LOAN NUMBER 9185-IN




           Project Agreement
(Nagaland: Enhancing Classroom Teaching and Resources Project)



                           between



             INTERNATIONAL BANK FOR
         RECONSTRUCTION AND DEVELOPMENT


                             and


                   STATE OF NAGALAND
                                   PROJECT AGREEME NT

        AGREEMENT between INTERNATIONAL BANK FOR RECONSTRUCTION AND
DEVELOPMENT ("Bank") and STATE OF NAGALAND ("Project Implementing Entity")
("Project Agreement") in connection with the Loan Agreement (Loan Agreement") of the
Signature Date between INDIA ("Borrower") and the Bank, concerning Loan No. 9185-IN. The
Bank 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 Loan 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 Loan 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 - REPRESENTATIVE; ADDRESSES

3.01.   The Project Implementing Entity's Representative is the Chief Secretary ofNagaland.

3.02.   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

3.03.   For purposes of Section 10.01 of the General Conditions:

        (a) the Project Implementing Entity's address is:
        Chief Secretary
        Government ofNagaland
                                              -2-




       Civil Secretariat
       Kohima 797004
                =


       Naga land; and

       (b) the Project Implementing Entity's Electronic Address is:

        Facsimile:             E-mail:

       +91-370-2270057         csngl@nic.in



AGREED as of the later of the two dates written below.


                                         INTERNATIONAL BANK FOR
                                         RECONSTRUCTION AND DEVELOPMENT


                                         By

                                                         Authorized Representative

                                                    Name; 7U)AS         no-tu Ph-aexs

                                                    Title: <?v97@&y_          ,
                                                                          0er<,        1987A


                                                    Date:    &eyes ''1_   372, 202,




                                                                          S     c.

                                                    Title:    210 EPP»         ?neoro(         Dee7   o#
                                                                                           I
                                                                                               ucet? SA
                                                    Date:    Feser®'?         2 2, 2o 2,
                                                 -3-




                                           SCHEDULE

                                     Execution of the Project

Section I.      Implementation Arrangements

A.      Institutional Arrangements

1.      The Project Implementing Entity shall vest the responsibility for the management and
        implementation of: (a) Parts 1, 2, 3.1, 3.2 and 3.3 of the Project in the Department of School
        Education (DSE), which shall implement the Project with the assistance of Participating
        Implementing Agencies; and (b) Part 3.4 of the Project in the Coordinating Authority.

2.      The Project Implementing Entity shall:

        (i)     maintain throughout the period of Project implementation, the Project steering
                committee, chaired by the chief secretary ofNagaland; which committee shall have
                composition, functions and responsibilities acceptable to the Bank, including
                providing oversight, guidance and authorization for Project implementation; and

        (ii)    maintain throughout the period of Project implementation, the Project
                Management Unit (PMU), headed by a Project director and comprising of
                experienced and qualified staff and consultants, in sufficient numbers and under
                terms ofreference acceptable to the Bank, which unit shall be responsible for day-
                to-day Project implementation and monitoring, and shall have functions and
                responsibilities acceptable to the Bank, including, inter alia: (a) preparing annual
                work plans and budgets and ensuring all Project activities are planned, financed
                and implemented accordingly; (b) ensuring Project implementation is in
                accordance with the Project Operations Manual (POM): (c) ensuring that
                procurement and financial management activities are carried out in timely manner
                in accordance with the POM; (d) ensuring social and environmental safeguards
                compliance; (e) monitoring Project activities; and (f) preparing Project progress
                reports and ensuring their timely submission to the Bank.

B.      Performance Incentive Grants

1.      For purposes of carrying out the activities under Part 1.3(d) of the Project, the Project
        Implementing Entity, through DSE or Participating Implementing Agencies, shall invite
        and competitively select SMCs and SMDCs for receiving Performance Incentive Grants,
        in accordance with the procedures and requirements set forth in the POM.

2.      The Project Implementing Entity, through DSE or Participating Implementing Agencies,
        shall ensure that the Performance Incentive Grants are made to selected SMCs and SMDCs
        ("Beneficiaries") in accordance with the eligibility criteria and procedures set forth in the
        POM.

3.      Upon selection of Beneficiaries, the Project Implementing Entity, through DSE or
        Participating Implementing Agencies, shall enter into a written agreement ( the "Subsidiary
                                        -4-




Agreement") with respective Beneficiary, under terms and conditions acceptable to the
Bank, as set forth in the POM, and pursuant to the respective template agreements
prescribed in the POM, which agreement shall provide, inter alia:

(i)     that the Beneficiary shall carry out activities financed by the Performance
        Incentive Grant with due diligence and efficiency and in accordance with sound
        technical, financial, environmental and managerial standards, including the
        provisions of the POM, the Anti-Corruption Guidelines and the ESCP;

(ii)    the requirement that the Performance Incentive Grant: (a) be used to finance only
        the eligible expenditures set forth in the POM; and (b) be disbursed upon
        achievement of specific, measurable, verifiable and attributable indicators/results
        by the Beneficiary as set forth in the respective Subsidiary Agreement and/or the
        Beneficiary's grant proposal;

(iii)   that the Beneficiary shall: (a) establish and/or maintain policies and procedures
        that would allow the Project Implementing Entity and/or the Bank to carry out
        supervision and monitor the implementation of activities under the Performance
        Incentive Grant: (ii) prepare and furnish to the Project Implementing Entity and/or
        the Bank, all such information that the Project Implementing Entity and/or the
        Bank shall reasonably request in relation to the Performance Incentive Grant; and
        (iii) accept random and/or unannounced physical or documentary inspections by
        the Project Implementing Entity and/or the Bank for the monitoring of, and in
        relation to, the carrying out of the Performance Incentive Grant;

(iv)    that the Beneficiary 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 Performance Incentive Grant;
        and (ii) whenever required by the Bank or the Project Implementing Entity, have
        such records and accounts audited in accordance with appropriate auditing
        principles consistently applied by an independent auditor;

(v)     the right of the Project Implementing Entity to suspend or terminate the right of
        the Beneficiary to withdraw and use the proceeds of the Performance Incentive           b
        Grant:
                                                                                                0
        (i)     upon any failure of the Beneficiary to perform its obligations under the
                Subsidiary Agreement; or

        (ii)    upon the Bank declaring the Beneficiary ineligible under the Anti-
                Corruption Guidelines;

(vi)    the Project Implementing Entity's right of restitution of any amounts disbursed to
        the Beneficiary under the Performance Incentive Grant with respect to which fraud
        and corruption has occurred, or with which an ineligible expenditure has been paid;
        and
                                                     -5-




            (vii)    the closing date for the Performance Incentive Grant, which date shall fall on or
                     before the date set forth in Section III.B.2 of Schedule 2 to the Loan Agreement.

    4.      The Project Implementing Entity shall exercise its rights under the Subsidiary Agreement
            in such manner as to protect the interests of the Borrower and the Bank and to accomplish
t           the purposes of the Loan. Except as the Bank shall otherwise agree, the Project
            Implementing Entity shall not assign, amend, abrogate or waive the Subsidiary Agreement
I           or any of its provisions.

    C.       Project Operations Manual

         The Project Implementing Entity shall:

            (a)       prepare, approve and adopt a Project Operations Manual (POM) in a manner and
                      substance satisfactory to the Bank, and thereafter carry out the Project in
                      accordance with the provisions of the POM, which manual shall include, inter
                      alia: (i) the details of the Project activities including results framework and
                      overall budget; (ii) the Project implementation arrangements; (iii) details on the
                      Performance Incentive Grants, including eligibility criteria, selection criteria and
                      procedure, template for the Subsidiary Agreement, implementation arrangements
                      and monitoring and reporting mechanisms; (iv) the fonnat of the interim
                      unaudited financial reports to be submitted under the Project; (v) the Project's
                      administrative, accounting, auditing, reporting, financial management and
                      procurement requirements; (vi) the Project's environmental and social safeguard
                      requirements; and (vii) the Project's monitoring and evaluation, and reporting
                      requirements; and

             (b)      refrain from amending, suspending, waiving, and/or voiding any provision of the
                      POM, whether in whole or in part, without the prior written concurrence of the
                      Bank.

    2.     In the event of a conflict between the provisions of the POM and those of this Agreement
           and/or the Loan Agreement, the provisions of the latter agreements shall govern.

    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 Bank.

    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 Bank. 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;
                                              -6-




     (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 Bank 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 the Loan Agreement
     and/or this Agreement, the provisions of the latter agreements shall prevail.

4.   The Project Implementing Entity shall ensure that:

     (a)     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, infonnation 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: (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 Bank 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 enviromnent, the affected communities, the public or workers, 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 Bank.

6.   The Project Implementing Entity shall ensure that all bidding documents and contracts for
     civil works under the Project include the obligation of contractors, subcontractors and
                                                                                                       1
     supervising entities to: (a) comply with the relevant aspects ofESCP 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.

E.   Contingent Emergency Response

l.   In order to ensure the proper implementation of activities under the Contingent Emergency
     Response Component (CER Component), the Project Implementing Entity shall:
                                            .7-




     (a)    prepare and furnish to the Bank for its review and approval, a Contingent
            Emergency Response Component Manual (CERCM) which shall set forth detailed
            implementation arrangements for the CER Component, including: (i) desig      nation
            of, terms of reference for and resources to be allocated to, the entity or entities to
            be responsible for the coordination and implementation of the CER Component
            ("Coordinating Authority"); (ii) specific activities which may be included in the
            CER Component, eligible expenditures required therefor ("Emergency
            Expenditures"), and any procedures for such inclusion; (iii) financial management
            arrangements for the CER Component; (iv) procurement methods and procedures
            for the CER Component; (v) documentation required for withdrawals of
            Emergency Expenditures; (vi) application of any relevant safeguards instruments
            to the CER Component; and (vii) any other arrangements necessary to ensure
            proper coordination and implementation of the CER Component;

     (b)     afford the Bank a reasonable opportunity to review the proposed CERCM;

     (c)     promptly adopt the CERCM for the CER Component as accepted by the Bank:

     (d)     ensure that the CER Component is carried out in accordance with the CERCM;
             provided, however, that in the event of any inconsistency between the provisions
             of the CERCM and this Agreement and/or the Loan Agreement, the provisions of
             the latter agreements shall prevail; and

     (e)     not amend, suspend, abrogate, repeal or waive any provision of the CERCM
             without the prior written approval by the Bank.

2.   After the Borrower and the Project Implementing Entity have determined that an Eligible
     Crisis or Health Emergency has occurred, the Project Implementing Entity shall prepare
     and furnish to the Bank for its review and approval, in accordance with the provisions set
     forth in the CERCM, a Contingent Emergency Response Implementation Plan ("CERIP")
     which shall set forth detailed arrangements for the activation of CER Component,
     including: (i) specific activities to be financed out of the Emergency Expenditures:
     (ii) itemized costs for each expenditure item; (iii) implementation arrangements for the
     CER Component, as defined in the CERCM or with proposed amendments;
     (iv) procurement plan for the CER Component; (v) details regarding compliance with
     environmental and social safeguard instruments; and (vi) any other arrangements necessary
     to ensure proper implementation of the CER Component.

3.   The Project Implementing Entity shall, throughout the period of implementation of the
     CER Component, maintain the Coordinating Authority, with adequate staff and resources
     satisfactory to the Bank.

4.   The Project Implementing Entity shall undertake no activities under the CER Component
     (and no activities shall be included in the CER Component) unless and until the following
     conditions have been met in respect of said activities:

     (a)     (i) the Borrower and the Project Implementing Entity have determined that an
             Eligible Crisis or Health Emergency has occurred; (ii) the Project Implementing
                                                -8-




                Entity has furnished to the Bank a request to include said activities in the CER
                Component in order to respond to said Eligible Crisis or Health Emergency; and
                (iii) the Bank has agreed with such detennination, accepted said request and
                notified the Project Implementing Entity thereof; and

        (b)     (i) the Project Implementing Entity has prepared and disclosed all safeguard
                instruments required for said activities, in accordance with the CERCM: (ii) the
                Bank has approved all such instruments; and (iii) the Project Implementing Entity       i
                has implemented all actions which are required to be taken under said instruments
                prior to the commencement of such activities.

Section II.     Project Monitoring. Reporting and Evaluation


 1.     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 indicators acceptable to the Bank. Each such Project Report
        shall cover the period of one calendar semester, and shall be furnished to the Bank not later
        than forty-five (45) days after the end of the period covered by such report.

 2.     The Project Implementing Entity shall prepare, under terms ofreference satisfactory to the
        Bank, and furnish to the Bank no later than forty-two (42) months from the Effective Date,
        a consolidated mid-term review report for the Project. summarizing the results of the
        monitoring and evaluation activities carried out from the inception of the Project, and
        setting out the measures recommended to ensure the efficient completion of the Project and
        to further its objective.

Section Ill.    Other Undertakings

The Project Implementing Entity shall:

         (a) ensure that the Project's activities involving collection, storage, usage, and/or
             processing of Personal Data are carried out with due regard to the Borrower's existing
             legal framework and appropriate international data protection and privacy standards
             and practices;

         (b) in the event that, during the implementation of the Project, the approval of any new
             legislation regarding Personal Data protection may have an impact on the activities
             financed by the Project, ensure that a technical analysis of said impact is conducted,
             and that the necessary recommendations and adjustments, are implemented, as
             appropriate; and

         ( c) except as may otherwise be explicitly required or permitted under this Agreement
              and/or the Loan Agreement, or as may be explicitly requested by the Bank, in sharing
              any information, report or document related to the activities described in Schedule I
              to the Loan Agreement, ensure that such information, report or document does not
              include Personal Data.