OFFICIAL DOCUMENTS CREDIT NUMBER 6250-SB GRANT NUMBER D327-SB Project Agreement (Electricity Access and Renewable Energy Expansion Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOLOMON ISLANDS ELECTRICITY AUTHORITY PROJECT AGREEMENT AGREEMENT between INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") and SOLOMON ISLANDS ELECTRICITY AUTHORITY ("Project Implementing Entity") ("Project Agreement") in connection with the Financing Agreement ("Financing Agreement") of the Signature Date between Solomon Islands ("Recipient") and the Association, concerning Credit No. 6250-SB and Grant No. D327-SB. 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, in the General Conditions or in this Agreement. ARTICLE II - PROJECT 2.01. The Project Implementing Entity declares its commitment to the objective of the Project. To this end, the Project Implementing Entity shall carry out 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 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 its 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: -2- Telex: Facsimile: E-mail: 248423(MCI) 1-202-477-6391 cdonupaciftic('a ivorldbank.org 4.03. For purposes of Section 11.01 of the General Conditions: (a) the Project Implementing Entity's address is: Solomon Islands Electricity Authority P.O. Box 6, Ranadi Honiara, Solomon Islands; and (b) the Project Implementing Entity's Electronic Address is: Facsimile: E-mail: +677 39472 Pradip.Verma@solomonpower.com.sb -3- AGREED, as of the later of the two dates written below. INTERNATIONAL DEVELOPMENT ASSOCIATION By dAuthorized Representative Name: A(T1SA_AL-%> 1%/A(cL- Title: CdkA01 -V- -P v1t2.cWOf Date: 1-5 rA Wo SOLOMON ISLANDS ELECTRICITY AUTHORITY By Authorized Representative Name: Title: Date: -4- SCHEDULE Execution of the Project Section I. Implementation Arrangements A. Institutional Arrangements 1. The Project Implementing Entity shall maintain, throughout the Project implementation period, staff and/or personnel in adequate numbers for the implementation of Project activities. 2. Without limitation to the generality of Section I.A.1 above, the Project Implementing Entity shall: (a) maintain throughout the Project implementation period, a financial management specialist, with terms of reference, qualifications and experience satisfactory to the Association; and (b) (i) by no later than three (3) months after the Effective Date (or such other date which the Association has confirmed in writing to the Recipient is reasonable and acceptable under the circumstances, as determined by the Association in its sole discretion), recruit or appoint the following staff and/or personnel: (A) a Project manager, responsible for the coordination and day-to-day implementation of all Project activities, including coordination with MMERE on the implementation of Part 4.2 of the Project; and (B) a program manager, responsible for assisting the Project manager in coordinating the implementation of Part 2 of the Project; (C) a procurement specialist; (D) a safeguards specialist; and (E) a solar engineer, each with terms of reference, qualifications and experience satisfactory to the Association; and (ii) thereafter maintain such positions throughout the Project implementation period. B. Subsidiary Agreement 1 . The Project Implementing Entity shall perform its obligations and exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Project Implementing Entity shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. C. Project Implementation Manual 1 . By no later than three (3) months after the Effective Date (or such other date which the Association has confirmed in writing to the Recipient and the Project Implementing Entity is reasonable and acceptable under the circumstances, as -5- determined by the Association in its sole discretion), the Project Implementing Entity shall prepare and adopt a Project Implementation Manual. 2. The Project Implementing Entity shall ensure that the Project is carried out in accordance with the arrangements and procedures set out in the Project Implementation Manual (provided, however, that in the event of any conflict between the arrangements and procedures set out in the Project Implementation Manual and the provisions of the Financing Agreement or this Agreement, the provisions of the Financing Agreement and this Agreement shall prevail, in that order of priority), and shall not amend, abrogate or waive any provision of the Project Implementation Manual unless the Association has provided its prior no- objection thereof in writing. D. Implementation of Part 2 of the Project 1. The Project Implementing Entity shall, throughout the implementation of Part 2 of the Project: (a) establish Electrical Connections in accordance with the Project Implementation Manual and this Agreement; and (b) enable an Independent Verification Agent, contracted by the Association, to carry out verifications of the Electrical Connections and provide Output Verification Reports to the Association and the Recipient, including to enable such Independent Verification Agent to visit any facilities and sites for such purpose and other purposes related to the Financing, in accordance with the Project Implementation Manual. E. Safeguards 1. The Project Implementing Entity shall ensure that the activities under the Project: (a) are carried out in accordance with the provisions of the Safeguards Instruments; and (b) each contract financed under the Project includes the obligation of the relevant contractor to implement the respective activities under the contract in accordance with the Safeguards Instruments. 2. Whenever a Safeguards Assessment and Plan shall be required for any proposed Project activity in accordance with the provisions of the ESMF, the Project Implementing Entity shall ensure that: (a) prior to the commencement of such activity, such Safeguards Assessment and Plan is prepared and adopted in accordance with the provisions of the ESMF; and (b) thereafter such measures are taken as shall be necessary or appropriate to ensure compliance with the requirements of such Safeguards Assessment and Plan. 3. The Project Implementing Entity shall not amend, abrogate or waive, or permit to be amended, abrogated or waived any of the Safeguards Instruments, unless the Association has provided its prior no-objection thereof in writing, and the Project Implementing Entity has ensured compliance with the same consultation and disclosure requirements as applicable to the original adoption of the said instruments. -6- 4. The Project Implementing Entity shall ensure that: (a) all terms of reference for any technical assistance or studies carried out under the Project are consistent with the Association's environmental and social safeguards policies, as well as the Recipient's laws relating to the environment and social aspects and the Safeguards Instruments; and (b) in drafting any regulations, guidelines or corporate procedures and carrying out capacity building activities under the Project, due attention is given to said policies, laws and instruments. 5. Without limitation on its other reporting obligations under this Agreement, the Project Implementing Entity shall ensure that the consolidated reports on the status of compliance with the Safeguards Instruments are collected, compiled, and furnished to the Recipient and the Association on a six (6) monthly basis (or such other frequency as may be agreed with the Association) or promptly whenever the circumstances warrant, giving details of: (a) measures taken in furtherance of the said Safeguards Instruments; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the said Safeguards Instruments; and (c) remedial measures taken or required to be taken to address such conditions. 6. The Project Implementing Entity shall carry out with due diligence all remedial measures agreed with the Association so as to ensure the proper implementation of the Project in accordance with the Safeguards Instruments. 7. In the event of a conflict between the provisions of any of the Safeguards Instruments, and the provisions of the Financing Agreement or this Agreement, the provisions of the Financing Agreement and this Agreement shall prevail, in that order of priority. Section II. Project Monitorin2, Reporting and Evaluation A. Project Reports 1 . The Project Implementing Entity shall monitor and evaluate the progress of the Project and prepare Project Reports 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 (1) calendar semester, and shall be furnished to the Recipient and the Association not later than forty-five (45) days after the end of the period covered by such report. 2. The Project Implementing Entity shall provide to the Recipient not later than four (4) months after the Closing Date, for incorporation in the report referred to in Section 5.08(c) of the General Conditions all such information as the Recipient or the Association shall reasonably request for the purposes of such Section.