GRANT NUMBER E435-SO Financing Agreement (Somalia Productive, Resilient, and Inclusive Growth (SPRING) Project) between FEDERAL REPUBLIC OF SOMALIA and INTERNATIONAL DEVELOPMENT ASSOCIATION FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between FEDERAL REPUBLIC OF SOMALIA (“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 seventy-two million six hundred thousand Special Drawing Rights (SDR 72,600,000) (“Financing”), to (a) assist in financing the project described in Schedule 1 to this Agreement (“Project”); and (b) provide the Rapid Response Option (“RRO”). 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 April 15 and October 15 in each year. 2.05. The Payment Currency is Dollar. ARTICLE III — PROJECT; CONTINGENT EMERGENCY RESPONSE PROJECT 3.01. The Recipient declares its commitment to the objective of the Project and the Contingent Emergency Response Project (“CERP”). To this end, the Recipient shall: (a) carry out the Project in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement, and (b) carry out, or cause to be carried out, the CERP in accordance with Article V of the General Conditions. -2- ARTICLE IV — EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (a) the Recipient has prepared and adopted the Project Operations Manual, in form and substance satisfactory to the Association; and (b) the SMPF Grant Agreement has been duly executed and delivered, and all conditions precedent to its effectiveness, or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Agreement), have been fulfilled. 4.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 4.03. 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 V — REPRESENTATIVE; ADDRESSES 5.01. The Recipient’s Representative is its minister responsible for finance. 5.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient’s address is: Ministry of Finance Corso Somali Street Shangani District Mogadishu, Somalia; and (b) the Recipient’s Electronic Address is: Email: info@mof.gov.so 5.03. 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 (MCI) 1-202-477-6391 -3- AGREED as of the Signature Date. FEDERAL REPUBLIC OF SOMALIA By _____________________________________/s1/ Authorized Representative H.E. Bihi Iman Egeh Name: __________________________/n1/ Minister of Finance Title: __________________________ /t1/ 16-May-2025 Date: __________________________/d1/ INTERNATIONAL DEVELOPMENT ASSOCIATION By _____________________________________/s2/ Authorized Representative Qimiao Fan Name: __________________________/n2/ Division Director Title: __________________________/t2/ 16-May-2025 Date: __________________________/d2/ -4- SCHEDULE 1 Project Description The objective of the Project is to promote private sector-led growth and job creation by improving the business-enabling environment, strengthening the financial system, and enhancing access to finance. The Project consists of the following parts: Part 1: Improving the Enabling Environment for the Private Sector 1.1. Strengthening Institutional and Regulatory Framework for the Private Sector Carrying out a program of activities to address institutional and regulatory gaps to enhance business growth, efficiency, and competition, including: (a) supporting legal and regulatory reforms procedures to: (i) streamline the business licensing and registration process, and (ii) harmonize, upgrade, and expand outreach of the Somalia Business Registration System (SBRS) across the federal institutions and the Federal Member States; (b) facilitating the registration of women-owned businesses, including interventions focused on micro and small business-related reforms as well as awareness-raising; (c) fostering effective public-private cooperation to drive reforms; (d) expanding market access and opportunities for Somali businesses by supporting the Recipient’s integration into regional and global markets and enhancing its participation in regional, continental and international trade, including institutional and regulatory reforms necessary for the Recipient’s full integration to the EAC, and accession to the AfCFTA and WTO. 1.2. Enhancing the Somali Identification (ID) System Carrying out a program of activities to strengthen and scale-up the Recipient’s foundational digital identification (ID) system, including: (a) expanding the ID registration and issuance processes particularly to vulnerable segments of the population, including through support for communications and outreach campaigns, effective customer feedback, and grievance redress mechanisms; -5- (b) conducting an assessment of the identity management system, and updating the system where necessary, to facilitate more people-centric and secure identity management. (c) supporting the: (i) integration of the ID with high-impact services, including telecommunications services, banking services, passport services, and the unified social registry/social protection programs; (ii) mutual recognition and interoperability of Somalia’s national ID within the East African Community (EAC), to enhance regional integration. (d) institutional strengthening and capacity building for National Identification and Registration Authority (NIRA), including enhancing policy and regulatory frameworks, and support for local and international stakeholder engagement. Part 2: Deepening Financial Sector Reforms and Strengthening Institutional Capacity 2.1. Operational and capacity building support to Gargaara Supporting the operations of Gargaara, including financing expenditures, for its: (a) capacity-building towards its core functions, including enhanced appraisal of participating financial institutions, and advanced monitoring and evaluation; (b) operational costs; and (c) continued non-lending support programs for participating banks and microfinance institutions to strengthen institutional capabilities. 2.2. Strengthening Financial Sector Stability, Integrity, and Infrastructure (a) Supporting the Central Bank of Somalia (CBS) to carry out a program of reforms aligned with the CBS Strategy, for: (i) strengthening the financial sector oversight and policy implementation, including support for: (A) upgrading and strengthening relevant implementing guidelines and regulations under the Recipient’s (1) financial institutions law, insurance law, anti-money laundering/countering the financing of terrorism law, and targeted financial sanctions (TFS) legal framework, and (2) national payment systems law and CBS law; (B) the development of legal, regulatory, and institutional frameworks for depositor and consumer protection; (C) the development and -6- implementation of framework and policies to support financial market stability, depth and intermediation, including development and implementation of the financial sector roadmap, framework for climate finance for financial institutions and related financial products and services, and a financial inclusion strategy; (D) enhancing economic advisory functions for related data collection and policy development, including (1) enhancing capacity for foreign exchange reserves management, (2) supporting efficient and secure future currency management operations, (3) supporting capacity and institutional development to strengthen coordination with FMS for more effective oversight and enhanced implementation of financial sector reforms, and harmonized financial sector across Somalia, including support to the State Bank of Puntland (SBP) to improve its institutional efficiency and capacity, and financial inclusion efforts; (ii) promoting selected financial sector and institutional reforms, leveraging Performance Based Conditions (PBCs), including: (A) strengthening macroprudential framework; (B) improving the financial sector data collection, its analysis and transparency; (C) expanding oversight over the financial system; (D) establishing effective regulations and institutional practices for consolidated supervision of banks and non-bank financial institutions; and (E) the development, approval, launch and utilization of a Credit Information System (CIS). (iii) enhancing the safety, security, soundness, and resilience of the payment system, and strengthening related oversight, including: (A) full operationalization of the Somalia Payment Switch (SPS), including the Somalia Instant Payment System (SIPS); and (B) carrying out a program of activities to enhance the oversight of the financial market infrastructure and related capacity, strengthen and streamline the governance and operational framework for National Payment System, and support policies, practices, and procedures for resilient payment and settlement systems and services; (b) Supporting the Financial Reporting Center (FRC): (i) with the implementation of the National Risk Assessment (NRA) Action Plan and any updates needed to the NRA Action Plan; (ii) with implementation of the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Law, National Terrorist Financing Risk Assessment Action Plan, AML/CFT Awareness Strategy, go-AML (anti-money laundering system) customization, as well as upgrades/ enhancements to disaster recovery and secondary data systems; (iii) prepare for the Middle East and -7- North Africa Financial Action Task Force (MENAFATF) mutual evaluation and related technical reviews and in supporting related follow- up actions; and (iv) in enhancing its operational and oversight capacities including upgrading related information, communication, technology (ICT) systems, and expanding outreach to FMS; (c) Supporting the Bank of Somaliland (BoS) to enhance its financial services and strengthen the financial sector in Somaliland including: (i) implementing the Somaliland Financial Inclusion Strategy, including increasing access to formal financial services, development of new products aligned with emerging market needs, and enhancing financial literacy and consumer protection for individuals and entrepreneurs; (ii) strengthening the BoS capacity to carry out its core functions, such as supporting financial sector development in Somaliland, including enhancing the BoS financial infrastructure to inter alia, strengthen data exchange and cooperation and broader financial market infrastructure, and improve integrated monitoring of the financial system. Part 3: Enhancing Access to Finance and Resilience for MSMEs 3.1. Derisking Access to Finance for MSMEs (a) Enhance the design and scale up the Risk Sharing Mechanism (RSM) support to enhance access to finance for: (i) MSMEs in high-priority underserved productive sectors; and (ii) MSMEs in climate-critical, and/or vulnerable sectors; and (b) Support the: (i) the enhancement and confirmation of RSM model/design, related operations, and market research; and (ii) financial institutions and related stakeholders in strengthening their capabilities, including: (A) developing new products and services; and (B) supporting related capacity building for key participating institutions and stakeholders. 3.2. Enhancing MSMEs’ Resilience Providing business development services and targeted interventions to enhance business continuity and productivity, to: (i) MSMEs from the roster of firms that have already completed the standardized training and advisory services provided under the SCALED-UP or other relevant programs; (ii) productive and climate critical and vulnerable MSMEs and related cooperatives or associations that receive sector specific climate resilience technical assistance. -8- Part 4: Project Management Strengthening the capacity of the Project Implementation Unit (PIU) for Project management and implementation, including coordination with other FMS and implementing agencies, monitoring and evaluation, fiduciary aspects (i.e. procurement and financial management) and environmental and social safeguards, through the acquisition of goods, provision of technical advisory services and training, and Operating Costs. -9- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. The Recipient shall vest all responsibilities for Project implementation (except for financial transactions handled by the EAFS Unit pursuant to the COAP Manual) in the Ministry of Finance, which shall carry out the Project in accordance with this Section. To this end, the Recipient shall: (a) establish not later than thirty (30) days after the Effective Date, and thereafter maintain throughout the period of Project implementation, a Project steering committee (“Project Steering Committee”): (i) chaired by the Director General of the Ministry of Finance, and comprised of Director General of the Ministry of Commerce and Industry (MoCI), General Manager of CBS, Director of FRC, Director General of NIRA, Chief Executive Officer of Gargaara and other stakeholders as set forth in the POM; and (ii) vested with such powers, functions and competencies, acceptable to the Association and set forth in the POM, as shall be required to: (A) provide support to the PIU addressing any obstacles to Project implementation; (B) provide policy direction and guidance to the PIU for the carrying out of the Project; (C) promote inter-agencies and federal collaboration, coordination, and cooperation for Project activities; and (D) review and approve the Annual Work Plans and Budgets and Project Reports; and (b) maintain throughout the period of Project implementation, a Project implementation unit within MoF (variously the “Project Implementation Unit” or “PIU”): (i) led by a Project coordinator and assisted by competent, experienced and qualified staff, in sufficient numbers and under terms of reference acceptable to the Association (including a procurement specialist, social specialist, and financial management specialist), as further set forth in the POM; and (ii) vested with such powers, financial resources, functions and competencies, acceptable to the Association and set forth in the POM, as shall be required to: (A) coordinate all activities under the Project among all institutional stakeholders and FMS, and liaising with the Association; and (B) carrying out the day-to-day implementation of the Project including, procurement and contract management, financial management, budgeting and planning, safeguards (ESCP) compliance and monitoring, including establishing and operating grievance redress mechanism(s), communications, and awareness. -10- B. Other Implementation Arrangements 1. Somaliland Subsidiary Agreement (a) To facilitate the carrying out of Somaliland’s Respective Part of the Project, the Recipient shall make part of the proceeds of the Financing, allocated from time to time to Category 3 of the table set forth under Section III of this Schedule, available to Somaliland pursuant to a written agreement between the Recipient and Somaliland, under terms and conditions approved by the Association (“Somaliland Subsidiary Agreement”), which shall include: (i) the implementation arrangements for Somaliland’s Respective Activities to be carried out by a dedicated implementation unit (“Somaliland Project Implementation Unit”); (ii) the arrangement for flow of funds out of the Financing proceeds; (iii) the environmental and social arrangements for Somaliland’s Respective Part of the Project; (iv) the obligation to prepare and adopt the Somaliland Manual; and (v) other institutional arrangements, including specialists to be recruited to the Somaliland Project Implementation Unit, where necessary, as shall be required for Somaliland to carry out its Respective Part of the Project. (b) The Recipient shall exercise its rights under the Somaliland Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Association, and to accomplish the purposes of the Financing. (c) Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate, or waive the Somaliland Subsidiary Agreement or any of its provisions, and in the event of any conflict between the provisions of the Somaliland Subsidiary Agreement and those of this Agreement, the provisions of this Agreement shall prevail. 2. Implementing Partners (a) The Recipient shall designate, as a technical Implementing Partner, in coordination with the MoF, each of: (i) MoCI, with respect to the implementation of Part 1.1 of the Project, (ii) the CBS, with respect to the implementation of Part 2.2(a) of the Project, (iii) the FRC, with respect to the implementation of Part 2.2(b) of the Project; (iv) the NIRA, with respect to the implementation of Part 1.2 of the Project; and (v) the MSME Financing Facility, with respect to the implementation of Parts 2.1 and 3 of the Project. (b) Without limitation to the provisions of sub-paragraph (a) immediately above, the Recipient shall: (i) comply, and cause the Implementing Partners to comply, with the collaborative arrangements set forth in the -11- POM, (ii) not later than ninety (90) days after the Effective Date, enter into a legal agreement acceptable to the Association, with the MSME Financing Facility, setting out the respective roles and responsibilities of the MoF and the MSME Financing Facility, as may be further provided in the POM. C. Manuals 1. Project Operations Manual /COAP Manual (a) The Recipient shall: (i) prepare a Project operations manual, in form and substance satisfactory to the Association, containing detailed arrangements and procedures for implementation of the Project including inter alia: (A) institutional arrangements including delineation of roles and responsibilities of various entities, institutions and agencies involved in Project implementation and their coordination and inter- relationships including reporting and accountabilities lines for implementation units and Project staff; (B) disbursement arrangements, reporting requirements, financial management procedures and audit procedures (ancillary to those of the COAP Manual); (C) the procurement procedures, standard procurement documentation, contracts administration and management procedures; (D) measures to mitigate fraud and corruption as well as other fiduciary risks; (E) environmental and social risks mitigation measures (ancillary to those of the ESCP) including measures to address risk of gender based violence, sexual exploitation and abuse, sexual harassment, as well as operation of grievance redress mechanism; (F) arrangements to address community health, safety and security risks and impacts - including measures to avoid or minimize the transmission of communicable diseases, as well as measures to mitigate data/ privacy risks under the Project; (G) procedures for preparing and reviewing a consolidated annual work plan and budget for each Fiscal Year; (H) monitoring and evaluation arrangements, reporting and communication, including the Project’s performance indicators and results framework; and Personal Data collection and processing in accordance with applicable national law and good international practices; (I) the necessary legal arrangement required between CBS and the State Bank of Puntland, (J) such other administrative, financial, technical and organizational arrangements and -12- procedures as shall be required for the Project; and (ii) (A) furnish to, and exchange views with the Association, on such manual promptly upon its preparation; (B) adopt such manual satisfactory to the Association (“Project Operations Manual” or “POM”); and (C) thereafter implement, and cause the Project to be implemented, in accordance with the POM. (b) The Recipient shall implement the Project and cause the Project to be implemented, in accordance with the COAP Manual, in a manner and substance satisfactory to the Association. (c) The Recipient shall refrain from materially and/or substantially amending, revising, waiving, voiding, suspending or abrogating, any provision of the POM and/or COAP Manual, whether in whole or in part, without the prior written concurrence of the Association. (d) In the event of any conflict between the provisions of: (a) the Project Operations Manual or the COAP Manual; and (b) those of this Agreement, the provisions of this Agreement shall prevail. 2. Risk Sharing Mechanism Manual (a) Without limitation to the provisions of Section I.C.1 of this Schedule, the Recipient shall prior to the implementation of activities under Part 3 of the Project, cause the MSME Financing Facility to prepare and adopt a Risk Sharing Mechanism Manual (“RSM Manual”), to be annexed to the Project Operations Manual, containing details of the guidelines and procedures governing the Risk Sharing Mechanism under Part 3 of the Project, including, inter alia, criteria for beneficiary eligibility, eligible expenditures, disbursement mechanisms, applicable requirements for compliance with environmental and social standards, and terms and conditions of the risk sharing products to be offered under the Risk Sharing Mechanism. (b) The Recipient shall carry out Part 3 of the Project in accordance with the POM (including the RSM Manual). -13- (c) In case of a conflict between the provisions of the Project Operations Manual (including the annexed RSM Manual) and this Agreement, the provisions of this Agreement shall prevail. D. Risk Sharing Mechanism The Recipient shall cause the MSME Financing Facility to ensure that each Eligible PFI shall appraise, approve, monitor, and evaluate respective Subprojects eligible for guarantee under Part 3 of the Project, and administer credits or loans to the respective MSME Beneficiaries, in accordance with the terms and conditions of the pertinent Subproject Agreement between MSME Financing Facility and the Eligible PFI, and the guidelines and procedures set forth in the RSM Manual. E. Annual Work Plan and Budget 1. The Recipient shall prepare and furnish to the Association on an annual basis, by no later than October 31 of each year or such other period as may be agreed with the Association, the annual work plan and budget containing all activities proposed to be included in the Project during the following Fiscal Year, and a proposed financing plan (setting forth the proposed amounts and sources of financing) for expenditures required for such activities; provided that the Annual Work Plan and Budget for the first year of Project implementation shall be prepared and furnished to the Association, not later than one (1) month after the Effective Date. 2. The Recipient shall afford the Association a reasonable opportunity to exchange views with the Recipient on each such proposed work plan and budget, have the Project Steering Committee adopt the work plan and budget before the end of the same calendar year the plan and budget was prepared, and thereafter ensure that the Project is implemented with due diligence during the following Fiscal Year in accordance with such work plan and budget as shall have been approved by the Association (“Annual Work Plan and Budget”). 3. The Recipient shall not make or allow to be made any changes to the approved Annual Work Plan and Budget without prior approval in writing by the Association. F. 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: -14- (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. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 4. 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. 5. 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. -15- Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 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. No later than thirty (30) months after the Effective Date, the Recipient shall, in conjunction with the Association, carry out a mid-term review of the Project (the “Mid-term Review”), covering the progress achieved in the implementation of the Project. To this end, the Recipient shall prepare under terms of reference satisfactory to the Association and furnish to the Association not less than three (3) months prior to the beginning of the mid-term review, a report integrating the results of the Project’s monitoring and evaluation activities, on the progress achieved in the carrying out of the Project during the period preceding the date of such report, and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objective of the Project during the period following such date. Following the mid-term review, the Recipient shall act promptly and diligently in order to take, or cause to be taken, measures recommended to ensure the efficient completion of the Project and the achievement of the objective as well as any corrective action deemed necessary by the Association to remedy any shortcoming noted in the carrying out of the Project in furtherance of the objective of the Project. B. Verification of Performance Based Conditions 1. Without limitation to the provisions of Part A of this Section II, for purposes of implementation of the PBCs under Part 2.2(a)(ii) of Schedule 1 to this Agreement, the Recipient shall: (a) not later than nine (9) months after the Effective Date, appoint and enter into a verification agreement with a Verification Agency, under terms of reference satisfactory to the Association; (b) cause the Verification Agency to undertake the independent verification, in accordance with the Verification Protocol and in a manner and substance acceptable to the Association, to ascertain whether the PBCs have been achieved for the period under review; and (c) furnish to the Association corresponding verification report(s) in form and substance agreed with the Association, and any information and/or documentation that the Verification Agency and/or the Association shall reasonably require for the monitoring, audit, analysis and/or verification -16- of the achievement/fulfillment of the Performance Based Conditions set forth in Schedule 3 to this Agreement. 2. In the event of a need for verification services prior to the appointment of such agency, the Recipient shall put in place adequate interim arrangements acceptable to the Association and approved in writing by the Association for this purpose. Section III. Withdrawal of the Proceeds of the Financing A. General 1. Without limitation upon the provisions of Article II of the General Conditions, the Recipient may withdraw the proceeds of the Financing: (a) to finance Eligible Expenditures for the Project or the CERP in accordance with the respective Disbursement and Financial Information Letter; and (b) for the Complementary Financing for the CAT DDO in accordance with the provisions of Section II.A of the relevant Schedule on “Program Actions, Availability of Financing Proceeds” (or such equivalent heading) to the Cat DDO Legal Agreement (including the relevant provisions of any other document that is referred to or forms part of the Cat DDO Legal Agreement), which are hereby incorporated by reference in this Agreement, and which shall apply, mutatis mutandis, to the amount of the Grant allocated to the aforementioned Category; all in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Percentage of Financing Allocated Expenditures (expressed in SDR) to be Financed (inclusive of Taxes) (1) Goods, non-consulting services, 64,576,000 100% consulting services, Training, and Operating Costs for Parts 1, 2.1, 2.2 (except 2.2(a)(i)(A)(2), 2.2(a)(ii), and 2.2(c)), 3, and 4 of the Project (2) Goods, non-consulting services, 764,000 100% consulting services, Training, and Operating Costs for Part 2.2(a)(i)(A)(2) of the Project (3) Goods, non-consulting services, 2,675,000 100% consulting services, Training, and -17- Category Amount of the Percentage of Financing Allocated Expenditures (expressed in SDR) to be Financed (inclusive of Taxes) Operating Costs for Part 2.2(c) of the Project (4) Eligible Expenditure Program under 4,585,000 100% Part 2.2(a)(ii) of the Project (5) Eligible Expenditures for the CERP 0 100% (6) Complementary Financing for the 0 Not Applicable Cat DDO TOTAL AMOUNT 72,600,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) for payments made prior to the Signature Date; (b) under Category (2) unless and until the Recipient has put in place as part of its legal regime: (i) a national law governing payment systems; and (ii) a revised law governing the CBS, in form and substance satisfactory to the Association; (c) under Category (3) unless and until Somaliland has: (i) executed the Somaliland Subsidiary Agreement setting forth implementation arrangements for Somaliland’s Respective Activities under the Project (including the flow of funds out of the Financing proceeds) and all Somaliland’s internal requirements for the agreement to be binding upon Somaliland in accordance with its terms have been duly obtained/secured; (ii) prepared and formally adopted the Somaliland Manual for its Respective Activities under the Project; (iii) established the institutional arrangements set forth in the foregoing manual, as shall be required for carrying out its Respective Part of the Project; and (iv) prepared, adopted and disclosed its environmental and social commitment plan, including the environmental & social risk management documents; in a manner and substance satisfactory to the Association. -18- (d) under Category (4) with respect to each PBC, as set forth in Schedule 3, for which a withdrawal request has been submitted, until and unless the Recipient has also submitted: (i) evidence, in form and substance satisfactory to the Association, of the eligible PBC expenditures paid, as presented in the IFR and verified pursuant to the POM; and (ii) supporting documentation confirming the Recipient’s achievement of the respective PBC(s) in form and substance satisfactory to the Association, as further elaborated in Schedule 3 and as set forth in the Verification Protocol, including, but not limited to, a report issued by the Verification Agency, confirming the achievement of the respective PBC(s) and the amount to be paid. (e) for Eligible Expenditures under Category (5), until and unless the Association has notified the Recipient that the conditions set forth in Section 5.15 (a) of the General Conditions have been fulfilled; (f) for Complementary Financing for the Cat DDO under Category (6), until and unless: (i) the Recipient has furnished to the Association a request to reallocate and thereafter withdraw all or part of the Unwithdrawn Credit Balance for the Complementary Financing for the Cat DDO, and such notice specifies the Cat DDO Legal Agreement; and (ii) the Association has accepted said request and notified the Recipient thereof, and is satisfied, based on evidence satisfactory to it, that the conditions precedent to withdrawal of the financing provided under the Cat DDO Legal Agreement have been fulfilled. 2. Notwithstanding the provisions of Part B.1(d) of this Section: (a) the Recipient may request withdrawals of the Financing when the relevant Eligible PBC Expenditures have been incurred, but prior to the PBCs having been met, provided that the Recipient shall: (i) achieve such PBCs no later than the Closing Date; and (ii) submit to the Association evidence satisfactory to the Association of such PBCs having been met no later than the Disbursement Deadline Date; provided however, that if by the Disbursement Deadline Date, the Recipient has failed to provide the Association evidence satisfactory to the Association that one or more -19- PBCs have been fully achieved, the Recipient shall, upon notice from the Association, promptly refund to the Association the Withdrawn Financing Balance related to those expenditures under the Eligible PBC Expenditures under Category (4). Except as the Association may otherwise determine, the Association shall cancel all amounts refunded pursuant to this Section; (b) if any of the PBCs referred to in Schedule 3 to this Agreement has not been achieved, the Association may, by notice to the Recipient: (a) reallocate all or a portion of the proceeds of the Financing then allocated to said PBC to any other PBC or any other Category; and/or (b) cancel all or a portion of the proceeds of the Financing then allocated to said PBC. 3. In the event of withdrawal of the Complementary Financing for the Cat DDO, the Recipient shall comply with any provisions on “Deposits of Financing Proceeds/Amounts” and “Audits” (or such equivalent heading) set forth in Section II of the relevant Schedule on “Program Actions, Availability of Financing Proceeds” (or such equivalent heading) to the Cat DDO Legal Agreement (including the relevant provisions of any other document that is referred to or forms part of the Cat DDO Legal Agreement) to the same extent as if such provisions have been set out in full in this Agreement, except that: (a) the terms “Credit”, “Grant” or “Financing” (or such equivalent terms) shall be deemed to refer to the amount of the Complementary Financing for the Cat DDO; and (b) the terms “Credit Account”, “Grant Account” or “Financing Account” (or such equivalent terms) shall be deemed to refer to the Financing Account for this Financing. 4. The Closing Date is June 30, 2030. -20- SCHEDULE 3 Performance-Based Conditions and Allocated Amounts PBC Action Allocated Total Amount Amount (SDR) (SDR) PBC 1: Macro Macroprudential framework to monitor, 573,000 573,000 prudential assess, and mitigate systemic risks approved framework by the CBS Board and implementation plan strengthened operationalized. PBC 2: (a) Consolidated Financial Soundness 382,000 764,000 Financial Indicators (FSI) data is published on the CBS sector data website, with expanded IMF FSI data collection, coverage (including all licensed banks). analysis and transparency (b) Consolidated FSI data is published on the improved CBS website, with expanded IMF FSI data 382,000 coverage (including all licensed banks and other licensed financial institutions) PBC 3: (a) Regulation issued by CBS on safeguarding 306,000 955,000 Expanded of Mobile Money Funds oversight of financial (b) Regulation issued by CBS relating to 267,000 system Savings and Credit Cooperative Societies (SACCOs) (c) at least 5 microfinance institutions and 1 191,000 SACCO licensed by CBS (d) Regular offsite supervision for all licensed 191,000 microfinance institutions and SACCOs conducted and onsite examinations completed for at least 2 microfinance institutions and 1 SACCO. PBC 4: (a) Regulation to undertake consolidated 765,000 1,529,000 Consolidated supervision and financial reporting of supervision of financial groups is issued by the CBS banks and non-bank (b) CBS has completed consolidated 382,000 financial supervision of at least 1 financial group institutions (comprising one of the four largest banks in terms of total assets at the end of previous calendar year). 382,000 -21- (c) CBS has completed consolidated supervision of at least 2 additional financial groups (comprising at least 1 additional bank from the four largest banks in terms of total assets at the end of previous calendar year). PBC 5: (a) Credit Information System (CIS) 191,000 764,000 Improved framework developed and approved by the access to CBS Board; financial services (b) CIS launched with at least 4 banks 382,000 through better connected and contributing to data collection; risk assessment of (c) CIS being used by at least 4 banks 191,000 borrowers contributing and accessing credit information consistently over 3 months. TOTAL 4,585,000 APPENDIX Section I. Definitions 1. “AfCFTA” means the African Continental Free Trade Area, approved by the 18th ordinary Session of Assembly of Heads of State and Government, held in Addis Ababa, Ethiopia in January 2012, aimed at accelerating intra-African trade and boosting Africa’s trading position in the global market. 2. “Annual Work Plan and Budget” means the yearly work plans and budgets to be prepared, approved and implemented by the Recipient pursuant to Section I.E. of Schedule 2 to this Agreement, as further elaborated in the POM. 3. “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. 4. “AML/CFT Awareness Strategy” means the Recipient’s strategy designed to educate individuals and organizations about the risks of money laundering and terrorist financing, and to promote compliance with national AML/CFT regulations and international best practices. 5. “Bank of Somaliland” or “BoS” means the Somaliland's bank established in 1994 under the Bank of Somaliland Act of 1994. 6. “Category” means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 7. “CBS Strategy” means the strategy (2025-2019) approved by the CBS Board that identifies key reform priorities organized around four strategic goals, to: (i) issue a viable national currency and develop, implement, and continuously assess effective monetary and foreign exchange policies; (ii) strengthen the financial system’s stability, effectiveness, and inclusiveness; (iii) enhance the financial market infrastructure to ensure payment systems and services are safe and efficient; and (iv) promote good governance, institutional resilience, and operational excellence. 8. “CBS Board” means the board established pursuant to the CBS Act and responsible for the formulation and adoption of policies and rules for the functioning of the CBS. 9. “CBS Act” means the Central Bank of Somalia Act, 2012 (Law No. 130 of 2012), as may be amended. 10. “Central Bank of Somalia” or “CBS” means the bank established pursuant to the CBS Act, responsible for formulating and implementing monetary policies for the Recipient and such other functions provided under the said Act. -2- 11. “COAP Manual” means the comprehensive operation and accounting procedures manual dated January 1, 2019, as amended from time to time with the prior written concurrence of the Association. 12. “Complementary Financing for the Cat DDO” means the amount of the Financing allocated to the Category entitled “Complementary Financing for the Cat DDO” in the table set forth in the table in Section III.A of Schedule 2 to this Agreement. 13. “Consolidated Financial Soundness Indicators” means indicators compiled to monitor the health and soundness of financial institutions, including supporting macroprudential analysis, surveillance and assessment of the strengths and vulnerabilities of financial systems. 14. Credit Information System” or “CIS” means a system established for the purpose of collecting, analyzing and sharing credit information of customers with financial institutions and any other authorized entities. 15. “EAFS Unit” means the Recipient’s external assistance fiduciary section unit established within MoF’s Office of the Accountant General, to carry out the overall financial management in respect of the external developmental assistance including proceeds received from the Association. 16. “East African Community” or “EAC” means the community established by a treaty signed in Arusha on 30 November 1999, which entered into force on 7 July 2000 following the conclusion of the process of its ratification and deposit of the instruments of ratification with the Secretary-General by all the original partner states. 17. “Eligible Expenditure Program” means a set of defined expenditures for goods, consulting and non-consulting services, Training, and Operating Costs made by the Project Implementation Unit under Part 2.2(a)(ii) of the Project, as detailed in the POM. 18. “Eligible PFI” means an approved bank, or financial institution, which is registered as a bank or financial institution pursuant to the laws of the Recipient and approved to participate in the Risk Sharing Mechanism under this Project. 19. “Environmental and Social Commitment Plan” or “ESCP” means the environmental and social commitment plan for the Project, dated March 19, 2025, 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. -3- 20. “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) “Environmental and Social Stan dard 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 African 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. 21. “Federal Member States” and the acronym “FMS” mean each of the states constituting the Somali federation, as acknowledged in the Recipient’s Provisional Constitution (2012). 22. “Financial Reporting Center” or “FRC” means the center established pursuant to the Anti-Money Laundering and Countering the Financing of Terrorism Act, 2016, to serve as the central, national agency responsible for receiving, requesting, analyzing, and appropriately disseminating information concerning money laundering and terrorist financing. 23. “Fiscal Year” means the Recipient’s fiscal year commencing on January 1 of each calendar year and finishing on December 31 of the same calendar year. 24. “Gargaara” means an apex financial institution, incorporated in April 2019 by the Recipient and registered by the Central Bank of Somalia, for facilitating access to finance for MSMEs. 25. “General Conditions” means the “International Development Association General Conditions for IDA Financing, Investment Project Financing”, dated December 14, 2018 (Last revised on July 15, 2023), with the modifications set forth in Section II of this Appendix. 26. “IMF” means International Monetary Fund, established by its articles of agreement, which were adopted at the United Nations Monetary and Financial Conference (Bretton Woods, New Hampshire) on July 22, 1944. 27. “Middle East and North Africa Financial Action Task Force” or “MENAFATF” means a cooperative regional body for Arab countries tasked to counter money -4- laundering and terrorist financing through capacity-building, information sharing and mutual evaluation. 28. “Ministry of Commerce and Industry” or “MoCI” means the Recipient’s ministry responsible for commerce and industry or any successor(s) thereto. 29. “Ministry of Finance” or “MoF” means the Recipient’s ministry responsible for finance or any successor to it. 30. “Mobile Money Funds” means monetary value, represented by a claim on the issuer, which is stored on an electronic device, issued upon receipt of funds in an amount not less in value than the monetary value received, and accepted as a means of payment by persons other than the issuer. 31. “MSME” means a micro, small and medium enterprise duly operating in the Recipient’s territory; and MSMEs refers to all such enterprises collectively 32. “MSME Beneficiaries” means the micro, small, and medium enterprises eligible to be provided guarantee cover under the Risk Sharing Mechanism as further detailed in the RSM Manual; and “MSME Beneficiary” refers to one. 33. “MSME Financing Facility” means the autonomous entity known as Gargaara, or such other entity approved by the MoF and acceptable to the Association, to be responsible for the management of the RSM under Part 3 of the Project. 34. “National Identification and Registration Authority” or “NIRA” means the Recipient’s agency established under the Identification and Registration Act (Law No. 009 of March 2023), responsible for establishing and maintaining the Recipient’s comprehensive national identification system. 35. “National Payment System” means the institutions, infrastructure, processes, activities, mechanisms, laws, rules, regulations and procedures in Somalia, whether wholly or partially, that are related to systems, operators, payment service providers, payment services, payment instruments, participants, other users of systems and users of payment services. 36. “National Risk Assessment (NRA) Action Plan” means an action plan developed based on the findings of the national risk assessment to guide policymakers in tailoring national Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) strategies to appropriately mitigate identified risks. 37. “National Terrorist Financing Risk Assessment Action Plan” means the plan setting out the comprehensive process used by countries to identify, assess, and understand terrorist financing risks. -5- 38. “Operating Costs” means the reasonable incremental cost arising out of, or on account of Project implementation, based on Annual Work Plans and Budgets, approved by the Association pursuant to Section I.E of Schedule 2 to this Agreement, including office supplies, vehicle operation and maintenance, maintenance of office equipment, communication, advertisement and insurance costs, office administration costs, bank charges, costs associated with translation of documents, utilities, rental, consumables, accommodation, travel and per diem of Project staff on official travel, salaries of Project staff excluding the salaries of the Recipient’s civil service staff. 39. “Performance Based Conditions” or “PBCs” means each of the disbursement - linked targets/results set forth in Schedule 3 to this Agreement; and “Performance- Based Conditions” or “PBCs” means, collectively, more than one such Performance Based Condition or PBC. 40. “Personal Data” means any information relating to an identified or identifiable individual. For purpose of this definition, an identifiable individual is a person 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 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 and social identity of an individual. 41. “Procurement Regulations” means, for purposes of paragraph 85 of the Appendix to the General Conditions, the “World Bank Procurement Regulations for IPF Borrowers”, dated September 2023. 42. “Project Implementation Unit” or “PIU” means the unit established within the MOF, pursuant to the SCALED-UP Project, to be responsible for the implementation of the Project, referenced in Section I.A.1(b) of Schedule 2 to this Agreement, as detailed in the POM. 43. “Project Operations Manual” or “POM” means the operations manual to be prepared and adopted pursuant to Section I.C.1 of Schedule 2 to this Agreement, as the same may be amended from time to time with the prior written concurrence of the Association. 44. “Project Steering Committee” or “PSC” means the unit referred to in Section I.A.1(a) of Schedule 2 to this Agreement. 45. “Rapid Response Option” or “RRO” means the use of all or any portion of the Financing that has been requested by the Recipient and accepted by the Association in accordance with the terms of this Agreement to: (a) assist in financing the CERP; and (b) provide complementary financing in support of the program defined in the Cat DDO Legal Agreement. -6- 46. “Respective Part of the Project” means (a) in respect of the Recipient: the Project (except Part 2.2(c)) to be carried out by the Recipient; and (b) in respect of Somaliland: Part 2.2(c) of the Project to be carried out by Somaliland. 47. “Risk Sharing Mechanism (RSM)” means the risk sharing mechanism under Part 3 of the Project, as detailed in the RSM Manual. 48. “RSM Manual” means the manual for the RSM under the Project to be prepared pursuant to Section I.C.2 of Schedule 2 to this Agreement, as an annex to the POM. 49. “Savings and Credit Cooperative Societies” or “SACCOs” means financial institutions whose principal business is to encourage thrift among its members and to create a source of credit for its members. 50. “SCALED-UP” means the Somalia Capacity Advancement, Livelihoods and Entrepreneurship, through Digital Uplift (SCALED-UP) Project, pursuant to which the Recipient entered into various agreements (Grant No. D433-SO, Grant No. D843-SO, and TF Grant No. TF0B5774) with the Association, to support progress towards increased access to basic digital financial and government services targeting entrepreneurship and employment, particularly for women. 51. “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. 52. “Somalia Business Registration System” or “SBRS” means the online business registration system, automating the manual registration of businesses. 53. “SMPF Grant Agreement” means the grant agreement (SMPF Grant No. TF C7790-SO) for the Project between the Recipient and the International Development Association (acting as administrator of the Somalia Multi-Partner Fund 2), for the provision of a grant for the Project, as such agreement may be amended from time to time. “Grant Agreement” includes all appendices, schedules and agreements supplemental to the Grant Agreement. 54. “Somalia Instant Payment System” or “SIPS” means the digital payment platform designed to enable real-time, secure, and seamless financial transactions across Somalia, operated by the Somali Payment Switch. 55. “Somalia Payment Switch or “SPS” means the entity jointly established by CBS and member banks, aimed at contributing to the interoperability of payment systems and schemes across Somalia. 56. “Somaliland” or “SL” means the Recipient’s territory of Somaliland. -7- 57. “Somaliland Financial Inclusion Strategy” means the strategy (2025-2029) approved by BoS, which inter alia, focuses on increasing access to formal financial services, development of new products aligned with emerging market needs, and empowering individuals and entrepreneurs through enhanced financial literacy and consumer protection. 58. “Somaliland Manual” means the manual to be prepared by Somaliland, in form and substance satisfactory to Recipient and the Association, as the same may be amended from time to time with the prior approval of the Association. 59. “Somaliland’s Ministry of Finance” means the ministry responsible for finance within Somaliland or any successor thereto. 60. “Somaliland Project Implementation Unit” means the unit to be stablished and maintained within the Somaliland Ministry of Finance, or such other agency as may be agreed with the Association, for the implementation of Somaliland’s Respective Part of the Project. 61. “Somaliland Subsidiary Agreement” means the written legal agreement to be entered between the Recipient and Somaliland, pursuant to Section I.B.1 of Schedule 2 to this Agreement. 62. “State Bank of Puntland” means the bank owned by the Puntland State of Somalia or any successor thereto. 63. “Subproject” means an eligible MSME activity identified in the RSM Manual to be financed under Part 3 of the Project, as detailed in the POM. 64. “Subproject Agreement” means any agreement to be executed between an Eligible PFI and an MSME Beneficiary for an MSME Subproject, as such agreement may be amended from time to time. 65. “Training” means the reasonable costs associated with training under the Project, based on the relevant Annual Work Plans and Budgets, 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. 66. “Verification Agency” means one or more entities, agencies or consultants, acceptable to the Association, to be engaged by the Recipient for the purpose of certifying the achievement of PBCs in accordance with the provisions of Section II.B.1 of Schedule 2 to this Agreement. 67. “Verification Protocol” means the verification protocol agreed on between the Recipient and the Association for purposes of: (i) defining the PBC terms and -8- requirements; (ii) listing the documentary evidence to be provided in support thereof; and (iii) providing the verification procedures and responsibilities to certify compliance with/achievement of each PBC, as such verification protocol may be revised, updated or supplemented from time to time with the mutual agreement of the Recipient and the Association. 68. “WTO” means World Trade Organization, established pursuant to the Marrakesh Agreement, signed in Marrakesh on 15 April 1994, and entered into force on 1 January 1995. Section II. Modifications to the General Conditions The General Conditions are hereby modified as follows: 1. Section 1.01 (Application of General Conditions) is modified by adding a new paragraph as follows: “If the Financing Agreement provides for the use of the Financing to assist in financing the CERP, references in these General Conditions to the Project and the Respective Parts of the Project (other than those in sub-Sections 5.08(b)(i) and 5.08.(c)(i), and the definitions of terms “Anti-Corruption Guidelines”, “Procurement Regulations”, “Project”, and “Respective Part of the Project”) shall be deemed to also refer to the CERP and the Respective Parts of the CERP, respectively. Conversely, if the Financing Agreement does not provide for the use of the Financing to assist in financing the CERP, references to the CERP and the Respective Parts of the CERP in these General Conditions, and all clauses applicable exclusively to them, shall be disregarded.” 2. Paragraphs (b) and (c) of Section 5.08 (Project Monitoring and Evaluation) are modified to read as follows: “(b) The Recipient shall: (i) in respect to the Project, prepare or cause to be prepared periodic reports (“Project Report”), in form and substance satisfactory to the Association, integrating the results of such Project monitoring and evaluation activities and setting out measures recommended to ensure the continued efficient and effective execution of the Project, and to achieve its objectives; (ii) in respect to the CERP, prepare or cause to be prepared periodic reports (“CERP Report”) and in form and substance satisfactory to the Association, integrating the results of the monitoring and evaluation activities of the CERP and setting out measures recommended to ensure the continued efficient and effective execution of the CERP, and to achieve its objectives; and such CERP Reports shall be -9- prepared: (A) on an annual basis in the absence of an Eligible Crisis and Emergency; and (B) at least semi-annually, as further determined in the CERP Manual, throughout the implementation period of a Crisis Response Plan during an Eligible Crisis and Emergency; and (iii) the Recipient shall furnish or cause to be furnished each Project Report or CERP Report to the Association promptly upon its preparation, afford the Association a reasonable opportunity to exchange views with the Recipient and the Project Implementing Entity on any such report, and thereafter implement such recommended measures, taking into account the Association’s views on the matter. (c) Except as the Association may reasonably determine otherwise, the Recipient shall prepare, or cause to be prepared, and furnish to the Association: (i) in respect to the Project, not later than six (6) months after the Closing Date: (A) a report of such scope and in such detail as the Association shall reasonably request, on the execution of the Project, the performance by the Recipient and the Association of their respective obligations under the Legal Agreements and the accomplishment of the purposes of the Financing; and (B) a plan designed to ensure the sustainability of the Project’s achievements; and (ii) in respect to the CERP, not later than six (6) months after the end of the implementation period of the CERP: (A) a report of such scope and in such detail as the Association shall reasonably request, on the execution of the CERP, the performance by the Recipient and the Association of their respective obligations, and the accomplishment of the purposes of the Financing; and (B) a plan designed to ensure the sustainability of the CERP’s achievements.”] 3. A new Section 5.15 (Contingent Emergency Response Project) is added to read as follows: “Section 5.15. Contingent Emergency Response Project (a) If the Financing Agreement provides for the use of the Financing to assist in financing the CERP, the Association may reallocate all or part of the Unwithdrawn Financing Balance for the financing of a specific Crisis Response Plan if the Association has notified the Recipient that the following conditions have been fulfilled: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Association a request to reallocate and thereafter withdraw all or part of the Unwithdrawn Financing Balance for the financing of a specific Crisis Response Plan under the CERP under implementation at the time of the request; and -10- (B) the Association has agreed with such determination and accepted said request; and (ii) the Recipient has adopted the CERP Manual (with the CERP ESCP attached as an annex) and the Crisis Response Plan, both in form and substance acceptable to the Association. (b) The Recipient shall carry out, or cause to be carried out, the CERP pursuant to the Crisis Response Plan(s), the CERP Manual, the Environmental and Social Standards, the CERP ESCP, and the environmental and social instruments prepared thereunder, all in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (i) the structures and arrangements referred to in the CERP Manual are maintained throughout the implementation of the CERP and each of the Crisis Response Plans, in a manner and substance acceptable to Association; (ii) the environmental and social instruments required for the CERP and the respective Crisis Response Plan are prepared, disclosed and adopted in accordance with the CERP Manual and the CERP ESCP, and in form and substance acceptable to the Association; (iii) the measures and actions specified in the CERP ESCP are implemented with due diligence and efficiency, as provided in the CERP ESCP; (iv) sufficient funds are made available to cover the costs of implementing the CERP ESCP; (v) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the CERP ESCP, as provided in the said CERP ESCP; (vi) subject to the prior written agreement of the Association, any revised CERP ESCP or environmental and social documents prepared thereunder is disclosed promptly after their approval; (vii) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the CERP ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the CERP 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: (A) the status of implementation of the CERP ESCP; (B) conditions, if any, which interfere or threaten to interfere with the implementation of the CERP ESCP; and (C) corrective and preventive measures taken or required to be taken to address such conditions; and -11- (viii) the Association is promptly notified of any incident or accident related to or having an impact on the CERP 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 CERP ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. (c) The Recipient shall ensure that neither the Crisis Response Plan(s) nor the CERP Manual nor the CERP ESCP is amended, suspended, abrogated, repealed or waived without the prior written agreement by the Association. Nevertheless, in the event of any inconsistency between the provisions of the CERP Manual, the Crisis Response Plan(s), or the CERP ESCP, on the one side, and any provision of these General Conditions or the Legal Agreements, on the other, the provisions of the Legal Agreements and these General Conditions shall prevail. (d) The Recipient shall, or shall cause to, establish, publicize, maintain, and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of people affected by the CERP, 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. (e) The Recipient shall ensure that that all bidding documents and contracts for civil works under the CERP include the obligation of contractors, subcontractors and supervising entities to: (i) comply with the relevant aspects of the applicable CERP ESCP and the environmental and social instruments referred to therein; and (ii) 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.”] 4. The following definitions are inserted in the Appendix in alphabetical order, and the remaining definitions and paragraphs (as the case may be) renumbered accordingly: “[#]. “CERP ESCP” means the environmental and social commitment plan for the CERP to be prepared and adopted by the Recipient, as the same may be amended from time to time in accordance with the provisions thereof, setting forth the material measures and actions that the Recipient shall carry out to address the potential environmental and social risks and impacts of the activities detailed in the Crisis Response Plan, 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.” “[#]. “CERP Manual” means the implementation manual to be prepared and adopted by the Recipient setting forth the detailed implementation arrangements for the CERP, including: (a) any structures or institutional arrangements, allocation of responsibilities and decision making powers for coordinating and implementing the activities thereunder; (b) the specific activities to be implemented under the -12- CERP in response to the declared/determined Eligible Crisis and Emergency pursuant to the Crisis Response Plan; (c) the template for the Crisis Response Plan; (d) the positive list of Eligible Expenditures for the CERP; (e) the financial management and withdrawal arrangements for the implementation of the CERP; (f) the procurement methods and procedures to be followed in the implementation of the CERP; (g) a description of the environmental and social assessment and management arrangements applicable to the CERP; and (h) template of the CERP Reports as well as the monitoring and evaluation arrangements for the activities thereunder.” “[#]. “CERP Report” means each report on the CERP to be prepared and furnished to the Association pursuant to Section 5.08 (b)(ii) of these General Conditions.” “[#]. “Contingent Emergency Response Project” and the term “CERP” mean the contingent emergency response project prepared from time to time by the Recipient and agreed with the Association aimed at responding promptly and effectively to an Eligible Crisis or Emergency, as further elaborated in the Crisis Response Plan(s), as amended from time to time by agreement between the Recipient and the Association.” “[#]. “Crisis Response Plan” means the plan to be prepared and adopted by the Recipient in response to an Eligible Crisis or Emergency detailing, among others: (a) the activities to be implemented under the CERP in response to the Eligible Crisis or Emergency; (b) the estimated budget therefor and corresponding appropriations and/or financing sources; (c) the implementation timeline which, unless the Association otherwise agrees, shall not exceed twelve (12) months; (d) the foreseeable procurement and an abridged CERP Procurement Plan therefor; and (e) the envisioned results framework and indicators.” “[#]. “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.” [“[#]. “Environmental and Social Standards” 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) “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 African Historically Underserved Traditional Local Communities”; (viii) “Environmental and Social Standard 8: Cultural Heritage”; (ix) “Environmental -13- 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.” [“[5]. “Anti-Corruption Guidelines” means: (a) for the Project: the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, as further defined in the Financing Agreement; and (b) for the CERP: the latest iteration of the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants” that had been issued by the Association as the day of the Association’s endorsement of the CERP for financing.” [81. “Payment Date” means each date specified in the Financing Agreement occurring on or after the date of the Financing Agreement on which Service Charges, Interest Charges, Commitment Charges, and other Credit charges and fees (other than the Front-end Fee) are payable, as applicable.” [“[85.] “Procurement Regulations” means: (a) for the Project: the “World Bank Procurement Regulations for Borrowers under Investment Project Financing”, as further defined in the Financing Agreement; and (b) for the CERP: the latest iteration of the “World Bank Procurement Regulations for Borrowers under Investment Project Financing” that had been issued by the Association as the day of the Association’s endorsement of the CERP for financing.”] [“[90.] “Project Report” means each report on the Project to be prepared and furnished to the Association pursuant to Section 5.08 (b)(i) of these General Conditions.”]