CREDIT NUMBER 7124-DJ GRANT NUMBER E038-ET CREDIT NUMBER 7139-KE GRANT NUMBER E042-SO Project Agreement (De-Risking, Inclusion and Value Enhancement of Pastoral Economies in the Horn of Africa Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and ZEP-RE (PTA REINSURANCE COMPANY) CREDIT NUMBER 7124-DJ GRANT NUMBER 038-ET CREDIT NUMBER 7139-KE GRANT NUMBER E042-SO PROJECT AGREEMENT AGREEMENT between the INTERNATIONAL DEVELOPMENT ASSOCIATION (“Association”) and the ZEP-RE (PTA REINSURANCE COMPANY) (“Project Implementing Entity” or “ZEP-RE”) (“Project Agreement”) in connection with the following: (a) Financing Agreement (“Financing Agreement-Djibouti”) of the Signature Date between the Republic of Djibouti (“Djibouti”) and the Association, concerning Credit No. 7124-DJ; (b) Financing Agreement (“Financing Agreement-Ethiopia”) of the Signature Date between the Federal Republic of Ethiopia (“Ethiopia”) and the Association, concerning Grant No. E038-ET; (c) Financing Agreement (“Financing Agreement-Kenya”) of the Signature Date between the Republic of Kenya (“Kenya”)”) and the Association, concerning Credit No. 7139-KE; and (d) Financing Agreement (“Financing Agreement-Somalia”) of the Signature Date between the Federal Republic of Somalia (“Somalia”) and the Association, concerning Grant No. E042-SO. The term “Financing Agreements” refer, collectively to Financing Agreement-Djibouti, Financing Agreement-Ethiopia, Financing Agreement-Kenya, Financing Agreement- Somalia, and “Financing Agreement” refers, individually, to each of said agreements; and the term “Recipients” refer, collectively to Djibouti, Ethiopia, Kenya and Somalia, and the term “Recipient”, individually, to each of said Recipients. The Association and the Project Implementing Entity hereby agree as follows: ARTICLE I — GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to the Financing 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 Financing Agreement or the General Conditions. -2- ARTICLE II — PROJECT 2.01. The Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out Part 1 the Project in accordance with the provisions of Article V of the General Conditions and the Schedule to this Agreement, and shall provide promptly as needed, the funds, facilities, services and other resources required for Part 1 of the Project. ARTICLE III — TERMINATION 3.01. For purposes of Section 10.05(c) of the General Conditions, the date on which the provisions of this Agreement shall terminate is twenty (20) years after the Signature Date. ARTICLE IV — REPRESENTATIVE; ADDRESSES 4.01. The Project Implementing Entity’s Representative is the Managing Director and Chief Executive Officer. 4.02. For purposes of Section 11.01 of the General Conditions: (a) the Association’s address is: International Development Association 1818 H Street, NW Washington, DC 20433 United States of America; and (b) the Association’s Electronic Address is: Telex: Facsimile: 248423(MCI) or (+1) 202-477-6391 4.03. For purposes of Section 11.01 of the General Conditions: (a) the Project Implementing Entity’s address is: 8th Floor, ZEP-RE Place, Longonot Road, Upper Hill P.O. Box 42769-00100 Nairobi, Kenya; and -3- (b) the Project Implementing Entity’s Electronic Address is: E-mail: hmurera@zep-re.com copy bkamanga@zep-re.com AGREED as of the later of the two dates written below. INTERNATIONAL DEVELOPMENT ASSOCIATION By: _____________________________________ Authorized Representative Boutheina Guermazi Name: ____________________________ Title: Director, Regional Integration ____________________________ 21-Jun-2022 Date: ____________________________ ZEP-RE (PTA REINSURANCE COMPANY) By: _____________________________________ Authorized Representative Hope Murera Name: ____________________________ Title: Managing Director ____________________________ 22-Jun-2022 Date: ____________________________ -4- SCHEDULE Execution of the Part 1 of the Project Section I. Implementation Arrangements A. Institutional Arrangements 1. The Project Implementing Entity shall maintain at all times during the implementation of Part 1 of the Project, staff, with terms of reference, qualifications and resources satisfactory to the Association, to be responsible for overall coordination as well as day-to-day implementation of Part 1 of the Project, all in accordance with the provisions of the Part 1 PIM. 2. Without limitation to the provisions of paragraph 1 above and for purposes of implementation of Part 1 of the Project, the Project Implementing Entity shall: (a) within three (3) months from the Effective Date, designate an accountant, with terms of reference satisfactory to the Association, to be responsible for the financial management; and (b) within three (3) months from the Effective Date, have in place staff in each of the Participating Countries to liaise with the respective Project implementing agencies of the Participating Countries and to provide regular reporting to them. B. Regional Coordination Arrangements 1. The Project Implementation Entity shall appoint and send at least one representative to serve on, and attend meetings of, the respective Project Steering Committee and respective Project Technical Committee of each Participating Country. 2. The Project Implementation Entity shall facilitate, at a least once year, a meeting of all the Participating Countries to be convened by the Participating Country chairing the Horn of Africa Initiative Secretariat to review the implementation of the Project, and address issues of regional coordination of Parts 1 and 2 of the Project. C. Part 1 Project Implementation Manual 1. The Project Implementation Entity shall: (a) prepare, in accordance with terms of reference acceptable to the Association and furnish to the Association and the Recipient for review, -5- a Project implementation manual containing detailed guidelines and procedures for the implementation of Part 1 of the Project; (b) adopt such Project implementation manual, as shall have been approved by the Association (“Part 1 PIM”); (c) carry out Part 1 of the Project in accordance with the Part 1 PIM provided, however, that in case of any conflict between the provisions of the Part 1 PIM and the provisions of this Agreement, the provisions of this Agreement shall prevail; and (d) except as the Association shall otherwise agree, the Project Implementation Entity shall not amend, abrogate or waive any provision of the Part 1 PIM. D. Environmental and Social Management System 1. The Project Implementing Entity shall: (a) furnish to the Association for approval, a draft of its environmental and social management system, prepared in accordance with terms of reference satisfactory to the Association (including ESS9) for the management and implementation of Part 1 of the Project (“ ZEP- RE ESMS”); and (b) adopt and disclose such ZEP-RE ESMS as shall have been approved by the Association. E. Environmental and Social Standards 1. The Project Implementing Entity 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 Project Implementing Entity shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan (“ZEP-RE ESCP”), in a manner acceptable to the Association. To this end, the Project Implementing Entity shall ensure that: (a) the measures and actions specified in the ZEP-RE ESCP are implemented with due diligence and efficiency, and provided in the ZEP- RE ESCP; (b) sufficient funds are available to cover the costs of implementing the ZEP-RE ESCP; (c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ZEP-RE ESCP, as provided in the ZEP-RE ESCP; and -6- (d) the ZEP-RE 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 ZEP-RE ESCP, and ensure that the revised ZEP-RE ESCP is disclosed promptly thereafter. 3. Without limitation upon the provisions of paragraph 2 above, if sixty (60) days prior to the Closing Date, the Association determines that there are measures and actions specified in the ZEP-RE ESCP which will not be completed by the Closing Date, the Project Implementing Entity shall: (a) not later than thirty (30) days before the Closing Date, prepare and present to the Recipient and the Association, an action plan satisfactory to the Recipient and the Association on the outstanding measures and actions, including a timetable and budget allocation for such measures and actions (which action plan shall deemed to be considered an amendment of the ZEP-RE ESCP); and (b) thereafter, carry out said action plan in accordance with its terms and in a manner acceptable to the Association. 4. In case of any inconsistencies between the ZEP-RE ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 5. The Project Implementing Entity 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 ZEP-RE ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ZEP-RE 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 ZEP-RE ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ZEP-RE 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 ZEP-RE ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 6. The Project Implementing Entity 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. -7- Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. The Project Implementing Entity shall monitor and evaluate the progress of Part 1 of the Project and prepare Project Reports for Part 1 of the Project in accordance with the provisions of Section 5.08 (b) of the General Conditions and on the basis of the indicators acceptable to the Association. Each such Project Report shall cover the period of one calendar semester and shall be furnished to the Recipient and the Association not later than thirty (30) days after the end of the period covered by such report for incorporation and forwarding by the Recipient to the Association of the overall Project Report. Section III. Other Undertakings 1. Zep-Re shall take all measures necessary to maintain on matters within their control, during the period of Project implementation, its long-term issuer credit rating at the same level or above, the current rating issued by A.M. Best, which is an issuer of credit ratings for the insurance industry.