OFFICIAL DOCUMENTS Original Financing GRANT NUMBER H416-TO Additional Financing CREDIT NUMBER 5730-TO GRANT NUMBER D091-TO Financing Agreement (Amending and Restating the Original Financing Agreement) (Tonga Transport Sector Consolidation Project) between KINGDOM OF TONGA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated IS ,2015 GRANT NUMBER H416-TO CREDIT NUMBER 5730-TO GRANT NUMBER D091-TO FINANCING AGREEMENT AGREEMENT dated , 2015, entered into between KINGDOM OF TONGA (the "Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION (the "Association"). WHEREAS: (A) under an agreement dated July 17, 2008 as amended to date, between the Recipient and the Association ("Original Financing Agreement"), the Association agreed to provide the Recipient with a grant (H416-TO) in an amount equivalent to three million four hundred thousand Special Drawing Rights (SDR 3,400,000) to assist in financing the project described in Schedule 1 to the Original Financing Agreement ("Original Project"); (B) under an agreement dated August 23, 2011 as amended to date, between the Recipient and the International Bank for Reconstruction and Development and the Association (collectively, the "World Bank"), acting as administrator of grant funds provided under the Pacific Region Infrastructure Facility multi-donor trust fund ("PRIF Grant Agreement"), the World Bank agreed to provide the Recipient with a grant (TF099585) in an amount of ten million three hundred thousand Dollars (US$10,300,000) to assist in financing the Original Project; (C) the Recipient has requested the Association to provide additional financing in support of activities related to the Original Project, by providing a grant in an amount equivalent to one million five hundred thousand Special Drawing Rights (SDR 1,500,000) and a credit in an amount equivalent to one million five hundred thousand Special Drawing Rights (SDR 1,500,000); and (D) the Association has agreed, on the basis, inter alia, of the foregoing, to extend such additional financing to the Recipient upon the terms and conditions set forth in this Agreement. NOW THEREFORE the Recipient and the Association hereby agree to amend and restate the Original Financing Agreement as of the Effective Date of this Agreement, to read as one consolidated text constituting this Agreement and enter into effect as of the Effective Date. -2- ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01. The Association agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, an amount equivalent to six million four hundred thousand Special Drawing Rights (SDR 6,400,000) ("Financing"), which consists of: (a) a grant (H416-TO) in an amount equivalent to three million four hundred thousand Special Drawing Rights (SDR 3,400,000) ("Original Grant"); and (b) a grant and a credit (collectively, "Additional Financing") in the following amounts: an amount equivalent to one million five hundred thousand Special Drawing Rights (SDR 1,500,000) ("Additional Grant"), and an amount equivalent to one million five hundred thousand Special Drawing Rights (SDR 1,500,000) ("Credit"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate payable by the Recipient on the Unwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) per annum. 2.04. The Service Charge payable by the Recipient on the Withdrawn Credit Balance shall be equal to three-fourths of one percent (3/4 of 1%) per annum. 2.05. The Payment Dates are June 15 and December 15 in each year. -3- 2.06. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.07. The Payment Currency is Dollar. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out MolT's Respective Part of the Project through the Ministry of Infrastructure and Tourism and cause TAL's Respective Part of the Project to be carried out by Tonga Airports Limited (the "Project Implementing Entity") in accordance with the provisions of Article IV of the General Conditions and the Project Agreement. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Recipient and the Association shall otherwise agree, the Recipient shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension is that the Project Implementing Entity's Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Project Implementing Entity to perform any of its obligations under the Project Agreement. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness is that a Project Accountant has been appointed to the Project Management Unit within the Ministry of Infrastructure and Tourism with terms of reference, qualifications and on conditions acceptable to the Association. 5.02. The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement. 5.03. For purposes of Section 8.05(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 date of this Agreement. -4- ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its Minister of Finance and National Planning. 6.02. The Recipient's Address is: Ministry of Finance and National Planning P.O. Box 87 Tungi Collonade Taufa'ahau Road, Nuku 'alofa Kingdom of Tonga Facsimile: +676 26-011 6.03. The Association's Address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable: Telex: Facsimile: INDEVAS 248423 (MCI) 1-202-477-6391 Washington, D.C. -5- AGREED at N T , as of the day and year first above written. KINGDOM OF TONGA By Authorized Representative Name: M 1( Title: 0/Al INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name:. FX4NJ2 A Z*5- RC Title:. COMA7*V b1"~CM~A.SA CA1F -6- SCHEDULE 1 Project Description The objective of the Project is to assist the Recipient to develop its transport sector to have (i) stronger policy, planning and regulatory institutions and framework; (ii) improved safety and security facilities and compliance with international safety and security standards; and (iii) greater domestic capacity for road rehabilitation and maintenance. The Project consists of the following parts: Part A: Establishment of a Sustainable Transport Sector Policy, and Institutional and Operational Framework Enabling the creation of a sustainable transport sector, through: (i) formulation of a transport sector national policy and planning framework; (ii) preparation of an air transport sector strategic plan; (iii) preparation of an investment plan for (A) Fua'amotu International Airport, and (B) Lupepau'u Airport, Vava'u; (iv) preparation of a medium-term investment plan for the maritime sector; (v) developing and analyzing options for sustainable road maintenance and preparation of a road maintenance investment plan; (vi) training of domestic contractors and consultants in road maintenance; (vii) carrying out of a road network condition survey; and (viii) planning for sustainable road maintenance. Part B: Compliance with Mandatory Safety and Security Standards Carrying out reviews and strategic interventions to respond to and meet mandatory safety and security standards required under international agreements, treaties and obligations through: (i) reviewing and analyzing current primary aviation legislation, regulatory framework, and technical guidance, and providing recommendations for the strengthening and regulatory oversight of the aviation sector; -7- (ii) installation of navigational aids and equipment at airports in the Recipient's territory; (iii) replacement of one or more firefighting tenders at airports in the Recipient's territory; (iv) replacement of security (x-ray screening) equipment and emergency power equipment at airports in the Recipient's territory; (v) carrying out works to improve ferry terminals including lighting and navigational equipment; (vi) carrying out of a road safety audit; (vii) carrying out works and procurement of goods to improve maritime safety; (viii) construction of one or more rescue fire stations at airports in the Recipient's territory; (ix) carrying out works and procurement of goods to improve safety and security at airports in the Recipient's territory; (x) training and procurement of goods to improve environmental management and supervision by the Recipient; (xi) carrying out a study to examine the impacts of maritime investments under the Project; (xii) provision and installation of maritime navigation aids; (xiii) provision of marine safety, maintenance and environmental protection equipment; (xiv) carrying out infrastructure investments to improve wharves and maritime passenger and cargo facilities at ports and ferry terminals in the Recipient's territory; and (xv) provision of design and supervision services for maritime infrastructure investments. Part C: Supporting the Transition towards Sustainability in the Transport Sector Supporting the Recipient in the implementation of key initiatives consistent with Part A of the Project, which comprise of: (i) supporting the preparation of the relevant legislation to implement reforms; (ii) road maintenance design and supervision; -8- (iii) procurement of equipment to strengthen the road maintenance capacity; (iv) carrying out road maintenance and improvement works; (v) carrying out works to improve maritime safety; (vi) carrying out road safety public awareness and education campaigns; (vii) providing advisory services for evaluating options and making recommendations for road safety programs, such as for the use and/or rental of child car seats and safety restraints; (viii) providing advisory services and support for updating safety legislation in the transport sector; (ix) providing technical and advisory services and training to strengthen the capacity of the Ministry of Infrastructure and Tourism, including for: (A) asset management; (B) maritime, roads and traffic safety; (C) scaling-up change management reforms; and (D) the use of information and communications technology ("ICT") systems, including asset management systems; and (x) carrying out an assessment of the impacts of, and making recommendations for, reforms and change management processes in the Recipient's transport sector. Part D: Project Implementation Support Strengthening the capacity of the Ministry of Infrastructure and Tourism to implement MolT's Respective Part of the Project through the provision of Project implementation support, and technical and Project management training to staff of the Ministry of Infrastructure and Tourism. -9- SCHEDULE 2 Project Execution Section I. Implementation Arran2ements A. Institutional Arrangements 1. The Recipient shall vest responsibility for overall coordination of the implementation of the Project in MolT. MolT shall also be specifically responsible for the implementation of MolT's Respective Part of the Project. 2. The Recipient shall maintain throughout the period of Project implementation, a Project Management Unit within MolT, with composition, terms of reference and qualifications acceptable to the Association, to be responsible for the day-to-day management and administrative oversight of the Project. The Project Management Unit shall assist both MolT and the Project Implementing Entity with: (i) preparation of work plans and budgets; (ii) preparation of progress and impact reports under the Project; and (iii) coordinating with the Recipient, the Project Implementing Entity and the Association on matters relating to the Project. With respect to MolT's Respective Part of the Project, the Project Management Unit shall, in addition, be responsible for monitoring and evaluation, financial management and reporting, procurement and disbursement functions. 3. The Recipient shall maintain throughout the period of Project implementation, a Project Steering Committee to be responsible for providing strategic guidance and monitoring of the Project. The Project Steering Committee shall provide guidance to MolT on Project implementation and strategy and shall facilitate the resolution of Project implementation issues. To this end, the Project Steering Committee shall meet at least twice every calendar year throughout the period of Project implementation. 4. TAL's Respective Part of the Project shall be implemented by Tonga Airports Limited in accordance with the Project Agreement. B. Subsidiary Agreement 1 . To facilitate the carrying out of TAL's Respective Part of the Project by the Project Implementing Entity, the Recipient shall make part of the proceeds of the Original Grant available to the Project Implementing Entity under a Subsidiary Agreement between the Recipient and the Project Implementing Entity, under terms and conditions approved by the Association, which shall include the following: (a) the proceeds of the Original Grant shall be made available by the Recipient to the Project Implementing Entity on a grant basis; -10- (b) the Project Implementing Entity shall undertake to carry out the Project with due diligence and efficiency and in accordance with appropriate management, financial, engineering and social and environmental standards acceptable to the Association, and provide, promptly as needed, the funds, facilities and other resources required for the purpose; (c) the Recipient shall have the right to suspend or terminate the right of the Project Implementing Entity to the use of the proceeds of the Original Grant made available under the Subsidiary Agreement upon failure by the Project Implementing Entity to perform its obligations thereunder; and (d) in the event that any portion of the proceeds of the Original Grant provided to the Project Implementing Entity is not used for Eligible Expenditures or is otherwise used in breach of this Agreement, the Project Agreement, or the Subsidiary Agreement, the Project Implementing Entity shall, upon notice from the Recipient or from the Association, refund the notified amount to the account provided in such notice. 2. The Recipient shall exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Original Grant. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. C. Anti-Corruption The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. D. Safeguards 1 . The Recipient shall ensure that the Project is carried out in accordance with the Safeguard Instruments. 2. Whenever an additional or revised Safeguard Instrument is required for any proposed activity under the Project in accordance with the Association's Policies, the Recipient shall: (a) prior to the commencement of such activity, proceed to have such Safeguard Instrument: (i) prepared or revised (as the case may be) and furnished to the Association for review and approval; and (ii) thereafter adopted and disclosed as approved by the Association, in a manner acceptable to the Association; and - 11 - (b) thereafter take such measures as shall be necessary or appropriate to ensure compliance with the requirements of said safeguard instrument. 3. The Recipient shall ensure that each contract for civil works under the Project includes the obligation of the relevant contractor and any sub-contractor(s) to comply with the relevant provisions of the Safeguard Instruments applicable to such civil works commissioned/awarded pursuant to said contract. 4. The Recipient shall ensure that any studies and technical assistance activities to be supported by the Project are carried out under terms of reference satisfactory to the Association and are consistent with, and pay due attention to, the Association's Policies. 5. Without limitation upon its other reporting obligations under this Agreement, the Recipient shall, in accordance with terms of reference satisfactory to the Association: (a) monitor the status of compliance with the Safeguard Instruments; and (b) prepare and furnish to the Association, as part of each Project Report, a report on the results of such monitoring activities during the period covered by said Project Report, giving details of: (a) measures taken in furtherance of the Safeguard Instruments; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguard Instruments; and (c) remedial measures taken or required to be taken to address such conditions. 6. The Recipient shall not amend, vary or waive, or permit to be amended, varied or waived, any provision of the Safeguard Instruments, whether in whole or in part, unless the Association has provided its prior approval thereof in writing, and the Recipient has complied with the same consultation and disclosure requirements as applicable to the original adoption of the Safeguard Instruments. 7. In the event of a conflict between any provisions of the Safeguard Instruments and the provisions of this Agreement, the provisions of this Agreement shall prevail. Section II. Project Monitoring, Reportin2 and Evaluation A. Project Reports 1 . The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and the Results Framework. Each Project Report shall cover the period - 12 - of one (1) calendar semester, and shall be furnished to the Association not later than forty-five (45) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1. The Recipient shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 4.09 of the General Conditions. 2. Without limitation on the provisions of Part A of this Section, the Recipient shall prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Association. 3. The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 4.09(b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one (1) fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the Association not later than six (6) months after the end of such period. Section III. Procurement A. General 1. Goods and Works. All goods and works required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines, and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Association of particular contracts, refer to the corresponding method described in the Procurement Guidelines, or Consultant Guidelines, as the case may be. - 13 - B. Particular Methods of Procurement of Goods and Works 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods and works shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods and Works. The following methods, other than International Competitive Bidding, may be used for procurement of goods and works for those contracts specified in the Procurement Plan: (a) National Competitive Bidding, subject to the additional procedures set forth in the Annex to Schedule 2; (b) Shopping; (c) Force Account; and (d) Direct Contracting. C. Particular Methods of Procurement of Consultants' Services 1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following methods, other than Quality- and Cost-based Selection, may be used for procurement of consultants' services for those contracts which are specified in the Procurement Plan: (a) Quality-based Selection; (b) Least Cost Selection; (c) Selection based on Consultants' Qualifications; (d) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines for the Selection of Individual Consultants; (e) Single-source procedures for the Selection of Individual Consultants; and (f) Single-source Selection of consulting firms. D. Review by the Association of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Association's Prior Review. All other contracts shall be subject to Post Review by the Association. Section IV. Withdrawal of the Proceeds of the Financing A. General 1. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Association shall specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the Association and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. -14- 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing ("Category"), the allocations of the amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Amount of Amount of the the Percentage of Original Additional Amount of the Expenditures Grant Grant Credit to be Allocated Allocated Allocated Financed (expressed in (expressed (expressed in (exclusive of Category SDR) in SDR) SDR) Taxes) (1) Goods, 3,400,000 1,500,000 1,500,000 100% works, consultants' services, Operating Costs, Training and Workshops for the Project TOTAL 3,400,000 1,500,000 1,500,000 AMOUNT B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for payments made prior to the date of: (a) the Original Financing Agreement with respect to amounts of the Original Grant; and (b) this Agreement with respect to amounts of the Additional Financing, except that withdrawals up to an aggregate amount not to exceed SDR 200,000 equivalent out of the Additional Grant may be made for payments made prior to this date but on or after August 18, 2015, for Eligible Expenditures. 2. The Closing Date for the: (a) Original Grant is December 31, 2015; and (b) the Additional Financing is June 30, 2018. Section V. Other Undertakings 1 . The Recipient shall: (a) by no later than January 31, 2016, appoint within MolT a Director of Land Transport; and (b) maintain for the duration of the Project, adequate staffing within MolT with adequate resources to facilitate effective implementation of the Project. - 15 - 2. The Recipient shall, by not later than January 31, 2016, ensure that counterpart financing of not less than one million Dollars ($1,000,000) is deposited in the Road Maintenance Fund to support road maintenance activities under the Project. -16- ANNEX to SCHEDULE 2 Additional Procedures for National Competitive Bidding In order to ensure economy, efficiency, transparency, and broad consistency with the provisions included in Section I of the Procurement Guidelines (as required by paragraph 3.3 of the Procurement Guidelines), goods and works for which this Schedule allows procurement under paragraphs 3.3 and 3.4 of the Procurement Guidelines, shall be procured in accordance with the following paragraphs. Participation in Bidding 1. Government-owned enterprises in Tonga shall be eligible for bidding only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not a dependent agency of the Recipient. 2. Foreign bidders shall be eligible to participate in bidding under the same conditions as national bidders. In particular, no domestic preference over foreign bidders shall be granted to national bidders in bid evaluation. Advertising; time for bid preparation 3. Invitations to bid shall be advertised in at least one newspaper of national circulation, allowing a minimum of 30 days for the preparation and submission of bids, such 30 days to begin with the availability of the bidding documents or the advertisement, whichever is later. Standard bidding documents 4. Until national standard bidding documents approved by the Association are available, bidding documents approved by the Association shall be used. Bid security 5. All bidders shall provide bid security if indicated in the bidding documents. A bidder's bid security shall apply only to a specific bid. Classification of contractors: qualification: post-qualification 6. Bidding shall not be restricted to any particular class of contractors and nonclassified or contractors shall also be eligible to bid. Qualification criteria (in case prequalification was not carried out) shall be stated in the bidding documents, and before - 17- contract award the bidder having submitted the lowest evaluated responsive bid shall be subject to post-qualification. Registration 7. If a registration process was required, a foreign firm determined to be the lowest evaluated responsive bidder shall be given reasonable opportunity of registering, without any let or hindrance. Evaluation criteria 8. Evaluation criteria shall be clearly specified in bidding documents, and evaluation criteria other than price shall be quantified in monetary terms. Bid Opening; and Bid Evaluation 9. Bidders may deliver bids, at their option, either in person or by courier service or by mail. 10. Bids shall be opened in public, immediately after the deadline for submission of bids. 11. Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated bidder. 12. No bidder shall be rejected merely on the basis of a comparison with the owner's estimate and budget ceiling without the Association's prior concurrence. Rejection of Bids 13. Rebidding shall not be carried out without the Association's prior concurrence. Extension of the validity of bids 14. In exceptional circumstances, the procuring entity may, before the expiration of bid validity, request all bidders in writing to extend the validity of their bids. In such a case, bidders shall not be requested nor permitted to amend the price or any other condition of their bid. Bidders shall have the right to refuse to grant such an extension without forfeiting their bid security, but bidders granting such an extension shall be required to provide a corresponding extension of their bid security. No post-bidding; negotiations 15. There shall be no post-bidding negotiations between the procuring entity and the lowest or any other bidder. - 18 - Inspection and Auditing 16. Each contract financed from the proceeds of a Grant shall provide that the contractors shall permit the Association, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by the Association. Conflict of Interest 17. Contractors that have a business or family relationship with a senior member of the project implementing agency's staff may not be awarded a contract, unless the conflict of interest stemming from this relationship has been resolved in a manner satisfactory to the Association throughout the process of evaluation of the bids and the execution of the contract. - 19 - SCHEDULE 3 Repayment Schedule Date Payment Due Principal Amount of the Credit repayable (expressed as a percentage)* On each June 15 and December 15: commencing December 15, 2025 to and 1% including June 15, 2035 commencing December 15, 2035 to and 2% including June 15, 2055 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.03 (b) of the General Conditions. - 20 - APPENDIX Definitions 1. "Additional Financing" has the meaning ascribed to that term in Article 2.01(b) of this Agreement. 2. "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. 3. "Association's Policies" means, to the extent that they are applicable to the Project activities, the operational policies and procedures OP/BP 4.01 (Environmental Assessment), OP/BP 4.04 (Natural Habitats), OP/BP 4.07 (Water Resources Management), OP/BP 4.09 (Pest Management), OP/BP 4.10 (Indigenous Peoples), OP/BP 4.11 (Physical Cultural Resources), OP/BP 4.12 (Involuntary Resettlement), OP/BP 4.36 (Forests), and OP/BP 4.37 (Safety of Dams) contained in the Association's Operational Manual which can be found on the Association's website at www.worldbank.org. 4. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 5. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 6. "Environmental Management Plan" means the Recipient's environmental management plan dated July 9, 2015, acceptable to the Association, which sets out: (i) key principles for social and environmental management of activities under the Project; (ii) procedures to screen and process activities for significant social and environmental impacts and to assist in mitigating impacts; (iii) procedures to ensure that these principles and procedures are properly applied; (iv) guidelines for capacity building and monitoring; and (v) guidelines for grievance redress; as said plan may be revised from time to time with the prior written agreement of the Association. 7. "General Conditions" means the "International Development Association General Conditions for Credits and Grants", dated July 31, 2010. 8. "MolT" or "Ministry of Infrastructure and Tourism" means the Recipient's Ministry of Infrastructure and Tourism; or any successor thereto. -21- 9. "MolT's Respective Part of the Project" means Part A (i), (ii), (iv), (v), (vi), (vii) and (viii), Part B (i), (v), (vi), (vii), (x), (xi), (xii), (xiii), (xiv) and (xv), Part C and Part D of the Project. 10. "Operating Costs" means the incremental recurrent operating costs of the Project incurred by the Recipient on account of Project implementation, monitoring, evaluation, coordination and supervision, as approved by the Association based on annual budgets acceptable to the Association, which would not have been incurred but for the Project, including: (i) operation and maintenance of vehicles, repairs, fuel and spare parts; (ii) equipment and computer maintenance, including hardware and software; (iii) communication costs and shipment costs (whenever these costs are not included in the cost of goods); (iv) office supplies; (v) rent for office facilities; (vi) utilities and insurances; (vii) travel and per diem costs for technical staff carrying out supervisory, data collection and quality control activities; (viii) bank fees and charges; and (ix) salaries of local Project administrative staff but excluding salaries of the Recipient's civil servants. 11. "Original Grant" has the meaning ascribed to this term in Article 2.01(a) of this Agreement. 12. "Original Financing Agreement" has the meaning ascribed to this term in the preamble to this Agreement. 13. "Original Project" has the meaning ascribed to this term in the preamble to this Agreement. 14. "Part" means a part of the Project as described in Schedule 1 to this Agreement. 15. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 16. "Procurement Plan" means the Recipient's procurement plan for the Project, dated August 18, 2015 and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 17. "Project Agreement" means the Project Agreement between the Association and Tonga Airports Limited dated July 17, 2008, entered into in connection with the Original Financing Agreement, pursuant to which Tonga Airports Limited agrees to carry out TAL's Respective Part of the Project; as said agreement may be amended from time to time in accordance with its terms. 18. "Project Implementing Entity" means Tonga Airports Limited. - 22 - 19. "Project Implementing Entity's Legislation" means the Public Enterprises Act of 2002. 20. "Project Management Unit" means the unit established within MolT for the purposes of overseeing the implementation of the Project, and referred to in Section I.A.2 of Schedule 2 to this Agreement. 21. "Project Steering Committee" means the committee referred to in Section I.A.3 of Schedule 2 to this Agreement, chaired by the Minister of Finance and National Planning, and comprising key stakeholders, including representatives of the Ministry of Finance and National Planning, Ministry of Infrastructure and Tourism, Ministry of Public Enterprises, and Ministry of Meteorology Energy Information, Disaster Management, Environment, Climate Change and Communication. 22. "Road Maintenance Fund" means the Recipient's Road Maintenance Fund established and operating pursuant to the Public Finance Management Act 2002 and the regulations thereto. 23. "Results Framework" means the framework dated August 18, 2015 and agreed with the Association, setting forth the indicators and targets for purposes of monitoring and evaluation of the progress of the Project, as the same may be modified from time to time with the prior written agreement of the Association. 24. "Safeguard Instruments" means the Environmental Management Plan and any additional or revised safeguard instrument(s) required to be prepared by the Recipient in accordance with Section D.2 of Schedule 2 to this Agreement. 25. "Subsidiary Agreement" means the Subsidiary Grant Agreement between the Recipient and the Project Implementing Entity dated September 4, 2008, and referred to in Section I.B of Schedule 2 to this Agreement, pursuant to which the Recipient agrees to make part of the proceeds of the Original Grant available to the Project Implementing Entity for the purpose of implementation of TAL's Respective Part of the Project; as said agreement may be amended from time to time in accordance with its terms. 26. "TAL's Respective Part of the Project" means Part A (iii) and Part B (ii), (iii), (iv), (viii) and (ix) of the Project. 27. "Tonga Airports Limited" or "TAL" means the entity established and operating within the Recipient's territory pursuant to the Public Enterprises Act of 2002 and the Companies Act 1995, and is the Project Implementing Entity for the Project. 28. "Training and Workshops" means, in relation to the Project: (a) reasonable travel, room, board and per diem expenditures as incurred by trainers and trainees in -23 - connection with their training and by non-consultant training facilitators; (b) course fees; (c) training facility rentals; (d) national or international study tours; and (e) training material preparation, acquisition, reproduction and distribution expenses, in each case as approved by the Association based on annual budgets acceptable to the Association.