OFFICIAL DOCUMENTS LOAN NUMBER 8849-CN Loan Agreement (Jiangxi Integrated Rural and Urban Water Supply and Wastewater Management Project) between PEOPLE'S REPUBLIC OF CHINA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN NUMBER 8849-CN LOAN AGREEMENT AGREEMENT dated as of the Signature Date between PEOPLE'S REPUBLIC OF CHINA ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II- LOAN 2.01. The Bank agrees to lend to the Borrower the amount of two hundred million Dollars (USD 200,000,000), as such amount may be converted from time to time through a Currency Conversion ("Loan"), to assist in financing the project described in Schedule I to this Agreement ("Project"). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount. 2.04. The Commitment Charge is one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2.05. The interest rate is the Reference Rate plus the Variable Spread or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions. 2.06. The Payment Dates are June 1 and December 1 in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement. 2.08. (a) If on any given day, the Total Exposure exceeds the Standard Exposure Limit (as said terms are defined in sub-paragraphs (b)(ii) and (b)(iii) of this Section), the Borrower shall pay to the Bank a surcharge at the rate of one half of one percent (0.5%) per annum of the Allocated Excess -2- Exposure Amount (as defined in sub-paragraph (b)(i) of this Section) for each said day ("Exposure Surcharge"). The Exposure Surcharge (if any) shall be payable semi-annually in arrears on each Payment Date. (b) For purposes of this Section the following terms have the meanings set forth below: (i) "Allocated Excess Exposure Amount" means for each day during which the Total Exposure exceeds the Standard Exposure Limit, the product of: (A) the total amount of said excess; and (B) the ratio of all (or, if the Bank so determines, a portion) of the Loan to the aggregate amount of all (or the equivalent portions) of the loans made by the Bank to the Borrower and to other borrowers guaranteed by the Borrower that are also subject to an exposure surcharge, as said excess and ratio are reasonably determined from time to time by the Bank. (ii) "Standard Exposure Limit" means the standard limit on the Bank's financial exposure to the Borrower which, if exceeded, would subject the Loan to the Exposure Surcharge, as determined from time to time by the Bank. (iii) "Total Exposure" means for any given day, the Bank's total financial exposure to the Borrower, as reasonably determined by the Bank. ARTICLE III - PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall cause the Project to be carried out by the Project Implementing Entity in accordance with the provisions of Article V of the General Conditions, Schedule 2 to this Agreement and the Project Agreement. ARTICLE IV - REMEDIES OF THE BANK 4.01. The Additional Event of Suspension consists of the following, namely, that any of the parties to the Subsidiary Agreement shall have failed to perform any of their respective obligations thereunder. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following, namely, that the Subsidiary Agreement has been executed on behalf of Project Implementing Entity and Provincial Water Investment Group in accordance with Section I.A.2 of the Schedule to the Project Agreement. -3- 5.02. The Additional Legal Matter consists of the following, namely, that the Subsidiary Agreement has been duly authorized or ratified by the Project Implementing Entity and Provincial Water Investment Group, respectively, and is legally binding upon the parties thereto in accordance with its terms. 5.03. The Effectiveness Deadline is the date one hundred and twenty (120) days after the Signature Date. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Borrower's Representative is its Minister of Finance. 6.02. For purposes of Section 10.01 of the General Conditions: (a) the Borrower's address is: Ministry of Finance Sanlihe Xicheng District Beijing 100820 People's Republic of China; and (b) the Borrower's Electronic Address is: Facsimile: (86-10) 6855-2077 6.03. For purposes of Section 10.01 of the General Conditions: (a) the Bank's address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank's Electronic Address is: Telex: Facsimile: 248423(MCI) or 1-202-477-6391 64145(MCI) -4-. AGREED as of the Signature Date. PEOPLE'S REPUBLIC OF CHINA By Authorized Representative Name: Title: / __ __ Date:____________ INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authoriz Representative Name: ( Title: - C I Date: -5- SCHEDULE 1 Project Description The objectives of the Project are: (a) to increase access to, and improve operating efficiency of, water supply services; and (b) to pilot provision of improved wastewater management in selected counties in Jiangxi Province. The Project consists of the following parts: Part 1: Expansion, Rehabilitation, and Modernization of Water Supply System (a) (i) Construction, upgrade, repair and/or rehabilitation of urban and rural water supply infrastructure including water intake works, water treatment works and water distribution works such as pump stations, transmission and distribution pipelines and control valves; and (ii) installation and/or replacement of urban and rural household water service connections and corresponding water meters. (b) Design, procurement, installation and trial operation of a Smart Water Supply Management System. (c) Carrying out of energy audits of pump stations and water supply and treatment plants, preparation of audit reports and carrying out of remedial measures recommended in such reports. (d) Conducting technical studies designed to inform modernization of rural water supply management in Jiangxi Province, including studies on rural water pricing and on alternative models for rural water supply management. Part 2: Demonstration of Rural Wastewater Management (a) Design, construction and trial operation of wastewater management system in Zhajin town in Xiushui County, such a system to comprise a treatment plant, sewerage pipelines, household sewer connections, as well as related public outreach and system management, operation and maintenance. (b) Conducting technical studies designed to improve rural wastewater management in Jiangxi Province including a study on sustainable mechanism for rural wastewater management and a feasibility study on public-private partnership approach for rural wastewater management. -6- Part 3: Public Engagement and Project Management (a) Carrying out a program to integrate public and community participation into the Project, such a program to include such activities as: (i) public dissemination, mobilization, and training (including media outreach); (ii) establishment of community participation mechanisms; (iii) promotion of women's participation in Project activities through inter alia gender- sensitive needs assessment; (iv) participatory design for household sewers connections; (v) participatory management of local water supply systems; (vi) participatory monitoring of water quality; (vii) public participation in water supply and wastewater management system operation and maintenance; and (viii) behavioral change campaigns. (b) Supporting the overall capacity of the Project Implementing Entity and Project Counties to coordinate, manage and supervise the implementation of the Project through such activities as: (i) undertaking preliminary and final engineering designs and preparing bidding documents; (ii) construction supervision; (iii) technical review of studies undertaken under the Project; (iv) training and study tours; and (v) procurement of office equipment and vehicles. (c) Establishment and operation of an integrated management information system and a monitoring and evaluation system. -7- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Financing Arrangements 1. For the purposes of carrying out the Project, the Borrower shall make available the proceeds of the Loan to the Project Implementing Entity, under terms and conditions acceptable to the Bank, including the following principal terms: (a) The principal amount shall be made available in Dollars or any other Currency as the Loan may be converted from time to time through a Currency Conversion of the value of the currency or currencies so withdrawn (such principal amount determined on the date, or respective dates, of withdrawal from the Loan Account). (b) The principal amount so made available (including an amount equal to the fee paid pursuant to Section 2.03 of this Agreement) shall be recovered over a period of twenty-nine (29) years, inclusive of a grace period of six (6) years. (c) Interest shall be charged on such principal amount withdrawn and outstanding from time to time at a rate equal to the rate of interest applicable from time to time to the Loan pursuant to the provisions of Section 2.05 of this Agreement. (d) A Commitment Charge shall be charged equal to one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2. The Borrower shall cause the Project Implementing Entity to: (a) manage, operate, monitor, transfer and reconcile the proceeds of the Loan made available to it pursuant to paragraph I above in accordance with arrangements and procedures acceptable to the Bank; (b) take all required actions, including provision of timely consents and approvals as may be necessary, to facilitate the utilization of said Loan proceeds and the implementation of the Project and, to enable the Project Implementing Entity to comply with its undertakings under the Project Agreement; and (c) maintain all relevant records and documents related to the Loan and the Project and provide promptly such documents and records, including all other Project related information, as may be requested by the Borrower or the Bank from time to time. -8- B. Safeguards and Dam Safety Measures The Borrower shall take, and shall cause the Project Implementing Entity to take, all measures necessary to comply with, or all measures necessary to enable the Project Implementing Entity to comply with, the provisions of Section I.B and I.C of the Schedule to the Project Agreement. Section II. Project Monitoring Reportina and Evaluation The Borrower shall cause the Project Implementing Entity to furnish to the Bank each Project Report not later than sixty (60) days after the end of each calendar semester, covering the calendar semester. Section III. Withdrawal of Loan Proceeds A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Borrower may withdraw the proceeds of the Loan to: (a) finance Eligible Expenditures; (b) pay the Front-end Fee; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Percentage of Loan Expenditures to be Allocated financed (expressed in (inclusive of Taxes) USD) (1) Goods, Works, Consulting services, Training and Workshops, 199,500,000 100% Incremental Operating Costs and Non-consulting services for the Project (2) Front-end Fee 500,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions TOTAL AMOUNT 200,000,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed USD 40,000,000 may be made for payments made -9- prior to this date but on or after January 23, 2018 for Eligible Expenditures under Category (1). 2. The Closing Date is June 30, 2024. -10- SCHEDULE 3 Commitment-Linked Amortization Repayment Schedule The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). Principal Payment Date Installment Share June 1, 2024 1.18% December 1, 2024 1.21% June 1, 2025 1.24% December 1, 2025 1.27% June 1, 2026 1.30% December 01, 2026 1.34% June 1, 2027 1.37% December 1, 2027 1.40% June 1, 2028 1.44% December 1, 2028 1.47% June 1, 2029 1.51% December 1, 2029 1.55% June 1, 2030 1.59% December 1, 2030 1.63% June 1, 2031 1.67% December 1, 2031 1.71% June 1, 2032 1.75% December 1, 2032 1.80% June 1, 2033 1.84% December 1, 2033 1.89% June 1, 2034 1.93% December 1, 2034 1.98% June 1, 2035 2.03% December 1, 2035 2.08% June 1, 2036 2.13% December 1, 2036 2.19% June 1, 2037 2.24% December 1, 2037 2.30% June 1, 2038 2.36% December 1, 2038 2.42% June 1, 2039 2.48% December 1, 2039 2.54% June 1, 2040 2.60% December 1, 2040 2.67% -11- June 1, 2041 2.73% December 1, 2041 2.80% June 1, 2042 2.87% December 1, 2042 2.94% June 1, 2043 3.02% December 1, 2043 3.09% June 1, 2044 3.17% December 1, 2044 3.25% June 1, 2045 3.33% December 1, 2045 3.41% June 1, 2046 3.50% December 1, 2046 3.78% -12- APPENDIX Section I. Definitions 1. "Annual Dam Safety Action Plan" means each of the plans referred to in Section I.C.4 of Schedule to the Project Agreement. 2. "Annual Work Plan" means each of the consolidated annual work plans and budgets for the Project to be prepared or updated by PWIG, submitted by the Project Implementing Entity and approved by the Bank, on an annual basis as provided for in Section I.A.5 of the Schedule to the Project Agreement; and "Annual Work Plans" means, collectively, all such plans. 3. Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011 and as of July 1, 2016. 4. "Bank's Safeguards Policies" means the operational policies and procedures for the financing of development projects by the Bank at the date of this Agreement and relating to Environmental Assessment, Natural Habitats, Pest Management, Indigenous Peoples (Ethnic Minorities), Physical Cultural Resources, Involuntary Resettlement, Forests, Safety of Dams, Projects on International Waterways, and Projects in Disputed Areas, as published under http://policies.worldbank.org/ to the extent they are applicable to the Project. 5. "Beneficiary Participation Manual" means a guideline prepared by the Project Implementing Entity on how to implement activities under Part 3(a) of the Project. 6. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 7. "County Project Implementing Unit" means the unit referred to in Section I.A. 1(e) of the Schedule to the Project Agreement, and any successor thereto. 8. "County Project Leading Group" means the group referred to in Section I.A.1(d) of the Schedule to the Project Agreement, and any successor thereto. 9. "Ecological Protection Group" means the entity referred to in Section I.A. 1(g) of the Schedule to the Project Agreement, and any successor thereto. 10. "Environmental Impact Assessment" means the environmental impact assessment report, acceptable to the Bank, dated November 2017 and disclosed on the Bank's external website (documents and reports) on November 26, 2017 (Report No. SFG3822). -13- 11. "Environmental and Social Management Plan" or "ESMP" means the environmental and social management plan for the Project, acceptable to the Bank, dated November 2017 and disclosed on the Bank's external website (documents and reports) on November 25, 2017 (Report No. SFG3778), which sets out the environmental and social protection measures in respect of the Project - including for dam safety measures and measures for protection of physical cultural resources, as well as administrative, monitoring, supervision and training arrangements to ensure the implementation of said plan, as said plan may be revised from time to time with the prior written agreement of the Bank, and such term includes all schedules and annexes supplemental thereto. 12. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for IBRD Financing, Investment Project Financing", dated July 14, 2017. 13. "Global Expert Group" means the group referred to in Section I.A.1(i) of the Schedule to the Project Agreement, and any successor thereto. 14. "Incremental Operating Costs" means the reasonable costs incurred for purposes of Project management and implementation based on the Annual Work Plans approved in advance by the Bank, on account of office rental, supplies and consumables, utilities, bank charges, communications, mass media and printing services, interpretation and translation services, vehicle rental, operation, maintenance, and insurance, building and equipment maintenance, local transportation, domestic travel, lodging, and subsistence allowances, and salaries of contractual and temporary staff, but excluding salaries and any salary supplements of members of the Borrower's or the Project Implementing Entity's civil service. 15. "Independent Expert" means any of the independent qualified dam professionals who have not been involved with the investigation, design, construction, or operation of the dam that they are tasked to inspect. 16. "Jiangxi Provincial Water Resources Department" and the acronym "PWRD" mean the agency of the Jiangxi Province responsible for water resources, or any successor thereto. 17. "Procurement Regulations" means, for purposes of paragraph 85 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated July 2016, revised November 2017. 18. "Project Affected Persons" means persons who, on account of the execution of the Project, have experienced or would experience direct economic and social impacts caused by: (a) the involuntary taking of land, resulting in: (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or -14- means of livelihood, whether or not such persons must move to another location; or (b) the involuntary restriction of access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such persons; and a "Project Affected Person" means any of such Project Affected Persons. 19. "Project Agreement" means the agreement between the Bank and the Project Implementing Entity of even date herewith, as the same may be amended from time to time; and such term includes all schedules and agreements supplemental to the Project Agreement. 20. "Project Counties" means, collectively, the following counties of Jiangxi Province selected to participate in the Project: Yongxin; Linchuan; Dongxiang; Jinxi; Nanfeng; Xiushui; and Leping, provided that the list of such Project Counties may be amended from time to time with the prior written agreement of the Bank; and "Project County" means, individually, any of such Project Counties. 21. "Project Dams" means the existing dams/ reservoirs on which the Project is directly dependent as listed in the Environmental and Social Management Plan. 22. "Project Implementation Plan" means the Project Implementing Entity's plan dated February 2018, acceptable to the Bank, which incorporates the Procurement Plan, procurement manual, financial management manual, the Project's results framework and performance indicators, technical modules, and other operational arrangements for the Project, as the same may be revised from time to time with the prior written agreement of the Bank. 23. "Project Implementing Entity" means the Borrower's Jiangxi Province, or any successor thereto. 24. "Provincial Project Implementing Unit" means the unit referred to in Section I.A. 1(c) of the Schedule to the Project Agreement, and any successor thereto. 25. "Provincial Project Leading Group" means the group referred to in Section I.A. 1(a) of the Schedule to the Project Agreement, and any successor thereto. 26. "Provincial Project Management Office" means the office referred to in Section I.A. 1(b) of the Schedule to the Project Agreement, and any successor thereto. 27. "Provincial Water Investment Group" and the acronym "PWIG" mean the state- owned enterprise established and operating according to the laws of the Borrower and responsible for providing integrated urban and rural water supply services in Jiangxi Province. 28. "Resettlement Action Plan" or "RAP" means the consolidated resettlement action plan for the Project, acceptable to the Bank, dated October 2017 and disclosed on -15- the Bank's external website (documents and reports) on November 26, 2017 (Report No. SFG 3830), setting forth, inter alia: (i) the principles and procedures governing the acquisition of land required for the Project and related facilities; (ii) actions and measures for the payment of compensation to Project Affected Persons and for their resettlement and rehabilitation; (iii) grievance redress mechanisms; and (iv) reporting and monitoring arrangements to ensure compliance with said plan, as the same may be revised from time to time with the prior written agreement of the Bank; and such term includes all attachments and annexes supplemental to said plan. 29. "Safeguards Instruments" means, collectively, Beneficiary Participation Manual, Environmental Impact Assessment, Environmental and Social Management Plan, and Resettlement Action Plan, as well as any attachments, schedules and annexes supplemental to said instruments. 30. "Signature Date" means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to "the date of the Loan Agreement" in the General Conditions. 31. "Smart Water Supply Management System" means the system of sensors, meters, controls, data transmission devices, data storage and processing equipment, management and end-user terminals, software, user interfaces and applications, and other associated infrastructure designed and developed under the project to monitor, manage, and control the water and wastewater systems. 32. "Subsidiary Agreement" means the agreement referred to in Section I.A.2 of the Schedule to the Project Agreement, to be entered into between Project Implementing Entity and PWIG, acceptable to the Bank, in accordance with the terms and conditions set forth in the Annex to the Schedule to the Project Agreement. 33. "Technical Expert Panel Unit" means the group referred to in Section I.A.1(h) of the Schedule to the Project Agreement, and any successor thereto. 34. "Training and Workshops" means the costs of training activities under the Project, based on the Annual Work Plans, and attributable to seminars, workshops, and domestic and overseas training, along with travel and subsistence allowances for training participants, services of trainers, rental of training facilities, preparation and reproduction of training materials, and other activities directly related to course preparation and implementation. 35. "Water Affairs Group" means a subsidiary company of PWIG, referred to in Section I.A.I(f) of the Schedule to the Project Agreement, responsible for provision of water supply services in the Jiangxi Province, and any successor thereto.