OFFIC IL DOCUMENTS CREDIT NUMBER 4399-MAG Agreement providing for the Amendment and Restatement of the Financing Agreement (Additional Financing For the Integrated Growth Poles Project) between REPUBLIC OF MADAGASCAR and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 'D C, 2012 CREDIT NUMBER 4399-MAG AGREEMENT PROVIDING FOR THE AMENDMENT AND RESTATEMENT OF THE FINANCING AGREEMENT AGREEMENT, dated TO - 6-r - G , 2012, entered into between REPUBLIC OF MADAGASCAR ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - AMENDMENT AND RESTATEMENT 1.01. The Financing Agreement is hereby amended and restated so as to read as set forth in the Annex hereto. ARTICLE II- TRANSITIONAL PROVISIONS 2.01. Except as provided below, the Current Guidelines (as defined in the Annex to this Agreement) shall apply to all contracts for goods, works and services under the Project, whether entered into before or after the date of this Agreement. 2.02. Where, in the case of contracts for which the invitation to bid or request for proposals was issued on or before June 30, 2012, the relevant contracts do not provide for the application of the Current Guidelines or otherwise allow for such application, the applicable guidelines shall be those which applied immediately prior to the date of this Agreement. ARTICLE III - ENTRY INTO FORCE 3.01. This Agreement shall come into force upon signature by the parties hereto. -2- AGREED at n tt , t , as of the day and year first above written. REPUBLIC OF MADAGASCAR By: By: Authorized Representative Le Ministre Title: jes Finances et du Budget INTERNATIONAL DEVELOPMENT ASSOC TIO By: Authorized Representative Name: _____ &___ Title: DJ1i\ 4LtL4 Sq -3- ANNEX CREDIT NUMBER 4399-MAG Financing Agreement (Additional Financing For the Integrated Growth Poles Project) between REPUBLIC OF MADAGASCAR and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated May 8, 2008 -4- CREDIT NUMBER 4399-MAG FINANCING AGREEMENT AGREEMENT dated May 8, 2008, entered into between REPUBLIC OF MADAGASCAR ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for the purpose of providing additional financing for the Original Project (as defined in the Appendix to this Agreement). 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) constitute an integral 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. 1.03. Italicized terms used in this Agreement to denote place names and locations shall be deemed to denote place names and locations in the Recipient's territory. ARTICLE II- FINANCING 2.01. The Association agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a credit in an amount equivalent to twenty-five million Special Drawing Rights (SDR 25,000,000) (variously, "Credit" and "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 IV of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate payable by the Recipient on the Unwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) per annum. 2.04 The Service Charge payable by the Recipient on the Withdrawn Credit Balance shall be equal to three-fourths of one percent (3/4 of 1%) per annum. 2.05. The Payment Dates are January 15 and July 15 in each year. 2.06. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.07. The Payment Currency is the Dollar. -5- ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out the Project in accordance with the provisions of Article IV of the General Conditions. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Recipient and the Association shall otherwise agree, the Recipient shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (a) The PIM and the PAFAM have been updated, all in a manner satisfactory to the Association. (b) The Recipient has employed the independent external auditors referred to in Section 4.09 (b) of the General Conditions, in accordance with the provisions of Section III of Schedule 2 to this Agreement; and (c) The Recipient has submitted an action plan, satisfactory to the Association, on a livelihood restoration and monitoring program for Affected Persons in Fort Dauphin. 4.02 The Effectiveness Deadline is the date ninety days (90) after the date of this Agreement. ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Recipient's Representative is the Minister at the time responsible for finance. 5.02. The Recipient's Address is: Ministry of Finance and Budget B.P. 61 Antananarivo 101 Madagascar -6- Cable address: Facsimile: MFB (261) 20 22 34530 Antananarivo 5.03. The Association's Address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: Facsimile: INDEVAS 248423 (MCI) 1-202-477-6391 Washington, D.C. AGREED at Antananarivo, Republic of Madagascar, as of the day and year first above written. REPUBLIC OF MADAGASCAR By: /s/ Haja Nirina Razafinjatovo Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By: /s/ Robert R. Blake Authorized Representative -7- SCHEDULE 1 Project Description The objective of the Project is to increase business and formal job creation in particular in the mining, tourism and agribusiness sectors in the Nosy Be and Taolagnaro Regions. Part A: Strengthening the business environment 1. (Paragraph (1) is intentionally omitted for numbering purpose). 2. Capacity building (a) Providing training and business development services to individuals and to micro, small and medium enterprises in Selected Regions, in particular by strengthening support to selected agricultural value chains and by implementing new vocational training strategies. (b) Supporting NPS to provide grants to Beneficiaries for the financing of Micro-projects to support growth for selected enterprises. 3. Supporting tourism development initiatives (a) Supporting the Recipient's capacity to manage the tourism sector, through the provision of: (i) technical advisory services, goods and training for national and regional staff of MTC and Regional Tourism Offices to strengthen their capacity to implement the Regional tourism master plans; (ii) technical advisory services, goods and training to strengthen the capacities of MTC and the National Tourism Office to manage, regulate, market and enhance the quality of services and a new information system; (iii) technical advisory services, goods and training to the National Tourism Office and the Regional Tourism Offices to develop a communication strategy and carry out an international marketing campaign for promotion of the relevant areas; and (iv) technical advisory services, for analytical work on air access, demand and supply in the tourism sector. (b) Supporting the development of selected tourism sites or initiatives in the Nosy Be and Taolagnaro Regions through the provision of technical advisory services, goods and works. (c) Strengthening the Recipient's national tourism training system, through: (i) the provision of technical advisory services; (ii) the provision of works and goods for the rehabilitation of tourism training facilities; and (iii) the provision of training in tourism-related subjects. 4. Improving the business environment (a) (Paragraph (a) is intentionally omitted for numbering purpose). -8- (b) Strengthening the EDBM's capacity for investment facilitation functions such as the establishment and operation of a one stop shop, public-private dialogue and business environment reforms and the design and implementation of a strategy to strengthen the sustainability of the Project's development impact. (c) Supporting institutional reforms to increase private sector investments, through monitoring, workshop and analytical works. (d) Providing technical support to the CGAs and supporting targeted assessments of new investment opportunities. (e) Supporting NPS to design and implement enterprise-based training activities such as training of trainers and the establishment of training programs through private-public partnerships and the establishment of skills development centers and enterprise-based skills programs through public-private partnerships, all through the provision of technical advisory services, training, goods and works. Part B: (Part B is intentionally omitted for numbering purpose). Part C: Supporting tourism led growth in Nosy Be 1 . Strengthening the capacities of the Nosy Be Municipality and the decentralized authorities of the Diana Region to support urban planning, tax collection and fiscal management, delivery of municipal services, including community cleaning, solid waste management, road maintenance and repair, as well as implementation of the tourism master plan, all through technical assistance, staff training, goods and minor rehabilitation works. 2. (Paragraph (2) is intentionally omitted for numbering purpose). 3. Supporting the development and implementation of business development services to stimulate job and business creation. 4. (Paragraph (4) is intentionally omitted for numbering purpose). 5. Supporting the upgrading of the Hellville and Ankify ports, through the provision of technical advisory services and emergency works, such as the rehabilitation of the east berth, the short access road in the port and improvement of the organization and management of the travelers, merchants and vehicles. 6. Supporting the upgrading of selected infrastructure in the territory of Nosy Be Municipality, such as paved and unpaved urban roads, the road to Mont Passot, the maintenance of critical urban and rural roads, water drainage infrastructure, and urban street lightings, through the provision of works, goods and technical advisory services. 7. (Paragraph (7) is intentionally omitted for numbering purpose). 8. Supporting the upgrading of the power system in Nosy Be by: (i) renting or purchasing up to six megawatt of generation capacity, (ii) upgrading and expanding the distribution network, (iii) providing technical assistance to the new management team in JIRAMA, and (iv) supporting the development of a new energy program based on renewable energy sources, all through the provision of works, goods and technical advisory services. 9. Supporting the upgrading of the water, sewerage, latrine and solid waste management systems by: (i) rehabilitating and upgrading the water distribution system, including the standpipes and water meters; (ii) supporting the collection and disposal of solid waste; and (iii) improving the quality of the management systems, all through the provision of works, goods and technical advisory services. 10. (Paragraph (10) is intentionally omitted for numbering purpose). 11. (Paragraph (11) is intentionally omitted for numbering purpose.) 12. Strengthening the capacity of the Regional Tourism Office and MTC in Nosy Be in promoting sustainable tourism, through the provision of goods and technical advisory services. Part D Supporting mining and tourism led growth in Taolagnaro 1. Supporting the development of the new public port and the industrial zone in Ehoala peninsula, through the provision of promotional and technical advisory services. 2. Supporting the upgrading and maintenance of selected rural roads to more effectively leverage the Anosy Region's agribusiness potential and the Ehoala Port, through the provision of technical advisory services, goods and works. 3. Supporting the development and implementation of business development services to stimulate job and business creation. 4. (Paragraph (4) is intentionally omitted for numbering purpose). 5. Supporting the upgrading of the power system in Taolagnaro by expanding the distribution network, improving the management of power and developing wind energy, all through the provision of works, goods and technical advisory services. 6. Supporting the upgrading of the water, sewerage, latrine and solid waste systems by: (i) upgrading the water production and distribution systems; (ii) supporting the collection and the disposal of solid waste; and (iii) improving the quality of the management systems, all through the provision of works, goods and technical advisory services. 7. Supporting the upgrading of selected urban roads through the provision of works, good and technical advisory services. -10- 8. Supporting the upgrading of medical facilities at the Tsiranana hospital by rehabilitating a portion of the hospital and upgrading a surgery block, all through the provision of works, goods and technical advisory services. 9. Strengthening the capacities of the Taolagnaro Municipality and of the decentralized authorities in the Anosy Region to support Regional and urban planning, tax collection and fiscal management, delivery of Municipal and Regional services, including community cleaning, solid waste management, road maintenance and repair, as well as environmental protection activities including mitigation of coastal erosion and deforestation; all through the provision of technical assistance, staff training, goods and minor rehabilitation works. 10. Strengthening the capacity of the Regional Tourism Office and the MTC in Taolagnaro in promoting sustainable tourism through the provision of goods and technical advisory services. Part E Suport to Proiect implementation, evaluation and monitoring 1. Supporting Project implementation, Project coordination, procurement, financial management and communication, technical and financial audits and monitoring and evaluation activities under the Project, through the provision of technical advisory services, training, goods and small works, as well as the financing of Operating Costs. 2. Supporting the implementation of the provisions of the Environmental and Social Documents, as well as the carrying out of all environmental and social activities under the Project. - 11 - SCHEDULE 2 Project Execution Section I. Implementation Arran2ements A. Institutional Arrangements 1. The Recipient shall, at all times during the execution of the Project, maintain NPS, with functions, composition and staffing (including qualifications and experience of personnel) satisfactory to the Association, under the overall oversight of the General Secretary in the Recipient's ministry responsible for finance. 2. Without limitation to the generality of the foregoing provisions of paragraph (1) immediately above, NPS shall be responsible for, inter alia: (A) day-to-day supervision of Project implementation, including management of procurement and disbursement for activities under its responsibility, and management of all environmental and social matters; (B) consolidation of annual work programs and budgets; (C) maintenance of records for all transactions and accounts related to NPS; (D) contracting and supervision of contractors; (E) management of disbursements; (F) preparation and production of progress reports, consolidated financial statements and quarterly FMR; and (G) monitoring and evaluation of Project activities. 3. Without limitation to the generality of the foregoing provisions in paragraph (1) immediately above, the Recipient shall, not later than four months after the Effective Date, employ an environmental specialist for NPS. 4. (a) Without limitation to the generality of the foregoing provisions, in paragraph (1) immediately above, the Recipient shall maintain from the date indicated in paragraph (b) immediately below, local representatives of NPS at Nosy Be and Taolagnaro with qualifications, experience and performance satisfactory to the Association, to be responsible for monitoring and coordination of Project activities at the local level. (b) without limitation to the generality of the foregoing provisions in paragraph (a) immediately above, the Recipient shall, not later than six months after the Effective Date, appoint a local representative of NPS at Nosy Be and Taolagnaro, respectively, in a manner satisfactory to the Association. 5. The Recipient shall ensure that representatives of the private sector and all relevant decentralized authorities established by the laws of the Recipient, in particular at the Regional and Communal levels, regulatory bodies and public utilities companies will be properly involved and cooperate in the implementation of the Project in accordance with the terms and conditions of their respective mandates or area of expertise. -12- B. Anti-Corruption The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. C. Matching Grants 1 (a) For the implementation of Part A.2(b) of the Project, the Recipient shall (through NPS) extend Grants to eligible Beneficiaries for the financing of eligible Micro-projects, under terms and conditions acceptable to the Recipient and the Association and further described in the Project Implementation Manual. (b) (i) Without limitation to the provisions of paragraph (a) immediately above, no Beneficiary shall be eligible for a Grant, unless NPS shall have determined, on the basis of an appraisal conducted in accordance with guidelines acceptable to the Association, that the proposed Beneficiary of such Grant and the Micro-project for which the Grant is to be made satisfy the respective eligibility criteria acceptable to the Association, and described in the Project Implementation Manual. (ii) Without limitation to the provisions of paragraph (i) immediately above, the appraisal shall extend to details of: (a) the requested Grant, activities to be financed by the requested Grant, Beneficiaries and eligibility criteria; (b) arrangements and procedures for preparation, appraisal, approval, implementation and supervision of the proposed Micro-project; (c) procurement, financial management and disbursement arrangements; (d) performance indicators; and (e) such other legal, administrative, financial and organizational arrangements as shall be required for providing the Grant. (iii) Without limitation to the provisions of paragraph (i) immediately above, the proposed Beneficiary shall be an entity with legal personality and ability to contract under the laws of the Recipient. 2. The Recipient shall make each Grant to a Beneficiary for a Micro-project under a Grant Agreement, in the form attached to the Project Implementation Manual, on terms and conditions approved by the Association, which shall include the following: (a) The Recipient shall obtain rights adequate to protect the Recipient's interests and those of the Association, including the following: (i) the Recipient shall have the right to suspend or terminate the right of the Beneficiary to use the proceeds of the Grant, or obtain a refund of all or any part of the amount of the Grant -13- then withdrawn, upon the Beneficiary's failure to perform any of its obligations under the Grant Agreement; and (ii) each Beneficiary shall be required to: (A) carry out its Micro-project 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: (1) with the provisions of the Anti-Corruption Guidelines applicable to recipients of Financing proceeds other than the Recipient, and (2) with the Environmental and Social Documents; (B) procure the goods, works and services to be financed out of the Matching Grant in accordance with the provisions of this Agreement and use the works, goods and services financed from the proceeds of the Grant exclusively for the carrying out of the Micro- project; (C) maintain policies and procedures adequate to enable it to monitor and evaluate in accordance with indicators acceptable to the Association, the progress of the Subproject and the achievement of its objectives; (D) (1) prepare and furnish to the Recipient quarterly (or any other periodicity agreed upon by the Association) progress reports reflecting, inter alia, the Micro-project's performance on the basis of performance indicators agreed between the Recipient and the Beneficiary, quarterly (or any other periodicity agreed upon by the Association) financial statements, and a final report upon completion of the Micro-project; and (2) at the Recipient's or the Association'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, promptly furnish the statements as so audited to the Recipient and the Association, and allow the Association to make the Grant Agreement and all audited financial statements available to the public in accordance with the Association's policies on access to information; (F) enable the Recipient and the Association to inspect the Micro-project, its operation and any relevant records and documents; and (G) prepare and furnish to the Recipient and the Association all such information as the Recipient or -14- the Association shall reasonably request relating to the foregoing. (c) The Recipient shall exercise its rights and carry out its obligations under each Grant 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 Grant Agreement or any of its provisions. D. Safeguards. 1. The Recipient shall ensure that: (a) all terms of reference for any technical assistance or studies carried out under the Project are consistent with, and pay due attention to, the Association's environmental and social safeguards policies, as well as the Recipient's own laws relating to the environment and social aspects; and (b) in drafting any regulations under the Project, due attention will be given to said policies and laws. 2. The Recipient shall ensure that the Project shall be implemented in accordance with the guidelines, procedures, timetables and other specifications set forth in the Environmental and Social Documents. In particular, the Recipient shall ensure that: (a) for each activity under the Project of a type for which the Environmental and Social Management Framework provides that an Environmental and Social Management Plan should be prepared, such Environmental and Social Management Plan, in form and substance satisfactory to the Association, is effectively prepared and locally disclosed, before the implementation of such activity, in accordance with the provisions of the Environmental and Social Management Framework, and the relevant activity is implemented in accordance with its Environmental and Social Management Plan; and (b) for each activity under the Project of a type for which the Resettlement Policy Framework provides that a Resettlement Action Plan should be prepared, such Resettlement Action Plan, in form and substance satisfactory to the Association, is effectively prepared and locally disclosed, before the implementation of such activity, in accordance with the provisions of the Resettlement Policy Framework, and the relevant activity is implemented in accordance with its Resettlement Action Plan. (c) Without limitation to the foregoing provisions of this Section I.D.2, the Recipient shall: (a) prepare, furnish to the Association and publicly disclose a RAP, in form and substance satisfactory to the Association, before entering into any agreement for the sale of a Tourism Reserve or to grant a Tourism Reserve Concession; and (b) - 15 - ensure that adequate measures in support of said RAP are agreed upon with the contractor, and, thereafter, monitor the implementation of said measures by the contractor. 3. Except as the Association shall otherwise agree in writing and subject to compliance with applicable consultation and public disclosure requirements of the Association, the Recipient shall not abrogate, amend, repeal, suspend or waive any provisions of any of the Environmental and Social Documents. 4. (a) The Recipient shall: (i) maintain, at all times during the implementation of the Project, the ESAP in form and with terms of reference, composition and resources satisfactory to the Association, for the purpose of reviewing and advising the Recipient on all environmental and social aspects of the Project; and (ii) promptly provide to the Association a copy of each report prepared by ESAP, and shall make such reports publicly available. (b) Without limitation upon its other reporting obligations under this Agreement and, in particular, the obligation in paragraph 4(a)(ii) immediately above, the Recipient shall regularly collect, compile and submit to the Association, on a semi-annual basis, reports on the status of compliance with the Ehvironmental and Social Documents, giving details of: (a) measures taken in furtherance of the Environmental and Social Documents; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Environmental and Social Documents; and (c) remedial measures taken or required to be taken to address such conditions. 5. In the event that any provision of the Environmental and Social Documents shall conflict with any provision under this Agreement, the terms of this Agreement shall prevail. E. Annual Work Programs and Budgets 1 . Each year the Recipient shall prepare and shall submit to the Association for approval, a draft annual work program (including Training and Operating Costs), and budget for the Project, for each subsequent year of Project implementation, of such scope and detail as the Association shall have reasonably requested. 2. The Recipient shall furnish to the Association, as soon as available, but in any case not later than November 30 of each year, the annual work programs and budgets, for their review and approval; except for the annual work program and budget for the Project for the first year of Project implementation which shall be furnished no later than one (1) month after the Effective Date. Only the activities included in an annual work program and budget expressly approved by the Association (each an "Annual Work Program and Budget") are eligible to a financing from the proceeds of the Financing. 3. Training shall be carried out on the basis of Annual Work Programs and Budgets, which shall, inter alia, identify: (a) particulars of the training -16- envisaged; (b) the personnel to be trained; (c) the selection method of the institution or individuals conducting such training; (d) the institution conducting such training if identified; (e) the purpose and justification for such training; (f) the location and duration of the proposed training; and (g) the estimate of the cost of such training. 4. Annual Work Programs and Budgets may be revised as needed during Project implementation subject to the Association's prior approval. F. Project Manuals 1. (a) The Recipient shall carry out the Project in accordance with the Project Manuals; and (b) except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate, or waive the Project Manuals, or any provision thereof. 2. In the event of any conflict between the provisions of the Project Manuals and those of this Agreement, the provisions of this Agreement shall prevail. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of indicators acceptable to the Association. Each Project Report shall cover the period of one calendar quarter, and shall be furnished to the Association not later than forty-five (45) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1. The Recipient shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 4.09 of the General Conditions. 2. The Recipient shall prepare and furnish to the Association as part of the Project Report, interim unaudited financial reports for the Project covering each quarter, in form and substance satisfactory to the Association. 3. The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 4.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the Association not later than six months after the end of such period. Section III. Procurement A. General 1. Goods and Works. All goods and works required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance -17- with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines, and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Association of particular contracts, refer to the corresponding method described in the Procurement Guidelines, or Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods and Works 1 . International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods and works shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods and Works. The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used: Procurement Method (a) National Competitive Bidding (b) Shopping (c) Direct Contracting (d) Procurement from UN Agencies (e) Community Participation C. Particular Methods of Procurement of Consultants' Services 1 . Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following table specifies methods of procurement, other than Quality- and Cost-based Selection, which may be used for consultants' services. The Procurement Plan shall specify the circumstances under which such methods may be used. Procurement Method (a) Least-Cost-Selection (b) Selection Based on Consultants' Qualifications (c) Single Source Selection (d) Individual Consultants -18- D. Review by the Association of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Association's Prior Review. All other contracts shall be subject to Post Review by the Association. Section IV. Withdrawal of the Proceeds of the Financing A. General 1. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Association shall specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the Association and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing ("Category"), the allocations of the amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Category Amount of the Percentage of Financing Expenditures to be Allocated Financed (expressed in SDR) (1) Goods, works, 100% consultants' services, including Training, except for Micro-projects: (a) under Part B.3 of the Project until October 0 31, 2012 (b) under Parts A.3, C.1, C.2 and C.11 of the Project until October 31,2012 0 (c) under Part C.5 of the Project until October 31,2012 0 (d) under all other parts of the Project except Parts A.4(d) and (c) of 3,433,000 the Project until -19- Category Amount of the Percentage of Financing Expenditures to be Allocated Financed (expressed in SDR) October 31, 2012 750,000 (e) under Parts A.4(b) and (c) of the Project from November 1, 2012. 17,617,000 (f) under Parts A.2, A.3, A.4(d) and (e), Parts C.1, C.3, C.5, C.6, C.8, C.9 and C.12, Parts D.1, D.2, D.3, D.5, D.6, D.7, D.8, D.9 and D.10 and Part E of the Project from November 1, 2012. (2) Goods, works, 1,000,000 100% consultants' services, including Training for Micro-projects (3) Operating Costs 1,400,000 100% (4) Mitigation Costs 800,000 100% (5) Unallocated 0 TOTAL AMOUNT 25,000,000 B. Withdrawal Conditions; Withdrawal Period 1 . No withdrawal shall be made: (a) for payments made prior to the date of this Agreement; or (b) under Category 2 above unless: (i) funds under Category 2 of the table in Part A. 1 of Schedule 1 of the Original Agreement have been exhausted; and (ii) a first Grant Agreement has been entered into in accordance with the provisions of Section I.C.2 of Schedule 2 to this Agreement. 2. The Closing Date is December 31 2014. Section V. Other Undertakings -20 - A. No later than March 31, 2013, the Recipient shall have submitted to the Association a strategy and an action plan, in form and substance satisfactory to the Association, that outlines a road map to ensure the financial sustainability of EDBM, in particular of its activity of one stop shop. B. No later than June 30, 2014, the Recipient shall take all measures, in form and substance satisfactory to the Association, to implement the strategy and action plan referred to in (A) immediately above to ensure that EDBM becomes financially sustainable and can continue its activity of one stop shop. C. No later than October 31, 2013, the Recipient shall have submitted a plan in form and substance satisfactory to the Association, to ensure an autonomous management of the power section of JIRAMA in Nosy Be. -21- SCHEDULE 3 Repayment Schedule Date Payment Due Principal Amount of the Credit repayable (expressed as a percentage)* On each January 15 and July 15: commencing July 15, 2018 to and including 1 January 15, 2028 commencing July 15, 2028 to and including 2 January 15, 2048 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.03 (b) of the General Conditions. -22- APPENDIX Section I. Definitions 1. "Affected Persons" means persons who, on account of the execution of the Project, had or would have their: (i) standard of living adversely affected; or (ii) right, title, interest in any house, land (including premises, agricultural and grazing land) or any other fixed or movable asset acquired or possessed, temporarily or permanently; (iii) access to productive assets adversely affected, temporarily or permanently; or (iv) business, occupation, work or place of residence or habitat adversely affected; and "Affected Person" means any of the Affected Persons. 2. "Annual Work Program and Budget" means an annual work program and budget for the implementation of the Project approved by the Association referred to in Section I.E.2 of Schedule 2 to this Agreement. 3. "Anti-Corruption Guidelines" means 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. 4. "Beneficiary" means any entity established and operating pursuant to the laws of the Recipient for which a Grant is financed or proposed to be financed out of the proceeds of the Credit pursuant to a Grant Agreement in accordance with Section I.C of Schedule 2 to this Agreement. 5. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 6. "CGA" means Centre de Gestion Agrid, a non-profit organization established in accordance with the laws of the Recipient among members who are small private sector-operators, through which members can receive tax, financial management and business development support from the Recipient. 7. "Cultural Heritage Policy Framework" or "CHPF" means the Recipient's document entitled "Cadre de Gestion du Patrimoine Culturel" and dated July 5, 2005, setting forth guidelines and procedures to protect any physical cultural property from loss or damage as a result of Parts A through D of the Project. 8. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. 9. "Current Guidelines" means, collectively, the Anti-Corruption Guidelines, Consultant Guidelines and Procurement Guidelines. 10. "EDBM" means the Economic Development Board of Madagascar established by Recipient's decree no. 2006-382 dated May 31, 2006. -23- 11. "Environmental and Social Advisory Panel" or "ESAP" means the panel of experts referred to in Section I.D.4(a) of Schedule 2 to this Agreement. 12. "Environmental and Social Documents" or "ESDs" means, collectively, the CHPF, the ESIAs, the ESMF, the EMPs, the Green Charter, the PF, the RAPs, and the RPF. 13. "Environmental and Social Impact Assessment" or "ESIA" means any of the three evaluations of the potential environmental and social risks and impacts of Parts A through D of the Project that have been prepared by the Recipient and dated March 2005, or that may be later prepared in accordance with the ESMF, as the same may be amended from time to time with the prior approval of the Association. 14. "Environmental and Social Management Framework" or "ESMF" means the Recipient's document entitled "Cadre de Gestion Environnemental et Social" and dated July 5, 2005, setting forth, inter alia, guidelines, procedures, timetable and other specifications for the ESIAs and/or EMPs that will be prepared, as the case may be, by the Recipient for additional activities that may be proposed during Project implementation for financing under Parts A through D of the Project, designed to offset adverse environmental and social impacts related to Project activities, or to reduce them to acceptable levels, or to enhance positive impacts, as the same may be amended from time to time with the prior approval of the Association. 15. "Environmental Management Plan" or "EMP" means any of four plans, dated March 2005, describing measures for the mitigation, reduction and/or offset of the environmental and social impacts of activities under Parts A through D of the Project, that have been prepared as part of the three ESIAs or, in the case of the proposed protected area at Nosy Tanikely as a separate document, or that may be prepared pursuant to the ESMF. 16. "General Conditions" means the "International Development Association General Conditions for Credits and Grants", dated July 31, 2010. 17. "Grant" means a grant made, or to be made, out of the proceeds of the Financing, to finance a Micro-project. 18. "Grant Agreement" means the agreement to be entered into between the Recipient, through NPS, and a Beneficiary. for the purpose of extending a Grant to said Beneficiary. 19. "Green Charter" means the plan adopted by the Recipient in April 2006, for the sustainable development of hotels and restaurants in Tourism Reserves (as hereinafter defined), identifying inter alia norms in terms of waste disposal, pollution, code of ethics (including policies regarding Human Immuno-Deficiency Virus and Acquired Immuno-Deficiency Syndrome), safeguards and other footprints, for private sector investment on Tourism Reserves. -24- 20. "JIRAMA" means Jiro Sy Rano Malagasy or the Recipient's water and electricity company established and operating pursuant to the Recipient's Ordonnance No. 75-024 dated October 17, 1975. 21. "MEFB" means the Recipient's ministry responsible for finance. 22. "Micro-project" means a set of specific activities financed or to be financed through a Grant made under Part A.2 (b) of the Project. 23. "Mitigation Costs" means the costs of implementing the measures described in the Environmental and Social Documents to mitigate the environmental and social impacts of the Project, but expressly excluding the cost of acquisition of land. 24. "MTC" means the Recipient's ministry responsible for tourism. 25. "Municipality" means a regional administrative authority of the Recipient, governed by the Recipient's laws no. 94-007 and 94-008, both dated April 26, 1995; and "Municipal" as a corresponding meaning. 26. "NPS" means the national Project management secretariat (Secritariat National du Projet) established at MEFB by the Recipient's Decree no. 2005- 289 dated May 24, 2005. 27. "National Tourism Office" means the non-profit association established and operating under the Recipient's laws and regulations and its by-laws dated December 4, 2003, in charge of the promotion of tourism (Office National du Tourisme de Madagascar). 28. "Operating Costs" means the incremental expenses incurred by NPS or EDBM, on account of Project implementation, management and monitoring, including office supplies, vehicles operation and maintenance, communication costs, rental expenses, utilities expenses, consumables, transport, travel and accommodation, per diem, supervision costs and salaries of contractual and temporary staff, but excluding salaries, fees, honoraria, and bonuses of members of the Recipient's civil service. 29. "Original Agreement" means the development credit agreement for the Integrated Growth Poles Project between the Recipient and the Association, dated July 13, 2005, as amended to the date of this Agreement (Credit No. 4101 -MAG). 30. "Original Project" means the Project described in the Original Agreement. 31. "Process Framework" or "PF" means the specific resettlement framework dated February 2005, prepared for the Protected Area to be established at Nosy Tanikely. 32. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. -25- 33. "Procurement Plan" means the Recipient's procurement plan for the Project, dated March 4, 2008 and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 34. "Project Administrative, Financial and Accounting Manual" or "PAFAM" means the manual entitled "Manuel de .Proc6dures administratives, budgitaires, financijres et comptables du Projet PIC" and dated April 2008 adopted by the Recipient, outlining the financial and accounting procedures, policies, and guidelines to be followed by the Recipient in the implementation of the Project, as the same may be amended from time to time with the concurrence of the Association, and such term includes any schedules to the PAFAM. 35. "Project Implementation Manual" or "PIM" means the manual entitled "Manuel d'Exicution du Projet PIC" and dated September 2005 adopted by the Recipient, outlining the institutional and operational arrangements for the implementation of the Project, including, inter alia, the monitoring and evaluation arrangements and the eligibility criteria for activities, and guidelines to be followed in Project implementation, as the same may be amended from time to time with the concurrence of the Association, and such term includes any schedules to the PIM. 36. "Project Manuals" means, collectively the PIM and the PAFAM. 37. "Protected Area" means a delineated protected area established pursuant to the Recipient's law No. 2001/05 dated August 7, 2002. 38. "Region" means a decentralized subdivision of the Recipient, governed by the Recipient's law no. 2004-001dated June 11, 2004, as amended until the date of this Agreement, and "Regional" has a corresponding meaning. 39. "Regional Tourism Office" means any of the Recipient's establishments responsible for the promotion of tourism for a Region (Office R6gional du Tourisme) established pursuant to the laws and regulations of the Recipient. 40. "Resettlement Action Plan" or "RAP" means any of the three plans describing measures for the mitigation of the Project's impacts on Affected Persons dated February 2005, March 2005 and March 2005, respectively, or any plan that may later be prepared pursuant to the RPF, all in form and substance satisfactory to the Association. 41. "Resettlement Policy Framework" or "RPF" means the Resettlement Policy Framework, dated February 2005, issued by the Recipient, and describing a program of actions, measures and policies designed to avoid or minimize any adverse impact or hardship to Affected Persons as a result of the Project or, if such adverse impact or hardship cannot be avoided altogether, provide for the compensation and resettlement of such Affected Persons as may be appropriate. -26- 42. "Selected Regions" means, collectively, the Nosy Be and Taolagnaro Regions, as well as any other part of the Recipient's territory proposed by the Recipient for the purpose of carrying out Project activities and which the Association has confirmed in writing is acceptable to the Association. 43. "Tourism Reserve" means a delineated geographical zone (Riserve fonciire touristique) where tourist enterprises are to be established pursuant to the Recipient's law No. 95-017 dated August 25, 1995. 44. "Tourism Reserve Concession" means a concession for the exploitation of a Tourism Reserve granted by the Recipient to a private party.