OFFICIAL
DOCUMENTS
ARTF GRANT NUMBER TFB3025
Afghanistan Reconstruction Trust Fund
Grant Agreement
(COVID-19 Response Development Policy Grant)
between
ISLAMIC REPUBLIC OF AFGHANISTAN
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
acting as an administrator of the Afghanistan Reconstruction Trust Fund


ARTF GRANT NUMBER TFB3025
AFGHANISTAN RECONSTRUCTION TRUST FUND
GRANT AGREEMENT
AGREEMENT dated as of the Signature Date between ISLAMIC REPUBLIC OF
AFGHANISTAN ("Recipient") and INTERNATIONAL DEVELOPMENT
ASSOCIATION ("Bank"), acting as administrator of the Afghanistan Reconstruction Trust
Fund, for the purpose of providing financing in support of the Program (as defined in the
Appendix to this Agreement). The Bank has decided to provide this financing on the basis,
inter alia, of: (i) the actions which the Recipient has already taken under the Program and
which are described in Section I of the Schedule to this Agreement; and (ii) the Recipient's
maintenance of an adequate macroeconomic policy framework. The Recipient and the
Bank therefore hereby agree as follows:
Article I
Standard Conditions; Definitions
1.01.  The Standard 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 Standard Conditions or in the Appendix
this Agreement.
Article II
Program
2.01.  The Recipient declares its commitment to the Program and its implementation. To
this end, and further to Section 2.06 (renumbered as such pursuant to paragraph I
of Section II of the Appendix to this Agreement and relating to Cooperation and
Consultation) of the Standard Conditions:
(a)    the Recipient and the Bank shall from time to time, at the request of either
party, exchange views on the Recipient's macroeconomic policy
framework and the progress achieved in carrying out the Program and the
actions specified in Section I of Schedule 1 to this Agreement;
(b)    prior to each such exchange of view, the Recipient shall furnish to the
Bank for its review and comment a report of the progress achieved in
carrying out the Program in such detail as the Bank shall reasonably
request; and
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(c)    without limitation upon the provisions of paragraphs (a) and (b) of this
Section, the Recipient shall promptly inform the Bank of any situation that
would have the effect of materially reversing the objectives of the Program
or any action taken or to be taken under the Program, including any action
specified in Section I of the Schedule to this Agreement.
Article III
The Grant
3.01.  The Bank agrees to extend to the Recipient a grant in an amount not to exceed one
hundred million United States Dollars ($100,000,000) ("Grant").
3.02.  The Recipient may withdraw the proceeds of the Grant in accordance with Section
II of the Schedule to this Agreement.
3.03.  The Grant is funded out of the abovementioned trust fund for which the Bank receives
periodic contributions from the donors to the trust fund. In accordance with Section
3.02 of the Standard Conditions, the Bank's payment obligations in connection with
this Agreement are limited to the amount of funds made available to it by the donors
under the abovementioned trust fund, and the Recipient's right to withdraw the Grant
proceeds is subject to the availability of such funds.
Article IV
Additional Remedies
4.01.  The Additional Event of Suspension referred to in Section 4.02 (k) of the Standard
Conditions consists of the following, namely, that a situation has arisen which shall
make it improbable that the Program, or a significant part of it, will be carried out.
Article V
Effectiveness; Termination
5.01.  The Agreement shall not become effective until the Bank is satisfied with the
progress achieved by the Recipient in carrying out the Program and with the
adequacy of the Recipient's macroeconomic policy framework.
5.02.  Except as the Recipient and the Bank shall otherwise agree, this Agreement shall
enter into effect on the date upon which the Bank dispatches to the Recipient notice
of its acceptance of the evidence required pursuant to Section 5.01 ("Effective
Date"). If, before the Effective Date, any event has occurred which would have
entitled the Bank to suspend the right of the Recipient to make withdrawals from
if this Agreement had been effective, the Bank may postpone the dispatch of the
notice referred to in this Section until such event (or events) has (or have) ceased
to exist.
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5.03. Termination for Failure to Become Effective. This Agreement and all obligations
of the parties under it shall terminate if it has not entered into effect by the date
ninety (90) days after the date of the Signature Date, unless the Bank, after
consideration of the reasons for the delay, establishes a later date for the purpose
of this Section. The Bank shall promptly notify the Recipient of such later date.
Article VI
Recipient's Representative; Addresses
6.01.  The Recipient's Representative referred to in Section 7.02 of the Standard
Conditions is its Minister of Finance.
6.02.  For purposes of Section 7.01 of the Standard Conditions:
(a)    the Recipient's address is:
Ministry of Finance
Pashtunistan Watt
Kabul, Islamic Republic of Afghanistan; and
(b)    the Recipient's Electronic Address is:
Facsimile:
+93-202-103-259
6.03.  For purposes of Section 7.01 of the Standard Conditions:
(a)    the Bank's address is:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America; and
(b)    the Bank's Electronic Address is:
Facsimile:
+1-202-477-6391
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AGREED as of the Signature Date.
ISLAMIC REPUBLIC OF AFGHANISTAN
By
ize Representative
Name: A"AA 4adj &i~ 3
Title:-Ni   NI     E C)V MtILC-
Date:
INTERNATIONAL DEVELOPMENT
ASSOCIATION
acting as administrator of the Afghanistan Reconstruction
Trust Fund
By
Autho   Representative
Name: JENA  Y <fRALM
Title: (2UW(Zy bma,-rop'
Date:  UL   1  2DO
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SCHEDULE
Program Actions; Availability of Grant Proceeds
Section I.    Actions Taken Under the Proaram.
The actions taken by the Recipient under the Program include the following:
Pillar 1.     Strengthening the Policy Framework to Support Relief and Recovery
for Vulnerable People and Firms
1.     To support sustained access to credit for MSMEs, DAB has issued a circular
reducing provisioning requirements for loans secured by risk guarantees from the
Afghan Credit Guarantee Foundation.
2.     To support increased use of electronic money, DAB has issued a circular to
simplify procedures for the opening of mobile wallets and to increase transaction
limits.
3.     To protect healthcare workers, the Ministry of Public Health has issued guidelines
in compliance with WHO standards for: (a) safe healthcare work practices and the
provision of adequate PPE to frontline medical staff; and (b) safe and appropriate
management of medical waste.
4.     To help address gender-based violence, the Minister of Education has approved a
gender-based violence action plan.
Pillar 2.     Strengthening the Policy Framework for Recovery and Resilience in
Infrastructure Provision
5.     To support the continuation of essential infrastructure services, DABS and the
Ministry of Finance have signed a revision to the Partnership Agreement to ensure
continued financial sustainability through the COVID- 19 crisis.
6.     To support recovery and resilience of the water sector, Afghanistan Urban Water
Supply and Sewerage Corporation has approved fully funded Recovery Plans for
its three strategic business units in the major cities of Afghanistan.
Section II.   Availability of Grant Proceeds
A.     General. The Recipient may withdraw the proceeds of the Grant in accordance
with the provisions of this Section and such additional instructions as the
Association may specify by notice to the Recipient.
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B.     Allocation of Grant Amounts. The Grant is allocated in a single withdrawal
tranche, from which the Recipient may make withdrawals of the Grant proceeds.
The allocation of the amounts of the Grant to this end is set out in the table below:
Allocations                  Amount of the Grant
Allocated
(expressed in USD)
Single Withdrawal Tranche                       100,000,000
TOTAL AMOUNT                                    100,000,000
C.     Withdrawal Tranche Release Conditions.
I.    No withdrawal shall be made of the Single Withdrawal Tranche unless the Bank
is satisfied: (a) with the Program being carried out by the Recipient; (b) with the
adequacy of the Recipient's macroeconomic policy framework.
D.     Deposit of Grant Amounts.
1.     The Recipient, within thirty (30) days after the withdrawal of the Financing from
the Financing Account, shall report to the Bank: (a) the exact sum received into
the account designated by the Recipient and acceptable to the Bank; (b) the details
of the account to which the Afghani equivalent of the Grant proceeds will be
credited; (c) the record that an equivalent amount has been accounted for in the
Recipient's budget management systems; and (d) the statement receipts and
disbursement of the account designated by the Recipient and acceptable to the
Bank.
E.     Audit. Upon the Bank request, the Recipient shall:
1.    have the account referred to in Section II.D.1(a) of this Schedule audited by
independent auditors acceptable to the Bank, in accordance with consistently
applied auditing standards acceptable to the Bank;
2.    furnish to the Bank as soon as available, but in any case not later than four months
after the date of the Bank's request for such audit, a certified copy of the report of
such audit, of such scope and in such detail as the Bank shall reasonably request,
and make such report publicly available in timely fashion and in a manner
acceptable to the Bank; and
3.    furnish to the Bank such other information concerning the account referred to in
Section II.D.1(a) of this Schedule and their audit as the Bank shall reasonably
request.
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F.     Excluded Expenditures.
1.    The Recipient undertakes that the proceeds of the Grant shall not be used to finance
Excluded Expenditures. If the Bank determines at any time that an amount of the
Grant was used to make a payment for an Excluded Expenditure, the Recipient
shall, promptly upon notice from the Bank, refund an amount equal to the amount
of such payment to the Bank. Amounts refunded to the Bank upon such request
shall be cancelled.
G.     Closing Date. The Closing Date is December 31, 2020.
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APPENDIX
Section L Definitions
1. "Afghan Credit Guarantee Foundation" means the charitable foundation registered
in September 2014 under German law in Cologne, Germany to contribute to the
development of the private sectors by improving access to finance for Afghan
small- and medium-sized enterprises.
2.     "Afghanistan Urban Water Supply and Sewerage Corporation" or "AUWSSC"
means the Recipient's corporation responsible for urban water supply and
sewerage, or any successor thereto.
3.     "COVID- 19" means the coronavirus disease caused by the 2019 novel coronavirus
(SARS-CoV-2).
4.     "DAB" or "Da Afghanistan Bank" means the Recipient's central bank, established
and operating pursuant to Da Afghanistan Bank Law (published in the Recipient's
Official Gazette No. 819 of February 19, 2004, as amended to the date), or any
successor thereto.
5.     "Excluded Expenditure" means any expenditure:
(a)    for goods or services supplied under a contract which any national or
international financing institution or agency other than the Bank, IBRD or
IDA has financed or agreed to finance, or which the Bank, IBRD or IDA
has financed or agreed to finance under another credit, grant or loan;
(b)    for goods included in the following groups or sub-groups of the Standard
International Trade Classification, Revision 3 (SITC, Rev.3) published by
the United Nations in Statistical Papers, Series M, No. 34/Rev.4 (1986)
(the SITC), or any successor groups or subgroups under future revisions
to the SITC, as designated by the Bank by notice to the Recipient:
Group        Sub-group           Description of Item
112                   Alcoholic beverages
121                   Tobacco, un-manufactured, tobacco
refuse
122                   Tobacco, manufactured (whether or
not containing tobacco substitutes)
525                   Radioactive and associated materials
667                   Pearls, precious and semiprecious
stones, unworked or worked
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718         718.7     Nuclear reactors, and parts thereof;
fuel elements (cartridges), non-
irradiated, for nuclear reactors
728        728.43     Tobacco processing machinery
897        897.3      Jewelry of gold, silver or platinum
group metals (except watches and
watch cases) and goldsmiths' or
silversmiths' wares (including set
gems)
971                   Gold, non-monetary (excluding gold
ores and concentrates)
(c)    for goods intended for a military or paramilitary purpose or for luxury
consumption;
(d)    for environmentally hazardous goods, the manufacture, use or import of
which is prohibited under the laws of the Recipient or international
agreements to which the Recipient is a party;
(e)    on account of any payment prohibited by a decision of the United Nations
Security Council taken under Chapter VII of the Charter of the United
Nations; and
(f)    with respect to which the Bank determines that corrupt, fraudulent,
collusive or coercive practices were engaged in by representatives of the
Recipient or other recipient of the Grant proceeds, without the Recipient
(or other such recipient) having taken timely and appropriate action
satisfactory to the Bank to address such practices when they occur.
6.     "Ministry of Education" means the Recipient's ministry responsible for education,
or any successor thereto.
7.     "Ministry of Finance" means the Recipient's ministry responsible for finance, or
any successor thereto.
8.     "Ministry of Public Health" means the Recipient's ministry responsible for public
health, or any successor thereto.
9.     "MSME" means micro, small, and medium enterprise; and "MSMEs" means,
collectively, all such MSME.
10.    "Partnership Agreement" means the agreement between the Ministry of Finance
and DABS dated November 11, 2018, for the purposes of ensuring DABS financial
sustainability to support its power supply operations.
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11.   "PPE" means personal protective equipment.
12.    "Program" means the program of objectives, policies, and actions set forth or
referred to in the letter dated June 1, 2020 from the Recipient to the Bank declaring
the Recipient's commitment to the execution of the Program, and requesting
assistance from the Bank in support of the Program during its execution and
comprising actions taken, including those set forth in Section I of the Schedule to
this Agreement, and actions to be taken consistent with the program's objectives.
13.    "Recovery Plans" means the plans prepared by AUWSSC's strategic business
units to: (a) protect staff; (b) safely organize service delivery under COVID-19
pandemic; and (c) strengthen recovery as well as resilience in case of future
emergencies.
14.    "Signature Date" means the later of the two dates on which the Recipient and the
Bank signed this Agreement and such definition applies to all references to "the
date of the Grant Agreement" in the Standard Conditions.
15.    "Single Withdrawal Tranche" means the amount of the Grant allocated to the
category entitled "Single Withdrawal Tranche" in the table set forth in Part B of
Section II of the Schedule to this Agreement
16.    "Standard Conditions" means the "International Bank for Reconstruction and
Development and International Development Association Standard Conditions for
Grant Financing Made by the Bank out of Trust Funds", dated February 25, 2019,
with the modifications set forth in Section II of this Appendix.
17.    "WHO" or "World Health Organization" means the specialized agencies of the
United Nations responsible for international health, established and operating
pursuant to its constitution dated April 7, 1948.
Section II. Modifications to the Standard Conditions
The Standard Conditions are modified as follows:
I.     Section 2.01 (Project Execution Generally), 2.07 (Financial Management;
Financial Statements; Audits), 2.10 (Procurement), and 2.11 (Anti-Corruption) are
deleted in their entirety, and the remaining Sections in Article II are renumbered
accordingly.
2.     Paragraph (a) of Section 2.03 (renumbered as such pursuant to paragraph I above
and relating to Use of Goods, Works and Services) is deleted in its entirety.
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3.     Paragraph (c) of Section 2.04 (renumbered as such pursuant to paragraph I above)
is modified to read as follows:
"Section 2.04. Documents; Records. The Recipient shall ensure that:
... (c) all records (contracts, orders, invoices, bills, receipts and other documents)
evidencing expenditures made from the Grant proceeds are retained until two years
after the Closing Date. The Recipient shall enable the World Bank's
representatives to examine such records."
4.     Paragraph (c) of Section 2.05 (renumbered as such pursuant to paragraph 1 above)
is modified to read as follows:
"Section 2.05. Program Monitoring and Evaluation. The Recipient shall
ensure:
...    (ii)   except as the Bank may reasonably determine otherwise,
ensure the preparation and delivery to the World Bank, not later than six
(6) months after the Closing Date, a report of such scope and in such detail
as the World Bank shall reasonably request, on the execution of the
Program, the performance by the Recipient and the World Bank of their
respective obligations under the Grant Agreement and the accomplishment
of the purposes of the Grant."
5.     Sections 3.05 (Designated Accounts) and 3.06 (Eligible Expenditures) are deleted
in their entirety, and the subsequent Sections in Article III are renumbered
accordingly.
7.     The following terms and definitions set forth in the Appendix are modified or
deleted as follows, and the following new terms and definitions are added in
alphabetical order to the Appendix as follows, with the terms being renumbered
accordingly:
(a)    The definition of the term "Eligible Expenditure" is modified to read as
follows:
"'Eligible Expenditure' means any use to which the Grant is put in
support of the Program, other than to finance Excluded Expenditures."
(b)    The term "Financial Statements" and its definition as set forth in the
Appendix are deleted in their entirety.
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(c)    The term "Project" is modified to read "Program" and its definition is
modified to read as follows:
""Program" means the program referred to in the Grant Agreement in
support of which the Grant is made." All references to "Project"
throughout these General Conditions are deemed to be references to
"Program".
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