CONFORMED COPY THE WORLD BANK ISRD • IOA. I WORLD BANK GROUP FULL MUTUAL RE1,IANCE FRAMEWORK AGREEMENT between ASIAN DEVELOPMENT BANK and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and INTERNATIONAL _DEVELOPMENT ASSOCIATION February 20, 2025 Full Mutual Reliance Framework Agreement FULL MUTUAL RELIANCE FRAMEWORK AGREEMENT ("Framework Agreement") dated February 20, 2025 between the ASIAN DEVELOPMENT BANK ("ADB"), and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("IBRD") and the INTERNATIONAL DEVELOPMENT ASSOCIATION ("IDA") (collectively, the "World Bank") (individually, a "Party" and collectively, the "Parties"). WHEREAS: (A) The Parties are multilateral development banks ("MDBs") committed to the economic development of Asia and the Pacific region, with a longstanding history of successful collaboration through co-financing and other means. (B) The Parties have considered feedback from their member countries emphasizing increased collaboration and efficiency, which has been amplified by the G20's calls for increased coordination and mutual reliance within the MDB system. (C) The Parties have therefore developed an innovative new co-financing arrangement, the Full Mutual Reliance Framework ("FMRF"), to allow the Parties' common borrowers to apply a single set of operational policy requirements and communicate with a single lead lender for certain development operations in their common member countries. (D) The FMRF is designed to enhance the efficiency and effectiveness of the Parties' development assistance by enabling either Party to rely on the other as a lead lender responsible for all aspects of design, preparation, appraisal, supervision, completion, and evaluation of an operation. This approach aims to simplify procedures, enhance the efficiency of preparation, due diligence and oversight processes, facilitate implementation, and avoid duplication of efforts-ultimately strengthening collaboration and coordination of borrower services. (E) On 28 January 2025, the Board of Directors of the ADB and the World Bank, respectively, approved the policy on the FMRF which, amongst other things, sets out the scope of cooperation between the Parties, roles and responsibilities of the designated lead lender and trail lender in Operations to be co-financed under the FMRF, and requirements to roll out and implement the FMRF. (F) To give effect to this FMRF policy, the Parties now wish to enter into this Framework Agreement on the terms and conditions set out herein. NOW THEREFORE, the Parties hereby agree as follows: ARTICLE I - Definitions and Interpretation Section I.OJ Definitions and Interpretation In this Framework Agreement, as the context may require, references to "Borrower" include the recipients of grant financing, references to "lending" include the making of grants to Borrowers, and references to "Lender" and "Co-Lender" include the maker of grants to Borrowers. As used in this Framework Agreement, the following capitalized terms have the meanings set forth below: (a) "ADB Environmental and Social Framework" means the environmental and social framework approved by ADB's Board of Directors on 22 November 2024; - 1- (b) "Borrower" means the country or entity to which a Financing is extended as identified in the Project/Program Co-Lenders' Agreement, or, where applicable, the Project/Program implementing entity tasked with carrying out the Project/Program; (c) "Disbursement Notice" means a disbursement notice sent from the Lead Lender to the Trail Lender, substantially in the form of Attachment 1 to the Project/Program Co-Lenders' Agreement, pursuant to Section 4.04(e) and (h) of this Framework Agreement; (d) "Financing" means the financing in the form of one or more loan(s) and/or grant(s) provided by ADB or the World Bank for an FMRF Operation; (e) "Financing Agreement(s )" means (i) the agreement or agreements between the Borrower and ADB providing for ADB 's Financing or any other agreement between ADB and the Borrower related to the implementation of the FMRF Operation, as applicable; or (ii) the agreement or agreements between the Borrower and the World Bank providing for the World Bank's Financing or any other agreement between World Bank and the Borrower related to the implementation of the FMRF Operation, as applicable; (t) "FMRF" means the Full Mutual Reliance Framework as approved by the respective Board of Directors of the Parties on 28 January 2025; (g) "FMRF Operation" means an Operation co-financed by the Parties in accordance with this Framework Agreement, as described in the Project/Program Co-lenders' Agreement for the Operation; (h) "Fraud and Corruption" means, as applicable: (i) with respect to ADB, any of the integrity violations defined in ADB's Operational Framework; and (ii) with respect to the World Bank, any of the prohibited practices defined in the World Bank's Operational Framework; (i) "Independent Accountability Mechanism(s)" or "IAM(s)" means, as applicable: (i) for ADB, the Special Project Facilitator and/or Compliance Review Panel; and/or (ii) for the World Bank, the Inspection Panel and the Dispute Resolution Service; G) "Lead Lender" means the Party designated as the lead lender for a specific FMRF Operation, whose Operational Framework would apply to that Operation as set out in Section 3.03 of this Framework Agreement; (k) "Operation" means a Project and/or a Program, as the case may be; (I) "Operational Framework" means the policy and procedural framework of a Party which applies to the preparation and administration of a Project or Program, including all applicable operational policies, procedures, directives, regulations, and instructions, including those related to anticorruption, integrity, sanctions, and the independent accountability mechanisms; (m) "Procurement Plan" means the Borrower's procurement plan for a Project processed under this Framework Agreement, including its updates; (n) "Program" means (i) a specific set of expenditures, activities and associated results (in the form of program for results financing as defined by the World Bank under its Operational Framework, or results- based lending as defined by ADB under its Operational Framework); or (ii) a program of policy and institutional actions (in the form of a development policy lending as defined by the World Bank under its operational policies, or policy-based lending as defined by ADB under its Operational Fram~work); (o) "Project" means a specific set of expenditures and activities to be financed (in the form of investment project financing as defined by the World Bank under its Operational Framework, or investment project lending as defined by ADB under its Operational Framework); -2- (p) "Project/Program Co-Lenders' Agreement" means the agreement to be entered into between the Parties for a specific FMRF Operation pursuant to Section 6.0 I of this Framework Agreement, the form of which is attached as Annex A to this Framework Agreement; (q) "Sanctions List" means any list used by ADB or the World Bank, and made available to the Borrower, which identifies the firms and individuals ineligible to participate in an ADE-related activity or World Bank financed, administered, or supported activities including procurement process and includes any sanction or suspensions directly imposed by ADB or the World Bank or imposed by ADB or the World Bank pursuant to the Agreement for Mutual Enforcement of Debarment Decisions (2010), as amended from time to time; (r) "Trail Lender" means the Party which is not designated as the Lead Lender for an FMRF Operation; (s) "TFP" means the official designated by the Trail Lender as its technical focal person for an FMRF Operation pursuant to Section 3.03(e) of this Framework Agreement; and (t) "WA" means a withdrawal application submitted by a Borrower in respect ofa Financing. ARTICLE II - Scope of Application; Initial Phase Section 2.01 Scope ofApplication (a) This Framework Agreement covers selected Operations to be co-financed by the Parties for which a Financing is proyided in the form of: (i) investment lending, policy-based lending, or results-based lending (as defined by ADB under its operational policies); (ii) investment project financing, development policy financing or program for results financing (as defined by the World Bank under its operational policies); or (iii) any other modalities and instruments that apply the same Operational Framework. (b) This Framework Agreement does not apply to: (i) non-sovereign/private sector lending operations; (ii) the administration by the World Bank on behalf of ADB of funds provided by ADB under trust fund arrangements; (iii) the administration by ADB on behalf of World Bank of funds provided by World Bank under trust fund arrangements; or (iv) operations which involve project-based guarantees or policy-based guarantees. (c) The Parties agree that the application of this Framework Agreement to an Operation is optional and does not exclude the use of other co-financing arrangements between the Parties for other co-financed Operations. Section 2.02 Initial Phase During the first four years of the implementation of the FMRF, the Parties agree to track and report results related to FMRF Operations using the indicators described in Annex C. ARTICLE III - General Coordination; Selection of Operations for FMRF Co-financing; Designation of FMRF Co-financing Roles Section 3.01 General Coordination (a) The Parties will identify Operations from their respective Project/Program pipelines and Operations under implementation that may be suitable for co-financing under this Framework Agreement and establish the mechanisms to regularly discuss opportunities for co-financing under this Framework Agreement. -3- (b) The Parties will maintain a steering committee with management representation from both Parties as an oversight body to monitor the first four years of implementation of the FMRF, including: (i) fostering a balanced distribution o_froles of Lead Lender and Trail Lender for each Party across the portfolio ofFMRF Operations; (ii) review/monitor the ongoing portfolio of FMRF Operations co-financed under this Framework Agreement; and (iii) discuss other matters relating to the FMRF. Section 3. 02 Selection of FMRF Operations (a) The Parties will identify Operations that may be suitable for co-financing under this Framework Agreement based on relevant factors, including: (i) the Borrower's needs and capacity; (ii) the Operation's alignment with the Parties' country partnership strategies/frameworks; and (iii) the Parties' long-term vision for the sector and the Operation's alignment with the corporate and operational priorities. (b) The decision to process an Operation under this Framework Agreement will be made by the Parties, with tp.e agreement of the Borrower, as early as possible during the Project/Program cycle, and the Parties will use reasonable efforts to ensure such decision is made prior to concept approval. Section 3.03 Designation of Lead and Trail Lender Roles (a) Where the Parties agree to apply this Framework Agreement to an Operation, the Parties will designate a Lead Lender and a Trail Lender, with the agreement of the Borrower. The decision to designate a Party as the Lead Lender on an FMRF Operation will be based on the following factors: (i) the experience and expertise of each Party in the relevant sector and/or country; (ii) ongoing institutional engagement in a given sector and country; and (iii) aiming to achieve a balanced distribution of roles of Lead Lender and Trail Lender for each Party across the portfolio of FMRF Operations. (b) Notwithstanding paragraph (a) of Section 3.03 above, ADB may only be designated as the Lead Lender for a Project under this Framework Agreement if the concept paper for said Project is approved on or after the effective date of the ADB Environmental and Social Framework. (c) When a Party has approved a concept paper for an Operation and a decision is reached between the Parties to co-finance that Operation under this Framework Agreement after such concept approval, the Party that has approved the concept paper for the Operation will be designated as the Lead Lender. (d) Once designated, the roles of Lead Lender and Trail Lender may not be changed during the implementation of the FMRF Operation, notwithstanding the restructuring or processing of any additional financing for the FMRF Operation. This is also applicable for programmatic policy-based FMRF Operations. (e) The Trail Lender will appoint a Technical Focal Point ("TFP") to act as the point of contact for the Lead Lender on an FMRF Operation. The Trail Lender will communicate the name of its TFP for the FMRF Operation when the Lead and Trail Lender roles are agreed, and will update the name, in writing, as needed. The TFP will receive periodic updates and relevant information and documentation on the FMRF Operation, as set out in Section 5.02 below. ARTICLE IV - Coordination Between the Parties During the Project/Program Cycle Section 4.01 Project/Program Preparation (a) The Lead Lender appraises the FMRF Operation in accoi:dance with its Operational Framework and this Framework Agreement, including the instrument-specific arrangements that are detailed in Annex B. In particular, the Lead Lender will carry out all activities relating to the preparation and appraisal of an FMRF -4- Operation, including leading missions and dialogue with the Borrower, conducting technical, fiduciary and environmental and social assessments, and preparing, reviewing, and approving relevant FMRF Operation- related documentation. (b) The Lead Lender will keep the Trail Lender informed of progress on the preparation of the FMRF Operation and share relevant information about the FMRF Operation in accordance with the provisions of Section 5.02 below. The Lead Lender will invite the Trail Lender to participate in joint missions, technical discussions, and review meetings (both internal and with the Borrower). (c) During preparation of the FMRF Operation, the Trail Lender, through the TFP, may: (i) participate in missions, technical discussions, and review meetings with the Borrower; and (ii) provide non-fiduciary technical inputs for the Lead Lender's consideration, under the understanding that only the Lead Lender's Operational Framework will be applicable and the Lead Lender will have sole responsibility to decide whether, and to what extent, such inputs are incorporated in the preparation and design of the FMRF Operation. (d) The Trail Lender will rely on the Lead Lender's confirmation that the FMRF Operation has been fully prepared/appraised. (e) The Lead Lender and Trail Lender will each prepare and negotiate their own Financing Agreement(s) with the Borrower regarding their respective Financing for an FMRF Operation in accordance with the provisions set out in Article VI of this Framework Agreement. (t) The Lead Lender will finalize all operational documents related to the FMRF Operation that are required for approval and share the same with the Trail Lender in a timely manner. The Trail Lender will use the documents provided by the Lead Lender to secure the approval of its Financing. (g) If requested by the Trail Lender, the Lead Lender will assist in responding to any questions raised by the Trail Lender's Board of Directors during the submission and consideration of the FMRF Operation by the Trail Lender's Board of Directors. Section 4. 02 Project/Program Implementation (a) The Lead Lender will carry out all activities relating to the supervision and implementation support of an FMRF Operation, including leading missions and dialogue with the Borrower, monitoring compliance with fiduciary and environmental and social and other requirements, supervising procurement, reviewing and approving FMRF Operation-related documents submitted by the Borrower, and overseeing completion and evaluation of the FMRF Operation in accordance with its Operational Framework and as further detailed in this Framework Agreement. The Lead Lender will share periodic reports and relevant information related to the implementation of the FMRF Operation with the Trail Lender as set out in Section 5.02(a) and invite the TFP to join supervision and review missions. (b) During implementation of the FMRF Operation, the Trail Lender, through the TFP, may: (i) participate in missions, technical discussions, and review meetings with the Borrower; and (ii) provide non- fiduciary technical inputs for the Lead Lender's consideration, under the understanding that only the Lead Lender's Operational Framework will be applicable and the Lead Lender will have sole responsibility to make decisions with respect to the supervision of the FMRF Operation. Section 4.03 Changes to FMRF Operations The Lead Lender may, in consultation with the Borrower, propose changes to the design or implementation arrangements of an FMRF Operation as originally approved. The Lead Lender will inform the Trail Lender -5- of such proposed changes in a timely manner and any such proposed change to an FMRF Operation will be made with the agreement of the Trail Lender. Section 4. 04 Disbursement Arrangements (a) The Lead Lender is responsible for certain aspects relating to the disbursement of the Trail Lender's Financing under the FMRF Operation, including, as applicable, the assessment of proposed flow of funds and withdrawal arrangements, as set out below. (b) The Parties will consult each other during the preparation of an FMRF Operation (and prior to its approval) to identify and address any potential issues that may arise during implementation relating to the disbursement currency. (c) The Lead Lender will reflect in its disbursement system: (i) the disbursement conditions specified in the Parties' Financing Agreements; and (ii) a loan account in respect of the Trail Lender's Financing to record and monitor the loan and disbursement amounts for the FMRF Operation. (d) Each Party will require the Borrower, in its respective Financing Agreement, to submit WAs and copies of required supporting documents to the Lead Lender. (e) The Lead Lender will: (i) review each such WA submitted by the Borrower in accordance with its Operational Framework to verify whether the amount requested by the Borrower is eligible for financing under the Trail Lender's Financing Agreement; (ii) promptly notify the Trail Lender (through a signed Disbursement Notice) that it has reviewed the WA, and that it has determined the amount eligible for financing, if any, under the Trail Lender's Financing Agreement; and (iii) provide a copy of the WA and any supporting documents provided by the Borrower to the Trail Lender for its records. (f) Upon receipt of a Disbursement Notice from the Lead Lender, the Trail Lender disburses the requested amount of its Financing to the Borrower and will promptly notify the Lead Lender of its actions, and the Lead Lender will record such disbursement under the Financing account for the Trail Lender's Financing in the Lead Lender's loan disbursement system. If the Trail Lender does not disburse the amount approved for payment by the Lead Lender, it shall promptly inform the Lead Lender and the Borrower in writing of its decision and the basis for such decision. The Parties will then consult on the appropriate course of action. (g) Where a decision to process an Operation under this Framework Agreement is reached during its preparation, the amount, percentage and time period of retroactive financing or the financing of prior results of the FMRF Operation, as applicable, will be determined by the Lead Lender in accordance with its Operational Framework and will be replicated by the Trail Lender in its Financing Agreement. (h) For WAs that are submitted by the Borrower for purposes of documentation / liquidation of expenditures only (and not for purposes of disbursement), the Lead Lender will: (i) review each such WA to verify whether the amount requested for documentation / liquidation is eligible for financing under the Trail Lender's Financing Agreement; and (ii) promptly notify the Trail Lender (through a signed Disbursement Notice specifying the amounts to be documented by category) whether the WA is in proper order, and the amount, if any, that it has determined is eligible for financing under the Trail Lender's Financing Agreement. (i) Subsequent to the disbursement of a Financing amount, the Lead Lender will: (i) initiate requests for refunds of ineligible expenditures if necessary; (ii) process reports on the utilization of advances made (e.g. to the special account/advance account) for the FMRF Operation; (iii) coordinate the return of any unutilized advances to facilitate the closure of the Financing account by the Trail Lender; and (iv) initiate request for refunds due, if any, under a program for results financing/results based lending program, including when the Parties' combined disbursements by the end of the disbursement period exceed the total actual expenditures under the Program (in which case the refund will be proportionate to each Party's total -6- amount of Financing). The Lead Lender will serve as the point of contact with the Borrower for managing disbursement-related issues and advise the Trail Lender of any necessary adjustments to disbursement for the FMRF Operation. Section 4.05 Anticorruption and Integrity Matters (a) The Lead Lender will decide whether to undertake any inquiry or investigation of allegations or indications of Fraud and Corruption related to the FMRF Operation, and do so, as applicable, in accordance with its Operational Framework. (b) If the Trail Lender receives allegations or indications of Fraud and Corruption relating to the FMRF Operation, it will promptly forward them to the Lead Lender to determine necessary action. (c) The Lead Lender will, in accordance with its Operational Framework, determine whether to impose sanctions, enforcement actions, and/or other corrective or remedial actions, based upon the findings of any inquiry or investigation that it conducts into allegations or indications of Fraud and Corruption. (d) The Lead Lender will, in accordance with its Operational Framework, promptly inform the Trail Lender of: (i) any non-frivolous allegations or indications of Fraud and Corruption relating to the FMRF Operation; (ii) the findings of any inquiries or investigations into allegations or indications of Fraud and Corruption relating to the FMRF Operation; and/or (iii) any sanctions, enforcement actions, and/or other corrective or remedial actions, taken based upon those findings. Should the Lead Lender impose a sanction that includes a conditional release from sanction, the Lead Lender also will notify the Trail Lender of any such later release decision. The Lead Lender will, subject to its policies on disclosure of information and access to information, provide additional information as reasonably requested by the Trail Lender. The Parties' respective integrity offices will establish a protocol on information sharing relating to the FMRF Operation. (e) The Trail Lender may recognize and enforce sanctions, enforcement actions, and/or other corrective or remedial actions imposed by the Lead Lender under FMRF Operations in future non-FMRF Operations, in accordance with the Trail Lender's Operational Framework. The Parties acknowledge that this may result in non-public sanctions or enforcement actions imposed by the Lead Lender being made public by the Trail Lender, pursuant to the Trail Lender's Operational Framework. (f) Notwithstanding anything to the contrary in this Framework Agreement, any allegation or indication of Fraud and Corruption or other misconduct against a Party's staff (as defined in their respective policies) will be handled by that Party in accordance with its policies and procedures. (g) Where ADB is the Lead Lender, it will explicitly require the Borrower to report any allegations of, and take measures to prevent, Fraud and Corruption in connection with the use of proceeds financed by an FMRF Operation that come to its attention. Section 4. 06 Reporting, Disclosure and Transparency (a) The Lead Lender will prepare, or require the Borrower to prepare, all information and documents relating to an FMRF Operation in accordance with the requirements of its Operational Framework and share the same with the Trail Lender in accordance with Section 5.02 of this Framework Agreement. (b) Without limiting Section 5.01 of this Framework Agreement and subject to its policies on disclosure of information, each Party will: (i) disclose information and documents relating to the Operations it finances under this Framework Agreement on its website in accordance with its Operational Framework; and (ii) ensure that in such documents FMRF Operations are identified as being co-financed by the Parties under the FMRF and the institution that will be the Lead Lender for the FMRF Operation is specified. -7- Section 4.07 Complaints Received by Management (a) The Lead Lender will inform the Trail Lender of any complaint, received related to the FMRF Operation and regularly share information with the Trail Lender about the status of the complaint and their resolution process and outcome. For avoidance of doubt, the Lead Lender will handle allegations or indications of Fraud and Corruption relating to the FMRF Operation in accordance with the provisions of Section 4.05 above. (b) The Trail Lender will promptly forward to the Lead Lender any complaint received related to the FMRF Operation for further processing. (c) The complaint resolution process and communication with any complainant will be managed solely by the Lead Lender in accordance with its policies and procedures. The Trail Lender will not have any advisory, clearance or decision-making role in connection with the complaint. The Lead Lender remains solely responsible for all decisions and actions related to addressing the complaint. Section 4.08 Complaints received by Independent Accountability Mechanisms (a) Any compliance review/inspection relating to an FMRF Operation will be conducted exclusively by the Lead Lender's 1AM in accordance with its Operational Framework. The scope ofreview by the Lead Lender's 1AM will be limited to the Lead Lender's compliance with the Lead Lender's Operational Framework. The Lead Lender will inform the Trail Lender of the 1AM complaint and its resolution process and outcome, but the Lead Lender's management will be solely responsible for engaging in the complaints process of the Lead Lender's 1AM, including responding to the complaint and to a compliance review/inspection by the Lead Lender's 1AM in accordance with the Lead Lender's Operational Framework. (b) The Trail Lender's management will not have any advisory, clearance or decision-making role in connection with the complaint. As provided in both Lenders' FMRF policy/waiver approved by their respective Boards, if the Trail Lender's 1AM receives a complaint related to an FMRF Operation, the Trail Lender's 1AM will not accept or process the complaint, but it will forward it to the Lead Lender's 1AM for action, and notify the complainants or their representatives, if any, accordingly. ARTICLE V - Exchange oflnformation; Notification Section 5.01 Disclosure; Non-reliance (a) Neither Party will publicly disclose any information received by it from the other Party on a confidential basis under this Framework Agreement or any Project/Program Co-Lenders' Agreement without obtaining the prior written consent of the disclosing Party. (b) Except for a Party's decision to recognize and enforce a sanction, enforcement action, and/or other corrective or remedial actions made by the other Party, no information or documentation received by either Party from the other Party pursuant to this Framework Agreement or any Project/Program Co-Lenders' Agreement may be: (i) relied upon by the Party receiving the information as a basis to initiate any administrative, civil, or criminal action; or (ii) attributed to the disclosing Party. Nothing in this Agreement will prevent either Party from using the information provided to develop independently its own evidence for use in support of sanctions, enforcement actions, and/or other corrective or remedial actions. Section 5. 02 Sharing of Operational Information (a) The Lead Lender will provide the Trail Lender in a timely manner relevant documentation related to the FMRF Operation, including Project/Program concept note, drafts and fmal versions of the - 8- Project/Program document, Procurement Plan, restructuring papers, implementation status and results reports, completion reports, and mission-related documents. (b) If either Party at any time reasonably requests additional information or documents relating to the FMRF Operation, the other Party will promptly provide such additional information or documents, to the extent it has access to such additional information or documents, in accordance with the providing Party's policies and procedures on the matter. (c) If requested by the Trail Lender, the Lead Lender will promptly reply to inquiries or provide clarifications with respect to any actions taken or issues arising in connection with any aspect of the FMRF Operation. (d) Notwithstanding the provisions in this Section, the Lead Lender remains solely responsible for the design, preparation, appraisal and supervision of the FMRF Operation, including its fiduciary, environmental and social, and technical assessments and reviews. The Trail Lender neither monitors nor ensures the Borrower's compliance with the Operational Framework applicable to the FMRF Operation. Section 5.03 Notification of Missions The Lead Lender will: (a) promptly notify the Trail Lender through its TFP, in advance, of any proposed mission it plans to conduct for each FMRF Operation; (b) afford a reasonable opportunity to the Trail Lender to participate in such mission; and (c) share the aide memoire, memorandum of understanding, and back- to-office report (as applicable) for the mission. If the Trail Lender does not participate in the mission, the Lead Lender will notify the Trail Lender of the main findings and results of the mission. Section 5.04 Notification of Contractual and other Events Without limitation to any of the other provisions of this Framework Agreement, each Party will promptly notify the other Party of any of the following events in relation to each FMRF Operation, and share relevant information and documentation related to such event: (a) any event of which the notifying Party becomes aware and which, in its opinion, is likely to materially interfere with, or seriously hinder or impair, the implementation of the FMRF Operation, or to adversely and materially interfere with the performance by the Borrower of its obligations under its Financing Agreement(s); (b) a determination by the notifying Party that: (i) an event of suspension of the Borrower's right to make withdrawals under the notifying Party's Financing, or cancellation of all or part of the unwithdrawn amount of such Financing, or of acceleration of such Financing's maturity, has occurred or may occur; (ii) the measures the Party has taken or proposes to take as a consequence of the event under (i); (iii) a disbursement of an amount of its Financing was made for any expenditure or in any amount not eligible for financing under its Financing Agreement, or was not justified by the evidence furnished pursuant to its Financing Agreement; or (iv) the measures it has taken or proposes to take, as a consequence of such event, including the request for a refund of any amount withdrawn under its Financing; (c) any notice given by the Borrower to the notifying Party of the Borrower's intention to cancel any unwithdrawn amount, or prepay any withdrawn amount, of the notifying Party's Financing, and the amount of such Financing actually cancelled or prepaid; and (d) any proposed: (i) amendment to its Financing Agreement(s); (ii) action which may result in the termination of its Financing Agreement(s); (iii) extension of the deadline for withdrawal of amounts of its Financing; and (iv) waivers pursuant to its Financing Agreement(s). -9- Section 5. 05 Implications for Co-financing Arrangements. If any of the events or actions referred to in Section 5.04 of this Framework Agreement occurs or is taken, the Parties will discuss the potential implications of such event or action on the FMRF Operation, including the actions to be taken by each Party, with a view to taking appropriate steps to address these implications. Section 5.06 Changes to the Parties' Operational Policies ];:ach Party will keep the other Party informed of any material changes planned to be made with respect to the Party's operational policies or 1AM policy. The Parties will jointly assess any proposed changes to confirm continued substantial alignment of the relevant policies and jointly consult on engagement with respective Boards of Directors of the Parties as appropriate. ARTICLE VI- Documentation and Negotiations Section 6. 01 Project/Program Co-Lenders' Agreement For each FMRF Operation, the Parties will execute a Project/Program Co-Lenders' Agreement, substantially in the form of Annex A to this Framework Agreement. Section 6.02 Financing Agreements; Negotiations; Signing (a) Financing Agreements. Each Party will enter into its own Financing Agreement(s) with the Borrower for its respective Financing of the FMRF Operation. The Trail Lender ensures that its Financing Agreement(s) replicate(s) the FMRF Operation-specific (non-financial) covenants and conditions negotiated by the Lead Lender. (b) The Lead Lender will: (i) share: (A) a draft of its Financing Agreement(s) prior to being distributed for formal review; and (B) promptly, all updated drafts prior to negotiations marked to show the relevant changes; and (ii) discuss and agree with the Trail Lender the date of negotiations, prior to it sending to the Borrower a formal invitation to negottate. (c) Negotiations. When the decision to process an Operation under FMRF is made before the negotiation of the Lead Lender's Financing Agreement(s), the Lead Lender will coordinate with the Trail Lender and the Borrower to ensure that there is a single set of negotiation meetings in which: (i) each Party negotiates its own financing terms; (ii) the Lead Lender negotiates the FMRF Operation-specific covenants and conditions that are then replicated by the Trail Lender in its Financing Agreement(s); and (iii) the minutes of negotiations are agreed by the Parties and the Borrower. (d) Signing. In relation to each FMRF Operation, where applicable, the Lead Lender will coordinate with the Trail Lender on all matters concerning the signing of the Financing Agreement(s) of each Party, such that they are executed on or about the same date. Each Party shall be responsible for arranging the signing of its own Financing Agreement(s) in accordance with its standard procedures. Section 6. 03 Cross Default; Cross Effectiveness (a) Each Party will incorporate in its respective Financing Agreement(s) for an FMRF Operation such provisions as may be required to reflect the co-financing arrangements envisaged in the Project/Program Co-lenders' Agreement. - 10 - (b) The Trail Lender will incorporate in its Financing Agreement(s) as an event of suspension the suspension by the Lead Lender of its Financing. The Trail Lender will require the Borrower to comply with the same conditions of effectiveness for the Lead Lender's Financing. (c) The Lead Lender will: (i) use its best efforts to expedite the timely effectiveness of its Financing Agreement(s); (ii) provide regular and timely updates to the Trail Lender on the status of the conditions to effectiveness; (iii) promptly provide the Trail Lender with copies of all final documentary conditions to effectiveness for the Trail Lender's records; (iv) notify the Trail Lender that effectiveness has been achieved; and (v) coordinate with the Trail Lender on the issuance of the Parties' respective declarations of effectiveness. ARTICLE VII - Rights of Action; No Financing Commitment; Privileges and Immunities; Degree of Care Section 7.01 Independent Rights ofAction Each Party reserves the right to enforce its rights and perform its obligations under its Financing Agreement(s), and nothing in said agreements will be deemed to preclude or limit the right of either Party to exercise its contractual remedies under the terms set out in its Financing Agreement. Notwithstanding the foregoing, the Parties expect that the Trail Lender will exercise remedies under its Financing Agreements in relation to project-level performance issues, Fraud and Corruption, ineligibility and misprocurement, with due regard to the Lead Lender's recommendation. For the avoidance of doubt, the Parties agree that such "project-level performance issues" exclude matters not related to the implementation of the FMRF Operation, such as payment defaults, as these pertain to financial matters, or are triggered for reasons unrelated to the FMRF Operation. Section 7. 02 No Financing Commitment Nothing in this Framework Agreement, nor any Project/Program Co-lenders' Agreement, will be construed as representing any commitment with regard to the financing of a particular FMRF Operation on the part of either Party, and no provision of any of said agreements will be construed as imposing any fmancial obligation to the Borrower on the part of either Party. Any such commitment and obligation will be exclusively reflected in the Party's Financing Agreement. Section 7. 03 No Waiver of Privileges and Immunities Nothing in this Framework Agreement or any Project/Program Co-lenders' Agreement will operate, or will be construed, as a waiver, renunciation or any other modification (express or implied) of any of the privileges, immunities or exemptions of either Party under its organizational documents, or any international convention, or any applicable law, including, without limiting the generality of the foregoing, the privileges, immunities and exemptions of the ADB under its Agreement Establishing the Asian development Bank, and the privileges, immunities and exemptions of the World Bank under the Articles of Agreement of the IBRD, and the Articles of Agreement of the IDA, respectively. Section 7. 04 Degree of Care The Parties will each exercise the same care in the discharge of its functions under this Framework Agreement and each Project/Program Co-lenders' Agreement as it exercises with respect to the administration and management of its own affairs and will have no further responsibility in respect thereof to the other Party. - 11 - ARTICLE VIII - Execution; Effectiveness; Modifications; Termination; Term; Notices; Miscellaneous Section 8.01 Execution; Effectiveness; Modifications This Framework Agreement will be signed in two counterparts, each of which will be an original, and will enter into force and effect upon its signature by an authorized representative of each Party. It may be modified from time to time by further agreement in writing signed by an authorized representative of each Party. Section 8. 02 Termination This Framework Agreement may be terminated at any time upon sixty (60) days' advance written notice given by either Party to the other Party. Upon such notice, the Parties will consult with a view to agreeing on the most practical arrangements to effect such termination. Notwithstanding any termination of this Framework Agreement, the provisions of this Framework Agreement will, to the extent incorporated by reference in any Project/Program Co-lenders' Agreement in effect as of the date of termination of this Framework Agreement, continue to apply to said Project/Program Co-lenders' Agreement and the relevant FMRF Operation to which it applies. Section 8. 03 Term This Framework Agreement will remain in force and effect for an initial period of five (5) years following the date of the agreement and will be automatically renewed for a subsequent period of five (5) years, unless either Party has provided a notice of termination pursuant to Section 8.02 of this Framework Agreement. Section 8.04 Notices Any notice or request required or permitted to be given or made under this Framework Agreement will be in writing. Such notice or request will be deemed to have been duly given or made when delivered by hand, mail, facsimile, or electronic mail to the Party to which it is required or permitted to be given or made at such Party's address specified below: For World Bank: International Bank for Reconstruction and Development International Development Association 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Attention: Director, Operations Policy, OPCS Email address: ops.partnerships.notices@worldbank.org ForADB: Asian Development Bank 6 ADB Avenue Mandaluyong City 1550 Philippines Attention: Director, Strategic Partnerships, Strategy, Policy and Partnerships Department Email address: strategicpartnerships@adb.org - 12 - Section 8.05 Disputes The Parties agree to resolve any dispute, disagreement or claim arising out of or in relation to, this Framework Agreement or any Project/Program Co-lenders' Agreement by means of prompt and amicable resolution. Section 8.06 Conflicts In the event of any conflict between the provisions of this Framework Agreement or a Project/Program Ca- lenders' Agreement, and the provisions of the Financing Agreements, the provisions in the Financing Agreements will prevail. Section 8. 07 Disclosure The Parties agree that this Framework Agreement and any Project/Program Co-lenders' Agreement may be made publicly available, subject to the policies and procedures of each Party on access to information. Section 8.08 Branding and Visibility The Lead Lender shall ensure that both the ADB and World Bank logos are included in all relevant publications and on any equipment or facility funded under an FMRF Operation. - 13 - IN WITNESS WHEREOF, the authorized representatives of the Parties have executed this Framework Agreement in duplicate in the English language. INTERNATIONAL BANK FOR ASIAN DEVELOPMENT BANK RECONSTRUCTION AND DEVELOPMENT and INTERNATIONAL DEVELOPMENT ASSOCIATION /S/ /S/ By: By: AjayBanga Masatsugu Asakawa President, WorldBank Group President -14- ANNEX A- FORM OF PROJECT/PROGRAM CO-LENDERS' AGREEMENT PROJECT/PROGRAM CO-LENDERS' AGREEMENT AGREEMENT dated [ ] between the Asian Development Bank ("ADB") and the International Bank for Reconstruction and Development ("IBRD") and the International Development Association ("IDA") (collectively, the "World Bank") (individually, a "Party" and collectively, the "Parties"). WHEREAS: (A) ADB and the World Bank have entered into a full mutual reliance framework agreement ("FMRF Agreement") dated 20 February 2025, setting forth the basis on which they will co-finance Operations under the FMRF. This Project/Program Co-lender's Agreement ("Agreement") shall be read together with the FMRF Agreement; (B) ] ("Borrower") has requested ADB and the World Bank to assist in financing the Operation described in Section 1.02 of this Agreement; (C) The Parties and the Borrower have agreed that the Operation will be prepared and implemented in accordance with the FMRF and that [ADB] [the World Bank] will be the Lead Lender for the Operation; (D) ADB [intends to]/[has agreed to] [make a loan][provide a grant] to the Borrower in an amount of [ ] ("ADB Financing") to assist in financing the Operation on the terms and conditions set forth in a [loan][grant] agreement to be entered into between the Borrower and ADB ("ADB Financing Agreement"); (E) an World Bank [intends to]/[has agreed to] [make a loan][provide a grant] to the Borrower in amount of [ ] ("World Bank Financing") to assist in financing the Operation on the terms and conditions set forth in a [loan][grant] agreement to be entered into between the Borrower and World Bank ("World Bank Financing Agreement"); and (F) To facilitate the application of the FMRF Agreement to the Operation, the Parties now wish to enter into this Agreement 'on the terms and conditions set out herein. NOW THEREFORE, the Parties hereby agree as follows: ARTICLE I Definitions; Description of Co-financed FMRF Operation Section 1.01. Definitions. Unless otherwise defined herein, the capitalized terms have the meanings ascribed to them in the FMRF Agreement. Section 1.02. Description of Co-financed Operation. World Bank and ADB intend to co-finance the Operation described below:.[insert Project/Program description as stated in the concept documentationJ - 15 - 1 [Section 1.03. Method of Co-financing. ADB and the World Bank intend to co-finance the Operation whereby expenditures under the Operation will be financed [ ] % out of the proceeds of ADB Financing and [ ]% out of the proceeds of the World Bank Financing.] ARTICLE II FMRF Agreement Coordination Matters Section 2.01. Undertakings. The World Bank and ADB will cooperate with each other on all matters with respect to the co-financing, preparation, supervision and appraisal of the Operation in accordance with the FMRF Agreement. Section 2.02. Designation of Lead Lender. The World Bank and ADB agree that [the World Bank] [ADB] is designated as Lead Lender for the Operation. Section 2.03. Disbursement The Disbursement Notice provided by the Lead Lender to the Trail Lender will be in substantially the form set forth in Attachment 1 to this Agreement. ARTICLE ill FMRF Agreement Coordination Matters Section 3.01. Execution; Effectiveness; Modification. This Agreement will be signed in two counterparts, each of which will be an original, and will enter into force and effect upon its signature by an authorized representative of each Party. It may be modified from time to time by further agreement in writing signed by an authorized representative of each Party. Section 3.02. Terminatio11. This Agreement may be terminated at any time upon sixty (60) days' advance notice given in writing by either Party to the other. Upon such notice, the Parties will consult with a view to agreeing on and implementing the most practical and efficient arrangements to effect such termination. Section 3.03. Notice. (a) Except as provided in Section 3.03(b) of this Agreement, any notice or request required or permitted to be given or made under this Agreement will be in writing, and be deemed to have been duly given or made when delivered by hand or by mail, facsimile or electronic mail to the Party to which it is required or permitted to be given or made at such Party's address specified below: For World Bank: International Bank for Reconstruction and Development International Development Association 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Tel. number: +I (202) 473-3556 Attention: [Country Director] Cc: [Director, Trust Funds and Partner Relations, Development Finance] 1 Draftingnote: Insert this provision where ADB and the World Bank are jointly financing the same contracts or expenditures of an FMRF Project in agreed proportions. - 16 - Email address: [ ForADB: Asian Development Bank 6ADBAvenue Mandaluyong City 1550 Philippines Tel. number: +632 8636-2444 (Central) Attention: Director, Partner Funds, Climate Change and Sustainable Development Department Cc: [Specify Country Director or Sectors Department Director] Email address: [ ] (b) Any notice (including without limitation a Disbursement Notice) or request required or permitted to be given or made under this Agreement relating to disbursement services will be in writing and will be deemed to have been duly given when delivered by hand, mail, facsimile or electronic mail to the Party to which it is required or permitted to be given or made at such Party's address specified below: For World Bank: International Bank for Reconstruction and Development International Development Association 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Tel. number: + I (202) 473-3556 Attention: [Manager, WFACS Loan Operations] Cc: [Financial Officer], [Operations Manager or Country Manager] Email address: [ ] ForADB: Asian Development Bank 6ADBAvenue Mandaluyong City 1550 Philippines Fax number: +632 8632-4444 (Central) Tel. number: +632 8636-2444 (Central) Attention: [Director Loan Administration Division, Asian Development Bank] Email address: [ ] - 17 - IN WITNESS WHEREOF, the authorized representatives of the Parties have executed this Project Ca- lenders' Agreement in duplicate in the English language. INTERNATIONAL BANK FOR ASIAN DEVELOPMENT BANK RECONSTRUCTION AND DEVELOPMENT and INTERNATIONAL DEVELOPMENT ASSOCIATION By: By: [Name] [Name] [Designation] [Designation] - 18 - PROJECT/PROGRAM CO-LENDERS' AGREEMENT Attachment 1 DISBURSEMENT NOTICE To: [World Bank Address under Section 3.03(6) of Project/Program Co-Lenders' Date: Agreement] OR Email: [ADB Address under Section 3.03(6) of Project/Program Co-Lenders' Agreement] Originator: [Name of ADB CTLA-LGD Officer] [Designation] E-mail: xxx@adb.org OR [Name ofWorldBankADB Controller Officer] [Designation] E-mail: xxx(a),worldbank. org Subject: [ World Bank LN0000XX-ABC (9999-ABC) 2 : [Project Name]] OR Subject: [ ADB LN9999-ABC (0000XX-ABC): [Project Name]] I. We have reviewed WA No. xxxxx [Payment Procedure] and found the expenditures aggregating to the amounts stated below to be eligible for financing. If the determination is acceptable, please make the following disbursement/liquidation: Amount [currency and amount in figures] To [Payee Bank Name] [Payee Bank Address] [Payee SWIFT Code (if available)] In favor of [Payee Name as enrolled in bank] [Address of Payee] Account No. [Payee Account Number] 2 LN0000XX-ABC refers to World Bank loan number and three-character country indicator; 9999-ABC refers to ADB loan/grant number and three-character country indicator. - 19 - Contract No. xxxx Category No. [Category Details - Number and Description] Other Instructions: (Please indicate the reference number such as the Invoice No. & Date or Certificate No., indicate if Payee is Individual or Firm, and any special disbursement instructions contained in the withdrawal application) 2. Please advise us of the (Loan Currency) equivalent and value date of payment once available for our final records. Sincerely, [[Name ofCTLA Financial Control Specialist] [Designation/Title] [Loan Administration Division, Asian Development Bank] [Loan Department, World Bank] cc: [ADB Project Officer; CCPF][WB Project/Program Financial Officer] - 20 - [DISBURSEMENT DOCUMENTATION NOTICE]3 World Bank LN0000XX- (9999-ABC) WA NO. XXXXX or ADB LN9999-ABC (0000XX-ABC) WA NO. XXXXX Attachment - Breakdown of Expenditure Category Currency of Amount Approved for Details of Expenditure Disbursement/Liquidation Disbursement/Liquidation4 (e.g., Interim Payment Certificate No, Period Covered or Invoice No.) [Category] [Currency] [Approved Amount] Total 3 To be included as part of the Disbursement Notice, where applicable. 4 Total amount should be the same as the amount approved for disbursement or liquidation in item I above. - 21 - ANNEX B- INSTRUMENT SPECIFIC ARRANGEMENTS In line with the applicable requirements of their respective Operational Frameworks, the Parties agree to the following specific requirements with respect to FMRF Operations: I. Investment Lendingllnvestment Project Financing Procurement: (a) The Lead Lender will: (i) require the Borrower to ensure that the procurement documents for all co-financed contracts: (A) reflect that the Parties have agreed to co-finance the contract in accordance with the Lead Lender's Operational Framework; and (B) provide for the application of both Parties' Sanctions Lists: and (ii) reflect in its notices (including, inter alia, general procurement notices, special procurement notices, requests for expressions of interest, requests for proposals, and contract award results) that the Parties are co-financing the Operation and the specific procurement contract(s). (b) No member country eligibility restrictions may be put in place with respect to the procurement of goods, works or services to be financed under an FMRF Operation. Financial Management: (c) The Lead Lender will require the Borrower, in its Financing Agreement, for financial reports and statements to include expenditures funded by both Parties together with funds of any other financiers. Environmental and Social: (d) ADB will update its procurement documents for use in FMRF Operations to align with the ADB Environmental and Social Framework, including by setting out explicit provisions on sexual exploitation and abuse or sexual harassment (SEA/SH) where appropriate. II. Results-Based Lending/Program/or Results Financing The Lead Lender will also ensure that the total disbursement of both institutions at closing date does not exceed the actual Program expenditure. m. Policy-Based Lending/Development Policy Financing Program Document: (a) The Lead Lender will include in the Program Document an assessment of the adequacy of the Borrower's macroeconomic policy framework that includes the following: (i) a paragraph highlighting a bottom-line assessment of the adequacy ofthe macroeconomic policy framework, emphasizing the consistency, sustainability, and credibility of the Borrower's macroeconomic policies; (ii) an analysis of consistency confirming that the monetary, exchange rate and fiscal policies are complementary and aligned with the policies being supported by the Program; - 22- (iii) an analysis of sustainability, confirming debt sustainability (if there are no recent debt sustainability analyses, the Lead Lender will undertake the necessary update to inform its assessment); (iv) an analysis of credibility, including a view on the track record of policy implementation and any credible anchor for sound macroeconomic policies (e.g., a fiscal rule); (v) a discussion of the Borrower's commitment and ownership to reforms underlying the macroeconomic projections; and (vi) tables on selected macroeconomic indicators, fiscal account, balance of payments account, and debt composition and debt service (said tables to include 3 years of projections and 3 years of historical values along with the current year). (b) The Lead Lender will also include in the Program Document: (i) an International Monetary Fund (IMF) letter assessing the Borrower's macroeconomic policy framework, or (ii) other IMF documentation as agreed between the Parties and dated no earlier than six months prior to the expected date of approval ofthe FMRF Operation. Financing Agreement: (c) The Lead Lender will require in its Financing Agreement(s) that the Lead Lender is satisfied with the adequacy of the macroeconomic policy framework of the Borrower as a condition for effectiveness and disbursement. - 23 - ANNEX C- FMRF INDICATORS During the first four years after the date of this Framework Agreement, the Parties agree to track and report results related to FMRF Operations using the following indicators in accordance with Section 2.02 of this Framework Agreement: (a) Operational efficiency and effectiveness: (i) Savings in Operation preparation time and costs per Operation (as measured by total FMRF Operation processing time and hours saved during FMRF Operation preparation and corresponding cost savings, in comparison to the average Operation preparation time and cost of ADB-World Bank co-financed Operations within the 5 years prior to signing of this Framework Agreement); (ii) Savings in Operation implementation time and costs per Operation (as measured by total FMRF Operation processing time and hours saved during FMRF Operation implementation and corresponding cost savings, in comparison to the average Operation implementation time and cost of ADB-World Bank co-financed Operations within the 5 years prior to signing of this Framework Agreement); and (iii) Percentage of FMRF Operations rated "on track" (for ADB) and Implementation Performance (IP) ratings of"moderately satisfactory or higher" (for the World Bank) for four reporting periods or more during implementation, in comparison to corresponding ratings of ADB-World Bank co-financed Operations within the 5 years prior to signing of this Framework Agreement); (b) Knowledge exchange and enhanced engagement between the Borrower and the Parties: (i) Increase in the number of joint World Bank-ADB knowledge sharing events with Borrowers, in comparison with the average number ofjoint World Bank-ADB knowledge events for World Bank-ADB co-financed Operations in the 5 years prior to signing of this Framework Agreement); (ii) Additional engagements with Borrowers in the areas of financing, technical assistance, advisory services and analytics activities or others because of expanded areas of consultations with the Borrower, and (iii) The number ofrecommendations from the analytical work of the Trail Lender informing the components of, or reforms in, the Lead Lender's Operation; and (c) Client satisfaction, including on quality of FMRF Operations at entry and during implementation: (i) Client satisfaction with the joint working arrangement between the two Parties (as measured through client/borrower surveys); (ii) Client satisfaction with the design quality of the FMRF Operations (as measured through client/borrower surveys); and (iii) Assessment of implementation management (as measured through Implementation Supervision Report ("ISR") indicators of ratings of Development Outcomes and Implementation Performance). - 24-