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CONFORMED COPY 
 
KTF GRANT NUMBER TF094998-CN 
 
Trust Fund for Bank-Korea Partnership 
on Poverty Reduction and  
Socio-Economic Development 
 
Grant Agreement 
 
(Guangdong Technical and Vocational Education and Training Project) 
 
between 
 
PEOPLE’S REPUBLIC OF CHINA  
 
and 
 
INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT 
 
acting as administrator of the Trust Fund for Bank-Korea Partnership on Poverty 
Reduction and Socio-Economic Development 
 
Dated June 2, 2010 
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KTF GRANT NUMBER TF094998 -CN 
 
TRUST FUND FOR BANK-KOREA PARTNERSHIP ON POVERTY 
REDUCTION AND SOCIO-ECONOMIC DEVELOPMENT 
GRANT AGREEMENT 
 
AGREEMENT dated June 2, 2010
entered into between: 
PEOPLE’S REPUBLIC 
OF CHINA (“Recipient”); and INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVLOPMENT (“World Bank”), acting as administrator of the Trust Fund for 
Bank-Korea Partnership on Poverty Reduction and Socio-Economic Development. 
 
WHEREAS: (A) the Recipient, having satisfied itself as to the feasibility and 
priority of the project described in Schedule 1 to this Agreement (“the Project”), has 
requested assistance from the Trust Fund for Bank-Korea Partnership on Poverty 
Reduction and Socio-Economic Development in the financing of the Project; and 
(B)  the Recipient has also requested the World Bank, acting on its own behalf, to 
provide additional assistance towards the financing of the Project and by agreement dated 
July 23, 2009 (“Loan Agreement”), between the Recipient and the World Bank, the 
World Bank has agreed to provide a loan in the amount of twenty million dollars 
($20,000,000) (“Loan”). In relation to the Loan Agreement, the World Bank and 
Guangdong Province has entered into an agreement (“Loan Project Agreement”) for 
Guangdong Province to carry out the Project using the proceeds of the Loan. 
The Recipient and the World Bank hereby agree as follows: 
 
Article I 
Standard Conditions; Definitions 
 
1.01. 
The Standard Conditions for Grants Made by the World Bank Out of Various 
Funds, dated July 1, 2008 (“Standard Conditions”), constitute an integral part of 
this Agreement.  
1.02. 
Unless the context requires otherwise, the capitalized terms used in this 
Agreement have the meanings ascribed to them in the Standard Conditions or in 
the Appendix to this Agreement.  
Article II 
The Project 
 
2.01. 
The Recipient declares its commitment to the objectives of the Project.  To this 
end, the Recipient shall carry out Part 2(a) of the Project through its National 
Development and Reform Commission and Liaoning and Shandong Provinces, 
and cause Parts 1, 2(b) and 2(c) of the Project to be carried out by Guangdong 
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(“Project Implementing Entity”) in accordance with the provisions of the 
agreement dated the same date as this Agreement between the World Bank and 
the Project Implementing Entity, as such agreement may be amended from time 
to time (“KTF Project Agreement”).  
2.02. 
Without limitation upon the provisions of Section 2.01 of this Agreement, and 
except as the Recipient and the World Bank shall otherwise agree, the Recipient 
shall ensure that the Project is carried out in accordance with the provisions of 
Schedule 2 to this Agreement. 
Article III 
The Grant 
 
3.01. 
The World Bank agrees to extend to the Recipient, on the terms and conditions 
set forth or referred to in this Agreement, a grant in an amount equal to six 
hundred thousand United States Dollars ($600,000) (“Grant”) to assist in 
financing Parts 2(a) and 2(b) of the Project.  
3.02. 
The Recipient may withdraw the proceeds of the Grant in accordance with 
Section IV of Schedule 2 to this Agreement. 
3.03. 
The Grant is funded out of the abovementioned trust fund for which the World Bank 
receives periodic contributions.  In accordance with Section 3.02 of the Standard 
Conditions, the Recipient may withdraw the Grant proceeds subject to the 
availability of such funds. 
Article IV 
Additional Remedies 
 
4.01. 
The Additional Events of Suspension referred to in Section 4.02(k) of the 
Standard Conditions consists of the following:   
 
(a)  
The Recipient has taken or permitted to be taken any action which would prevent 
or interfere with the performance by the Project Implementing Entity of its 
obligations under the KTF Project Agreement.  
(b) 
The Project Implementing Entity has failed to perform any obligation under the 
KTF Project Agreement.  
(c) 
The World Bank or IDA has declared the Project Implementing Entity ineligible 
to
 
receive proceeds of any financing made by the World Bank or IDA, or 
otherwise to participate in the preparation or implementation of any project 
financed in whole or in part by the World Bank or IDA (including as 
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administrator of funds provided by another financier), as a result of a 
determination by the World Bank or IDA that the Project Implementing Entity 
has engaged in fraudulent, corrupt, coercive or collusive practices in connection 
with the use of the proceeds of any financing made by the World Bank or IDA.  
(d) 
As a result of events which have occurred after the date of this Agreement, an 
extraordinary situation has arisen which makes it improbable that the Project 
Implementing Entity will be able to perform its obligations under the KTF 
Project Agreement.   
(e) 
The World Bank has determined after the Effective Date referred to in  
Section 5.02 of this Agreement that prior to such date but after the date of this 
Agreement, an event has occurred which would have entitled the World Bank to 
suspend the Recipient's right to make withdrawals from the Grant Account if this 
Agreement had been effective on the date such event occurred. 
(f) 
The Recipient has failed to make payment (notwithstanding the fact that such 
payment may have been made by a third party) of principal or interest or any 
other amount due to the World Bank or IDA: (i) under the Loan Agreement (as 
defined hereinafter); or (ii) under any other agreement between the World Bank 
and the Recipient; or (iii) under any agreement between the Recipient and IDA; 
or (iv) in consequence of any guarantee extended or other financial obligation of 
any kind assumed by the World Bank or IDA to any third party with the 
agreement of the Recipient.  
Article V 
Effectiveness; Termination 
 
5.01 
This Agreement shall not become effective until evidence satisfactory to the 
World Bank has been furnished to the World Bank that the Loan Agreement has 
been executed and delivered and all conditions precedent to its effectiveness or to 
the right of the Recipient to make withdrawals under it have been fulfilled. 
5.02. 
Except as the Recipient and the World Bank shall otherwise agree, this 
Agreement shall enter into effect on the date upon which the World 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 World Bank to suspend the 
right of the Recipient to make withdrawals from the Grant Account if this 
Agreement had been effective, the World Bank may postpone the dispatch of the 
notice referred to in this Section until such event (or events) has (or have) ceased 
to exist.  
5.03. 
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 this 
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Agreement, unless the World Bank, after consideration of the reasons for the 
delay, establishes a later date for the purpose of this Section. The World 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 the Recipient’s Minster of Finance. 
6.02.  The Recipient’s Address referred to in Section 7.01 of the Standard 
 
Conditions is: 
 
Ministry of Finance 
Sanlihe 
Beijing 100820 
People’s Republic of China 
 
Facsimile: 
 
(86-10) 6855-1125 
 
6.03. 
The World Bank’s Address referred to in Section 7.01 of the Standard  
Conditions is: 
 
International Bank for Reconstruction and Development 
 
1818 H Street, N.W. 
Washington, D.C. 20433 
 
United States of America 
 
Cable: 
  Telex: 
  Facsimile: 
 INTBAFRAD 
 248423 
(MCI) 
or 1-202-477-6391 
Washington, D.C. 
  64145 (MCI) 
 
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AGREED at Beijing,
 People’s Republic of China, as of the day and year first 
above written. 
 
PEOPLE’S REPUBLIC OF CHINA 
 
By /s/ 
Wang Zhongjing 
Authorized Representative 
 
INTERNATIONAL BANK FOR  
 
RECONSTRUCTION AND DEVELOPMENT 
acting as administrator of the Trust Fund for Bank-Korea 
Partnership on Poverty Reduction and Socio-Economic 
Development 
 
By /s/ 
Klaus Rohland 
Authorized Representative 
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SCHEDULE 1 
Project Description
 
The objective of the Project is to assist Guangdong Province in improving the 
quality and relevance of technical education in selected schools and using the experience 
as a guide to further school reforms and policy development.  
 
The Project consists of the following parts, subject to modifications thereof as the 
Recipient and the World Bank may agree upon from time to time to achieve such 
objective: 
 
Part 1: School-Based Reforms and Innovation 
 
(a) 
Carrying out of sub-projects by the Selected Schools to: 
 
(i) 
Strengthen and institutionalize the linkage between schools and local 
industry including, providing goods and technical assistance for: 
 
(A)  establishment and strengthening of school-industry advisory bodies; 
(B) 
development of standard school and industry cooperation 
agreements, including agreements for training; (C) engagement of 
industry representatives in technical advisory committees to set 
competency standards, develop and adapt new curricula, validate testing 
and certification systems, and promote sharing of industry equipment and 
skilled personnel with schools; and (D) preparation of publicity and 
marketing materials for schools.  
 
(ii) 
Improve the management of schools by building capacity for effective 
use of school resources and for producing learning outcomes responsive 
to a market economy including, providing training, study tours and 
technical assistance for: (A) the design and conduct of foreign and 
domestic study tours; and (B) provision of long-term and short-term 
training for school administrators and lead instructors.   
 
(iii) 
Develop and implement a flexible competency-
based training (“CBT”) 
curriculum with competency standards that are determined in accordance 
with industry demand to promote improvements in quality and relevance 
including, providing goods and technical assistance for the development 
of: (A) 
modular CBT curricula; (B) 
instructional materials; and 
(C) revised testing and certification instruments that give priority to skills 
in high demand, as determined from consultations with industries.   
 
(iv) 
Improve quality of student assessment and quality assurance by 
establishing a competency-based benchmark for measuring student and 
school performance including providing goods and technical assistance 
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for: (A) alignment of the student assessment system with the new CBT 
curricula, and (B) development of instruments for reporting to the public 
about aggregate student performance on competency examinations as an 
indicator of school quality. 
 
(v) Improve
 
instructional capacity and the quality of training including, 
providing technical assistance for: (A) 
use of student learning 
assessments to highlight areas for improving instructor performance 
under the new CBT curricula; and (B) training instructors, before and 
during their start of service, to use the competency-based curriculum.   
 
(b) 
Upgrading of facilities at the Selected Schools based on market demand 
including, carrying out civil works and providing equipment and technical 
assistance to:  
 
(i) 
upgrade and expand teaching facilities and related infrastructure; and  
 
(ii) 
equip facilities to conform to the needs of the new modular CBT 
curricula.   
 
Part 2: Policy Development and Capacity Building   
 
(a) 
Supporting policy research and knowledge generation, providing assistance for: 
(i) carrying out national policy studies on key issues in technical and vocational 
education and training through the National Development and Reform 
Commission, (ii) carrying out provincial studies in Liaoning and Shandong 
provinces through Liaoning and Shandong Provinces; and (iii) learning from the 
experience of implementing the Project and other related projects and 
disseminating such lessons learnt and the results of said studies. 
 
(b) 
Improving monitoring and evaluation as a step towards evidence-based 
management and policy development including, providing technical assistance 
and training for: (i) the design and implementation of Project beneficiary 
assessments and tracer studies, and (ii) development and implementation of a 
school-based management information system for monitoring school 
performance.   
 
(c) 
Enhancing the capacity of the Provincial Project Management Office in Project 
management and coordination through provision of technical assistance and 
training. 
 
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SCHEDULE 2 
Project Execution 
Section I. 
Implementation Arrangements
A. Financing 
Arrangements
 
1. 
The Recipient shall make available part of the proceeds of the Grant to the 
Project Implementing Entity as a grant. 
 
B. Anti-Corruption 
 
The Recipient shall ensure that the Project is carried out in accordance with the 
provisions of the 
“Guidelines on Preventing and Combating Fraud and 
Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, 
dated October 15, 2006 (“Anti-Corruption Guidelines”).
 
Section II. 
Project Monitoring, Reporting and Evaluation 
A. 
Project Reports; Completion Report 
1. 
The Recipient shall monitor and evaluate, and cause the Project Implementing 
Entity to monitor and evaluate the progress of the Project and prepare Project 
Reports in accordance with the provisions of Section 2.06 of the Standard 
Conditions and on the basis of the indicators set forth in the Annex of the 
Schedule to the KTF Project Agreement.  Each Project Report shall cover the 
period of one (1) calendar semester, and shall be furnished to the World Bank not 
later than March 15 and September 15 each year.  
2. 
The Recipient shall prepare the Completion Report in accordance with the 
provisions of Section 2.06 of the Standard Conditions.  The Completion Report 
shall be furnished to the World Bank not later than six (6) months after the 
Closing Date
.
B. 
Financial Management; Financial Reports; Audits 
1. 
The Recipient shall maintain, or cause to be maintained, a financial management 
system in accordance with the provisions of Section 2.07 of the Standard 
Conditions. 
2. 
Without limitation on the provisions of Part A of this Section, the Recipient shall 
prepare and furnish, or cause to be prepared and furnished, to the World Bank as 
part of the Project Report by not later than March 15 and September 15 each 
year, interim un-audited financial reports for the Project covering the preceding 
calendar semester, in form and substance satisfactory to the World Bank. 
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3. 
The Recipient shall have its Financial Statements for the Project audited in 
accordance with the provisions of Section 2.07(b) of the Standard Conditions.  
Each audit of the Financial Statements shall cover the period of one (1) fiscal 
year of the Recipient.  The audited Financial Statements for each such period 
shall be furnished to the World Bank not later than six (6) months after the end of 
such period.
 
Section III. 
Procurement
A. General
 
1.
 
Procurement and Consultant Guidelines.  
All 
consultants’ services required 
for the Project and to be financed out of the proceeds of the Grant shall be 
procured in accordance with the requirements set forth or referred to in:  
(a) 
Sections I and IV of the Consultant Guidelines; and 
(b) 
the provisions of this Section III, as the same shall be elaborated in the 
Procurement Plan. 
2.
 Definitions.
 
The capitalized terms used below in this Section to describe 
particular procurement methods or methods of review by the World Bank of 
particular contracts, refer to the corresponding method described in the 
Consultant Guidelines. 
B. 
Particular Methods of Procurement of Consultants’ Services 
 
1. 
Quality- and Cost-based Selection.
 
Except as otherwise provided in 
 
paragraph
 2 below, consultants’ services shall be procured under contracts 
awarded on the basis of Quality- and Cost-based Selection.
 
2.
 
Other Methods of Procurement of Consultants’ Services
.
The following table 
specifies the methods of procurement, other than Quality- and Cost-based 
Selection, which 
may be used for procurement of consultants’ services. The 
Procurement Plan shall specify the circumstances under which such methods may 
be used.   
 
Procurement Method 
(a) 
Selection based on Consultants’ Qualifications 
(b) 
Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant 
Guidelines for the Selection of Individual Consultants 
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C. 
Review by the World Bank of Procurement Decisions 
1. 
The Procurement Plan shall set forth those contracts which shall be subject to the 
World Bank’s Prior Review.  All other contracts shall be subject to Post Review 
by the World Bank. 
Section IV. 
Withdrawal of Grant Proceeds
A. General 
1. 
The Recipient may withdraw the proceeds of the Grant in accordance with the 
provisions of: (a) Article III of the Standard Conditions; (b) this Section; and (c) 
such additional instructions as the World Bank may specify by notice to the 
Recipient (including the “World Bank Disbursement Guidelines for Projects” 
dated May 2006, as revised from time to time by the World Bank and as made 
applicable to this Agreement pursuant to such instructions), to finance Eligible 
Expenditures as set forth in the table in paragraph 2 below.   
2. 
The following table specifies the categories of Eligible Expenditures that may be 
financed out of the proceeds of the Grant (“Category”), the allocations of the 
amounts of the Grant to each Category, and the percentage of expenditures to be 
financed for Eligible Expenditures in each Category:  
Category 
Amount of the 
Grant Allocated 
(expressed in USD) 
Percentage of Expenditures to 
be Financed 
(inclusive of Taxes) 
(1) Consultants’ services 
under Part 2(a) i of the Project 
(through National 
Development and Reform 
Commission) 
210,000 100% 
(2) Consultants’ services 
under Part 2(a) ii of the 
Project (through Liaoning and 
Shandong Provinces) 
200,000  
(3) Consultants’ services 
under Part 2(b) of the Project 
100,000 100% 
(4) Training, workshops and 
overseas study tours under 
Part 2(a) of the Project 
(through National 
60,000 100% 
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Category 
Amount of the 
Grant Allocated 
(expressed in USD) 
Percentage of Expenditures to 
be Financed 
(inclusive of Taxes) 
Development and Reform 
Commission) 
(5) Operating costs under Part 
2(a) of the Project (through 
National Development and 
Reform Commission) 
30,000 100% 
TOTAL AMOUNT 
600,000  
For purposes of this paragraph, the term “Operating costs” means the reasonable 
expenditures directly related to the implementation of Part 2(a) of the Project, incurred by 
the Recipient (which expenditures would not have been incurred absent the Project), 
including the costs of publications and dissemination, but excluding salaries. 
B. 
Withdrawal Conditions; Withdrawal Period   
1.
 
Notwithstanding the provisions of Part A of this Section no withdrawal shall be 
made for payments made prior to the date of this Agreement. 
2. 
The Closing Date referred to in Section 3.06(c) of the Standard Conditions is 
December 31, 2014. 
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APPENDIX 
 
Definitions 
1. 
“Anti-Corruption Guidelines” means the “Guidelines on Preventing and 
Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA 
Credits and Grants”, dated October 15, 2006. 
2. 
“Category” means a category set forth in the table in Section IV of Schedule 2 to 
this Agreement. 
3. 
“Consultant Guidelines” means the “Guidelines: Selection and Employment of 
Consultants by World Bank Borrowers” published by the Bank in May 2004 and 
revised in October 2006. 
4. 
“Environmental Management Framework” means the Environmental 
Management Framework dated October 20, 2008, prepared by the World Bank 
Loan Project Management Office, Department of Labor and Social Security of 
Guangdong Province
 
and referred to in Section I, paragraph  C.1 of the Schedule 
to the KTF Project Agreement, which framework sets out the policies and 
procedures for environment assessment and preparation of environment 
mitigation plans in
 
respect of activities under the Project, as well as 
administrative and monitoring arrangements to ensure the implementation of said 
plans, as said framework may be revised from time to time with the agreement of 
the World Bank. 
5. 
“Guangdong” means the Recipient’s Province of Guangdong, and any successor 
thereto. 
6. 
“Innovation Sub-project” means, individually, a sub-project selected by the 
Project Implementing Entity and approved by the World Bank in accordance 
with paragraph 1 of Section IV of the Schedule to the KTF Project Agreement, 
and comprising activities to be carried out under Part 1(a) of the Project by a 
Selected School; and “Innovation Sub-projects” means, collectively, all such sub-
projects. 
7. 
“Innovation Sub-project Financing” means the reasonable cost of: (a) goods, but 
excluding fixed assets; (b) workshops and training, including rental of premises, 
the provision of related materials and honorarium paid to industry/sector experts; 
and (c)  incremental expenditures incurred by each Selected School in the 
implementation of an Innovation Sub-project (which expenditures would not 
have been incurred absent the Innovation Sub-project) including, but not limited 
to, the reasonable cost of office consumables, communication, transportation, per 
diem, printing, translation, and interpretation, but excluding the salaries and 
salary supplements of staff of the Selected Schools. 
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8. 
“Procurement Guidelines” means the “Guidelines for Procurement under IBRD 
Loans and IDA Credits” published by the World Bank in May 2004 and revised 
in October 2006. 
9. 
“Procurement Plan” means the Recipient’s procurement plan for the Project, 
dated March 13, 2009, and referred to in paragraph 1.16 of the Procurement 
Guidelines and paragraph 1.24 of the Consultant Guidelines, as the same shall be 
updated from time to time in accordance with the provisions of said paragraphs. 
10. 
“Project Implementation Plan” means the project implementation plan dated 
March 16, 2009, setting out the procedural basis for implementation of the 
Project and its monitoring and supervision, which was adopted on April 15, 
2009, by the Project Implementing Entity through its Department of Labor and 
Social Security. 
11. 
“Project Implementing Entity” means Guangdong. 
12. 
“Project Steering Committee” and the acronym “PSC” mean the project steering 
committee that will be maintained pursuant to the provisions of Section I.A 
paragraph 1(a) of the Schedule to the KTF Project Agreement.   
13. 
“Provincial Project Management Office” and the acronym “PPMO” mean the 
project management office established in the Guangdong Department of Labor 
and Social Security and to be maintained pursuant to the provisions of  
Section I.A paragraph 1(c) of the Schedule to the KTF Project Agreement.   
14. 
“Selected Schools” means, collectively: 
(a) 
Guangdong Urban Construction Secondary and Tertiary Technical 
School founded in 1980, the Guangdong Light Industry Secondary and Tertiary 
Technical School founded in 1974, and the Yangjiang Secondary and Tertiary 
Technical School founded in 1997; and 
(b) 
any other schools selected by agreement among the Recipient, 
Guangdong and the World Bank, 
and any successors thereto; and “Selected School” means, individually, any of 
such Selected Schools.