Boutheina Guermazi Director, Regional Integration Africa and Middle East and North Africa 24-Feb-2023 Date:_______________ Honorable Sosten Alfred Gwengwe MP Minister of Finance Ministry of Finance P.O. Box 30049 Capital City Lilongwe 3 Malawi Re: Republic of Malawi: Advance Agreement for Preparation of Proposed SADC Regional Statistics Project Project Preparation Advance No. V465-MW Honorable Minister: In response to the request for financial assistance made on behalf of the Republic of Malawi (“Recipient”), I am pleased to inform you that the International Development Association (“Bank”) proposes to extend to the Recipient an advance out of the Bank’s Project Preparation Facility in an amount not to exceed One million one hundred thirty four thousand Dollars ($1,134,000) (“Advance”) on the terms and conditions set forth or referred to in this letter agreement (“Agreement”), which includes the attached Annex, to assist in financing the activities described in the Annex (“Activities”). The objective of the Activities is to facilitate the preparation of a proposed project designed to strengthen the institutional capacity of SADC and participating countries through production, dissemination and use of quality statistics, while increasing harmonization and regional collaboration (“Project”) for the carrying out of which the Recipient has requested the Bank’s financial assistance. The Recipient represents, by confirming its agreement below, that: (a) it understands that the provision of the Advance does not constitute or imply any commitment on the part of IBRD or IDA to assist in financing the Project; and (b) it is authorized to enter into this Agreement and to carry out the Activities, repay the Advance and perform its other obligations under this Agreement, all in accordance with the provisions of this Agreement. -2- Please confirm the Recipient’s agreement to the foregoing by having an authorized official of the Recipient sign and date the enclosed copy of this Agreement, and returning it to the Bank. Upon receipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date of the countersignature; provided, however, that the offer of this Agreement shall be deemed withdrawn if the Bank has not received this countersigned copy within 90 days after the date of signature of this Agreement by the Bank, unless the Bank has established a later date for such purpose. Very truly yours, INTERNATIONAL DEVELOPMENT ASSOCIATION By ________________________________________/ps1/ Boutheina Guermazi Director of Regional Integration Africa and Middle East and North Africa AGREED: REPUBLIC OF MALAWI By : _______________________________/ps2/ Authorized Representative Name: Honorable Sosten Alfred Gwengwe MP /pn2/ Title: Minister of Finance and Economic Affairs and member of Parliament for Lilongwe Msozi North/pt2/ 15-Mar-2023 Date __________________________/pd2/ Enclosures: (1) “Standard Conditions for Advances Made by the Bank under its Project Preparation Facility”, dated August 1, 2022; and (2) Disbursement and Financial Information Letter for the Advance of the same date as this Agreement, together with “Disbursement Guidelines for Investment Project Financing”, dated February 2017. -3- PPA No. V465-MW ANNEX Article I Standard Conditions; Definitions 1.01. Standard Conditions. The Standard Conditions (as defined in Section 1.02 below) constitute an integral part of this Agreement. 1.02. Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Standard Conditions or in this Section (a) “Anti-Corruption Guidelines” means, for purposes of paragraph 11 of the Appendix to the Standard Conditions, the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006, and revised in January, 2011, and as of July 1, 2016. (b) “Category” means a category set forth in the table in Section 3.01 of this Agreement. (c) “Environmental and Social Commitment Plan” or “ESCP” means the environmental and social commitment plan for the Project, dated December 2022, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. (d) “Environmental and Social Standards” or “ESSs” means, collectively: (i) “Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts”; (ii) “Environmental and Social Standard 2: Labor and Working Conditions”; (iii) “Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management”; (iv) “Environmental and Social Standard 4: Community Health and Safety”; (v) “Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement”; (vi) “Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources”; (vii) “Environmental and Social Standard 7: Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities”; (viii) “Environmental and Social Standard 8: Cultural Heritage”; (ix) “Environmental and Social Standard 9: Financial Intermediaries”; (x) “Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure”; effective on October 1, 2018, as published by the Bank. (e) “NSO” or “National Statistics Office” means the Recipient’s government department which is the central depository of all official statistics produced in Malawi, established pursuant to the National Statistics Act of 2013. -4- (f) “Operating Costs” means the incremental operating expenditures incurred by the Recipient through the NSO on account of the implementation of the Activities, management, monitoring and evaluation, including office supplies, vehicles operation and maintenance cost, vehicle rental and fuel costs, maintenance of equipment, communication costs, office rental and moving expenses, utilities expenses, consumables, printing and publication costs, bank charges, transport and accommodation, per diem, and salaries of locally contracted support staff (excluding the salaries of Recipient’s civil servants) and other miscellaneous costs directly associated with the implementation of the Activities as shall be agreed with the Bank. (g) “Procurement Regulations” means, for purposes of paragraph 50 of the Appendix to the Standard Conditions, the “World Bank Procurement Regulations for IPF Borrowers”, dated November 2020. (h) “SADC” means Southern African Development Community. (i) “Standard Conditions” means the “Standard Conditions for Advances Made by the Bank under its Project Preparation Facility”, dated August 1, 2022. (j) “Training” means the reasonable costs associated with training and workshop participation under the Activities, consisting of travel and subsistence costs for Training participants, costs (other than consulting services) associated with securing the services of trainers and presenters, rental of training facilities, translation and interpretation services, preparation and reproduction of training materials. Article II Execution of the Activities 2.01. Description of the Activities. The Activities for which the Advance is provided consist of the following parts: (a) Establishment of an implementation unit under the NSO for the Project through, inter alia, the hiring of staff, including a project manager, a financial management specialist, a procurement specialist, an environmental and social specialist, and a monitoring and evaluation specialist. (b) Carrying out the preparation of household surveys, agricultural census, economic activities census, including the purchase of survey instruments and material required for the purpose. (c) Provision of training to trainers, to personnel to supervise the undertaking of surveys, and to data collectors. 2.02. Execution of the Activities Generally. The Recipient declares its commitment to the objectives of the Activities. To this end, the Recipient shall carry out the Activities through the NSO in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) this Article II; and (c) the Anti-Corruption Guidelines. 2.03. Institutional and Other Arrangements. Without limitation upon paragraph 2.02 above, the Recipient shall, ensure that not later than three (3) months after the signature of this Advance, -5- a full-time Accountant, a minimum of one (1) senior accounts clerk, and a Procurement Specialist, all with terms of reference, qualifications and experience satisfactory to the Bank, are assigned and thereafter maintained throughout the Refinancing Date for the purpose of the implementation of the Activities. 2.04. Environmental and Social Standards. (a) The Recipient shall ensure that the Activities are carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Bank. (b) Without limitation upon paragraph (a) above, the Recipient shall ensure that the Activities are implemented in accordance with the Environmental and Social Commitment Plan (“ESCP”), in a manner acceptable to the Bank. To this end, the Recipient shall ensure that: (i) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (ii) sufficient funds are available to cover the costs of implementing the ESCP; (iii) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (iv) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Bank shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. (c) In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. (d) The Recipient shall ensure that: (i) all measures necessary are taken 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 environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Bank, setting out, inter alia: (A) the status of implementation of the ESCP; (B) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (C) corrective and preventive measures taken or required to be taken to address such conditions; and (ii) the Bank is promptly notified of any incident or accident related to or having an impact on the Activities which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the ESCP, the environmental -6- and social instruments referenced therein and the Environmental and Social Standards. (e) The Recipient shall establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Activities-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 Bank. 2.05. Monitoring, Reporting and Evaluation of the Activities. The Recipient shall ensure that each Activity Report is furnished to the Bank not later than one (1) month after each calendar quarter, covering the calendar quarter. Article III Withdrawal of the Advance 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Advance in accordance with the provisions of: (a) Article III of the Standard Conditions; and (b) this Section, to finance Eligible Expenditures as set forth in the following table. The table specifies each category of Eligible Expenditures that may be financed out of the proceeds of the Advance (“Category”), the amount of the Advance allocated to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Category Amount of the Advance Percentage of Allocated Expenditures to be (expressed in Dollars) Financed (inclusive of Taxes) Goods, Training, Operating 1,134,000 100% Costs, non-consulting services and consulting’ services under the Activities TOTAL AMOUNT 1,134,000 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawal shall be made for payments made prior to the date of countersignature of this Agreement by the Recipient. 3.03. Refinancing Date. The Refinancing Date is October 31, 2023. Article IV Terms of the Advance 4.01. Refinancing under the Refinancing Agreement: If, on or before the Refinancing Date, a Refinancing Agreement has been executed by all of its parties, then the full amount of the Withdrawn Advance Balance shall be paid to the Bank as soon as the Refinancing Agreement -7- becomes effective, by means of a withdrawal by the Bank of such amount of the Refinancing Proceeds, in accordance with the provisions of the Refinancing Agreement. 4.02. No Repayment in the absence of a Refinancing Agreement: Notwithstanding any provision to the contrary in the Standard Conditions, if, on or before the Refinancing Date, no Refinancing Agreement has been executed by all of its parties, or if, by such date, it has been so executed but terminates without becoming effective, then the Recipient shall not be obligated to repay the Withdrawn Advance Balance. Article V Recipient’s Representative; Addresses 5.01. Recipient’s Representative. The Recipient’s Representative referred to in Section 9.02 of the Standard Conditions is its minister responsible for finance. 5.02. Recipient’s Address. For purposes of Section 9.01 of the Standard Conditions: (a) the Recipient’s Address is: Ministry of Finance P.O. Box 30049 Capital City Lilongwe 3 Malawi (b) the Recipient’s Electronic Address is: 5.03. Bank’s Address. For purposes of Section 9.01 of the Standard Conditions: (a) the Bank’s Address is: International Development Association 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)