LOAN NUMBER 9216-JM Loan Agreement (COVID-19 Response and Recovery Development Policy Loan) between JAMAICA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN AGREEMENT AGREEMENT dated as of the Signature Date between JAMAICA ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank") for the purpose of providing financing in support of the Program (as defined in the Appendix to this Agreement). The Bank has decided to provide this financing on the basis, inter alia, of: (i) the actions which the Borrower has already taken under the Program and which are described in Section I of Schedule 1 to this Agreement; and (ii) the Borrower's maintenance of an adequate macroeconomic policy framework. The Borrower and the Bank therefore hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - LOAN 2.01. The Bank agrees to lend to the Borrower the amount of one hundred and fifty million Dollars ($150,000,000), as such amount may be converted from time to time through a Currency Conversion ("Loan"). 2.02. The Front-end Fee is one quarter of one percent (0.25%). 2.03 The Commitment Charge is one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2.04. The interest rate is the Reference Rate plus the Variable Spread or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions. 2.05. The Payment Dates are June 15 and December 15 in each year. 2.06. The principal amount of the Loan shall be repaid in accordance with Schedule 2 to this Agreement. 2.07. Without limitation upon the provisions of Section 5.05 of the General Conditions, the Borrower shall promptly furnish to the Bank such information relating to the provisions of this Article II as the Bank may, from time to time, reasonably request. -2- ARTICLE III - PROGRAM 3.01. The Borrower declares its commitment to the Program and its implementation. To this end, and further to Section 5.05 of the General Conditions: (a) the Borrower and the Bank shall from time to time, at the request of either party, exchange views on the Borrower's macroeconomic policy framework and the progress achieved in carrying out the Program and the actions specified in Section I of Schedule 1 to this Agreement; (b) prior to each such exchange of views, the Borrower shall furnish to the Bank for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Bank shall reasonably request; and (c) without limitation upon paragraph (a) and (b) of this Section, the Borrower shall promptly inform the Bank of any situation that would have the effect of materially reversing the objectives of the Program or any action taken under the Program including any action specified in Section I of Schedule 1 to this Agreement. ARTICLE IV - REMEDIES OF THE BANK 4.01. The Additional Event of Suspension consists of the following, namely, that a situation has arisen which shall make it improbable that the Program, or a significant part of it, will be carried out. 4.02. The Additional Event of Acceleration consists of the following, namely, that the event specified in Section 4.01 of this Agreement occurs and is continuing for a period of 60 days after notice of the event has been given by the Bank to the Borrower. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following, namely, that the Bank is satisfied with the progress achieved by the Borrower in carrying out the Program and with the adequacy of the Borrower's macroeconomic policy framework. 5.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. -3- ARTICLE VI- REPRESENTATIVE; ADDRESSES 6.01. The Borrower's Representative is its Minister of Finance and the Public Service. 6.02. For purposes of Section 10.01 of the General Conditions: (a) the Borrower's address is: Ministry of Finance and the Public Service P.O. Box 512 30 National Heroes Circle Kingston 4 Jamaica; and (b) the Borrower's Electronic Address is: Facsimile: E-mail: (876) 924-9291 finsec@mof.gov.jm 6.03. For purposes of Section 10.01 of the General Conditions: (a) the Bank's address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank's Electronic Address is: Telex: Facsimile: 248423(MCI) or 1-202-477-6391 64145(MCI) -4- AGREED as of the Signature Date. JAMAICA By Authorizbd Representative Name: Nigel Clarke Title: Minister of Finance and the Public Service Date: March 24, 2021 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: Tahscen Sayed Title: Country Director Date: 24-Mar-2021 -5- SCHEDULE 1 Program Actions; Availability of Loan Proceeds Section . Actions taken under the Program The actions taken by the Borrower under the Program include the following: Pillar 1: Protecting poor and vulnerable people 1. To provide emergency support to affected individuals impacted by the COVID- 19 pandemic, the Borrower, through the Cabinet, has approved emergency measures, including the provision of: (i) temporary cash transfers through the SET to individuals who lost employment between March 10, 2020 and December 31, 2020 and who had an annual taxable income less than or equal to J$1.5 million; (ii) COVID-19 General Grants to selected occupational groups who are registered with a state or municipal authority; and (iii) Compassionate Grants to individuals with a valid tax payer registration number, not fonnally employed and not recipients or not intending to be recipients of any other benefit under the CARE Programme (as evidenced by: (a) Technical Advisory: Treatment of COVID-19 BEST & SET CASH Grant, issued by Tax Administration Jamaica, dated December 4, 2020; (b) letter from the Cabinet Secretary on Cabinet Decision No. 18/20, dated January 14, 2021; and (c) brochure "CARE: COVID-19 Allocation of Resources for Employees", issued by the Ministry of Finance and the Public Service). 2. To mitigate the impact of the COVID-19 pandemic on the poor, the Borrower, through the Cabinet, has approved: (i) one additional payment to PATH beneficiary households through a PATH CARE grant and top-ups to PATH beneficiary households with school-enrolled children; and (ii) a Social Pension for elderly individuals aged 75 years or more, who are not in receipt of other pensions, including National Insurance Scheme pension, or PATH or Poor Relief payments (as evidenced by: (i) (a) letter from the Cabinet Secretary on Decision No. 38/20, dated January 14, 2021; (b) brochure "CARE: COVID-19 Allocation of Resources for Employees", issued by the Ministry of Finance and the Public Service; and (ii) (a) letter from the Cabinet Secretary on Decision No. 2/21, dated January 19, 2021; and (b) letter from the Permanent Secretary of the Ministry of Labour and Social Security on Decision No. 2/2 1, dated January 26, 2021). 3. To ensure the safe re-opening of the economy, the Borrower, through the Cabinet, has approved an interim National Deployment and Vaccination Plan for the COVID-19 Vaccine including priority groups, such as health workers and non-health frontline workers, recommended for vaccination during the first phase of vaccine deployment (as evidenced by: (a) letter from the Cabinet Secretary on -6- Cabinet Decision No. 2/21, dated January 19, 2021; and (b) National COVID-19 Vaccine Deployment and Vaccination Interim Plan, issued by the Ministry of Health and Wellness, dated December 15, 2020). Pillar 2. Supporting sustainable business growth and job creation 4. To help small businesses, in particular in the tourism sector, to cope with the economic impacts of COVID- 19, the Borrower, through the Cabinet has approved emergency liquidity support to small businesses including: (i) the BEST Cash Program, to provide temporary cash transfers to businesses in the tourism sector based on the number of workers they have kept employed and with an annual income of J$1.5 million or less; (ii) one-time COVID-19 Small Business Grants to small businesses with annual sales of J$50 million or less; and (iii) one-time COVID-19 Tourism Grants to operators in the tourism sector (as evidenced by: (a) Technical Advisory: Treatment of COVID-19 BEST & SET CASH Grant, issued by Tax Administration Jamaica, dated December 4, 2020; (b) letter from the Cabinet Secretary on Cabinet Decision No. 18/20, dated January 14, 2021; and (c) brochure "CARE: COVID-19 Allocation of Resources for Employees", issued by the Ministry of Finance and the Public Service). 5. To promote the growth of microcredit institutions and support responsible lending to MSMEs by the sector, the Borrower has tabled a bill shortly entitled "The Microcredit Act, 2021", which licenses and regulates microcredit institutions and strengthens borrower protection (as evidenced by: (a) letter from the Acting Clerk of the Houses of Parliament on The Microcredit Act, 2021, dated January 13, 2021; and (b) "The Microcredit Act, 2021" bill). 6. To foster Fintech and digital payment products and promote financial inclusion, the Borrower, through the Bank of Jamaica, has issued guidelines for the operation of a Fintech Regulatory Sandbox, including application requirements, eligibility criteria and Fit and Proper requirements (as evidenced by the Fintech Regulatory Sandbox Guidelines, issued by the Bank of Jamaica, published on March 2, 2020 and updated on March 16, 2020 and June 22, 2020). 7. To modernize the trade infrastructure, promote export competitiveness and improve the efficiency of border clearance processes, the Borrower, through the Jamaica Customs Agency, has: (i) allowed electronic processing of export manifests by shipping agents through the online Port Community System and ceased the processing of the dock receipt for export shipments; and (ii) launched the Trade Board Limited on the Jamaica Electronic Single Window for Trade platform for imports and exports (as evidenced by: (i) (a) letter from the Commissioner of Customs on the commencement of electronic export manifest for maritime cargo, dated February 28, 2020; (b) letter from the Commissioner of Customs on the change in customs processes for dock receipt, dated March 26, 2020; (c) letter from the Commissioner of Customs on the submission -7- of maritime manifests through the Port Community System, dated November 5, 2020; and (d) Status Report on Electronic Export Manifest Submission, prepared by the Jamaica Customs Agency, dated January 2021; and (ii) (a) letter from the Permanent Secretary of the Ministry of Industry, Investment and Commerce, dated December 29, 2020; and (b) JSWIFT Status Report, prepared by the Jamaica Customs Agency, dated January 2021). Pillar 3: Strengthening policies and institutions fbr resilient and sustainable recovery 8. To strengthen the fiscal responsibility framework, the Borrower has tabled the legal framework to establish the Independent Fiscal Commission (as evidenced by: (a) letter from the Acting Clerk to the Houses of Parliament on The Independent Fiscal Commission Act, 2020, dated December 29, 2020; and (b) "The Independent Fiscal Commission Act, 2020" bill). 9. To reinforce the independence of the Bank of Jamaica and its inflation targeting regime, the Borrower has approved amendments to the Bank of Jamaica Act, which include provisions to enhance the Bank of Jamaica's governance, clarify its mandate and improve its operational independence (as evidenced by: (a) letter from the Clerk of the Houses of Parliament on the Bank of Jamaica (Amendment) Act, 2020, dated December 29, 2020; and (b) "The Bank of Jamaica (Amendment) Act, 2020" bill). 10. To strengthen climate resilience and sustainability of growth, the Borrower, through the Cabinet, has adopted the revised Nationally Determined Contributions including target greenhouse gas emissions lower than planned in the previous Nationally Determined Contributions, and climate resilience considerations (as evidenced by (a) Update of Nationally Determined Contribution (NDC) of Jamaica to the United Nations Framework Convention on Climate Change (UNFCCC), dated June 2020; and (b) Inter-office Memo from the Director General of the Climate Change Division of the Ministry of Economic Growth and Job Creation, in relation to Cabinet Decision No. 33/20), dated July 8, 2020). Section II. Availability of Loan Proceeds A. General. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of this Section and such additional instructions as the Bank may specify by notice to the Borrower. B. Allocation of Loan Amounts. The Loan is allocated in: (a) a single withdrawal tranche, from which the Borrower may make withdrawals of the Loan proceeds; and (b) the amounts requested by the Borrower to pay: (A) the Front-end Fee; and -8- (B) each Interest Rate Cap or Interest Rate Collar premium. The allocation of the amounts of the Loan to this end is set out in the table below: Amount of the Loan Allocations Allocated (expressed in USD) (1) Single Withdrawal Tranche 149,625,000 (2) Front-end Fee 375,000 (3) Amount due pursuant to Section 4.05 (c) of the 0 General Conditions TOTAL AMOUNT 150,000,000 C. Withdrawal Tranche Release Conditions No withdrawal shall be made of the Single Withdrawal Tranche unless the Bank is satisfied: (a) with the Program being carried out by the Borrower; and (b) with the adequacy of the Borrower's macroeconomic policy framework. D. Deposit of Loan Amounts The Borrower, within thirty (30) days after the withdrawal of the Loan from the Loan Account, shall report to the Bank: (a) the exact sum received into the account referred to in Section 2.03 (a) of the General Conditions; (b) the details of the account to which the Jamaican Dollar equivalent of the Loan proceeds will be credited; (c) the record that an equivalent amount has been accounted for in the Borrower's budget management systems; and (d) the statement of receipts and disbursement of the account referred to in Section 2.03 (a) of the General Conditions. E. Audit. Upon the Bank's request, the Borrower shall: 1. have the account referred to in Section 2.03 (a) of the General Conditions audited by independent auditors ("Independent Auditors") acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank; 2. furnish to the Bank as soon as available, but in any case not later than six months after the date of the Bank's request for such audit, a certified copy of the report of such audit, of such scope and in such detail as the Bank -9- shall reasonably request, and make such report publicly available in a timely fashion and in a manner acceptable to the Bank; and 3. furnish to the Bank such other information concerning the account referred to in Section 2.03 (a) of the General Conditions and their audit as the Bank shall reasonably request. F. Closing Date. The Closing Date is March 31, 2022. - 10 - SCHEDULE 2 Commitment-Linked Amortization Repayment Schedule The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). Level Principal Repayments Principal Payment Date Installment Share On each June 15 and December 15 Beginning June 15, 2026 3.7% through December 15, 2038 On June 15, 2039 3.8% - 11 - APPENDIX Definitions 1. "Auditor General" means the Borrower's Auditor General, or any legal successor as appointed under the Borrower's Constitution. 2. "Bank of Jamaica" means the Borrower's central bank. 3. "BEST" means Business Employee Support and Transfer. 4. "Cabinet" means the Borrower's Cabinet. 5. "CARE" means COVID-19 Allocation of Resources for Employees. 6. "CARE Programme" means the Borrower's COVID-19 Allocation of Resources for Employees program, created pursuant to Cabinet Decision No. 18/20, dated April 6, 2020, which includes the following: Supporting Employees with Transfer of Cash, Business Employee Support and Transfer of Cash, COVID-19 General Grants, COVID-19 Compassionate Grants, COVID-19 PATH Grants, COVID-19 Small Business Grants and COVID-19 Tourism Grants. 7. "COVID-19" means novel coronavirus disease 2019. 8. "Fintech" means technological innovation to be used in the provision of financial products and services. 9. "Fit and Proper" means a general concept for assessing the honesty, integrity and reputation of officers of a company that applies to participate in a Regulatory Sandbox. 10. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for IBRD Financing, Development Policy Financing", dated December 14, 2018 (revised on August 1, 2020 and December 21, 2020). 11. "Houses of Parliament" means the Borrower's Houses of Parliament. 12. "Independent Auditors" means, solely for the purpose of this Agreement, the Auditor General. 13. "Jamaica Customs Agency" means the Borrower's customs agency. 14. "Jamaican Dollars" or "J$" means the Borrower's lawful currency. 15. "JSWIFT" means Jamaica Electronic Single Window for Trade Platform. - 12 - 16. "Ministry of Finance and the Public Service" means the Borrower's Ministry of Finance and the Public Service, or any successor thereto acceptable to the Bank. 17. "Ministry of Health and Wellness" means the Borrower's Ministry of Health and Wellness, or any successor thereto acceptable to the Bank. 18. "Ministry of Tourism" means the Borrower's Ministry of Tourism, or any successor thereto acceptable to the Bank. 19. "MSMEs" means micro, small and medium-sized enterprises. 20. "National Insurance Scheme" means the Borrower's insurance scheme established pursuant to the National Insurance Act of April 4, 1966, as amended. 21. "PATH" means the Borrower's Programme of Advancement through Health and Education, a conditional cash transfer program providing cash benefits for eligible poor and vulnerable families, or any successor thereto acceptable by the Bank. 22. "Poor Relief' means relief granted pursuant to the Borrower's Poor Relief Act of April 29, 1886. 23. "Program" means: the program of objectives, policies, and actions set forth or referred to in the letter dated February 1, 2021 from the Borrower to the Bank declaring the Borrower's commitment to the execution of the Program, and requesting assistance from the Bank in support of the Program during its execution and comprising actions taken, including those set forth in Section I of Schedule 1 to this Agreement, and actions to be taken consistent with the program's objectives. 24. "Regulatory Sandbox" means a contained environment in which companies may test their products, services or solutions. 25. "SET" means Supporting Employees with Transfer. 26. "Signature Date" means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to "the date of the Loan Agreement" in the General Conditions. 27. "Single Withdrawal Tranche" means the amount of the Loan allocated to the category entitled "Single Withdrawal Tranche" in the table set forth in Part B of Section II of Schedule 1 to this Agreement.