CREDIT NUMBER 7144-NP Project Agreement (Digital Nepal Acceleration Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and NEPAL TELECOMMUNICATIONS AUTHORITY PROJECT AGREEMENT AGREEMENT between INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") and NEPAL TELECOMMUNICATIONS AUTHORITY ("Project Implementing Entity") ("Project Agreement") in connection with the Financing Agreement ("Financing Agreement") of the Signature Date between Nepal ("Recipient) and the Association, concerning Credit No. 7144-NP. 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 Part 1 of 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 its Respective Part of 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 years after the Signature Date. ARTICLE IV REPRESENTATIVE; ADDRESSES 4.01. The Project Implementing Entity's Representative is Chairman. 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 -2- (b) the Association's Electronic Address is: Telex: Facsimile: E-mail: 248423(MCI) or 1-202-477-6391 secretary@mof.gov .np 4.03. For purposes of Section 11.01 of the General Conditions: (a) the Project Implementing Entity's address is: Nepal Telecommunications Authority Kantipath, Jamal, Kathmandu G.P.O. Box No. 9754 Kathmandu, Nepal; and (b) the Project Implementing Entity's Electronic Address is: Facsimile: E-mail: +977-1-5355250 chairman@nta.gov.np -3- AGREED as of the later of the two dates written below. INTERNATIONAL DEVELOPMENT ASSOCIATION By Ztdlepre sbntative Name: Faris H. Hadad-Zervos Title: Country Director for Maldives, Nepal and Sri Lanka Date: September 18, 2022 NEPAL TELECOMMUNICATION AUTHORITY % By Authorized Representative Name: Purushottam Khanal Title: Chairman Date: Nepal Telecommunications Authority - 4- SCHEDULE Execution of the Project Implementing Entity's Respective Part of the Project Section I. Implementation Arrangements A. Institutional Arrangements. The Project Implementing Entity shall establish within one (1) month from the Effective Date a Project Implementation Team to be headed by a focal point, to oversee and manage the activities under its Respective Part of the Project. The focal point will be responsible to liaise with the PMU to provide reports, official documents, manage correspondence, and ensure completion of all Project-related administrative and operational actions as needed from a technical perspective B. Project Operations Manual 1. The Project Implementing Entity shall adopt the Project Operations Manual for its Respective Part of the Project in form and substance satisfactory to the Association, including, inter alia: (i) the Project administrative, accounting, auditing, reporting, financial, disbursement and procurement procedures, as agreed with the Association. 2. The Project Implementing Entity shall ensure that its Respective Part of the Project is carried out in accordance with the arrangements and procedures set out in the Project Operations Manual, provided, however, that in the case of any conflict between the arrangements and procedures set out in the Project Operations Manual and the provisions of this Agreement, the provisions of this Agreement shall prevail. 3. Subsidiary Agreement (a) The Project Implementing Entity shall enter into a Subsidiary Agreement with the Recipient, which shall include the provisions set out in Section I.B of Schedule 2 to the Financing Agreement. (b) The Project Implementing Entity shall exercise its rights, and carry out its obligations, under the Subsidiary Agreement in such manner as to protect the interests of 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 the Subsidiary Agreement or any of its provisions. -5- C. Specific Implementation Arrangements under Part 1.1 (b) of the Project 1. Sub-projects: For purposes of carrying out Part l.l(b) of the Project, the Project Implementing Entity, shall, after selection of the SP of a Sub-project, in accordance with the provisions of this Agreement and the Grant Manual, and before the eligible SP carries out any activity under said Sub-project, enter into an agreement with the eligible SP ("Sub-project Agreement"), under terms and conditions satisfactory to the Association as set forth in the Grant Manual, which shall include, inter alia: (a) the Project Implementing Entity's obligation to provide a Grant to the said SP; and (b) the obligation of the SP to carry out the Sub-project in accordance with the pertinent provisions of this Agreement, including compliance with the Anti-Corruption Guidelines, the Environmental and Social Standards and the Procurement Regulations. 2. The Project Implementing Entity shall exercise its rights and carry out its obligations under each Sub-project Agreement in such manner as to protect the interests of the Recipient, Project Implementing Entity, and the Association and to accomplish the purposes of the Grant. Except as the Association shall otherwise agree, the Project Implementing Entity shall not assign, amend, abrogate, waive, terminate, or fail to enforce any Sub-project Agreement or any provisions thereof. 3. The Project Implementing Entity shall ensure that the SP carries out the activities under Part 1.1 (b) of the Project: (a) with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social standards and practices satisfactory to the Association, including the provisions of the Anti-Corruption Guidelines applicable to recipients of the proceeds of the Grant other than the Recipient; and (b) consistent with the requirements set forth in this Agreement and the Grant Manual. 4. If the SP fails to perform any of its obligations, the Project Implementing Entity has the right to suspend or terminate SP' s right to use the proceeds of the Grant, or to obtain a refund of all or any part of the amount of the Grant then withdrawn. D. 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. 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: -6- (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 ofimplementing the ESCP; (c) 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 (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, 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) 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 instruments 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 shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, -7- and subcontractors and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental 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. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports. 1. The Project Implementing Entity shall monitor and evaluate the progress of its Respective Part of the Project and prepare Project Reports for its Respective Part of the Project 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 Fiscal Quarter and shall be furnished to the Recipient not later than 30 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. 2. The Project Implementing Entity shall provide to the Recipient not later than six months after the Closing Date, for incorporation in the report referred to in Section 5.08 (c) of the General Conditions all such information as the Recipient or the Association shall reasonably request for the purposes of such Section.