SCF - FIP LOAN NUMBER TF B5388 Strategic Climate Fund - Forest Investment Program Loan Agreement (Northern Congo Agroforestry Project) between REPUBLIC OF CONGO and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as an implementing entity of the Forest Investment Program under the Strategic Climate Fund SCF - FIP LOAN NUMBER TF B5388 STRATEGIC CLIMATE FUND FOREST INVESTMENT PROGRAM LOAN AGREEMENT AGREEMENT dated as of the Signature Date between the REPUBLIC OF CONGO ("Borrower") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("World Bank"), acting not in its individual capacity but solely in its capacity as an implementing entity of the Forest Investment Program ("FTP") under the Strategic Climate Fund ("SCF'). (A) WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the project described in Schedule I to this Agreement ("Project"), has requested the World Bank to assist in financing the Project; and (B) WHEREAS by agreement dated the same date as this Agreement (the "FIP Grant Agreement"), the World Bank, acting as an implementing agency of the FIP under the SCF, has agreed to extend to the Borrower a grant in the amount of three million five hundred seventy-five thousand Dollars ($3,575,000) to assist the Borrower in financing the Project. The Borrower and the World Bank hereby agree as follows: Article I Standard Conditions; Definitions 1.01. The Standard 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 Standard Conditions or in the Appendix to this Agreement. Article II Loan 2.01. The World Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of twelve million United States Dollars ($12,000,000) ("Loan"), to assist in financing the Project. 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. -3- 2.03. The Loan is funded out of the resources made available to the World Bank as an implementing entity of the SCF. In accordance with Section 3.02 of the Standard Conditions (as defined in the Appendix to this Agreement), the World Bank's payment obligations in connection with this Agreement are limited to the amount of funds made available to it from the SCF trust fund, and the Borrower's right to withdraw the Loan proceeds is subject to the availability of such funds. 2.04. The Service Charge payable by the Borrower on the Withdrawn Loan Balance shall be equal to one-fourths of one percent (1/4 of 1%) annum. 2.05. The Payment Dates are May 15 and November 15 in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.08. The Payment Currency is USD. Article III The Project 3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall carry out the Project through its Ministry of Forest Economy ("MEF") in accordance with the provisions of Article II of the Standard Conditions. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower and the World Bank shall otherwise agree, the Borrower 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 FIP Grant Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Borrower to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled; (b) the Borrower has recruited the following key staff for the Project Implementation Unit, each on the basis of terms of reference, qualification and experience acceptable to the World Bank and in accordance with the provisions of Section I.A.3 of Schedule 2 to this Agreement: (i) a Project coordinator; (ii) a financial management specialist; (iii) a procurement -4- specialist; (iv) a social development specialist; (v) an environmental specialist; and (vi) an agroforestry specialist; and (c) the Borrower has adopted a Project Implementation Manual, in form and substance satisfactory to the World Bank, in accordance with the provisions of Section LB of Schedule 2 to this Agreement. 4.02. The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement. Article V Borrower's Representative; Addresses 5.01. The Borrower's Representative referred to in Section 10.02 of the Standard Conditions is its minister responsible for finance. 5.02. The Borrower's Address referred to in Section 10.01 of the Standard Conditions is: Ministry of Finance, Budget and Public Portfolio Boulevard Denis Sassou-N'guesso B.P. 2083 Brazzaville, Republic of Congo Facsimile: Email: (242) 2281.43.69 contact@finances.gouv.cg 5.03. The World Bank's Address referred to in Section 10.01 of the Standard Conditions is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable: Telex: Facsimile: INDEVAS 248423 (MCI) or 1-202-477-6391 Washington, D.C. 64145 (MCI) JDN BUDGfl, Q0UE D AG REED as of the Signature Date REPUBLIC OF CONGO n By Aut 1on.ze( IRepresenitative qia'dobert Roger AMETIy Namec: SMinistre des finances, æu Bulget Title: -t l, Portefuifte 'u~fic Date: INTERNATIONAL DEVELOPIMENT ASSOCJATION acting as an imuplementing entity of cnent Program under the Strategic Climatce 1111 D3 . Narnc: \jCdSX -- Tide: Ccý X\'veý, ~ ~ Dýcý (ý __I,__ý -6- SCHEDULE1 Project Description The objective of the Project is to strengthen climate smart agriculture and conservation practices in Community Development Zones in the departments of Sangha and Likouala. The Project consists of the following parts: Part 1: Involving Indigenous Peoples and Local Communities in Climate-smart Agroforestry and Sustainable Forest Resource Management Supporting the Borrower to reduce the environmental footprint of agriculture on the forest while improving local livelihoods, through: 1.1 Promoting climate-smart agroforestry production 1.1.1 Implementing agroforestry systems in degraded areas through the provision of inputs, services, and technical support to identified smallholders, by: (a) developing a database and atlas to identify priority sites for agroforestry investments in Community Development Zones; (b) providing agroforestry production packages (including inputs, Extension Services, technical advisory services and Training) to selected smallholders converting a portion of their smallholding into climate-smart agroforest, through the contracting of a Service Provider (an "Agroforestry Microproject"); (c) supporting combinations of market gardening crops with tree species through provision of inputs and irrigation, to rehabilitate degraded and deforested areas in proximity to refugee camps, improve nutrition and increase revenues of vulnerable households, through the contracting of a Service Provider (a "Market Gardening Microproject"); (d) (i) financing microprojects: (A) providing to farmer producer groups seeds and seedlings for climate-smart agroforestry species; and (B) constructing four new nurseries with corresponding irrigation systems and rehabilitating four existing abandoned nurseries and their irrigation systems, in selected forest concessions (a "Nursery Microproject"); and (ii) contracting one -7- or more Service Providers to support and monitor effective implementation of said Nursery Microprojects; (e) supporting the creation of vegetative firebreaks and fire lines and providing light equipment and Training to CGDCs; (f) providing technical advisory services, Training and Extension Services to support selected farmers and indigenous peoples with climate-smart agroforestry practices and sustainable forest management; and (g) carrying out awareness campaigns to sensitize farmers regarding the benefits of agroforestry systems, including: (i) support to establish farmer field schools with community demonstration plots and an agroforestry champions strategy; (ii) educational activities to promote nutritional awareness; (iii) communication activities with a focus on women at the local level with support from local NGOs; (iv) a gender assessment and gender-based violence action plan, as well as capacity building measures to identify and address gender-based violence affecting Project beneficiaries; and (v) awareness raising activities to address the needs of other vulnerable population groups, particularly indigenous peoples. 1.1.2 Strengthening capacity of: (a) Service Providers involved in Project implementation; and (b) decentralized forest management and Extension Services at departmental and local level by providing: (i) installation fees and recurrent costs to provide internet connectivity services within the Departmental Directorates of Forest Economy in Sangha and Likouala; (ii) advisory services, Training and communication equipment (including GIS hardware and software for data collection and map analytics); (iii) advisory services, Training and acquisition and maintenance of two drones to be used for imaging, analysis and monitoring of Project areas only; and (iv) Training to agricultural agents in villages. 1.1.3 Enhancing land tenure arrangements, through: (a) assessment of land tenure; (b) support of an inter-ministerial dialogue on land security; (c) piloting a system to map and record land rights in the Project areas; (d) outreach and awareness raising activities on land tenure, land titling, applicable laws and rules; and (e) contracting a consultant to support the carrying out of activities under Parts 1.1.3(a), (b), (c), and (d). 1.2 Supporting integrated value chains for agroforestry and non-timber forest products Improving value addition of agroforestry products (including cocoa, food crops and non-timber forest products) in selected Project areas, through: (a) the creation of and the provision of advisory services and Training for farmer producer groups; and (b) the implementation of investments in climate-smart agroforestry, including inter alia: (i) financing microprojects providing to farmer producer groups inputs and technical assistance, including supply chain inputs, necessary transportation equipment and vehicles for selected farmer producer groups, small infrastructure, technologies, processing and marketing (a "Value Chain Microproject"); and (ii) contracting Service Providers to support and monitor effective implementation of said Value Chain Microprojects. Part 2: Paying for Environmental Services in Sangha and Likouala Supporting the Borrower to incentivize sustainable forest conservation and reforestation, through: 2.1 Piloting household paymentsfor environmental services for forest conservation Developing and implementing household payments for environmental services ("PES") to improve conservation of natural forest areas by piloting a mechanism in identified Project areas, through: (a) the financing of conditional cash transfers ('CCTs") for eligible CCT Beneficiaries; and (b) the contracting of one or more Service Providers to support the implementation and monitoring of said CCTs. 2.2. Piloting community payments for environmental services for forest conservation 2.2.1 Developing and implementing an incentive system to improve sustainable forest management on communal lands and enhance local communities' participation in forest conservation by piloting community PES for conservation areas through: (a) the financing of eligible subprojects (including inter alia inputs, technical assistance, local infrastructure and equipment) for the benefit of local communities, sustainable forest resource management practices and social development goals, that are proposed by CGDCs and approved by the PIU (a "PES Subproject"); and (b) the contracting of one or more Service Providers to support the implementation and monitoring of said PES Subprojects. 2.2.2 Strengthening institutional capacity for local service delivery for agroforestry and forest resource management, including through: (a) technical advisory services to support the development or update of Simple Management Plans for Community Development Zones in Project areas; and (b) contracting of Service Providers to provide capacity building support to CGDCs and FDLs. Part 3: Project Management, Monitoring, and Evaluation Support for Project management, coordination and monitoring and evaluation, including financial management, procurement management, contract management, Safeguards Instruments implementation, monitoring and evaluation, reporting and coordination of Project activities, through the provision of technical advisory services, Training, Operating costs, acquisition of goods and equipment. Part 4: Contingent Emergency Response Component Providing immediate response to an Eligible Crisis or Emergency, as needed. A-1 -10- SCHEDULE 2 Project Execution Section I. Institutional and Other Arrangements A. Institutional Arrangements The Borrower shall, throughout Project implementation, maintain the following institutional arrangements, as further described in the Project Implementation Manual. 1. The Borrower shall vest overall responsibility for Project implementation in its MEF and shall take all actions including the provision of funding, personnel and other resources necessary to enable the MEF to perform its functions, in collaboration with theBorrower's Ministry of Agriculture, Livestock and Fisheries ("MAEP"). 2. Steerin, Committee The Borrower shall maintain a steering committee (the "Steering Committee") at all times during Project implementation, with a structure, functions and responsibilities acceptable to the World Bank, which shall be responsible for overall Project oversight and guidance and approving Annual Work Plans and Budgets. The Steering Committee shall be chaired by a representative of the Borrower's Ministry of Economy, Planning, Statistics and Regional Integration, and shall include at least a representative from the Borrower's MFBPP, MEF and MAEP, as well as the Project coordinator. 3. Project Implementation Unit (a) The Borrower shall, not later than one (1) month after the Effective Date and, thereafter, maintain at all times during the Project implementation period, a Project Implementation Unit ("PIU") within the Borrower's MEF, with composition, mandate, staffing and resources decided by the Borrower and satisfactory to the World Bank. (b) Without limitation on the provisions of sub-paragraph 3(a) immediately above, the PIU shall have responsibility for Project implementation, management and day-to-day coordination of the Project activities, including inter alia: (i) the coordination, monitoring, evaluation, reporting and communication of the Project; (ii) planning and implementation of the Project; (iii) fiduciary management (i.e., financial and procurement management) of the Project; (iv) ensuring compliance with social and environmental safeguards aspects of the Project; (v) supervision, -11- monitoring and evaluation; and (vi) preparing Annual Work Plans and Budgets. (c) To this end, the PIU shall recruit and retain at all times during Project implementation, inter alia, the following staff, each with terms of reference, qualifications and experience satisfactory to the World Bank: (i) a Project coordinator; (ii) administrative / treasurer assistant; (iii) an accountant; (iv) a financial management specialist; (v) a procurement specialist; (vi) a social development specialist with experience in gender- based violence and communications; (vii) an environmental specialist with experience in monitoring and evaluation; and (viii) an agroforestry specialist. 4. Departmental Directorates of Forest Economy and National Center for the Inventory of Forest and Wildlife Resources Without limitation on the provisions of Sections I.A.2 and I.A.3 of this Schedule, for the purpose of ensuring the prompt and efficient implementation and monitoring of Project activities, the Borrower: (a) shall ensure that the PIU and MEF carry out all activities of the Project in close coordination with: (i) the two Directorates of Forest Economy (Directions D9partementales de l'Economie Forestire, "DDEF"), supported by the Brigades Forestibres, and (ii) the National Center for the Inventory of Forest and Wildlife Resources ("CNIAF"); and (b) shall make available to these DDEF, Brigades Forestibres, and CNIAF the resources and staff (including a focal point in each DDEF), required to facilitate the implementation and monitoring of the Project activities. To this end, the two DDEF, the Brigades Foresti&res and CNIAF shall support the PrU through technical and administrative support, as shall be further described in the Project Implementation Manual. B. Project Implementation Manual 1. Pursuant to Article 4.01 (c) of this Agreement, the Borrower shall: (a) elaborate and adopt a manual satisfactory to the World Bank which shall include the following provisions: (i) institutional coordination and day-to- day execution of the Project; (ii) Project budgeting, disbursement and financial management; (iii) procurement; (iv) monitoring, evaluation, reporting and communication of Project activities; (v) environmental and social safeguard guidelines; (vi) a grievance redress mechanism that encompasses transparent, timely and fair procedures that will allow people potentially affected by the Project to peacefully settle any possible grievance and will ensure that all complaints received from beneficiaries and other interested stakeholders related to any activity under the Project, are properly and timely addressed; (vii) personal data collection and -12- processing in accordance with applicable national law and good international practice; (viii) selection, implementation, payment, monitoring and evaluation (including inter alia eligibility criteria, payment methods, verification protocols) for Agroforestry Microprojects, Market Gardening Microprojects, Nursery Microprojects, Value Chain Microprojects, CCTs and PES Subprojects; (ix) measures to mitigate child labor risks; and (x) such other administrative, financial, technical, and organizational arrangements and procedures as shall be required for all Project activities ('Troject Implementation Manual", or "PIM"); and (b) ensure that the Project is implemented in accordance with the provisions of the Project Implementation Manual. 2. The Borrower shall not amend, abrogate, waive or fail to enforce any provision of the Project Implementation Manual without the prior written agreement of the World Bank. 3. In case of any conflict between the arrangements and procedures set out in the Project Implementation Manual and the provisions of this Agreement, the provisions of this Agreement shall prevail. C. Annual Work Plan and Budget 1 . The Borrower shall, not later than November 30 of each year of Project implementation, prepare and furnish to the World Bank for its approval, an annual work plan and budget ("Annual Work Plan and Budget") containing all activities proposed to be carried out under the Project and a proposed financing plan for expenditures required for such activities, setting forth the proposed amounts and sources of financing. 2. The Borrower shall afford the World Bank a reasonable opportunity to exchange views with the Borrower on such proposed Annual Work Plan and Budget and thereafter ensure that the Project is implemented in accordance with such Annual Work Plan and Budget as shall have been approved by the World Bank. 3. Only the activities included in an Annual Work Plan and Budget expressly approved by the World Bank shall be eligible for financing out of the proceeds of the Loan. 4. Each such proposed Annual Work Plan and Budget shall specify, among the activities, any training activities that may be required under the Project, including: (a) the type and scope of training; (b) the method of training; (c) the purpose of the training; (d) the personnel to be trained; (e) the institution or individual who will conduct the training; (f) the location and duration of the training; (g) the cost of the training; and (h) the outcome and impact of the training. -13- 5. The Borrower shall ensure that the Project is carried out in accordance with the Annual Work Plans and Budgets. 6. Notwithstanding the foregoing, an Annual Work Plan and Budget may be amended from time to time as needed, with the prior written agreement of the World Bank. D. Anti-Corruption The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. E. Microprojects under Part 1 of the Project 1 . In order to achieve the objectives of Part I of the Project, no proposed Agroforestry Microproject under Part 1.1.1(b), Market Gardening Microproject under Part 1.1.1(c), Nursery Microproject under Part 1.1.1(d), and/or Value Chain Microproject under Part 1.2 (all together, "Microprojects"), shall be eligible for financing unless the Borrower (through the PIU) has determined, on the basis of an assessment and in accordance with the procedures set forth in the PIM, that the proposed Microproject satisfies the eligibility criteria specified in further detail in the PIM, which shall include, inter alia, that: (a) the proposed Agroforestry Microproject provides climate-smart agroforestry production, the proposed Market Gardening Microproject is carried out in degraded and deforested areas, the proposed Nursery Microproject provides climate-smart agroforestry inputs, and the proposed Value Chain Microproject supports integrated value chains for agroforestry and non-timber forest products; (b) the proposed Microproject does not: (i) involve non-eligible expenditures (as such term is defined in the PIM); (ii) affect international waterways, natural habitats or disputed areas; (iii) involve the conversion or degradation of forest areas; (iv) involve the construction or rehabilitation of dams; (v) entail a classification as 'High" in accordance with the World Bank's environmental and social policies and procedures; and (vi) finance Excluded Expenditures, as set forth in this Agreement; and (c) the proposed Microproject has fulfilled the requirements of any applicable Safeguards Instrument. 2. The Borrower, through the PIU, shall prior to implementation of Microprojects under Part 1, contract Service Providers under Service Agreements, under terms and conditions which shall have been approved by the World Bank, to implement -14- selected Microprojects financed under Part I of the Project and monitor their compliance with Safeguards Instruments. 3. The Service Agreements shall include, inter alia: the Service Providers' obligation to: (a) procure the goods, works and services in accordance with the provisions of this Agreement; (b) carry out its obligations under the Service Agreement with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social aspects and practices satisfactory to the World Bank, including in accordance with the provisions of the Procurement Regulations, Environmental and Social Standards and the Anti-Corruption Guidelines; (c) provide, promptly as needed, the resources required for the purpose; (d) maintain procedures adequate to enable it to monitor and evaluate in accordance with indicators acceptable to the World Bank, the progress of the Microprojects, and the achievement of their objectives; (e): (i) maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the World Bank, both in a manner adequate to reflect the operations, resources and expenditures related to the Microprojects; and (ii) at the World Bank's or the Borrower's request, have such financial statements audited by independent auditors acceptable to the World Bank, in accordance with consistently applied auditing standards acceptable to the World Bank; (f) enable the Borrower and the World Bank to inspect the Service Provider, its operation and any relevant records and documents; and (g) prepare and furnish to the Borrower and the World Bank all such information as the Borrower or the World Bank shall reasonably request relating to the foregoing. 4. The Borrower shall, through the PIU, ensure that the Service Provider: (a) is a natural person or a legal entity established and operating under the laws of the Borrower with the organization, management, technical capacity and financial resources necessary to carry out the proposed Microproject(s); (b) has prepared a satisfactory business plan, including financing plan and budget, for the proposed Microproject(s); and (c) complies with specific requirements defined in the PIM. 5. The Borrower, through the P1U, shall exercise its rights and carry out its obligations under each Service Agreement in such manner as to protect the interests of the Borrower and the World Bank and to accomplish the purposes of the Loan, including the right to suspend or terminate the right of the Service Provider to use the proceeds of its financing, or obtain a refund of all or any part of the amount then withdrawn, upon the Service Provider's failure to perform any of its obligations under the Service Agreement. -15- 6. The Borrower shall not assign, amend, abrogate or waive any Service Agreement or any of its provisions without the prior written approval of the World Bank. F. Conditional Cash Transfers ("CCTs") under Part 2.1 of the Project 1. In order to achieve the objectives of Part 2.1 of the Project, the Borrower shall provide CCTs to CCT Beneficiaries, in accordance with eligibility criteria and procedures acceptable to the World Bank and further detailed in the PIM and as follows: (a) financing annual individual PES through CCTs for approximately 3,200 smallholders in targeted areas; and (b) individual CCTs shall not exceed the ceiling established during Project implementation and set forth in the Project Implementation Manual, subject to the World Bank's prior written approval. 2. The eligibility criteria for CCT Beneficiaries shall include, inter alia, that: (a) said CCT Beneficiary shall have been enrolled in the agroforestry activities carried out under Part 1.1 of the Project and living in degraded areas with high poverty rates; (b) said CCT Beneficiary shall continuously comply with best sustainable agroforestry practices as well as avoid deforestation, as set forth in the PIM); and (c) said CCT Beneficiary shall have been selected through a combination of targeting mechanisms to assess its eligibility (including a needs and conditions assessment and socioeconomic characteristics). 3. The Borrower, through the PIU, shall, prior to implementation of CCTs under Part 2.1 of the Project, conclude and thereafter implement, until it has expired in accordance with its terms, a Service Agreement, in form and substance satisfactory to the World Bank and in accordance with criteria and procedures set forth in the PIM, with one or more Service Providers, duly authorized to operate in the territory of the Borrower, selected on the basis of terms of reference, qualifications and experience satisfactory to the World Bank, to assist the Borrower in administering payments of CCTs to CCT Beneficiaries and in overseeing the implementation of CCTs. 4. The Borrower, through the PIU, shall ensure that each Service Agreement is: (a) signed and effective before any proceeds of the Loan are transferred to the Service Provider; and (b) carried out with due diligence and efficiency and in accordance with sound technical, financial, and managerial standards and practices acceptable to the World Bank, including in accordance with the provisions of the Anti-Corruption Guidelines applicable to the recipients of Loan proceeds other than the Borrower. 5. The Borrower, through the PIU, shall cause the Service Provider(s) to monitor and evaluate, under terms of reference satisfactory to the World Bank, the implementation of the CCTs, so as to ensure that payments made under Part 2.1 of the Project are made exclusively to CCT Beneficiaries, for productive purposes consistent with the objectives of the Project. -16- G. PES Subprojects under Part 2.2.1 of the Project In order to achieve the objectives of Part 2.2.1 of the Project, the Borrower shall provide community payments for environmental services (" Community PES") to offer alternative solutions to local communities to improve sustainable forest management on communal conservation areas identified through a participatory local process and in line with the Simple Management Plan ("PES Subprojects"), in accordance with eligibility criteria and procedures acceptable to the World Bank and further detailed in the PIM and as follows: (a) financing a PES Subproject in response to deforestation and forest degradation for approximately 25 villages; and (b) Community PES under a PES Subproject shall not exceed the cash equivalent of 3.600,000 FCFA per year (this ceiling may be revised as needed during Project implementation, subject to the World Bank's prior written approval). 2. The Borrower, through the PIU, shall, prior to implementation of PES Subprojects under Part 2.2.1, enter into an agreement with one or more Service Providers ("Service Agreement"), under terms and conditions which shall have been approved by the World Bank and shall include, inter alia: (a) the selected Service Provider's obligation to select PES Subprojects in accordance with eligibility criteria acceptable to the World Bank and set forth in the PIM, which shall not include: (i) any subprojects involving non-eligible expenditures (as such term is defined in the PIM); (ii) any subprojects affecting international waterways, natural habitats or disputed areas; (iii) any subprojects involving the conversion or degradation of forest areas; (iv) any subprojects involving the construction or rehabilitation of dams; (v) any subprojects that would be classified as 'High" in accordance with the World Bank's environmental and social policies and procedures; and (vi) any sub-projects that finance Excluded Expenditures, as set forth in this Agreement. (b) The Service Provider's obligation to: (i) procure the goods, works and services in accordance with the provisions of this Agreement; (ii) carry out -17- its obligations under the Service Agreement with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social aspects and practices satisfactory to the World Bank, including in accordance with the provisions of the Procurement Regulations, Environmental and Social Standards and the Anti-Corruption Guidelines; (iii) provide, promptly as needed, the resources required for the purpose; (iv) maintain procedures adequate to enable it to monitor and evaluate in accordance with indicators acceptable to the World Bank, the progress of the PES Subproject and the achievement of its objectives; and (v) prepare and furnish to the Borrower and the World Bank all such information as the Borrower or the World Bank shall reasonably request relating to the foregoing. 3. The Borrower, through the PIU, shall exercise its rights and carry out its obligations under each Service Agreement in such manner as to protect the interests of the Borrower and the World Bank and to accomplish the purposes of the Loan. Except as the World Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive any Service Agreement or any of its provisions. H. Safeguards 1 . The Borrower shall ensure that the Project is carried out with due regard to appropriate health, safety, social, and environmental standards and practices, and in accordance with the Safeguards Instruments. 2. To that end, the Borrower shall ensure that: (a) if any activity under the Project would require the adoption of any Supplemental Safeguards Instruments: (i) prepare: (A) such Supplemental Safeguards Instruments in accordance with the applicable Safeguards Instruments; (B) furnish such Supplemental Safeguards Instruments to the World Bank for review and approval; (C) adopt such Supplemental Safeguards Instruments prior to implementation of the activity; and (D) incorporate said Supplemental Safeguards Instruments in the bidding documents; and (ii) thereafter take such measures as shall be necessary or appropriate to ensure full compliance with the requirements of such Supplemental Safeguards Instruments; and (b) if any activity under the Project would involve Affected Persons, ensure that no displacement (including restriction of access to legally designated parks and protected areas) shall occur before resettlement measures under -18- the RAP, including, in the case of displacement, full payment to Affected Persons of compensation and of other assistance required for relocation, have been taken. 3. Without limitation upon its other reporting obligations under this Agreement, the Borrower shall, for each Safeguards Instrument and each Supplemental Safeguards Instrument, regularly collect, compile and furnish to the World Bank reports in form and substance satisfactory to the World Bank, on the status of compliance with each Safeguards Instrument and each Supplemental Safeguards Instrument, as part of the Project Reports, giving details of: (a) measures taken in furtherance of such Safeguards Instrument and each Supplemental Safeguards Instrument; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of such Safeguards Instrument and each Supplemental Safeguards Instrument; and (c) remedial measures taken or required to be taken to address such conditions. 4. The Borrower shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors and subcontractors to: (a) comply with the relevant aspects of Safeguards Instruments; (b) adopt and implement measures to assess and manage the risks and impacts of labor influx; and (c) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures on environmental, social, health and safety, gender-based violence and violence against children; all as applicable to such civil works commissioned or carried out pursuant to said contracts. 5. The Borrower shall promptly notify (and no later than forty-eight (48) hours after becoming aware of the incident or accident) the World Bank of any incident or accident related to or having an impact on the Project, including but not limited to any Project-related allegation of gender-based violence or alleged violation of Project-related labor and working conditions, which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the Safeguards Instruments, and the instruments referenced therein. 6. Except as the World Bank shall otherwise agree, the Borrower shall ensure that none of the provisions of the Safeguards Instruments is abrogated, amended, repealed, suspended or waived. -19- 7. In case of any inconsistencies between the provisions of any of the Safeguards Instruments or any Supplemental Safeguards Instrument and the provisions of this Agreement, the provisions of this Agreement shall prevail. 1. Grievance Mechanism The Borrower shall maintain throughout Project implementation, and publicize the availability of a grievance redress mechanism, in form and substance satisfactory to the World Bank, to receive and address fairly and in good faith all complaints raised in relation to the Project (including occupational health and safety, gender-based violence, violence against children and sexual exploitation and abuse complaints), and take all measures necessary to implement the determinations made by such mechanism in a manner satisfactory to the World Bank J. Contingent Emergency Response 1 . In order to ensure the proper implementation of contingent emergency response activities under Part 4 of the Project ("Contingent Emergency Response Part"), the Borrower shall ensure that: (a) a manual ("CERC Manual") is prepared and adopted in form and substance acceptable to the World Bank, which shall set forth detailed implementation arrangements for the Contingent Emergency Response Part, including: (i) any structures or institutional arrangements for coordinating and implementing the Contingent Emergency Response Part; (ii) specific activities which may be included in the Contingent Emergency Response Part, Eligible Expenditures required therefor ("Emergency Expenditures"), and any procedures for such inclusion; (iii) financial management arrangements for the Contingent Emergency Response Part; (iv) procurement methods and procedures for the Contingent Emergency Response Part; (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 Part; and (vii) a template Emergency Action Plan; (b) the Emergency Action Plan is prepared and adopted in form and substance acceptable to the World Bank; (c) the Emergency Response Part 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 -20- (d) neither the CERC Manual nor the Emergency Action Plan is amended, suspended, abrogated, repealed or waived without the prior written approval by the World Bank. 2. The Borrower shall ensure that the structures and arrangements referred to in the CERC Manual are maintained throughout the implementation of the Contingent Emergency Response Part, with adequate staff and resources satisfactory to the World Bank. 3. The Borrower shall ensure that: (a) the environmental and social instruments required for the Contingent Emergency Response Part are prepared, disclosed and adopted in accordance with the CERC Manual and the ESCP, and in form and substance acceptable to the World Bank; and (b) the Contingent Emergency Response Part is carried out in accordance with the environmental and social instruments in a manner acceptable to the World Bank. 4. Activities under the Contingent Emergency Response Part shall be undertaken only after an Eligible Crisis or Emergency has occurred. Section U. Project Monitoring, Reporting and Evaluation A. Project Reports; Completion Report 1. The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Conditions and on the basis of indicators acceptable to the World Bank. Each Project Report shall cover the period of one calendar quarter, and shall be furnished to the World Bank not later than forty-five (45) days after the end of the period covered by such report. 2. The Borrower shall prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than six (6) months after the Closing Date. B. Financial Management; Financial Reports; Audits 1. The Borrower shall ensure that a financial management system is maintained in accordance with the provisions of Section 2.07 of the Standard Conditions. -21- 2. Without limitation on the provisions of Part A of this Section, the Borrower shall ensure that interim unaudited financial reports for the Project are prepared and furnished to the World Bank as part of the Project Report not later than forty-five (45) days after the end of each calendar quarter, covering the quarter, in form and substance satisfactory to the World Bank. 3. The Borrower shall have its Financial Statements for the Project audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Each such audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the World Bank not later than six (6) months after the end of such period. Section Ill. Procurement All goods, works, non-consulting services and consulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in the Procurement Regulations and the provisions of the Procurement Plan. Section IV. Withdrawal of Loan Proceeds A. General 1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article III of the Standard Conditions, this Section and such additional instructions as the World Bank may specify by notice to the Borrower (including the "Disbursement Guidelines for Investment Project Financing" dated February 2017, as revised from time to time by the World Bank 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 Loan ("Category"), the allocations of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: -22- Amount of the Loan Percentage of Allocated Expenditures to be Category (expressed in USD) Financed (inclusive of Taxes) (1) Goods, works, non-consulting 8,000,000 77% services and consulting services, Training and Operating Costs under the Project (excluding Parts 1.1.11(b)(c)(d), 1.2, 2.1 and 2.2.1 of the Project) (2) Microprojects, CCTs, and PES 4,000,000 77% Subprojects, under Parts 1.1.1(b)(c)(d), 1.2, 2.1 and 2.2.1 of the Project (3) Emergency Expenditures 0 under Part 4 of the Project TOTAL AMOUNT 12,000,000 B. Withdrawal Conditions; Withdrawal Period I1. Notwithstanding the provisions of Part A of this Section no withdrawal shall be made: (a) for payments made prior to the date of this Agreement; (b) for Emergency Expenditures under Category (3), unless and until all of the following conditions have been met in respect of said expenditures: (i) (A) the Borrower has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the World Bank a request to withdraw Loan Financing amounts under Category (3); and (B) the World Bank has agreed with such determination, accepted said request and notified the Borrower thereof; and (ii) the Borrower has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the World Bank. 2. The Closing Date is January 31, 2027. Al -23- SCHEDULE 3 Repayment Schedule Date Payment Due Principal Amount of the Loan repayable (expressed as a percentage) On each May 15 and November 15: commencing May 15, 2032 to and including 1% November 15, 2041 commencing May 15, 2042 to and including 2% November 15, 2061 Al -24- APPENDIX Definitions I. "Affected Person" means a person or entity who, on account of the execution of the Project and/or Subprojects, has experienced or would experience direct economic and social impacts caused by: (a) the involuntary taking of land resulting in: (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not such person must move to another location; or (b) the involuntary restriction of access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such person; and, "Affected Persons", means more than one such Affected Person. 2. "Agroforestry Microproject" means an eligible microproject under Part 1.1.1 (b) of the Project, to be selected and carried out in accordance with the requirements of Section I.E of Schedule 2 to this Agreement and the PIM; and "Agroforestry Microprojects" means two or more of such microprojects. 3. "Annual Work Plan and Budget" means each annual work plan, together with the related budget, for the Project approved by the World Bank pursuant to the provisions of Section I.C of Schedule 2 to this Agreement. 4. "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 and as of July 1,2016. 5. "Brigades Forestieres" means the forest brigades of the MEF located in the Project areas, supporting Project implementation and monitoring, referred to in Section I.A.4 of Schedule 2 to this Agreement. 6. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 7. "CCT" means a household PES provided through a conditional cash transfer to be financed under Part 2.1 of the Project, in accordance with provisions of Section I.F.1 of Schedule 2 to this Agreement; and "CCTs" means two or more of such cash transfers. 8. "CCT Beneficiary" means the beneficiary of CCTs, a smallholder household located in a degraded area, enrolled in the agroforestry activities carried out under Part 1.1 of the Project referred to in Section L.F.1 of Schedule 2 to this Agreement. 9. "CGDC" means a Comiti de Gestion et de Dgveloppenent Communautaire, decentralized governance units established through the Borrower's Decree No. -25- 2013-280 of June 25, 2013 to promote community participation and responsible for, among other tasks, implementing and monitoring local development projects of public interest. 10. "Community PES" means the community payments for environmental services provided under the PES Subprojects. 11. "Community Development Zones" or "SDCs" means s6ries de d6veloppement communautaire established under the Borrower's legislation and regulations, which are residential areas identified in the management plans of forest concession holders for forest communities to live and practice their livelihood activities. 12. DDEF' means the Borrower's Directions D9partementales de l'Economie Forestire, departmental directorates of forest economy supporting Project implementation and monitoring, referred to in Section LA.4 of Schedule 2 to this Agreement. 13. "Environmental and Social Management Framework" or "ESMF" means the instrument prepared and adopted by the Borrower, satisfactory to the World Bank, dated January 2021, disclosed in-country, and on the World Bank's website on February 25, 2021, setting out the principles, rules, guidelines and procedures to screen and assess the potential adverse environmental and social risks and impacts (including health and safety issues) of Project activities, adopt measures to avoid, reduce, mitigate or offset environmental and social adverse risks and impacts, procedural, budget and institutional arrangements and actions needed to implement these measures, and information on the agency or agencies responsible for addressing the Projects' risks and impacts; as well as for the preparation of environmental and social management plans as such framework may be amended by the Borrower from time to time, with the prior written agreement of the World Bank. 14. "Extension Services" means the services to be provided under Parts 1.1(b), 1.1 (f) and 1.1.2 ofthe Project, which may include inter alia: support on cleaning, staking, hole-drilling, sowing, transport and reception of seedlings, planting, harvest, collection and transport of production, processing, and marketing. 15. "FDL" means Fonds de ddveloppenent local, the local development funds, established through the Borrower's Orders No. 2667/MDDEFE/CAB and No. 2669/MDDEFE/CAB of April 15, 2010, which are funded by a tax on forest concession holders to support community development activities in the Community Development Zones. 16. "FIP Design Document" is the design document for the Forest Investment Program, approved by the Strategic Climate Fund Trust Fund Committee and -26- issued on July 7, 2009; said design may be amended from time to time in accordance with its terms. 17. "Forest and Economic Diversification Project" means the Forest and Economic Diversification Project, the Financing Agreement of which was signed by the Borrower and the Bank on June 13,2012 (CreditNo. 5121-CG), and the Additional Grant Agreement of which was signed by the Borrower and the World Bank on June 23, 2017 (GEF Grant No. TF0A4666). 18. "Forest Investment Program" or "FIP" means the program established under the Strategic Climate Fund in accordance with the Governance Framework for the Strategic Climate Fund for the purposes set forth in the FIP Design Document. 19. "Indigenous Peoples Planning Framework" or "IPPF" means the instrument prepared and adopted by the Borrower, satisfactory to the World Bank, and disclosed on the World Bank's website on February 25, 2021, which sets out the principles, organizational arrangements (including consultation, budget and disclosure), and design criteria to be applied to Project activities which affect indigenous peoples, including the preparation of indigenous peoples plans, as such framework may be amended from time to time with the prior written agreement of the World Bank. 20. "MAEP" means Ministhre de I'Agriculture, de VElevage, et de la Piche, the Borrower's ministry in charge of agriculture, or any successor thereto. 21. "Market Gardening Microproject" means an eligible microproject under Part 1.1.1(c) of the Project, to be selected and carried out in accordance with the provisions of Section I.E of Schedule 2 to this Agreement and the PIM; and "Market Gardening Microprojects" means two or more of such microprojects. 22. "MEF" means Minist&re de I'conomie Foresti6re, the Borrower's ministry in charge of forest economy, or any successor thereto. 23. "MFBPP" means the Borrower's ministry in charge of finance, budget and public portfolio, or any successor thereto. 24. "Microproject" means either an Agroforestry Microproject, a Market Gardening Microproject, a Nursery Microproject, or a Value Chain Microproject; and "Microprojects" means all Agroforestry Microprojects, Market Gardening Microprojects, Nursery Microprojects and Value Chain Microprojects financed under Part I of the Project. 25. "Ministry of Economy, Planning, Statistics and Regional Integration" means the Borrower's ministry in charge of planning, or any successor thereto. A6 -27- 26. "National Center for the Inventory of Forest and Wildlife Resources" or "CNIA" means the Borrower's Centre National d'Inventaire d'Aminagement des Ressources Foresti&res et Fauniques supporting Project implementation and monitoring, referred to in Section I.A.4 of Schedule 2 to this Agreement. 27. "NGO" means non-governmental organization; and "NGOs" means two or more of such organizations. 28. "Nursery Microproject" means an eligible microproject under Part 1.1.1(d) of the Project, to be selected and carried out in accordance with the provisions of Section .E of Schedule 2 to this Agreement and the PIM; and "Nursery Microprojects" means two or more of such microprojects. 29. "Operating Costs" means the reasonable incremental expenses incurred on account of Project implementation, management and monitoring, including office supplies, vehicle operation and maintenance, office equipment maintenance, communication costs, rental expenses, utilities expenses, consumables, transport, travel and accommodation, per diem, supervision costs and salaries of locally contracted staff, but excluding salaries of officials of the Borrower's civil service. 30. "Personal Data" means any information relating to an identified or identifiable individual. An identifiable individual is one who can be identified by reasonable means, directly or indirectly, by reference to an attribute or combination of attributes within the data, or combination of the data with other available information. Attributes that can be used to identify an identifiable individual include, but are not limited to, name, identification number, location data, online identifier, metadata and factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of an individual. 31. "PES" means household and/or community payments for environmental services financed under Part 2 of the Project. 32. "PES Subproject" means an eligible subproject financed under Part 2.2.1 of the Project, to be selected and carried out in accordance with the provisions of Section I.G of Schedule 2 to this Agreement and further described in the PIM; and "PES Subprojects" means two or more of such subprojects. 33. "Pest Management Plan" means the instrument, prepared by the Borrower, satisfactory to the World Bank, and disclosed on the World Bank's website on February 25, 2021, as said instrument may be updated from time to time with the prior written agreement of the World Bank. 34. "Procurement Plan" means the Borrower's procurement plan for the Project, dated April 12, 2021 and provided for under Section IV of the Procurement Regulations, as the same may be updated from time to time in agreement with the World Bank. -28- 35. "Procurement Regulations" means the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 36. "Project biplementation Manual" or "PIM", each means the manual referred to in Section .B.1 of Schedule 2 to this Agrcoient. as the same may be modified fiom time-to-time with the prior written agreement of the World Bank, and such term includes any annexes or schedules to such manual. 37. "Project Implementation Unit" and "PIU" means the unit responsible for the implementation of the Project, referred to in Section L.A.3(a) of Schedule 2 to this Agreement, to be established by the Borrower through a ministerial regulatory text, housed within the MEF, with a composition to be defined by the Borrower but satisfactory to the World Bank. 38. "Resettlement Policy Framework" or "RPF" means the instrument prepared and adopted by the Borrower, satisfactory to the World Bank, and disclosed oin the World Bank's website on February 25, 2021. which sets out the resettlement principles, guidelines, organizational arrangements (including consultation and budget), and design criteria for the preparation of RAPs under the Project, as such framework nay be amended from time to time with the prior writin agreement of the World Bank. 39. "Safecuards Instruments" means collectively, the ESMF, Indigenous Peoples Planning Framework, Resettlement Policy Framework. and Post Management Plan; and "Safeguards Instrument" means any of such Safeguards Instruments 40. "Safeguard Policies" means, the Operational Policies (Ops) and World Bank Procedures (BPs) of the World Bank, namely OP/BP 4.01 (Environmental Assessment), OP/BP 4.04 (Natural -abitats), OP/BP 4.09 (Pest Management). OP/BP 4.10 (Indigenous Peoples), OP/BP 4.11 (Physical Cultural Resources), OP/BPI d.12 (Involuntary Resettlement), OP/BP 4.36 (Forests), and OP/BP 4.37 (Safety of Dams); they can be found at hos:Hoolicies.worldhank.orC. 4 1. "Service Agreement" means the contract to be concluded between the Borrower (through the PlU) and a Service Provider to oversee the implementation and the monitoritg of activities financed under Part 1.1.1(b), 1.1.1(c), 1.1.1(d), 1.2, 2. 1, and/or 2.2.1 of the Project, referred to in Sections I.E and 1.F and I.G of Schedule 2 to this Agreement; and "Service Agreements" means two or more of such agreements. 42. "Service Provider" means a company, an individual or a local or international NGO, acceptable to the Bank, recruited by the Borrower under a Service Agreemtent, for the purposes ofcarrying out activities financed under Part 1.1.1(b), 1.1.1(c), 1.1.1 id), 1.2, 2.1, and/or 2.2.1 of the Project; and "Service Providers" means two or more of such companies. individuals or NGOs. -29- 43. "Signature Date" means the later of the two dates on which the Borrower and the World Bank signed this Loan Agreement. 44. "Simple Management Plans" means the plans developed by communities for each Community Development Zones to map land uses and identify development priorities, and on the basis of or purpose for which communities will designate conservation areas eligible for PES Subprojects and locations for community infrastructure supported under Part 2.2.1(a) of the Project. 45. "Standard Conditions" means the Standard Conditions for Loans Made by the World Bank Out of the Climate Investment Funds, dated February 18, 2014. 46. "Steering Committee" means the steering committee for the Project referred to in Section I.A.2 of Schedule 2 to this Agreement. 47. "Training" means the reasonable costs for training under the Project, as shall have been approved by the World Bank, including seminars, workshops, study tours, along with travel and subsistence costs for training participants, costs associated with the services of trainers, rental of training facilities, preparation and reproduction of training materials, and other costs directly related to training preparation and implementation. 48. "Value Chain Microproject" means an eligible microproject under Part 1.2 of the Project, to be selected and carried out in accordance with the requirements of Section LE of Schedule 2 to this Agreement and the PIM; and "Value Chain Microprojects" means two or more of such microprojects.