Office" means the management office established by the Program Implementing Entity on November 11, 2021, within its provincial development and reform commission, and to be maintained in accordance with the provisions of Section I.B. l (a)(ii) of the Schedule to the Program Agreement. 30. "Provincial Program Steering Committee" means the steering committee established by the Program Implementing Entity and to be maintained in accordance with the provisions of Section I.B. l(a)(i) of the Schedule to the respective Program Agreement. 31. "Qing River" means Yangtze River's tributary of the same name flowing within Hubei Province. 32. "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. 33. "Sustainable Land Management Practices" means selected water and soil conservation measures set forth in the Program Implementation Plan that meet the Borrower's and the Program Implementing Entity's prevailing standards (as set forth in the Program Implementation Plan) and have operation and maintenance plans. 13 - . 34. "Verification Protocol" means the protocol setting forth the actions and mechanism required for verification ofDLRs, agreed with the Bank, dated March 3, 2023, and referred to in Section IV.B. l (b) of Schedule 2 to this Agreement, as the same may be amended from time to time with the prior written agreement of the Bank. 35. "Wastewater Treatment Plant and Network Integration Arrangement" means an arrangement, acceptable to the Bank, to be established by each Demonstration County in the form of a contract, an agreement or such other instrument set forth in the Program Implementation Plan, specifying the roles, responsibilities and performance standards for the provision of integrated wastewater services by service provider(s) assigned with the operation and maintenance of wastewater treatment plants and/or the sewage network. 36. "Xuan'en County" means the county of the same name within Enshi Prefecture, or any successor thereto. 3 7. "Yangtze River" means the river of the same name (also known as Changjiang), that flows through the territory of the Borrower. 38. "Yangtze River Basin" means the catchment area of the Yangtze River and its tributaries within the Borrower's territory. 14