GRANT NUMBER D941-MZ Financing Agreement (Rural and Small Towns Water Security Project) between REPUBLIC OF MOZAMBIQUE and INTERNATIONAL DEVELOPMENT ASSOCIATION GRANT NUMBER D941-MZ FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between REPUBLIC OF MOZAMBIQUE ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II- FINANCING 2.01. The Association agrees to extend to the Recipient a grant, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to one hundred and six thousand million Special Drawing Rights (SDR 106,000,000) ("Financing"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.04. The Payment Dates are February 15 and August 15 in each year. 2.05. The Payment Currency is Dollar. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objective of the Project and to this end, the Recipient, through MOPHRH, shall cause DNAAS (for Parts 2, 3(a) and 3(b) of the Project), AIAS (for Part I and 3(c) of the Project), and the DPOPs (for Part 2 of the Project), to carry out the Project all in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. -2- ARTICLE IV - ADDITIONAL REMEDIES 4.01 That AlAS's Legislation has been amended, suspended, abrogated, repealed or waived so as to affect, in the opinion of the Association, the ability of AlAS, to implement its respective parts of the Project. 4.02 That AIAS has failed to perform any obligation under their respective Subsidiary Agreement. 4.03 The Association has declared AIAS ineligible to be awarded a contract financed by the Association. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consist of the following, namely that the Subsidiary Agreement has been executed on behalf of the Recipient and AIAS in accordance with terms and conditions satisfactory to the Association. 5.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 5.03. For purposes of Section 10.05(b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty years after the Signature Date. ARTICLE VI- REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its minister responsible for economy and finance or any successor thereof. The Recipient's National Director of Public Debt Management may, by him or herself, represent the Recipient to sign this Agreement, amendments and/or notices to this Agreement. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Economy and Finance Praga da Marinha Popular Av. 10 de Novembro no 929 Maputo Republic of Mozambique; and (b) the Recipient's Electronic Address is: Facsimile: (+258) 21313747 6.03. For purposes of Section 11.01 of the General Conditions: -3- (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) (+1) 202 477 6391 AGREED as of the Signature Date. REPUBLIC OF MOZAMBIQUE By J 6--"Authorized Representative Name: 41>1Iel(6Jf4t Title: 4 Date: 0) INTERNATIONAL DEVE MENT ASSOCIATION By Authorized Representative Nam 4: Tit]: l tc. Dat:_ __ _ __ _ -4- SCHEDULE 1 Project Description The objective of the Project is to increase access to improved water supply and sanitation services in selected small towns and rural areas of the Recipient. The Project consists of the following parts: Part 1: Enhancement of Water Supply and Sanitation Services in Small Towns Provision of support to sector strategies and accelerate the achievement of universal access to sustainable drinking water services, through: (a) Construction, rehabilitation and expansion of small towns and Rural Growth Centers Water Supply Systems, through the financing of investments across the water supply value chain including, abstraction, transportation, storage, treatment, distribution network, and household connections to guarantee availability, reliability, and sustainability of water supply services for about 17 small towns (about 3 in Nampula and 3 in Zamb6zia will be built and 7 in Nampula and 4 in Zamb6zia will be rehabilitated and expanded), and about 22 new rural water supply systems (about 8 in Nampula and 14 in Zambizia), with use of solar energy, will be built. (b) Sanitation investments in small towns, through: (i) construction and rehabilitation of about 29 school sanitation facilities with improved conditions for menstrual hygiene management in about 22 small towns ; (ii) investments on fecal sludge management equipment (collection and transport), and treatment plants (drying beds) for about 4 small towns and support to private sector on fecal sludge management business development, post-treatment utilization or safe disposal; (iii) sanitation marketing and hygiene promotion to influence sanitation behaviors; (iv) subsidized upgrade and construction of resilient sanitation and hygiene facilities for poor households exposed to extreme climatic events for about 17 small towns. (c) Design and roll-out Performance-Based Contracts ("PBC") for improved and inclusive service delivery by private operators, through the design and roll-out performance-based contracts for private operators to deliver sustainable, resilient, and inclusive water supply and sanitation services, including the extension and modification of select ongoing contracts to include new investments for the purposes of simplifying contract supervision responsibilities given limited technical capacity. -5- Part 2: Enhancement of Water Supply and Sanitation Services in Rural Areas Local level support for improved service delivery. Provision of support of water supply and sanitation services in the rural space, through fiscal transfers to support provincial governments to implement Block Grants ("BG") financing mechanism for about 22 district (about 11 in Nampula and about 11 in Zamb6zia) investments to expand and sustain water supply and sanitation services including: (i) enhancement of local capacity for rural water supply and sanitation service delivery; (ii) support to local governments to improve rural water supply and sanitation services planning, funding, implementation and monitoring; (iii) on-site sanitation improvement of about 150 schools; (iv) investment in about 500 dispersed water points; (v) on-site sanitation improvements at household; and (vi) solar- powered water supply schemes, resilient toilets, WASH hygiene promotion activities for about 10 IDPs resettlement areas or host communities in Nampula and Zambezia provinces, and extended operational support until beneficiary communities recovery their income generation capacity. Part 3: Institutional Development and Project Management Support (a) Provision of support for the development of the sector, through: (i) the development of delegated regulation models for rural areas and small towns with strengthened participation of local governments and community structures in supervising services, establishment of monitoring systems for service quality at the district and provincial level; (ii) the refinement and development of instruments for pro-poor regulation, aiming to improve inclusive access to sustainable water supply and sanitation services, and development and operationalization of normative, regulatory and certification instruments; (iii) the financing of women in water initiative with training packages, business development support grant, and targeted recruitment programs for young female technicians; (iv) the planning for future sector development programs, including the development and implementation of a sustainable energy efficiency and renewable energy; and (v) the construction of AURA northern region delegation office. (b) Technical Assistance and Project management support for DNAAS, through: (i) technical assistance and incremental Operating Costs to ensure fiduciary compliance, including financial management, procurement and environment and social safeguards, monitoring and evaluation for activities related to Parts 2, 3.2 and 3.4 of the Project; (ii) necessary equipment (e.g. computers, software and other goods), capacity building (training), and incremental staff to allow the Project implementing unit to carry out their responsibilities; (iii) consultancies services for project design, supervision and for developed of improved service delivery models and plans; and (iv) implementation of the RAP and ESMP. (c) Institutional and Project management support for AIAS, through: (i) technical assistance and incremental Operating Costs to ensure fiduciary compliance including financial management, procurement and environment and social -6- safeguards, for activities related to Part 1 of the Project; (ii) equipment, training, and incremental staff to equip the AIAS-PIU to carry out their responsibilities; (iii) capacity building program for private operators; (iv) consultancies services for development of improved service delivery models and plans; (v) implementation of RAP and ESMP; (vi) technical assistance to AIAS for the transitioning to its new statute of public institute, including the establishment of corporate governance structures, policies and procedures, provision of working equipment, construction works and rehabilitation of its head office and provincial delegations in Nampula and Zambezia provinces. Part 4: Contingent Emergency Response Component Provision of immediate response to an Eligible Crisis or Emergency, as needed. -7- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. Implementing Agencies The Project overall implementation falls within MOPHRH with the support of DNAAS (for Parts 2, 3(a) and 3(b) of the Project), AIAS (for Part I and 3(c) of the Project), and the DPOPs (for Part 2 of the Project). 2. Project Implementation Units The Recipient shall maintain at all times during the implementation of the Project: (a) Project Implementation Units within DNAAS ("DNAAS-PIU"), and AIAS ("AIAS-PIU"), both with mandate, composition (including dedicated technical, management and fiduciary staff and headed by a Project coordinator), and resources acceptable to the Association and defined in the PIM, including: (i) For the DNAAS-PIU: a Project manager, Project rural coordinator, administrative and financial assistant, procurement specialist, Block Grants and financial-management specialist, on- site sanitation specialist, water supply technician, environmental and social safeguards specialist, and monitoring and evaluation specialist. (ii) For (he AIAS-PIU: a Project manager, Project small towns coordinator, administrative and financial assistant, water supply and sanitation specialist, sanitation marketing specialist, two water and two sanitation technicians for Nampula and Zamb6zia's delegations, environmental safeguards specialist, social safeguards specialist, gender-based violence officer, procurement specialist, and financial management specialist. (b) the PIUs shall be responsible for day-to-day management of their respective parts of the Project, including: (i) managing the implementation of their respective Project activities; (ii) managing the procurement, financial management, disbursements, and environmental and social aspects regarding the Project activities under their responsibility; (iii) coordinating the preparation, adjustments, and use of the Project management tools, including any updates to the PIM, Annual Work Plan, -8- Procurement Plan, and disbursement projections; (iv) coordinating with key stakeholders on the technical aspects of the Project; (v) monitoring the progress of the Project development objective and intermediate indicators of the Results Framework; (vi) preparing Project reports.; and (vii) other functions as set forth in the PIM. 3. Implementation at the Provincial Level The Recipient shall cause the provincial executive council, through the Provincial Directorate of Public Works, to lead province-level Project implementation responsibilities and shall cause DPOPs to establish provincial technical units ("PTUs") with administrative reporting to the Provincial director and technical reporting to the department of water and sanitation and shall include the following positions: a Project manager, water supply and sanitation specialist, financial and administrative assistant, on-site sanitation technician, water supply technician, environmental and social safeguards technician, M&E technician, procurement technician, financial and grants manager. 4. Steering Committee The Recipient shall maintain throughout Project implementation, a steering committee for the purposes of supporting the Project in resolving issues that may require high-level coordination, and to provide strategic and policy guidance for: (a) planning and implementation; (b) logistics and advocacy, and (c) social mobilization and communication, all with terms of reference, composition (Including representatives of the Project stakeholders and beneficiaries), and powers acceptable to the Association and described in the PIM B. Project Implementing Manual 1 . The Recipient, not later than thirty (30) days after Effective Date, shall prepare and adopt, in accordance with terms of reference acceptable to the Association a Project implementation manual ("PIM") setting out detailed guidelines, methods and procedures for the implementation of the Project, including: (a) the different roles and responsibilities of all the actors involved in the implementation of the Project, including the various mechanisms for ensuring close coordination and collaboration between various Project stakeholders; (b) budget and budgetary control; (c) flow of funds, disbursement procedures and banking arrangements; (d) financial, procurement and accounting procedures; (e) monitoring and evaluation arrangements; (f) the Annual Work Plans and Budget for the first year of Project implementation; (g) eligibility criteria for the selection of Block Grants for district investments; and (h) such other arrangements and procedures as shall be required for the effective implementation of the Project. -9- 2. The Recipient shall carry out the Project in accordance with this Agreement and the PIM. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate, or waive the provisions of the PIM without prior approval of the Association. In the event of any conflict between the provisions of the PIM and this Agreement, the provisions of this Agreement shall prevail. C. Subsidiary Agreement 1. To facilitate the carrying out of the Project, the Recipient shall make the proceeds of the Financing available to AIAS under a subsidiary agreement between the Recipient and AIAS (the "AIAS Subsidiary Agreement"), under terms and conditions approved by the Association; whereby, inter alia: (a) the Recipient agrees to make available to AIAS, on a grant basis, part of the proceeds of the Financing to finance AIAS' activities described under Parts 1 and 3(c) of the Project. 2. The Recipient shall cause AIAS to cooperate with the Recipient in the carrying out of their respective activities under the Project, including exchanging information, holding reviews and providing reports on the progress of activities under its responsibility in accordance with the terms and conditions set forth in this Agreement, including the Anti-Corruption Guidelines, PIM and the ESCP. 3. The Recipient shall cause AIAS to coordinate Project implementation activities with relevant national directorates and agencies, including MOPHRH, DNAAS and DPOP. 4. The Recipient shall exercise its rights under the Subsidiary Agreements in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate or waive the Subsidiary Agreements or any of their provisions. D. Block Grants to Eligible Provinces 1. For the purpose of carrying out Part 2 of the Project, the Recipient shall cause DNAAS to disburse Block Grants to Eligible Provinces Districts, for the support of provincial governments to implement a Block Grants financing mechanism for district investments to expand and sustain water supply and sanitation services, all in accordance with eligibility criteria and procedures set forth in the PIM. 2. The Recipient, through DNAAS shall make each Block Grant under a Grant Agreement with the respective Eligible Province on terms and conditions approved by the Association, which shall include the following: (a) the Block Grant shall be made on a non-reimbursable basis and (b) ensure that the Recipient shall obtain rights adequate to protect its interests and those of the Association. -10- 3. The Recipient shall cause DNAAS to 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. 4. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate or waive any Grant Agreement or any of its provisions. E. Annual Plans and Budgets 1. The Recipient shall: (a) not later than November 30 of every year during Project implementation, prepare and furnish to the Association, a work plan and budget ("Work Plan and Budget"), satisfactory to the Association, which shall include, inter alia, the activities to be carried out under the Project and a financing plan for expenditures required for such activities, setting forth the amounts and sources of financing; and (b) thereafter carry out said Work Plan and Budget in accordance with its terms and in a manner acceptable to the Association. 2. The Recipient shall not make or allow to be made any significant change to the approved Work Plan and Budget without prior approval in writing by the Association. F. Maintenance of Adequate Cost-Recovery For the purposes of implementing Part 1 of the Project, the Recipient shall ensure that the tariffs for the small towns water systems under the responsibility of AIAS shall reflect the principle of full cost-recovery and shall be sufficient to cover operating expenses, depreciation, and cost of capital for extension of services through additional connections to the population in the service area in a reasonable time horizon for all said systems, in a manner acceptable to the Association. Said tariffs shall be assessed yearly under guidelines set forth in the PIM, to ensure that they satisfy these requirements. G. Performance-Based Contracts under Part 1(c) of the Project 1 . For the purposes of implementing Part 1(c) of the Project, the Recipient shall cause AIAS to enter into Performance-based Contracts with autonomous private or public entities to operate clusters of water supply systems under AIAS' responsibility, under terms and conditions approved by the Association. Said contracts shall include the following provisions: (a) an extended duration of 10 years; (b) balanced risk sharing between the AIAS and the operator with mechanisms for reinstatement of the economic and financing equilibrium in the absence of annual tariff adjustments when deemed necessary; (c) supervision of performance by local authorities from served areas; (d) system specific agreed evolution of key-performance for the duration of the contract; and (e) financial -11- model and investment plan proposed by autonomous operators for the duration of the lease contract. 2. The Recipient shall cause AIAS to exercise its rights under each Performance- based Contract in such manner as to protect the interests of the Recipient, AIAS and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, AIAS shall not assign, amend, abrogate or waive any Performance-Based Contracts or any of their provisions. H. Environmental and Social Standards 1 . The Recipient shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 2. Without limitation upon paragraph 1 above, the Recipient shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan ("ESCP"), in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. 3. Without limitation upon the provisions of paragraph 2 above, if 60 days prior to the Closing Date, the Association determines that there are measures and actions specified in the ESCP which will not be completed by the Closing Date, the Recipient shall: (a) not later than 30 days before the Closing Date, prepare and present to the Association, an action plan satisfactory to the Association on the outstanding measures and actions, including a timetable and budget allocation for such measures and actions (which action plan shall be deemed an amendment of the ESCP); and (b) thereafter, carry out said action plan in accordance with its terms and in a manner acceptable to the Association. 4, In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. -12- 5. The Recipient shall ensure that: (a) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 6, The Recipient shall establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. 7. The Recipient shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts. I. Contingent Emergency Response under Part 4 of the Project 1 . In order to ensure the proper implementation of contingent emergency response activities under Part 4 of the Project ("Contingent Emergency Response Part"), the Recipient shall ensure that: (a) a manual ("CERC Manual") is prepared and adopted in form and substance acceptable to the Association, which shall set forth detailed implementation arrangements for the Contingent Emergency Response Part, including: (i) any structures or institutional arrangements for - 13 - 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 Association; (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 (d) neither the CERC Manual or the Emergency Action Plan is amended, suspended, abrogated, repealed or waived without the prior written approval by the Association. 2. The Recipient shall ensure that the structures and arrangements referred to in the CERC Manual are maintained throughout the implementation of the Contingent Emergency Response Part, with adequate staff and resources satisfactory to the Association. 3. The Recipient 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 Association; and (b) the Contingent Emergency Response Part is carried out in accordance with the environmental and social instruments in a manner acceptable to the Association. 4. Activities under the Contingency Emergency Response Part shall be undertaken only after an Eligible Crisis or Emergency has occurred. -14- Section II. Project Monitoring, Reporting and Evaluation 1. The Recipient shall furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. 2. Except as may otherwise be explicitly required or permitted under this Agreement or as may be explicitly requested by the Association, in sharing any information, report or document related to the activities described in Schedule 1 of this Agreement, the Recipient shall ensure that such information, report or document does not include Personal Data. Section III. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Amount of the Percentage of Category Grant Allocated Expenditures to be (expressed in SDR) Financed (inclusive of Taxes) (1) Goods, works, non- consulting services, consulting services, Block Grants, 104,590,000 100% Operating Costs and Training for the Project (2) Resettlement Costs 690,000 100% under the Project (3) Refund of Project Amount payable pursuant Preparation Advance 720,000 to Section 2.07(a) of the General Conditions (4) Emergency Expenditures under 0 Part 4 of the Project - 15 - TOTAL AMOUNT 106,000,000 B. Withdrawal Conditions; Withdrawal Period 1I Notwithstanding the provisions of Part A above, no withdrawal shall be made for: (a) payments made prior to the Signature Date; and (b) for Emergency Expenditures under Category (4), unless and until all of the following conditions have been met in respect of said expenditures: (i) that the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Association a request to withdraw Financing amounts under Category (4); and (ii) the Association has agreed with such determination, accepted said request and notified the Recipient thereof; and the Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Association. 2. The Closing Date is June 30, 2027. - 16 - APPENDIX Definitions 1, "AIAS" means AdministraVdo das Infraestruturas de Igua e Saneamento, the Recipient's Water and Sanitation Infrastructures Administration, responsible for investment planning and implementation in water supply for secondary systems, serving small towns, and for sanitation in the urban space, established and operating pursuant to Decree No. 18 and Decree No. 19, published in the Official Gazette No. 19 dated May 13, 2009, and Regulation No. 34, published in the Official Gazette No. 52 dated December 31, 2009, and Decree No. 112, published in the Official Gazette No. 248 dated December 29, 2020 as amended, of the laws of the Recipient, or any successor thereto. 2. "AIAS's Legislation" means Decree No. 18 and Decree No. 19, published in the Official Gazette No. 19 dated May 13, 2009, and Regulation No. 34, published in the Official Gazette No. 52 dated December 31, 2009, and Decree No. 112, published in the Official Gazette No. 248 dated December 29, 2020, as amended, including any legal or regulatory enactments upon which such instruments are based, or any licenses granted to AIAS related to the Project, all as in force on the date of this Agreement. 3. "AIAS-PIU" means the implementation unit within AIAS, referred to in Section I.A.2(a) of Schedule 2 to this Agreement. 4. "AIAS Subsidiary Agreement" means the Subsidiary Agreement referred to in Section I.C of Schedule 2 to this Agreement. pursuant to which the Recipient shall make part of the proceeds of the Financing available to AIAS for implementation of Parts 1 and 3(c) of the Project. 5. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011 and as of July 1, 2016. 6. "AURA" means the Recipient's Water Regulatory Authority (Autoridade Reguladora de Igua). 7. "Block Grant" means the financing mechanism under Part 2 of the Project and referred to in Section I.D of Schedule 2 to this Agreement. 8. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. -17- 9. "CERC Manual" means the manual referred to in Section 1.1 of Schedule 2 to this Agreement, as such manual may be updated from time to time with the agreement of the Association, and which is an integral part of the Operational Manual. 10. "Contingent Emergency Response Part" means any activity or activities to be carried out under Part 4 of the Project to respond to an Eligible Crisis or Emergency. 11. "DNAAS" means the Recipient's National Directorate of Water Supply and Sanitation, within MOPHRH. 12. "DPOP" means the Recipient's Provincial Directorate of Public Works, within the provincial Executive Council. 13. "Eligible Crisis or Emergency" means an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact to the Recipient, associated with a natural or man-made crisis or disaster. 14. "Eligible Districts" means districts located in the Recipient's Nampula and Zamb6zia provinces, selected based on a combined analysis of access to safe water supply, access to safe sanitation and prevalence of open defecation, selected in accordance with the criteria set forth in the PIM. 15. "Eligible Provinces" means the Recipient's provinces of Nampula and Zambezia. 16. "Emergency Expenditures" means any of the eligible expenditures set forth in the CERC Manual referred to in Section 1.1 of Schedule 2 to this Agreement and required for the Contingent Emergency Response Part. 17. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated November 11, 2021, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. 18. "Environmental and Social Standards" or "ESSs" means, collectively: (i) "Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts"; (ii) "Environmental and Social Standard 2: Labor and Working Conditions"; (iii) "Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management"; (iv) "Environmental and Social Standard 4: Community Health and Safety"; (v) - 18 - "Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement"; (vi) "Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources"; (vii) "Environmental and Social Standard 7: Indigenous Peoples/Sub- Saharan Historically Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; (ix) "Environmental and Social Standard 9: Financial Intermediaries"; (x) "Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure"; effective on October 1, 2018, as published by the Association. 19. "Environmental and Social Management Plan" or "ESMP" means an environmental and social management plan, to be prepared, adopted and disclosed by the Recipient, and acceptable to the Association, giving details of the magnitude of the environmental and social impacts, including procedures for the management of chance finds of physical cultural resources and procedures to ensure protection, maintenance, and rehabilitation of natural habitats, as well as the specific actions, measures and policies designed to facilitate the achievement of the objectives of the Project, including the budget and cost estimates, and sources of funding, along with the institutional and procedural measures needed to implement such actions, measures and policies, as the same may be amended from time to time with the prior written agreement of the Association. 20. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated December 14, 2018 (revised on August 1, 2020 and April 1, 2021). 21. "Grant Agreement" means each of the agreements for the financing of a Performance-based Grant, entered between the Recipient and an Eligible District. 22. "IDP" means internally displaced people. 23. "MOPHRH" means Ministerio das Obras Pablicas, Habitagdo e Recursos Hidricos, the Recipient's ministry of public works, housing and water resources. 24. "Operating Costs" means the reasonable incremental operating costs, based on Annual Work Plans and Budgets, incurred by the Recipient on account of Project implementation including: office equipment and supplies, maintenance of equipment, insurance costs, office administration costs, rental, consumables, accommodation, vehicle operation and maintenance costs, utilities, communication charges, per diems, travel allowances, and salaries of the Recipient's locally contracted staff, but excluding salaries, fees, honoraria, bonuses, and any other salary supplements of members of the Recipient's civil service. - 19 - 25. "Performance-Based Contracts" means the contracts to be entered between AIAS and selected autonomous private or public entities to operate clusters of water supply systems under Part 1(c) of the Project and referred to in Section I.G Traiiof Schedule 2 to this Agreement. 26. "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. 27. "PIU-AIAS" means the Project implementation unit within AIAS referred to in Section 1.A.2 of Schedule 2 to this Agreement. 28. "PIU-DNAAS" means the Project implementation unit within DNAAS referred to in Section 1.A.2 of Schedule 2 to this Agreement. 29. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 30. "Resettlement Action Plan" or "RAP" means in respect of any activity involving resettlement, a resettlement plan for such activity prepared, adopted, disclosed and implemented by the Recipient, and acceptable to the Association, such resettlement plan to include a program of actions, measures and policies for compensation and resettlement of affected persons, and setting forth the magnitude of displacement, proposed compensation and resettlement arrangements, budget and cost estimates, and sources of funding, together with adequate institutional, monitoring and reporting arrangements designed to ensure proper implementation of, and regular feedback on, compliance with such RAP, as the same may be amended from time to time with the prior written agreement of the Association. "Project Implementation Manual" and "PIM" means the manual prepared by the Recipient for Project implementation and referred to in Section I.B of Schedule 2 to this Agreement. 31. "Resettlement Costs" means the expenditures incurred for cash compensation and/ or other assistance paid for involuntary resettlement, such as costs related to moving, compensation to tenant farmers, special assistance to vulnerable PAPs, and for temporary loss of livelihoods, as set forth in the relevant site-specific resettlement action plan, acceptable to the Association. -20 - 32. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to "the date of the Financing Agreement" in the General Conditions. 33. "Training" means the reasonable costs associated with training under the Project, based on the relevant Annual Work Plan and Budget, and attributable to study tours, training courses, seminars, workshops and other training activities, not included under service providers' contracts, including costs of training materials, space and equipment rental, travel, accommodation and per diem costs of trainees and trainers, trainers' fees, and other training related miscellaneous costs. 34. "WASH" means water supply, sanitation and hygiene. 35. "Work Plan and Budget" means the work plan and budget acceptable to the Association referred to in Section I.E of Schedule 2 to this Agreement, as said work plan and budget may be modified from time to time with the written agreement of the Association.