Page 1 CONFORMED COPY LOAN NUMBER 7554-JM Loan Agreement (Early Childhood Development Project) between JAMAICA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated June 10, 2008 Page 2 LOAN NUMBER 7554-JM LOAN AGREEMENT Agreement dated June 10, 2008, between JAMAICA (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the 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) 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 General Conditions or in the Appendix to this Agreement. ARTICLE II — LOAN 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of fifteen million Dollars ($15,000,000) (the Loan), to assist in financing the project described in Schedule 1 to this Agreement (the Project). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount. 2.04. The interest payable by the Borrower for each Interest Period shall be at a rate equal to LIBOR for the Loan Currency plus the Variable Spread; provided, that upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02 (d) of the General Conditions. 2.05. The Payment Dates are April 15 and October 15 in each year. 2.06. The principal amount of the Loan shall be repaid in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Page 3 -2- 2.07. (a) The Borrower may at any time request any of the following Conversions of the terms of the Loan in order to facilitate prudent debt management: namely, a change of the interest rate basis applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate to a Fixed Rate, or vice versa. (b) Any conversion requested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a “Conversion”, as defined in the General Conditions, and shall be effected in accordance with the provisions of Article IV of the General Conditions and of the Conversion Guidelines. ARTICLE III — PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall: (a) cause the Project to be carried out by the Project Implementing Entity with the assistance of the Participating Entities; and (b) make Grants for Community Schools; all in accordance with the provisions of Article V of the General Conditions and the Project Agreement. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV — REMEDIES OF THE BANK 4.01. The Additional Events of Suspension consist of the following: (a) The Project Implementing Entity’s Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Project Implementing Entity to perform any of its obligations under the Project Agreement. (b) The NSP Cabinet Decision and/or the Early Childhood Act have been amended, suspended, abrogated, repealed or waived so as to affect the implementation of the Project. 4.02. The Additional Event of Acceleration consists of the following, namely, that any event specified in Section 4.01 of this Agreement occurs. ARTICLE V — EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) The Subsidiary Agreement has been executed on behalf of the Borrower and the Project Implementing Entity. Page 4 -3- (b) The Project Operational Manual has been adopted by the Project Implementing Entity, in a manner satisfactory to the Bank, including a confirmation that the Project Operational Manual is consistent with the NSP Cabinet Decision. 5.02. The Additional Legal Matter consists of the following, namely, that the Subsidiary Agreement has been duly authorized or ratified by the Borrower and the Project Implementing Entity and is legally binding upon the Borrower and the Project Implementing Entity in accordance with its terms. 5.03. Without prejudice to the provisions of the General Conditions, the Effectiveness Deadline is the date ninety (90) days after the date of this Agreement, but in no case later than the eighteen months after the Bank’s approval of the Loan which expire on November 13, 2009. ARTICLE VI — REPRESENTATIVE; ADDRESSES 6.01. The Borrower’s Representative is the Minister of Finance and the Public Service of the Borrower. 6.02. The Borrower’s Address is: Ministry of Finance and the Public Service 30 National Heroes Circle Kingston 4 Jamaica Facsimile: 876-924-9291 6.03. The Bank’s Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: Facsimile: INTBAFRAD 248423(MCI) or 1-202-477-6391 Washington, D.C. 64145(MCI) Page 5 -4- AGREED at the District of Columbia, United States of America, as of the day and year first above written. JAMAICA By /s/ Anthony Johnson Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Yvonne Tsikata Authorized Representative Page 6 -5- SCHEDULE 1 Project Description The objectives of the Project are to: (a) improve the monitoring of children’s development, the screening of household-level risks affecting such development, and early intervention systems of the Borrower to promote such development; (b) enhance the quality of ECIs; and (c) strengthen early childhood organizations and institutions. The Project consists of the following parts: Part 1 . Supporting the Implementation of the NSP in the Following Action Areas : (a) Parenting Education and Support . This action area includes: (i) the strengthening of the ECC’s parenting sub-committee; (ii) the development and implementation of a national early childhood development parenting education and support sub-strategy; (iii) a public awareness campaign; (iv) the creation of an accreditation system for early childhood parenting education and support programs; and (v) a grant facility to support service providers in meeting accreditation standards. (b) Preventive Health Care for Children . This action area includes: (i) the reorganization of well-child clinics, including the mainstreaming of well-child services at the primary care level, the expansion of the staff, the introduction of an accreditation system for health centers offering well-child services, and the strengthening of the referral system; (ii) the transformation and scaling up of nutritional programs to sustain achievements in reducing under-nutrition and, at the same time, address the emerging epidemic of over-nutrition; and (iii) the introduction of a child health passport to be used in all health centers. (c) Screening, Diagnosis and Early Intervention . This action area includes: (i) the development of a national policy for screening, referral and early intervention; (ii) the development of a screening system for household-level risks and its application to all households enrolled in the Borrower’s income support program; and (iii) the strengthening of the early intervention system through a new cadre of health professionals, entitled child development therapists, who will address vision, hearing, speech impairments and behavioral development challenges. (d) Safe, Learner-Centered Early Childhood Facilities . This action area includes: (i) the strengthening of the inspectorate for the ECIs at the ECC (through the provision of Grants for the ECC); and (ii) the strengthening of the support system for ECIs, including: (A) the recruitment of development officers to technically support ECIs (through the provision of Grants for the ECC); (B) the training of ECI caregivers in safety standards; and (C) the implementation of ECIs development plans to meet service standards (through the provision of Grants for Community Schools). Page 7 -6- (e) Trained Early Childhood Practitioners . This action area includes the implementation of a comprehensive early childhood development human resource strategy which entails: (i) the reform of training curricula; (ii) the increase in the cadre of trained practitioners; (iii) the upgrading of skills of early childhood development practitioners; and (iv) the development of continuing education and licensing systems. This will be supported through the provision of Grants for the ECC. (f) Early Childhood Development Sector Governance . This action area includes: (i) the reorganization of the ECC, including the expansion of its staff base; (ii) the development of a national early childhood development policy and local governance arrangements; (iii) the development of ECI management models; and (iv) the identification of specific budget lines of the Borrower’s national budget to allow for the comprehensive monitoring of early childhood development expenditures. This will be supported through the provision of Grants for the ECC. (g) Evidence-Based Decision Making . This action area includes the strengthening of the national early childhood development management and information system and the national early childhood development statistics. These systems will include the application of an internationally developed, locally adapted instrument to monitor the early child status and enable the ECC to report for the first time on the performance of the early childhood development system, including the human resources situation and the child development status at age four. This will be supported through the provision of Grants to the ECC. Part 2 . Technical Assistance (a) Development and support of the implementation of a national policy on screening, referral and early intervention, including: (i) the design of a screening system for risks affecting early childhood development at the household level; (ii) the development of a public education strategy about risks for children; (iii) the development of service delivery models for nutritional programs targeting different age groups; (iv) the development of a strategy for the reorganization and strengthening of well-child clinics; (v) the development of sub-strategies for early childhood parenting, including the mapping of existing parenting education and support programs of the Borrower, the development of an accreditation system for parenting programs, and the design of parenting public awareness campaigns. (b) Redesign of the Borrower’s grant facility supporting early childhood institutions, including the analysis of needs and gaps in service provision by ECIs. (c) Development of a comprehensive early childhood development human resource strategy, including the review of current compensation policies and the development of training modules for staff of ECIs. (d) Carrying out of studies to: (i) strengthen the legal framework governing early childhood development; (ii) develop a national early childhood development Page 8 -7- policy; and (iii) elaborate proposals for local governance and ECI management models. (e) (i) Carrying out of the evaluation of the NSP at mid-term and towards the end of its implementation period; (ii) development of a national early childhood development monitoring and evaluation system; and (iii) development of an instrument for the measuring of the child development status at age 4. (f) D evelopment of the Borrower’s Early Childhood Development National Strategic Plan for the period 2013-2017. Page 9 -8- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Subsidiary Agreement 1. To facilitate the carrying out of the Project, the Borrower shall make part of the proceeds of the Loan available to the Project Implementing Entity under a subsidiary agreement between the Borrower and the Project Implementing Entity, under terms and conditions approved by the Bank (“Subsidiary Agreement”), including, inter alia: (a) the proceeds amount; (b) the terms and conditions for the Project Implementing Entity’s receipt of part of the proceeds on a grant basis; (c) the management and staff positions to be maintained in the Project Implementing Entity; and (d) the obligation of the Project Implementing Entity to: (i) enter into an MOU with each of the Participating Entities every April during Project implementation, starting in 2008; and (ii) carry out a mid-term review of the NSP. 2. The Borrower shall exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan. Except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate, waive or fail to enforce the Subsidiary Agreement or any of its provisions. B. Institutional and Other Arrangements. 1. The Borrower shall cause the Project Implementing Entity to maintain, throughout Project implementation, key staff for Project implementation, including without limitation a director of cross-sectoral coordination, a director of finance and information technology, a procurement specialist and other staff in adequate numbers, all with qualifications and experience satisfactory to the Bank. 2. Without limitation to the provisions of Article V of the General Conditions, the Borrower shall ensure that: (a) the Bank is promptly informed of any developments in the legislation or regulations of the Borrower and the ECC and/or the rules or procedures of the Borrower and the ECC, including without limitation, the Project Implementing Entity’s Legislation, the Early Childhood Act and the NSP Cabinet Decision, that may affect Project implementation; and (b) the Borrower’s agencies which are required to provide services under the Project (including the Participating Entities), are made aware of the requirements of the Anti-Corruption Guidelines and take all actions necessary to support the carrying out of the Project in compliance with such requirements. 3. No later than May 31, 2010, the Borrower shall, or shall cause the ECC, to carry out a mid-term review of the NSP, including a review of the Disbursement-linked Targets Page 10 -9- 2010-2011, the Disbursement-linked Targets 2011-2012, and the Disbursement-linked Targets 2012-2013. C. Project Operational Manual Without limitation to the provisions of Article V of the General Conditions, the Borrower shall ensure that: (a) the Project is carried out in accordance with the Project Operational Manual; and (b) the Project Operational Manual or any part thereof is not amended, waived, suspended or abrogated without the Bank’s prior written concurrence, and in case of any inconsistency between the provisions of the Project Operational Manual and those of this Agreement, the provisions of this Agreement shall prevail. D. Anti-Corruption The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. E. Safeguards 1. The Borrower commits not to carry out under the Project any construction or expansion of infrastructure, other than minor works financed with counterpart funding to which the provisions set forth in the Project Operational Manual shall apply. 2. The Borrower further commits not to provide under the Project any health services that produce health care waste. Section II. Project Monitoring Reporting and Evaluation A. Project Reports 1. The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of indicators agreed with the Bank and set forth in the Project Operational Manual. Each Project Report shall cover the period of one FY Semester, and shall be furnished to the Bank not later than sixty days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1. The Borrower shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. 2. Without limitation on the provisions of Part A of this Section, the Borrower shall prepare and furnish to the Bank not later than sixty days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Bank. Page 11 -10- 3. The Borrower shall have its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one FY. The audited Financial Statements for each such period shall be furnished to the Bank not later than four months after the end of such period. Section III. Procurement A. General 1. Non-consultant services. All non-consultant services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Schedule. 2. Consultants’ Services. All consultants’ services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Schedule. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in the Procurement Guidelines, or Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Non-Consultant Services 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, non-consultant services shall be procured under contracts awarded on the basis of International Competitive Bidding procedures. 2. Other Methods of Procurement of Non-Consultant Services . The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for non-consultant services. The Procurement Plan shall specify the circumstances under which such methods may be used. Procurement Methods (a) National Competitive Bidding (b) Shopping (c) Direct Contracting Page 12 -11- C. 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 consultants’ services. The Procurement Plan shall specify the circumstances under which such methods may be used. Procurement Methods (a) Quality-Based Selection (b) Fixed Budget Selection (c) Least Cost Selection (d) Selection Based on Consultant Qualifications (e) Single Source Selection (f) Selection of Individual Consultants D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank’s Prior Review. All other contracts shall be subject to Post Review by the Bank. Section IV. Withdrawal of Loan Proceeds A. General 1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Bank shall specify by notice to the Borrower (including the “World Bank Disbursement Guidelines for Projects” dated May 2006, as revised from time to time by the 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 Loan (“Category”), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Page 13 -12- Category Amount of the Loan Allocated (expressed in USD) Percentage of Expenditures to be financed (inclusive of Taxes) (1) Grants for Community Schools and Grants for the ECC under Part 1 of the Project 13,100,000 100% (2) C onsultants’ services under Part 2 of the Project 1,862,500 100% (3) Front-end Fee 37,500 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions TOTAL AMOUNT 15,000,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) for payments made prior to the date of this Agreement, except that: (i) withdrawals up to an aggregate amount not to exceed $2,620,000 equivalent may be made for payments made prior to this date but on or after April 1, 2008 (but in no case earlier than one year from the date of this Agreement), for Eligible Expenditures under Category 1; and (ii) withdrawals up to an aggregate amount not to exceed $380,000 equivalent may be made for payments made prior to this date but on or after April 1, 2008 (but in no case earlier than one year from the date of this Agreement), for Eligible Expenditures under Category 2; or (b) for payments made for Grants for Community Schools and Grants for the ECC under Category 1 until the Borrower submits to the Bank evidence, satisfactory to the Bank, that: (i) the Borrower has implemented the action plan agreed with the Bank for the strengthening of the financial and accountability arrangements of the Grants for Community Schools; and (ii) the ECC and the MH have established budget lines exclusively dedicated to the financing of expenditures necessary to meet the Disbursement-linked Targets 2009-2010. 2. Notwithstanding the provisions of Part A of this Section and without limitation to the provisions set forth in paragraph 1 above, withdrawals from the Loan Account in respect of expenditures under Category (1) of the table in paragraph 1 above may be made by the Borrower only as follows: (a) A first withdrawal shall be made after the Effective Date, in an amount not exceeding $1,000,000, in respect of payments made by the Borrower in the first semester of the FY 2008-2009 for Grants for Community Schools and Grants for the ECC, subject to submission to the Bank of: (i) the IFR for the quarter ended Page 14 -13- September 30, 2008; and (ii) a budget execution report, satisfactory to the Bank, showing actual expenditures under the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2008-2009. (b) (i) A second withdrawal shall be made on or about June 1, 2009, in an amount not exceeding $180,000 for each Disbursement-linked Target 2008-2009 achieved pursuant to subparagraph (B) below, in respect of payments made by the Borrower in the previous FY for Grants for Community Schools and Grants for the ECC (other than those payments already reimbursed by the Bank under the preceding paragraph), subject to submission to the Bank of: (A) the IFR for the quarter ended March 31, 2009; (B) evidence, satisfactory to the Bank, that one or more of the following Disbursement-linked Targets 2008-2009 have been achieved: 1. the ECC has approved a sub-strategy for parenting education and support for parents of children pre-natal stage to age 3; 2. the ECC and the MH have developed and approved a model child health passport; 3. the ECC and the Borrower’s National Curriculum Agency (or other agency of the Borrower responsible for the licensing function which is acceptable to the Bank) have developed and approved a curriculum and delivery model for a child development therapy program; 4. the inspectorate of ECIs in the ECC is staffed with at least 35 trained inspectors; 5. at least 35% of all ECIs (denominator 2747) have received at least one complete inspection by ECC trained inspectors. An inspection will be considered complete if: (i) the ECI was inspected with regard to all of the standards; and (ii) the full inspection report was submitted to the legal and regulatory sub-committee of the ECC; 6. at least 75% of all ECIs (denominator 2747) have submitted to the ECC complete applications for registration. An application will be considered complete if it includes: (i) a public health report; (ii) a fire department inspection report; and (iii) police records for all staff; Page 15 -14- 7. the ECC has developed and approved a human resource strategy for early childhood practitioners of levels II, III and IV (according to the OCF); 8. the NCTVET and the ECC have developed and approved level III (according to the OCF) vocational competence standards; and 9. the ECC has conducted a spatial analysis of early childhood education services; (C) the budget appropriation for the FY 2009-2010 showing that the expenditures necessary to meet the Disbursement-linked Targets 2009-2010 have been adequately budgeted by the ECC and the Participating Entities; and (D) a budget execution report, satisfactory to the Bank, showing that the budget execution rates under th e Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2008-2009 exceed seventy (70) percent. (ii) In the event that any one or more of the Disbursement-linked Targets 2008-2009 are not achieved by June 1, 2009, or if any one or more of the other Disbursement-linked Targets are achieved prior to their scheduled completion, the Bank may agree to reschedule their timetable for approval. (c) A third withdrawal shall be made on or about December 1, 2009, in an amount not exceeding $1,000,000, in respect of payments made by the Borrower in the first semester of the FY 2009-2010 for Grants for Community Schools and Grants for the ECC, subject to submission to the Bank of: (i) the IFR for the quarter ended September 30, 2009; and (ii) a budget execution report, satisfactory to the Bank, showing actual expenditures under the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2009-2010. (d) (i) A fourth withdrawal shall be made on or about June 1, 2010, in an amount not exceeding $180,000 for each Disbursement-linked Target 2009-2010 achieved pursuant to subparagraph (B) below, in respect of payments made by the Borrower in the previous FY for Grants for Community Schools and Grants for the ECC (other than those payments already reimbursed by the Bank under the preceding paragraph), subject to submission to the Bank of: (A) the IFR for the quarter ended March 31, 2010; (B) evidence, satisfactory to the Bank, that one or more of the following Disbursement-linked Targets 2009-2010 have been achieved: Page 16 -15- 1. the ECC has approved a sub-strategy for parenting education and support for parents of children ages 4-6; 2. at least 20% of health centers offering well-child clinics use the child health passport as a monitoring and risk screening device for the cohort born in FY 09-10 . “Use” in this Disbursement-linked Target means that the health center fills in the child health passport for the relevant cohort of children, and that the average information is available per health center at the central MH level. Monitoring includes vaccinations, body mass index and growth (weight for age, height for age). Risk screening includes vision, hearing and developmental milestones; 3. the MH has approved an accreditation system (which consists of standards, tools and procedures) for health centers with well-child clinics; 4. the ECC and the MH have approved a service delivery model for nutrition support of children ages 4-6; 5. the MH, the MLSS, and the ECC have developed and approved a screening and documentation model for high risk households. Such model shall include metrics for minimum levels of service to be provided by the health centers, which will be used to judge whether health centers satisfactorily apply the model; 6. at least 75% of all ECIs (denominator 2747) have received at least one complete inspection by ECC trained inspectors. An inspection will be considered complete if: (i) the ECI was inspected with regard to all of the standards; and (ii) the full inspection report was submitted to the legal and regulatory sub-committee of the ECC; 7. the MFPS is reporting on expenditures on early childhood development, based on a national budget structure that allows monitoring of expenditures on early childhood development; 8. the ECC and the ME have designed and approved financial and accountability arrangements for financial support to ECIs. Such financial arrangements shall include allocation arrangements that specifically target poor populations based on the spatial analysis of early childhood education services; and Page 17 -16- 9. the PIoJ has incorporated into its Survey of Living Conditions measures of parenting and child development status; and (C) the budget appropriation for the FY 2010-2011 showing that the expenditures necessary to meet the Disbursement-linked Targets 2010-2011 have been adequately budgeted by the ECC and the Participating Entities; and (D) a budget execution report, satisfactory to the Bank, showing that the budget execution rates under: (1) th e Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2009-2010; and (2) the ECC’s and Participating Entities’ budget lines for expenditures necessary to meet the Disbursement-linked Targets 2009-2010, each exceed seventy (70) percent. (ii) In the event that any one or more of the Disbursement-linked Targets 2009-2010 are not achieved by June 1, 2010, or if any one or more of the other Disbursement-linked Targets are achieved prior to their scheduled completion, the Bank may agree to reschedule their timetable for approval. (e) A fifth withdrawal shall be made on or about December 1, 2010, in an amount not exceeding $1,000,000, in respect of payments made by the Borrower in the first semester of the FY 2010-2011 for Grants for Community Schools and Grants for the ECC, subject to submission to the Bank of: (i) the IFR for the quarter ended September 30, 2010; and (ii) a budget execution report, satisfactory to the Bank, showing actual expenditures under the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2010-2011. (f) (i) A sixth withdrawal shall be made on or about June 1, 2011, in an amount not exceeding $180,000 for each Disbursement-linked Target 2010-2011 achieved pursuant to subparagraph (B) below, in respect of payments made by the Borrower in the previous FY for Grants for Community Schools and Grants for the ECC (other than those payments already reimbursed by the Bank under the preceding paragraph), subject to submission to the Bank of: (A) the IFR for the quarter ended March 31, 2011; (B) evidence, satisfactory to the Bank, that one or more of the following Disbursement-linked Targets 2010-2011 have been achieved: 1. the ECC has approved a standards and accreditation system (consisting of tools and procedures) for early childhood parenting education and support programs; Page 18 -17- 2. the ECC and the MH have approved a service delivery model for nutrition for children ages 0-3; 3. at least 25 students have enrolled in the child development therapy program; 4. at least 30% of PATH social workers have been trained in delivering the screening and documentation model for high risk households developed according to the fifth Disbursement-linked Target 2009-2010; 5. detailed information on ECIs meeting of each of the 12 standards set forth in the Early Childhood Act for registration is accessible to the public; 6. the ME (or other agency acceptable to the Bank which at the time may be responsible for the licensing function) has developed and approved a licensing system for early childhood practitioners; 7. the HEART Trust and the ECC have developed and approved a level III (according to the OCF) vocational curriculum; 8. the financial and accountability arrangements for financial support to ECIs (designed pursuant to the eighth Disbursement-linked Target 2009-2010 mentioned above), have been implemented, including the transfer of the responsibilities to the ECC; and 9. the ME (or other agency of the Borrower acceptable to the Bank at the time responsible for the assessment function) has implemented a nationally representative survey of child development at age four (using the instrument indicated in the ninth Disbursement-linked Target 2009-2010 mentioned above) and has completed the necessary field work; and (C) the budget appropriation for the FY 2011-2012 showing that the expenditures necessary to meet the Disbursement-linked Targets 2011-2012 have been adequately budgeted by the ECC and the Participating Entities; and (D) a budget execution report, satisfactory to the Bank, showing that the budget execution rates under: (1) the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2010-2011; and (2) the ECC’s and Participating Entities’ budget lines for expenditures necessary to meet the Page 19 -18- Disbursement-linked Targets 2010-2011, each exceed seventy (70) percent. (ii) In the event that any one or more of the Disbursement-linked Targets 2010-2011 are not achieved by June 1, 2011, or if any one or more of the other Disbursement-linked Targets are achieved prior to their scheduled completion, the Bank may agree to reschedule their timetable for approval. (g) A seventh withdrawal shall be made on or about December 1, 2011, in an amount not exceeding $1,000,000, in respect of payments made by the Borrower in the first semester of the FY 2011-2012 for Grants for Community Schools and Grants for the ECC, subject to submission to the Bank of: (i) the IFR for the quarter ended September 30, 2011; and (ii) a budget execution report, satisfactory to the Bank, showing actual expenditures under the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2011-2012. (h) (i) An eighth withdrawal shall be made on or about June 1, 2012, in an amount not exceeding $180,000 for each Disbursement-linked Target 2011-2012 achieved pursuant to subparagraph (B) below, in respect of payments made by the Borrower in the previous FY for Grants for Community Schools and Grants for the ECC (other than those payments already reimbursed by the Bank under the preceding paragraph), subject to submission to the Bank of: (A) the IFR for the quarter ended March 31, 2012; (B) evidence, satisfactory to the Bank, that one or more of the following Disbursement-linked Targets 2011-2012 have been achieved: 1. the Borrower’s annual review publication for its FY 2010-2011 includes mapping (identification, location and quality assessment) of early childhood parenting education and support programs; 2. at least 60% of health centers offering well-child clinics use the child health passport as monitoring and risk screening device for the cohorts born in FYs 2009-2010, 2010-2011 and 2011-2012; 3. at least 15% of health centers of the Borrower offering well-child clinics are accredited (according to the accreditation system referred to in the third Disbursement-linked Target 2009-2010); 4. at least 50% of households enrolled in PATH with children 0-6 years old are screened using the screening documentation model for high risk households Page 20 -19- developed according to the fifth Disbursement-linked Target 2009-2010; 5. at least 20% of health centers offering well-child clinics identify high risk households within their area of service using the screening and documentation model developed according to the fifth Disbursement-linked Target 2009- 2010; 6. at least 85% of all ECIs (denominator 2747) have received a complete inspection by ECC trained inspectors in the Borrower’s FY 2011-2012. An inspection will be considered complete if: (i) the ECI was inspected with regard to all of the standards; and (ii) the full inspection report was submitted to the legal and regulatory sub-committee of the ECC; 7. at least 15% of all ECIs (denominator 2747) are registered with the ECC and the registration has been published in the Borrower’s Official Gazette; 8. at least 25% of early childhood practitioners receiving salaries from the ME (or other agency acceptable to the Bank at the time responsible for the financial support function for ECIs) are licensed by the ME (or other agency acceptable to the Bank at the time responsible for the licensing function); and 9. the Borrower’s Cabinet has approved an early childhood policy acceptable to the Bank; and (C) the budget appropriation for the FY 2012-2013 showing that the expenditures necessary to meet the Disbursement-linked Targets 2012-2013 have been adequately budgeted by the ECC and the Participating Entities; and (D) a budget execution report, satisfactory to the Bank, showing that the budget execution rates under: (1) the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2011-2012; and (2) the ECC’s and Participating Entities’ budget lines for expenditures necessary to meet the Disbursement-linked Targets 2011-2012, each exceed seventy (70) percent. (ii) In the event that any one or more of the Disbursement-linked Targets 2011-2012 are not achieved by June 1, 2012, or if any one or more of the other Disbursement-linked Targets are achieved prior to their scheduled completion, the Bank may agree to reschedule their timetable for approval. Page 21 -20- (i) A ninth withdrawal shall be made on or about December 1, 2012, in an amount not exceeding $1,000,000, in respect of payments made by the Borrower in the first semester of the FY 2012-2013 for Grants for Community Schools and Grants for the ECC, subject to submission to the Bank of: (i) the IFR for the quarter ended September 30, 2012; and (ii) a budget execution report, satisfactory to the Bank, showing actual expenditures under the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2012-2013. (j) (i) A tenth withdrawal shall be made on or about June 1, 2013, in an amount not exceeding $180,000 for each Disbursement-linked Target 2012-2013 achieved pursuant to subparagraph (B) below, in respect of payments made by the Borrower in the previous FY for Grants for Community Schools and Grants for the ECC (other than those payments already reimbursed by the Bank under the preceding paragraph), subject to submission to the Bank of: (A) the IFR for the quarter ended March 31, 2013; (B) evidence, satisfactory to the Bank, that one or more of the following Disbursement-linked Targets 2012-2013 have been achieved: 1. at least 30% of early childhood parenting education and support programs accredited according to the accreditation system approved pursuant to the first Disbursement-linked Target 2010-2011; 2. 30% of health centers offering well-child clinics are accredited according to the accreditation system approved pursuant to the third Disbursement-linked Target 2009-2010; 3. all fourteen parishes of the Borrower have at least one full-time child development therapist on staff with the regional health authorities; 4. at least 85% of ECIs (denominator 2747) have received a complete inspection by an ECC trained inspectors in the FY 2012-2013. An inspection will be considered complete if: (i) the ECI was inspected with regard to all of the standards; and (ii) the full inspection report was submitted to the legal and regulatory sub-committee of the ECC; 5. at least 25% of ECIs (denominator 2747) are registered with the ECC and their registration has been published in the Borrower’s Official Gazette; Page 22 -21- 6. at least 50% of early childhood practitioners receiving salaries from the ME (or other agency acceptable to the Bank at the time responsible for the financial support function for ECIs) are licensed by the ME (or other agency acceptable to the Bank at the time responsible for the licensing function); 7. at least 50% of early childhood practitioners receiving salaries from the ME (or other agency acceptable to the Bank at the time responsible for the financial support function for ECIs) are at level II (according to the OCF) or above; 8. at least 25% of ECIs for children ages three and above have at least one level III or level IV (according to the OCF) academic trained teacher; and 9. the ECC has drafted, costed, finalized and approved a National Strategic Plan for Early Childhood 2013-2017 that is acceptable to the Bank; and (C) a budget execution report, satisfactory to the Bank, showing that the budget execution rates under: (1) the Borrower’s budget lines for Grants for Community Schools and Grants for the ECC for the FY 2012-2013; and (2) the ECC’s and Participating Entities’ budget lines for expenditures necessary to meet the Disbursement-linked Targets 2012-2013, each exceed seventy (70) percent. (ii) In the event that any one or more of the Disbursement-linked Targets 2012-2013 are not achieved by June 1, 2013, or if any one or more of the other Disbursement-linked Targets are achieved prior to their scheduled completion, the Bank may agree to reschedule their timetable for approval. 2. The Closing Date is September 30, 2013. Page 23 -22- SCHEDULE 3 Amortization Schedule 1. 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”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date. Principal Payment Date Installment Share (Expressed as a Percentage) On each April 15 and October 15 Beginning October 15, 2013 through April 15, 2038 2% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date. 3. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub- paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. Page 24 -23- 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. “Disbursement-linked Targets” means, collectively, the Disbursement-linked Targets 2008-2009, Disbursement-linked Targets 2009-2010, Disbursement-linked Targets 2010- 2011, Disbursement-linked Targets 2011-2012 and Disbursement-linked Targets 2012- 2013; and “Disbursement-linked Target” individually means any one of such targets. 5. “Disbursement-linked Targets 2008-2009” means collectively the nine targets set forth in Section IV.B.2 (b) (i) (B) of Schedule 2 to this Agreement; and “Disbursement-linked Target 2008-2009” individually means any one of such targets. 6. “Disbursement-linked Targets 2009-2010” means collectively the nine targets set forth in Section IV.B.2. (d) (i) (B) of Schedule 2 to this Agreement; and “Disbursement-linked Target 2009-2010” individually means any one of such targets. 7. “Disbursement-linked Targets 2010-2011” means collectively the nine targets set forth in Section IV.B.2. (f) (i) (B) of Schedule 2 to this Agreement; and “Disbursement-linked Target 2010-2011” individually means any one of such targets. 8. “Disbursement-linked Targets 2011-2012” means collectively the nine targets set forth in Section IV.B.2. (h) (i) (B) of Schedule 2 to this Agreement; and “Disbursement-linked Target 2011-2012” individually means any one of such targets. 9. “Disbursement-linked Targets 2012-2013” means collectively the nine targets set forth in Section IV.B.2. (j) (i) (B) of Schedule 2 to this Agreement; and “Disbursement-linked Target 2012-2013” individually means any one of such targets. 10. “ECI” means an early childhood institution as defined in the Early Childhood Act. 11. “Early Childhood Act” means the Borrower’s Early Childhood Act, 2005 (Act 5 of 2005), dated February 28, 2005. 12. “FY” means the fiscal year of the Borrower (April 1-March 31). Page 25 -24- 13. “FY Semester” means a semester of the fiscal year of the Borrower (April 1-September 30 or October 1-March 31). 14. “General Conditions” means the “International Bank for Reconstruction and Development General Conditions for Loans”, dated July 1, 2005 (as amended through February 12, 2008). 15. “Grants for Community Schools” means payments made by the Borrower for salaries (or a portion thereof) of early childhood development practitioners, which grants are included in the Borrower’s budget for the relevant FY as a separate budget line, all in accordance with the NSP. 16. “Grants for the ECC” means payments made by the Borrower for: (i) salaries and travel expenses and subsistence of ECC staff; (ii) rental of property by the ECC; and (iii) public utility services for the ECC; which grants are included in the Borrower’s budget for the relevant FY as a separate budget line, all in accordance with the NSP. 17. “HEART/NTA” means the Borrower’s National Training Agency, a department of the HEART Trust. 18. “HEART Trust” means the Human Employment and Resource Training Trust established pursuant to the Borrower’s Human Employment and Resource Training Act dated September 1, 1982, as amended to the date of this Agreement. 19. “IFR” means the interim unaudited financial reports referred to in Section II.B.2 of Schedule 2 to this Agreement. 20. “ME” means the Borrower’s Ministry of Education. 21. “MFPS” means the Borrower’s Ministry of Finance and the Public Service. 22. “MH” means the Borrower’s Ministry of Health. 23. “MLSS” means the Borrower’s Ministry of Labor and Social Security. 24. “MOU” means any of the Memoranda of Understanding to be entered into between the Project Implementing Entity and each of the Participating Entities pursuant to Section I.A.1 (d) of the Schedule to the Project Agreement. 25. “NCTVET” means the Borrower’s National Council on Technical and Vocational Education and Training, a department of the HEART Trust. 26. “NSP” means the Borrower’s Early Childhood Development National Strategic Plan for the period 2008-2012 adopted pursuant to the NSP Cabinet Decision. 27. “NSP Cabinet Decision” means Cabinet Decision No. 12/08 of the Borrower, dated April 7, 2008, approving the NSP. Page 26 -25- 28. “Occupational Certification Framework” or “OCF” means the Borrower’s five-level framework of occupational certification established by the HEART Trust (through the HEART/NTA) in Jamaica 1994 and subsequently adopted by the Caribbean Community (CARICOM) in 2002. 29. “Participating Entities” means, collectively, the ME, the MH, the MLSS, the MFPS, the PIoJ, and the HEART Trust; and “Participating Entity” means each one of them individually. 30. “PATH” means the Borrower’s Program of Advancement through Health and Education. 31. “PIoJ” means the Planning Institute of Jamaica. 32. “Procurement Guidelines” means the “Guidelines: Procurement under IBRD Loans and IDA Credits” published by the Bank in May 2004 and revised in October 2006. 33. “Procurement Plan” means the Borrower’s procurement plan for the Project, dated April 1, 2008 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. 34. “Project Implementing Entity” or “ECC” means the Borrower’s Early Childhood Commission, a body corporate established pursuant to the Project Implementing Entity’s Legislation. 35. “Project Implementing Entity’s Legislation” means the Borrower’s Early Childhood Commission Act, 2003 (Act 2 of 2003), dated March 3, 2003. 36. “Project Operational Manual” means the manual, including all appendices and schedules thereto, satisfactory to the Bank and adopted by the Project Implementing Entity, which sets forth the policies and procedures that apply to the carrying out of the Project, which include, inter alia: (a) the roles and responsibilities of each of the agencies or entities involved in Project implementation, including the ECC and the Participating Entities; (b) the staffing requirements for the Project; (c) the estimated implementation schedule; (d) the procedures for accessing, disbursing and accounting for funds under the Project; (e) the indicators to be used in the monitoring and evaluation of the Project; (f) the procedures for Project monitoring, supervision and evaluation, including the format and content of the Project Reports; (g) procurement and financial management procedures for the Project; and (h) basic construction rules for contractors performing minor works under the Project, detailing provisions to minimize dust, noise and other nuisances, safeguard worker health and safety, and require adequate disposal of any construction materials. 37. “Subsidiary Agreement” means the agreement referred to in Section I.A of Schedule 2 to this Agreement pursuant to which the Borrower shall make part of the proceeds of the Loan available to the Project Implementing Entity.