OFFICIAL DOCUMENTS CREDIT NUMBER 7002-BF GRANT NUMBER D930-BF Financing Agreement (Third Fiscal Management, Sustainable Growth and Service Delivery Development Policy Financing) between BURKINA FASO and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 7002-BF GRANT NUMBER D930-BF FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between BURKINA FASO ("Recipient") and the INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for the purpose of providing financing in support of the Program (as defined in the Appendix to this Agreement). The Association has decided to provide this financing on the basis, inter aila, of: (i) the actions which the Recipient has already taken under the Program and which are described in Section I of Schedule I to this Agreement; and (ii) the Recipient's maintenance of an adequate macroeconomic policy framework. The Recipient and the Association 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 11- FINANCING 2.01. The Association agrees to extend to the Recipient a grant and a credit, which are deemed as Concessional Financing for purposes of the General Conditions (collectively, "Financing") in the following amounts: (a) an amount equivalent to seventy-one million Special Drawing Rights (SDR 71,000,000) ("Grant"); and (b) the amount of eighty-six million five hundred thousand Euros (EUR 86,500,000) ("Credit"). 2,02. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.03. The Service Charge is the greater of: (a) the sum of three-fourths of one percent (3/4 of 1%) per annum plus the Basis Adjustment to the Service Charge; and (b) three-fourths of one percent (3/4 of 1%) per annum; on the Withdrawn Credit Balance, 2.04. The Payment Dates are May 15 and November 15 in each year. -2- 2.05. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 2 to this Agreement. 2.06. The Payment Currency is Euro. 2.07. Without limitation upon the provisions of Section 5.05 of the General Conditions, the Recipient shall promptly furnish to the Association such information relating to the provisions of this Article 1I as the Association may, from time to time, reasonably request. ARTICLE III - PROGRAM 3.01. The Recipient declares its commitment to the Program and its implementation. To this end, and further to Section 5.05 of the General Conditions: (a) the Recipient and the Association shall from time to time, at the request of either party, exchange views on the Recipient's macroeconomic policy framework and the progress achieved in carrying out the Program; (b) prior to each such exchange of views, the Recipient shall furnish to the Association for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Association shall reasonably request; and (c) without limitation upon the provisions of paragraphs (a) and (b) of this Section, the Recipient shall promptly inform the Association of any situation that would have the effect of materially reversing the objectives of the Program or any action taken under the Program. ARTICLE IV - REMEDIES OF THE ASSOCIATION 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. ARTICLE V - EFFECTIVENESS; TERMINATION 5,01. The Additional Condition of Effectiveness consists of the following, namely, that the Association is satisfied with the progress achieved by the Recipient in carrying out the Program and with the adequacy of the Recipient's macroeconomic policy framework. 5.02. The Effectiveness Deadline is the date ninety days (90) days after the Signature Date. -3- 5.03. For purposes of Section 10.05(b) of the General Conditions, the date on. which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the Signature Date. ARTICLE VI- REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its minister in charge of economy and finance. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Economy, Finance and Development 395 avenue du 11 d6cembre Ouagadougou 01 Burkina Faso; and (b) the Recipient's Electronic Address is: Telex: Facsimile: 5555 (+226) 25-31-27-15 6.03. For purposes of Section 11.01 of the General Conditions: (a) the Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCt) (+1) 202-477-6391 -4- AGREED as of the Signature Date. BURKINA FASO By Authorized Representative Name: (\Qp (\ Title: \ C \ Date: L INTERNATION L DEVELOPMENT SOCITION By X-Thrized Representative Name: \ \ c (V\CY ( Title« \ \ (\ YV\ iL L\ \lCL Date: t si -5- SCHEDULE 1 Program Actions; Availability of Financing Proceeds Section I. Actions under the Program The actions taken by the Recipient under the Program include the following: 1I To broaden the tax base, improve tax administration and reduce transaction costs, the Recipient has: (i) introduced a tax simplification reform for micro-enterprises, and (ii) made e-payment of all taxes for medium-size enterprises mandatory, through the adoption of Decree No. 2020-0936/PRES dated November 24, 2020, ratifying the Budget Law No. 035-2020/AN dated October 19, 2020. 2. To contain the growth of the public wage bill, the Recipient has: (i) rationalized core jobs in the public administration (from 20 to 10); (ii) introduced mobility of existing staff across occupation and administrative units; and (iii) established transparent recruitment requirements, through the adoption of Decrees No. 2021- 0285 to 0289/PRES/PM/MINEFID/MFPTPS dated April 22, 2021, Decree No. 2021-0308/PRES/PM/MINEFID/MFPTPS dated April 27, 2021, Decree No. 2021-0430/PRES/PM/MINEFID/MFPTPS dated May 19, 2021, Decree No. 2021- 0529/PRES/PM/MINEFID/MFPTPS dated June 9, 2021, and Decree No. 2021- 0696/PRES/PM/MINEFID/MFPTPS dated July 6, 2021. 3, To reduce deforestation, the Recipient has: (i) established a data harmonization and sharing between the mining cadaster and the forestry cadaster through the adoption of Arr9tM No. 2021-337/MEEVCC/MEMC/MINEFID dated June 21, 2021, (ii) excluded 16 forests from the mining cadaster; and (iii) registered 5 classified forests in the land cadaster. 4. To strengthen the resilience of livestock, the Recipient has: (i) included PPR vaccination teams and private health veterinarians in the framework of two vaccination campaigns for the livestock of the rural sector through the adoption of Arr&t No, 2020-74/MRAHIMINEFID dated November 25, 2020; and (ii) established the modalities for the organization of annual mass PPR vaccination campaigns through the adoption ofArr&e No. 2021-76/MRAH/MINEFID/MATD dated August 9, 2021. 5. To improve state presence and tackle conflict drivers, the Recipient has established transparent terms and conditions for the assignment of civil servants across the Recipient's territory, through the adoption of Decree No. 2021- 1012/PRES/PM/MINEFID/MFPTPS dated October 18, 2021. 6. To increase the effectiveness of the social protection system, the Recipient has established the Unique Social Registry of households and people living in poverty -6- and vulnerability along with its institutional arrangements, operational structure, and provisions for its effective usage for social programs, through the adoption of Decree No. 2021-0354/PRES/PM/MATD/MINEFID/MFPTPS/MFSNFAH/ MENPTD dated September 30, 2021. Section II. Availability of Financing Proceeds A. General. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of this Section and such additional instructions as the Association may specify by notice to the Recipient. B. Allocation of Financing Amounts. The Financing is allocated in a single withdrawal tranche, from which the Recipient may make withdrawals of the Financing proceeds. The allocation of the amounts of the Financing to this end is set out in the table below: Allocation Amount of the Credit Amount of the Grant Allocated Allocated (expressed in EUR) (expressed in SDR) (1) Single 86,500,000 71,000,000 Withdrawal Tranche TOTAL 86,500,000 71,000,000 AMOUNT C. Withdrawal Tranche Release Conditions No withdrawal shall be made of the Single Withdrawal Tranche unless the Association is satisfied: (a) with the Program being carried out by the Recipient; and (b) with the adequacy of the Recipient's macroeconomic policy framework. D. Deposit of Financing Amounts 1. Notwithstanding the provisions of Section 2.03 of the General Conditions: (a) the Recipient shall open, prior to furnishing to the Association the first request for withdrawal from the Financing Account, and thereafter maintain the following two dedicated accounts on terms and conditions satisfactory to the Association: (i) a dedicated account in Euros ("Foreign Currency Dedicated Account"); and (ii) a dedicated account in the Recipient's currency ("Local Currency Dedicated Account"); and -7- (b) all withdrawals from the Financing Account shall be deposited by the Association into the Foreign Currency Dedicated Account. Upon each deposit of an amount of the Financing into the Foreign Currency Dedicated Account, the Recipient shall deposit an equivalent amount into the Local Currency Dedicated Account. 2. The Recipient, within thirty (30) days after the withdrawal of the Financing from the Financing Account, shall report to the Association: (a) the exact sum received into the Foreign Currency Dedicated Account; (b) the details of the account to which the CFA Franc equivalent of the Financing proceeds will be credited; (c) the record that an equivalent amount has been accounted for in the Recipient's budget management systems; and (d) the statement of receipts and disbursement of the Foreign Currency Dedicated Account. F. Audit Upon the Association's request, the Recipient shall: 1. have the account referred to in Section 2.03(a) of the General Conditions audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association; 2. furnish to the Association as soon as available, but in any case not later than four (4) months after the date of the Association's request for such audit, a certified copy ofthe report of such audit, of such scope and in such detail as the Association shall reasonably request, and make such report publicly available in a timely fashion and in a manner acceptable to the Association; and 3. furnish to the Association such other information concerning the account referred to in Section 2.03(a) of the General Conditions and its audit as the Association shall reasonably request. F. Closing Date, The Closing Date is December 31, 2022. SCHEDULE 2 Repayment Schedule Principal Amount of the Date Payment Due Credit repayable (expressed as a percentage)* On each May 15 and November 15, commencing on 1.5625% May 15, 2028 to and including November 15, 2059 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.05(b) of the General Conditions -9- APPENDIX Section 1. Definitions 1. "Basis Adjustment to the Service Charge" means the Association's standard basis adjustment to the Service Charge for credits in the currency of denomination of the Credit, in effect at 12:01 a.m. Washington, D.C. time, on the date on which the Credit is approved by the Executive Directors of the Association, and expressed either as a positive or negative percentage per annum. 1. "CFA Franc" means the Recipient's lawful currency. 2. "Dedicated Accounts" means both the Foreign Currency Dedicated Account and the Local Currency Dedicated Account. 3. "Foreign Currency Dedicated Account" means the account referred to in Part D.1(a) of Section II of Schedule I to this Agreement. 4. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Development Policy Financing", dated December 14, 2018 (revised on August 1, 2020 and April 1, 2021). 5. "Local Currency Dedicated Account" means the account referred to in Part D.1(b) of Section 11 of Schedule I to this Agreement. 6. "PPR" means sheep and goat plague. 7. "Program" means: the program of objectives, policies, and actions set forth or referred to in the letter dated October 27, 2021 from the Recipient to the Association declaring the Recipient's commitment to the execution of the Program and requesting assistance from the Association 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. 8. "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. 9. "Single Withdrawal Tranche" means the amount of the Financing allocated to the category entitled "Single Withdrawal Tranche" in the table set forth in Part B of Section II of Schedule I to this Agreement. -10- 10. "Unique Social Registry" means the Recipient's social cadaster identifying poor and vulnerable households and individuals on the Recipient's territory, established pursuant to Decree No, 2021-0354/PRES/PM/MATD/MINEFID/MFPTPS/ MFSNFAH/MENPTD dated September 30, 2021.