OFFICIAL DOCUMENTS GRANT NUMBER D985-TD Financing Agreement (Chad Energy Access Scale-Up Project) between REPUBLIC OF CHAD and INTERNATIONAL DEVELOPMENT ASSOCIATION GRANT NUMBER D985-TD FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between the REPUBLIC OF CHAD ("Recipient") and the INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for the purpose of assisting in financing the project described in Schedule 1 to this Agreement ("Project"). The Association has decided to provide this financing on the basis, among other things, of the existence of an adequate refugee protection framework. The Recipient and the Association 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 - FINANCING 2.01. The Association agrees to extend to the Recipient a grant, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to two hundred and twelve million Special Drawing Rights (SDR 212,000,000) ("Financing"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.04. The Payment Dates are March 15 and September 15 in each year. 2.05. The Payment Currency is Euro. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient, through its Ministry of Petroleum and Energy, shall carry out Parts 1.3, 2, 3, 4.1(a), 4.2, 4.3 and 5 of the Project, and shall cause Parts 1.1, 1.2 and 4.1(b) of the Project to be carried out by the Project Implementing Entity, in accordance with the provisions of Article V of the General Conditions, Schedule 2 to this Agreement and the Project Agreement. -2- ARTICLE IV- REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension consists of the following, namely that the Recipient no longer has an adequate refugee protection framework. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) the Association is satisfied that the Recipient has an adequate refugee protection framework; (b) the Subsidiary Agreement shall have been executed by the Recipient and the Project Implementing Entity, in form and substance satisfactory to the Association, and in accordance with Section I.B. of Schedule 2 to this Agreement, and satisfactory evidence shall have been provided to the Association that the Subsidiary Agreement is binding on the Recipient and the Project Implementing Entity in accordance with its terms; (c) the Recipient shall prepare and approve the Security Management Plan, and disclose a summary thereof, in form and substance satisfactory to the Association, and in accordance with the ESCP; and (d) the Recipient shall have caused the Project Implementing Entity to recruit for the Project: (i) an environmental specialist; (ii) a social specialist; (iii) an organizational health and safety specialist; and (iv) a sexual exploitation and abuse and sexual harassment specialist; all with terms of reference, qualifications, integrity and experience satisfactory to the Association. 5.02. The Effectiveness Deadline is the date one hundred and twenty (120) days after the Signature Date. 5.03. For purposes of Section 10.05(b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the Signature Date. -3- ARTICLE VI- REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its minister responsible for economy, development planning and international co-operation. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Economy and Development Planning and International Cooperation B.P. 286 N'Djamena Republic of Chad; and (b) the Recipient's Electronic Address is: Facsimile: (+235) 22 51 51 85 or (+235) 22 51 45 87 6.03. For purposes of Section 11.01 of the General Conditions: (a) the Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) (+1) 202-477-6391 -4- AGREED as of the Signature Date. REPUBLIC OF CHAD By Authorized Representative Name: Title: ___ __ Date: tmL INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: r \ Title: Date: -5- SCHEDULE 1 Project Description The objective of the Project is to increase access to electricity and clean cooking in Chad. . The Project consists of the following parts: Part 1: Electrification via grids Support the continued electrification ofN'Djamena and select secondary cities and provide electricity access to additional select secondary cities by: 1.1 Expanding electricity access and densifying the electric grid in N'Djamena through investments in power distribution facilities, battery storage, support to private investment in power generation capacity, related studies and financing of costs relating to services of Owner's Engineer. 1.2 Expanding electricity access in select secondary cities operated by SNE, to connect additional households, through rehabilitation or construction of power generation units and distribution facilities, battery storage, and support to private investment in power generation and distribution capacity. 1.3 Electrifying additional select secondary cities, including in the vicinity of refugee camps, through support to private investment: (a) towards the financing of mini- grids and isolated power systems, solar, photovoltaic and battery storage, and related studies, and (b) through Capital Expenditures Subsidies and/or RBF Subsidies. Part 2: Electrification via standalone solar systems Support electricity access for productive uses, public entities and households, including refugees and host communities through: 2.1 Electricity access for productive uses and households through: (a) financing of RBF Subsidies and/or Capital Expenditures Subsidies to support the provision of (i) solar-powered energy production and related energy use equipment for productive uses, (ii) including solar water pumps, and (iii) solar-home systems; and (b) related awareness-raising activities and technical assistance to the Recipient for the adoption of adequate regulatory standards and maintenance for the operation of solar-home systems. 2.2 Electrification of public entities by: (a) supporting the supply, installation and maintenance in select medical centers and schools of solar photovoltaic-based -6- energy systems, storage and related necessary appliances, and (b) financing internet access and small at-home solar lights for students. Part 3: Clean cooking and natural resource management Implement a strategy in two consecutive phases to reduce and diversify fuelwood consumption and strengthen the Recipient's institutions towards sustainable management of natural resources in areas affected by refugee influx by: 3.1 Providing an assessment of fuelwood demand and supply chains in the Recipient's territory and institutional setting (phase 1), through necessary studies, capacity- building and piloting activities on the supply and demand of fuelwood and alternative cooking options. 3.2 Supporting improved and modem/clean cooking options (phase 2) to reduce energy needs, including inter alia awareness-raising, and financing of RBF Subsidies. 3.3 Supporting activities towards restoration of degraded forests in the Recipient's territory and sustainable natural resource management, through: (a) encouraged community participation and management of natural and forest resources; (b) technical assistance to support the Recipient's forest management agency in setting up necessary geographical information systems; and (c) capacity-building to monitor and assess sustainable fuelwood supply. Part 4: Project management and technical assistance 4.1 Costs associated with Project management and supervision by: (a) the Recipient on: (i) technical, (ii) fiduciary, (iii) environmental and social, (iv) monitoring and evaluation aspects, and (v) including Operating Costs and Training; and (b) the Project Implementing Entity on: (i) technical, (ii) fiduciary, (iii) environmental and social, (iv) monitoring and evaluation aspects, and (v) including Operating Costs and Training. 4.2 Consultancies and studies, including preparation of environmental and social instruments, in support of Project implementation and future activities in the energy sector. 4.3 Institutional capacity-building and technical assistance to MPE, SNE, ADERM and ARSE for purposes of planning, procurement, technological, and operational support, including establishment of a monitoring unit within MPE to assist implementation and coordination of the Project. Part 5: Contingent Emergency Response Component -7- Provision of immediate response to an Eligible Crisis or Emergency, as needed. -8- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. The Recipient shall: (a) have overall responsibility for the Project; (b) carry out Parts 1.3, 2, 3,4.1(a), 4.2, 4.3 and 5 of the Project through its Ministry of Petroleum and Energy, including a specially designated monitoring unit, operating with roles, mandate, resources and responsibilities to be further set out in the Project Implementation Manuals; and (c) cause the Project Implementing Entity ("SNE") to carry out Parts 1.1, 1.2, and 4.1(b) of the Project. 2. For purposes of Project implementation, the Recipient shall, and shall cause SNE to, maintain the following functions throughout Project implementation, all with mandate, compositions, terms of reference, resources and staffing satisfactory to the Association and further set out in the Project Implementation Manuals: (a) the MPE-PIU, which shall be established not later than December 31, 2022, or any other later date agreed upon in writing with the Association, and thereafter maintained throughout Project implementation, and be responsible for day-to-day implementation on technical, fiduciary, environmental and social, and monitoring and evaluation aspects of Parts 1.3, 2, 3, 4.1(a), 4.2, 4.3 and 5 of the Project; and (b) the SNE-PIU, which shall be responsible for day-to-day implementation on technical, fiduciary, environmental and social, and monitoring and evaluation aspects of Parts 1.1, 1.2 and 4.1(b) of the Project. 3. Without prejudice to Section 2(a) immediately above, the Recipient shall ensure that MPE-PIU is composed at all times during Project implementation of at least the following key staff: (a) a procurement specialist; (b) a financial management specialist; (c) an accountant; (d) an environmental specialist; (e) a social specialist; (f) an organizational health and safety specialist; and (g) subject-matter specialists in adequate numbers in the areas of rural electrification, mini-grids, productive use of energy, energy access for refugees and host communities and clean cooking; all with terms of reference, integrity, qualifications and experience satisfactory to the Association. 4. Without prejudice to Section 2(b) above, the Recipient shall ensure, and cause the Project Implementing Entity to ensure, that the SNE-PIU is at all times during Project implementation: (a) supported by the Owner's Engineer, for purposes of supervision of construction works under Part 1.1. of the Project; and (b) staffed -9- with personnel in adequate numbers, including at least: (i) a procurement specialist; (ii) a financial management specialist; (iii) an environmental specialist; (iv) a social specialist; (v) an organizational health and safety specialist; and (vi) a sexual exploitation and abuse and sexual harassment specialist; all with terms of reference, qualifications, integrity and experience satisfactory to the Association. 5. The Recipient shall maintain at all times during Project implementation ARSE and ADERM, for purposes of Project implementation, under modalities and with staffing and resources satisfactory to the Association. B. Subsidiary Agreement 1 . To facilitate the carrying out of the Project Implementing Entity's Respective Parts of the Project, the Recipient shall make part of the proceeds of the Financing allocated from time to time to Categories (1) or (3) of the table set forth in Section III.A. of this Schedule, available to the Project Implementing Entity ("On- Granting") under a subsidiary agreement between the Recipient and the Project Implementing Entity, under terms and conditions approved by the Association ("Subsidiary Agreement"). 2. The Subsidiary Agreement shall provide inter alia the following: (a) the On-Granting shall: (i) be denominated in Euro; and (ii) be the equivalent in Euro (determined as of the date or respective dates of withdrawal from the Grant Account) of the value of the currency or currencies withdrawn from the Grant Account or paid out of the Designated Account for the Project on account of the cost of works, goods, services, training and Operational Costs and to be financed under the Subsidiary Agreement out of the proceeds of the Financing allocated from time-to-time to Categories (1) or (3); (b) the Recipient shall: (i) require SNE to: (A) carry out the Project Implementing Entity's Respective Parts of the Project with due diligence and efficiency and in accordance with sound technical, economic, energy, financial, managerial, environmental, and social standards and practices satisfactory to the Association, including in accordance with the provisions of this Agreement, the ESCP, the Project Implementation Manuals and the Anti-Corruption Guidelines applicable to recipients of loan proceeds other than the Recipient; and (B) provide, promptly as needed, the resources required for the purpose; and (ii) without limitation upon the provisions of Section 5.03 of the General Conditions, provide, or cause to be provided, adequate security to SNE, the contractors, sub- contractors and other parties involved in the implementation of the Project Implementing Entity's Respective Parts of the Project; and -10- (c) the Recipient shall obtain rights and specify SNE's obligations adequate to protect the interests of the Recipient and those of the Association, including: (i) the right to suspend or terminate the right of SNE to use the proceeds of the Financing or to obtain a refund of all or any part of the amount of the On-Granting then withdrawn, upon SNE's failure to perform any of its obligations under the Subsidiary Agreement; (ii) SNE's obligation to maintain policies and procedures adequate to enable it to monitor and evaluate, in accordance with the monitoring and evaluation indicators, the progress of the Project Implementing Entity's Respective Parts of the Project and the achievement of its objectives; (iii) SNE's obligation: (A) to maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association, both in a manner adequate to reflect the operations, resources and expenditures related to the Project; and (B) at the Association's or the Recipient's request, to have such financial statements audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association, and promptly furnish the statements as so audited to the Recipient and the Association; (iv) SNE's obligation to enable the Recipient and the Association to inspect the Project, its operation and any relevant records and documents; (v) SNE's obligation to comply with the ESCP; and (vi) SNE's obligation to prepare and furnish to the Recipient and the Association all such information as the Recipient or the Association shall reasonably request relating to the foregoing. 3. Unless agreed otherwise in writing with the Association, the Subsidiary Agreement shall set out modalities and procedures acceptable to the Association pursuant to which the Project Implementing Entity shall carry out on an interim basis, until December 31, 2022 or until the establishment of the MPE-PIU, whichever date falls the earliest, or any other later date agreed upon in writing with the Association, selected activities under Parts 1.3(a), 2.2(a), 4.1(a)(ii) and (iii), and 4.2, as allocated under Category (3). 4. The Recipient shall exercise its rights 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 Recipient shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. Notwithstanding the foregoing, if any of the provisions of the Subsidiary Agreement is inconsistent with the provisions of this Agreement or the Project Implementation Manuals, as the case may be, the provisions of this Agreement shall prevail and govern. -11- C. Project Implementation Manuals 1. The Recipient and the Project Implementing Entity shall each, prepare and maintain, in accordance with terms of reference acceptable to the Association, Project Implementation Manuals, containing detailed arrangements and procedures for: (a) institutional coordination and day-to-day execution of the Project; (b) monitoring, evaluation, reporting and communication; (c) administration, financial management, procurement and accounting, as financial management and procurement procedures may be further defined in separate financial management and procurement sections to be adopted within six (6) months after the Effective Date; (d) eligibility criteria, modalities, terms and conditions, and procedures for preparation, targeting, approval, payment, verification, monitoring, evaluation, reporting and auditing of RBF Subsidies; (e) modalities, procedures, amounts and verification mechanisms for payment of Capital Expenditures Subsidies; (f) environmental and social aspects; and (g) such other administrative, technical and organizational arrangements, and procedures as shall be required for purposes of implementation of the Project ("the MPE Project Implementation Manual", the "SNE Project Implementation Manual", together "the Project Implementation Manuals"). 2. Unless agreed otherwise in writing with the Association, the SNE Project Implementation Manual shall set out additional detailed arrangements and procedures acceptable to the Association for the implementation of selected activities under Parts 1.3(a), 2.2(a), 4.1(a)(ii) and (iii), and 4.2, as allocated under Category (3), on an interim basis, until December 31, 2022 or until the establishment of the MPE-PIU, whichever date falls the earliest, or until any other later date agreed upon in writing with the Association, as said arrangements and procedures shall comply with the requirements under paragraph 1 immediately above. 3. The Recipient shall, and shall cause the Project Implementing Entity to, implement the Project in accordance with the Project Implementation Manuals, provided, however, that, in the event of any conflict between the provisions of the Project Implementation Manuals and those of this Agreement, this Agreement shall prevail. 4. Except as the Association shall otherwise agree, the Recipient or the Project Implementing Entity shall not amend, waive or otherwise modify the Project Implementation Manuals, or any provision thereof if, in the opinion of the Association, such amendment, waiver or other modification may materially and adversely affect the implementation of the Project. -12- D. RBF Subsidies and Capital Expenditures Subsidies 1. For purposes of implementing Parts 1.3(b), 2.1(a) and 3.2 of the Project, the Recipient shall, through MPE-PIU, make results-based payments ("RBF Subsidies") in accordance with eligibility criteria and procedures acceptable to the Association, as further set out in the Project Implementation Manuals. 2. For purposes of implementing Parts 1.3(b) and 2.1(a) of the Project, the Recipient shall, through MPE-PIU, make payments for Capital Expenditures Subsidies, in accordance with eligibility criteria and procedures acceptable to the Association, as further set out in the Project Implementation Manuals. 3. As appropriate, and agreed with the Association, the Recipient, through MPE-PIU, may hire financial intermediaries and/or financial institutions ("Payment Agents") to carry out the transfer of RBF Subsidies to eligible suppliers or for the payment of Capital Expenditures Subsidies to eligible entities. For that purpose, the Recipient shall enter into agreements ("Agency Agreements") with Payment Agents, on terms and conditions satisfactory to the Association, for purposes of defraying or disbursing RBF Subsidies or Capital Expenditures Subsidies selected eligible beneficiaries; said Agency Agreements to include the Payment Agents' responsibility for, inter alia: (i) trail payments, including electronic, as needed; (ii) establishing payment centers, automatic teller machines and/or point of sales in publicly accessible places; (iii) providing monthly reconciliations of RBF Subsidies or Capital Expenditures Subsidies amounts withdrawn or outstanding by the beneficiaries; (iv) reporting arrangement; and (v) balance of payments management. 4. The Recipient shall exercise its rights under each Agency 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 Recipient shall not assign, amend, abrogate or waive any Agency Agreement or any of its provisions. In the event of conflict between the provisions of any Agency Agreement and those of this Agreement, those of this Agreement shall prevail. 5. The Recipient shall ensure and cause the Payment Agencies to ensure that: (a) no RBF Subsidies or Capital Expenditures Subsidies shall be paid unless the Recipient shall have determined that its beneficiary has met the eligibility requirements set out in the Project Implementation Manuals; and (b) payment of said RBF Subsidies or Capital Expenditures Subsidies has been made in accordance with procedures acceptable to the Association and further set out in the Project Implementation Manuals. 6. The Recipient shall make RBF Subsidies or Capital Expenditures Subsidies available to the respective beneficiary on a timely basis, and on terms and -13- conditions approved by the Association as further set out in the Project Implementation Manuals, and shall obtain rights adequate to protect its interests and those of the Association, including the right to: (a) suspend or terminate the right of each beneficiary of RBF Subsidies or Capital Expenditures Subsidies to use the proceeds of said subsidy, or obtain a refund of all or any part of the amount of the RBF Subsidies or Capital Expenditures Subsidies then withdrawn, upon the beneficiary's failure to perform any of its obligations; (b) require each beneficiary to: (i) carry out the activity for which the RBF Subsidies or Capital Expenditures Subsidies have been provided 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 in accordance with the provisions of the Anti-Corruption Guidelines applicable to recipients of Financing proceeds other than the Recipient; (ii) provide, promptly as needed, the resources required for the purpose; (iii) procure the goods and services to be financed out of the RBF Subsidies or Capital Expenditures Subsidies in accordance with the provisions of this Agreement; (iv) maintain policies and procedures adequate to enable it to monitor and evaluate in accordance with indicators acceptable to the Association, the progress of the activity for which the RBF Subsidies or Capital Expenditures Subsidies has been provided and the achievement of its objectives; (v) (1) maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association, both in a manner adequate to reflect the operations, resources and expenditures related to the activity for which the RBF Subsidies or Capital Expenditures Subsidies has been provided; and (2) at the Association's or the Recipient's request, have such financial statements audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association, and promptly furnish the statements as so audited to the Recipient and the Association; (vi) enable the Recipient and the Association to inspect any location, records and documents relating to RBF Subsidies or Capital Expenditures Subsidies; and (vii) prepare and furnish to the Recipient and the Association all such information as the Recipient or the Association shall reasonably request relating to the foregoing; and (c) exercise its rights in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. 7. The Recipient shall: (a) throughout the period of implementation of the Project, carry out verifications in accordance with the protocol for RBF Subsidies and -14- Capital Expenditures Subsidies set out in the Project Implementation Manuals and furnish the results of said verification to the Association for its review; and (b) for purposes of carrying out each such verification, engage before any payment of RBF Subsidies or Capital Expenditures Subsidies, an independent verification agent, with terms of reference, qualifications and experience satisfactory to the Association. E. Environmental and Social Standards 1 . The Recipient shall, and shall cause the Project Implementing Entity to, 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 Recipient shall, and shall cause the Project Implementing Entity to, 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 Recipient shall, and shall cause the Project Implementing Entity to, ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing 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. Without limitation upon the provisions of paragraph 2 above, if sixty (60) days prior to the Closing Date, the Association determines that there are measures and actions specified in the ESCP which will not be completed by the Closing Date, the Recipient shall: (a) not later than thirty (30) days before the Closing Date, prepare and present to the Association, an action plan satisfactory to the Association on the outstanding measures and actions, including a timetable and budget allocation for such measures and actions (which action plan shall deemed to be considered an amendment of the ESCP); and (b) thereafter, cary out said action plan in accordance with its terms and in a manner acceptable to the Association. -15- 4. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 5. The Recipient shall, and shall cause the Project Implementing Entity to, 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, infonration 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, any workplace accidents that result in death, serious or multiple injury, pollution, or any violent labor unrest or dispute between the Recipient or the Project Implementing Entity or security forces (assigned to protect the Project) and local communities, any case of sexual exploitation and abuse, sexual harassment and violence against minors, or any incidents in or related to international waterways or disputed areas, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 6. The Recipient shall, and shall cause the Project Implementing Entity to, 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. 7. The Recipient shall, and shall cause the Project Implementing Entity to, ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors, supervising entities and Owner's Engineer 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 -16- applicable to such civil works commissioned or carried out pursuant to said contracts. F. Contingent Emergency Response Component 1. In order to ensure the proper implementation of contingent emergency response activities under Part 5 of the Project ("Contingent Emergency Response Component"), the Recipient shall ensure that: (a) a manual ("CERC Manual") is prepared and adopted in form and substance acceptable to the Association, which shall set forth detailed implementation arrangements for the Contingent Emergency Response Component, including: (i) any structures or institutional arrangements for coordinating and implementing the Contingent Emergency Response Component; (ii) specific activities, including as relevant related to refugees and host communities, which may be included in the Contingent Emergency Response Component, Eligible Expenditures required therefor ("Emergency Expenditures"), and any procedures for such inclusion; (iii) financial management arrangements for the Contingent Emergency Response Component; (iv) procurement methods and procedures for the Contingent Emergency Response Component; (v) documentation required for withdrawals of Financing amounts to finance Emergency Expenditures; (vi) a description of the environmental and social assessment and management arrangements for the Contingent Emergency Response Component; and (vii) a template Emergency Action Plan; (b) the Emergency Action Plan is prepared and adopted in form and substance acceptable to the Association; (c) the Emergency Response Component is carried out in accordance with the CERC Manual and the Emergency Action Plan; provided, however, that in the event of any inconsistency between the provisions of the CERC Manual or the Emergency Action Plan and this Agreement, the provisions of this Agreement shall prevail; and (d) neither the CERC Manual or the Emergency Action Plan is amended, suspended, abrogated, repealed or waived without the prior written approval by the Association. 2. The Recipient shall ensure that the structures and arrangements referred to in the CERC Manual are maintained throughout the implementation of the Contingent Emergency Response Component, with adequate staff and resources satisfactory to the Association. 3. The Recipient shall ensure that: -17- (a) the environmental and social instruments required for the Contingent Emergency Response Component are prepared, disclosed and adopted in accordance with the CERC Manual and the ESCP, and in form and substance acceptable to the Association; and (b) the Contingent Emergency Response Component is carried out in accordance with the environmental and social instruments in a manner acceptable to the Association. 4. Activities under the Contingency Emergency Response Component shall be undertaken only after an Eligible Crisis or Emergency has occurred. G. Use of Military and/or Security Actors and Ineligibility of Expenditures Used for Law-Enforcement, Military or Paramilitary Purposes 1 . All activities carried out by security consultants/consulting firms and/or the Recipient's security or armed forces under the Project shall be under the control of the Ministry in charge of public security and shall be undertaken exclusively for the purposes related to the Project. All goods, works, services, incremental Operating Costs, and Training financed by the Financing proceeds may be used by the security or armed forces, or paid to the security consultants/consulting firms under the direction and control of said Ministry, and strictly in accordance with the Project Implementation Manuals and/or other arrangements or protocols that the Association may require for carrying out these activities. 2. The Recipient further undertakes that no Financing proceeds or Project resources may be used for law-enforcement, military, or paramilitary purposes or for any payments made to any law-enforcement, security, military, or paramilitary forces without the Association's express approval. 3. The Recipient shall take the following measures related to the use of security or military personnel (including security consultants/consulting firms) when providing security to Project workers, sites and/or assets, in a manner satisfactory to the Association: (a) adopt and enforce standards, protocols and codes of conduct for the selection and use of security or military personnel, and screen such personnel to verify that they have not engaged in past unlawful or abusive behavior, including sexual exploitation and abuse ("SEA"), sexual harassment ("SH") or excessive use of force; -18- (b) ensure that the military, security or armed personnel is deployed in accordance with the applicable national law, and the relevant requirements of ESSs, the ESCP, and the plans prepared thereunder; (c) ensure that the military, security or armed personnel is adequately instructed and trained, prior to deployment and on a regular basis, on the use of force and appropriate conduct (including in relation to civilian- military engagement, SEA and SH, and other relevant areas), as set out in the Project Implementation Manuals, ESCP, and the plans prepared thereunder; (d) ensure that the stakeholder engagement activities under the Stakeholder Engagement Plan include a communication strategy on the involvement of military, security or armed personnel under the Project; and (e) ensure that any concerns or grievances regarding the conduct of such military, security or armed personnel are received, monitored, documented (taking into account the need to protect confidentiality), resolved through the Project's grievance mechanism; and reported to the Association no later than forty-eight (48) hours after being received. H. International Waterways 1 . With the exception of activities under Part 2.1.(a)(ii) of the Project, any new investments or expansion of Project activities, which would use or risk polluting the water of International Waterways, shall be excluded, unless the Recipient and the Association otherwise agree explicitly and in writing. 2. Notwithstanding the requirements under Section II below, the Recipient shall promptly inform the Association of any contemplated investments or Project activities referred to in paragraph I immediately above. I. Annual Work Plans and Budget 1 . The Recipient shall, and shall cause the Project Implementing Entity to, not later than November 30 of each calendar year during the implementation of the Project (or one (1) month after the Effective Date for the first year of Project implementation), prepare and furnish to the Association for its approval: (a) a draft annual work plan and budget containing all proposed activities for inclusion in the Project during the following calendar year of Project implementation (including Training and Operating Costs); and (b) any instruments required by the Environmental and Social Commitment Plan ("ESCP") for the implementation of the activities included in the draft annual work plan and budget. -19- 2. The Recipient shall, and shall cause the Project Implementing Entity to, afford the Association a reasonable opportunity to exchange views with the Recipient on such proposed annual work plan and budget, and after approval by the Association, shall carry out such Annual Work Plan and Budget ("AWPB") during the period covered by the AWPB. Only those activities that are included in an Annual Work Plan and Budget shall be eligible for financing out of the proceeds of the Financing. 3. The Recipient shall ensure, and cause the Project Implementing Entity to ensure, that the Project is implemented in accordance with the AWPB (provided, however, that in the event of any conflict between the AWPB and the provisions of this Agreement, the provisions of this Agreement shall prevail). 4. Except with the prior and written concurrence of the Association, the AWPB shall not be waived, amended or otherwise revised to include new activities. Section II. Project Monitorin2, Reporting and Evaluation The Recipient shall, and shall cause the Project Implementing Entity to, furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. Section III. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to finance Eligible Expenditures; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: -20- Category Amount of the Percentage of Grant Allocated Expenditures to be (expressed in SDR) Financed (inclusive of Taxes) (1) Goods, works, non-consulting 77,614,000 100% services, consulting services, Operating Costs and Training for Parts 1.1, 1.2 and 4.1(b) of the Project (2) Goods, works, non-consulting 38,088,000 100% services, consulting services, Operating Costs and Training for Part 1.3 (except consulting services under Part 1.3(a)), Part 2 (except goods, works, non- consulting and consulting services under Part 2.2(a)), Part 3, Part 4.1(a) (except consulting services, Operating Costs and Training under Parts 4.1 (a)(ii) and (iii)), and Part 4.3 of the Project (3) Consulting services under Part 7,186,000 100% 1.3(a); goods, works, non- consulting and consulting services under Part 2.2(a); consulting services, Operating Costs and Training under Part 4. 1(a)(ii) and (iii); and goods, consulting and non-consulting services, Operating Costs and Training under Part 4.2 of the Project (4) Capital Expenditures Subsidies 89,112,000 100% and RBF Subsidies under Parts 1.3(b), 2.1(a) and 3.2 of the Project (5) Emergency Expenditures under 0 100% Part 5 of the Project TOTAL AMOUNT 212,000,000 -21- B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made: (a) for payments made prior to the Signature Date; or (b) under Category (1), until and unless the Recipient has caused SNE-PIU to adopt the SNE Project Implementation Manual in form and substance satisfactory to the Association and in accordance with Section I.C.1 of Schedule 2 to this Agreement; or (c) under Category (2), until and unless the Recipient has: (i) established the MPE-PIU, with staff, composition, mandate and resources satisfactory to the Association and in accordance with Sections I.A.2.(a) and I.A.3 of Schedule 2 to this Agreement and further specifications set out in the Project Implementation Manuals; and (ii) adopted the MPE Project Implementation Manual in form and substance satisfactory to the Association and in accordance with Section I.C. of Schedule 2 to this Agreement; or (d) under Category (3), until and unless the Recipient has: (i) caused SNE- PIU to adopt the SNE Project Implementation Manual in form and substance satisfactory to the Association and in accordance with Section I.C.3 of Schedule 2 to this Agreement; and (ii) delegated to SNE-PIU, through a memorandum of understanding, the authority, under terms and conditions and in form and substance acceptable to the Association, to carry out activities covered in this Category (3); or (e) under Category (4), in addition to the conditions set out in Section III.B.1.(d) of this Schedule above as applicable, until and unless the Recipient has engaged an independent verification agent, with terms of reference, qualifications and experience satisfactory to the Association, in accordance with Section I.D.7.(b) of this Schedule; or (f) for Emergency Expenditures under Category (5), unless and until all of the following conditions have been met in respect of said expenditures: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Association a request to withdraw Financing amounts under Category (5); and (B) the Association has agreed with such determination, accepted said request and notified the Recipient thereof; and (ii) the Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Association. -22- 2. The Closing Date is June 30, 2027. Section IV. Other Undertakin2s 1. The Recipient shall: (a) open a designated account for Parts 1.3, 2, 3 and 4.1(a), 4.2, 4.3 of the Project no later than one (1) month after the Effective Date, under terms and conditions satisfactory to the Association; (b) acquire, install and customize an accounting software for the Project, with terms and specifications acceptable to the Association, no later than three (3) months after the Effective Date; (c) prepare the terms of reference for the recruitment of an internal auditor for the Project, not later than one (1) month after the Effective Date; (d) recruit an external auditor for the Project, with terms of reference, integrity, qualifications and experience satisfactory to the Association, not later than six (6) months after the Effective Date; (e) organize Training on the Procurement Regulations and the Anti-Corruption Guidelines within three (3) months after the Effective Date, in form and substance satisfactory to the Association: and (f) develop adequate contract management plans for procurement documentation subject to prior review thresholds as further defined in the Project Implementation Manuals, in form and substance satisfactory to the Association, within two (2) months after the Effective Date. 2. The Recipient shall ensure, and cause the Project Implementing Entity to ensure, that the SNE-PIU has: (a) recruited: (i) an additional accountant within three (3) months after the Effective Date, and (ii) a procurement specialist within two (2) months after the Effective Date; both with terms of reference, qualifications, integrity and experience satisfactory to the Association; (b) opened a designated account for the Project Implementing Entity's Respective Parts of the Project no later than one (1) month after the Effective Date, under terms and conditions satisfactory to the Association; (c) acquired, installed and customized an accounting software for the Project, with terms and specifications acceptable to the Association, not later than three (3) months after the Effective Date; and (d) put in place: (i) adequate mechanisms satisfactory to the Association to incorporate technical inputs in procurement-related documents; (ii) adequate contract management plans for key procurement contracts under the Project; and (iii) related Training; in form and substance satisfactory to the Association, within two (2) months after the Effective Date. -23- APPENDIX Definitions 1. "ADERM" means Agence pour le D6veloppenent de l'Electrification Rurale et de la Maitrise d'Energie, the Recipient's rural electrification agency, established pursuant to Law N'036/PR/2019 of 26 August 2019, or its legal successor thereto with similar mandate as shall be agreed with the Association. 2. "Agency Agreements" means agreements with Payment Agents referred to in Section I.D.3 of Schedule 2 to this Agreement, under terms and modalities satisfactory to the Association. "Agency Agreement" means one such Agency Agreements. 3. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General 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. 4. "ARSE" means Autoriti de Rdgulation du Secteur de I'Energie Electrique, the Recipient's energy regulatory authority, established pursuant to Law No036/PR/2019 of 26 August 2019, or its legal successor thereto with similar mandate as shall be agreed with the Association. 5. "Capital Expenditures Subsidies" means the expenditures spent on account of eligible fixed or capital assets, as opposed to recurrent expenditures, and taking the form, for purposes of Project implementation, of partial subsidies by the Recipient to eligible private sector entities as results-based financing financed through the Project, for purposes of Parts 1.3(b) and 2.1(a) of the Project, under modalities, verification protocols and procedures further set out in the Project Implementation Manuals and satisfactory to the Association. 6. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 7. "CERC Manual" means the manual referred to in Section I.F of Schedule 2 to this Agreement, as such manual may be updated from time to time with the agreement of the Association, and which is an integral part of the PIM (as defined hereinafter). 8. "Contingent Emergency Response Component" means any activity or activities to be carried out under Part 5 of the Project to respond to an Eligible Crisis or Emergency. -24- 9. "Emergency Expenditures" means any of the eligible expenditures set forth in the CERC Manual referred to in Section I.F. of Schedule 2 to this Agreement and required for the Contingent Emergency Response Component. 10. "Emergency Action Plan" means the plan referred to in Section I.F., detailing the activities, budget, implementation plan, and monitoring and evaluation arrangements, to respond to the Eligible Crisis or Emergency. 11. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated February 10, 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. 12. "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 Historically Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; (ix) "Environmental and Social Standard 9: Financial Intermediaries"; and (x) "Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure"; effective on October 1, 2018, as published by the Association. 13. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated December 14, 2018 (revised on August 1, 2020, April 1, 2021, and January 1, 2022). 14. "International Waterways" means the waterways in the sense of the Association's operational policy OP 7.50 "Projects on International Waterways", as approved in June 2001 and revised in March 2012. 15. "Ministry of Petroleum and Energy" and the acronym "MPE" means Ministere du Petrole et de l'Energie, or its le I successor thereto as agreed in writing with the Association. -25- 16. "MPE-PIU" means the implementation unit for Parts 1.3, 2, 3, 4 and 5 of the Project, to be competitively recruited by MPE, in a manner and under modalities satisfactory to the Association, and in accordance with terms of reference further set out in Section I.A. of Schedule 2 to this Agreement. 17. "Operating Costs" means the reasonable incremental operating expenses, based on Annual Work Plans and Budgets approved by the Association, incurred by the Project on account of Project implementation, management and monitoring, including operation and maintenance costs of office, vehicles maintenance and office equipment, water and electricity utilities, telephone, office lease and supplies, bank charges, public awareness-related media expenditures, travel and supervision costs, per diem, additional staff costs, but excluding the salaries of officials and public servants of the Recipient's civil service or the Project Implementing Entity's payroll. 18. "Owner's Engineer" means the consulting firm employed under the agreement between the Recipient and the Association for Grant No. 657-TD, dated June 29, 2020, as amended, and employed to support the SNE-PIU for purposes of implementation of this Project and the Project financed through Financing Agreement No. D657-TD (Cameroon-Chad Power Interconnection Project), between the Association and the Recipient, dated June 29, 2020. 19. "Payment Agents" means the financial intermediaries and/or financial institutions hired by the Project, pursuant to Section I.D.3 of Schedule 2 to this Agreement. "Payment Agent" means one such Payment Agents. 20. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 21. "Project Implementation Manuals" means the MPE Project Implementation Manual and the SNE Project Implementation Manual, referred to in Section I.C. of Schedule 2 to this Agreement. 22. "Project Implementing Entity" means Socidtd Nationale d'Electricitd or SNE. 23. "Project Implementing Entity's Respective Parts of the Project" and "Respective Parts of the Project" means: (a) throughout Project implementation, Parts 1.1, 1.2 and 4.1(b) of the Project, and (b) until no later than December 31, 2022, or until the establishment of the MPE-PIU whichever date falls the earliest, or any other later date agreed upon in writing with the Association, activities referred to under Category (3) in Section III.A. of Schedule 2 to this Agreement.