CUMENTS LOAN NUMBER 8424-CN Lolan Agreement (Zhejiang Rural Water Supply and Sanitation Project) between PEOPLE'S REPUBLIC OF CHINA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT D ited Ao %4^V" - 2014 LOAN NUMBER 8424-CN LOAN AGREEMENT AGREEMENT dated pres*,b >-, 2014, 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; DEFIN'ITIONS 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 the Loan 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 two hundred million dollars ($200,000,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.07 of this Agreement ("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 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 the Reference Rate 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 Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non- payment continues for a period of thirty days, then the interest payable by the Borrower shall instead be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(e) of the General Conditions. 2.05. The Payment Dates are March 15 and September 15 in each year. -2- 2.06. The principal amount ol the Loan shall be repaid in accordance with the amortization schedule set brth in Schedule 3 to this Agreement. 2.07. (a) The Borrower ma r at any time request any of the following Conversions of the terms of th; Loan. in order to facilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a cl.ange of the interest rate basis applicable to: (A) all or any portion of i he principal amount of the Loan withdrawn and outstanding from i Variable Rate to a Fixed Rate, or vice versa; or (B) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Reference Rate and the Variable Spread t4 a Variable Rate based on a Fixed Reference Rate and the Variable Spre d, or vice versa; or (C) all of the principal amount of the Loan withdra vn and outstanding from a Variable Rate based on a Variable Spread to a Variable Rate based on a Fixed Spread; and (iii) the setting of limits oi the Variable Rate or the Reference Rate applicable to all or any portior of the principal amount of the Loan withdrawn and outstanding by,thc establishment of an hiterest Rate Cap or Interest Rate Collar on the Vari ible Rate or the Reference Rate. (b) Any conversion roquested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a "Conversion", as defined in the General Cc nditions, and shall be effected in accordance with the provisions of Arti, le IV of the General Conditions and of the Conversion Guidelines. (c) Promptly followi ig the Execution Date for an Interest Rate Cap or Interest Rate Co lar for which the Borrower has requested that the premium be paid out of the proceeds of the Loan, the Bank shall, on behalf of the Boi rower, withdraw from the Loan Account and pay to itself the amount, required to pay any premium payable in accordance with Section 4.05 (c) of the General Conditions up to the amount allocated from tin e to time for the purpose in the table in Section IV of Schedule 2 to this Agreement. AR rICLE M - PROJECT 3.01. The Borrower declares it. commitment to the objectives of the Project. To this end, the Borrower shall c ause the Project Implementing Entity to carry out the Project in accordance wit ithe provisions of Article V of the General Conditions and the Project Agreemen t. 3.02. Without limitation upon he provisions of Section 3.01 of this Agreement, and except as the Borrower a ad the Bank shall otherwise agree, the Borrower shall -3- ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - EFFECTIVENESS; TERMINATION 4.01. The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement. ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Borrower's Representative is its Minister of Finance. 5.02. The Borrower's Address is: Ministry of Finance Sanlihe Beijing 100820 People's Republic of China Facsimile: (86-10) 6855-1125 5.03. 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) -4- AGREED at Beijing, Pople's Republic of China, as of the day and year first above written. PEOPLE'S REPUBLIC OF CHINA By Authorized Representative Name: Lot, It. Title: INTERNATIONAL BANK FOR / s- RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: Title: C,A/ -5- SCHEDULE 1 Project Description The objective of the Project is to improve access to sustainable water supply and sanitation services in selected villages and towns in rural areas of Zhejiang Province. The Project consists of the following parts: Part 1. Improving Water Supply and Sanitation Improvement of drinking water services and sanitary services through the carrying out of Subprojects consisting of, inter alia, investments in rehabilitation and construction of water mains, water channels and ponds, distribution networks, pumping stations, water treatment plants, wastewater and storm water collection networks, septic tanks, toilets, end-of-pipe small scale domestic wastewater treatment facilities and municipal wastewater treatment plants in: (a) Anji County; (b) Fuyang City (inicluding the Fuyang WWTP Subproject - Phase 4); (c) Tiantai County; and (d) Longquan City. Part 2. Training and Capacity Building (a) Provision of technical assistance, training and carrying out of capacity building activities aimed at improving the implementation, efficiency, operation and maintenance performance of water supply and sanitation investments under the Project. (b) Provision of technical assistance and implementation of a program to monitor and evaluate the performance of Project-supported small scale end-of-pipe wastewater treatment facilities, aimed at improving the operational efficiency of Project investments. Part 3. Project Management and Supervision Provision of technical support, including training and capacity building activities, to the Project Implementing Entity, Project Participants and Project Companies to coordinate and manage the implementation of the Project, including on: (a) financial management, procurement, contract supervision. and reporting; (b) outcome monitoring and evaluation; (c) construction supervision; and (d) the supervision of Safeguards Instruments implementation. -6- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Financing Arrangemen :s 1. For the purposes of carry Eng out of the Project, the Borrower shall make available to the Project Implement ng Entity the proceeds of the Loan allocated from time to time to the Categories set forth in the table in Section IV of this Schedule, on the following principal te rms: (a) The principal ar iount shall be made available in Dollars or any other Currency as the Loan may be converted from time to time through a Currency Convei sion (such principal amount determined on the date, or respective dates, of withdrawal from the Loan Account) of the value of the currency or c Trrencies so withdrawn. (b) The principal an ount so made available (including an amount equal to the fee paid pursi tant to Section 2.03 of this Agreement and any premium for Interest Rate Caps or Interest Rate Collars paid pursuant to Section 2.07(c) of this Agreement and Section 4.05(c) of the General Conditions) shall be recovere over a period of twenty five (25) years, inclusive of a grace period of s: x (6) years. (c) Interest shall be charged on such principal amount withdrawn and outstanding fron time to time at a rate equal to the rate of interest applicable from :ime to time to the Loan pursuant to the provisions of Section 2.04 of ti s Agreement. 2. The Borrower shall cat se the Project Implementing Entity to: (a) manage, operate, monitor, transfei and reconcile the proceeds of the Loan made available to it pursuant to parag -aph 1 above in accordance with arrangements and procedures satisfactory :o the Bank; (b) take all required actions, including provision of timely cons4 pts and approvals as may be necessary, to facilitate the utilization of said Loan -roceeds and the implementation of the Project, and to comply with its undertal ings under the Project Agreement; and (c) maintain all relevant records and doc iments related to the Loan and the Project and provide promptly such document and records, including all other information, as may be requested by the Borrow r or the Bank from time to time. B. Anti-Corruption The Borrower shall ensu e that the Project is carried out in accordance with the provisions of the Anti-Cc rruption Guidelines. -7- C. Safeguards 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.C of the Schedule to the Project Agreement. Section 11. Project Monitoring, Reporting. Evaluation A. Project Reports 1. The Borrower shall monitor and evaluate the progress of the Project and cause the Project Implementing Entity to prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of the indicators set forth in the Operations Manual. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the Bank not later than sixty (60) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits I. 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 cause the Project Implementing Entity to prepare and furnish to the Bank, as part of the Project Report, not later than sixty (60) days after the end of each calendar semester, interim unaudited financial reports for the Project covering the semester, in form and substance satisfactory to the Bank. 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 fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six (6) months after.the end of such period. The Borrower shall make, or cause the Project Implementing Entity to make, the audited Financial Statements, publicly available in a timely fashion and in a manner acceptable to the Bank. Section III. Procurement A. General 1. Goods, Works and Non-consulting Services. All goods, works, and non- consulting 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 -8- referred to in Section I o 'the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the pi oceeds of the Loan shall be procured in accordance with the requirements set for h or referred to in Sections I and IV of the Consultant Guidelines and with the >rovisions of this Section. 3. Definitions. The capi alized terms used below in this Section to describe particular procurement i iethods or methods of review by the Bank of particular contracts refer to the cor esponding method described in Sections II and W of the Procurement Guideline:, or Sections II, m, IV and V of the Consultant Guidelines, as the case n ay be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1. International Competi ive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The followi ig methods, other than National Competitive Bidding, may be used for procu -ement of goods, works and non-consulting services for those contracts specil ed in the Procurement Plan: (a) National Competitive Bidding, subject to tho additional provisions set forth in the box below; (b) Direct Contracting; (c) 3hopping; and (d) Framework Agreements. The procedures appli able to the procurement of goods, works, and non- consulting services inder contracts awarded on the basis of National Competitive Bidding (;NCB") shall be the open tendering procedures set forth in the Borrower's. La)N on Tendering and Bidding promulgated by its Order No. 21 dated August 30, i999; provided, however, that such procedures shall be subject to the provisio: is of Section I, Paragraphs 3.3 and 3.4 of Section II, and Appendix 1 of the Pro,-urement Guidelines, and the additional provisions in the following. In the event of a conflict between the Borrower's procedures and these NCB Procedure Aodifications, the latter shall govern. (i) Eligibility to I articipate in a procurement process and to be awarded a Bank-financec contract shall be as defined under Section I of the Procurement 3uidelines; accordingly, no bidder or potential bidder shall be decl red ineligible for such contract for reasons other than those provide d in Section I of the Procurement Guidelines. No restriction bas ed on nationality of bidders and/or origin of goods shall apply, and f reign bidders shall be allowed to participate in NCB without appli ation of restrictive conditions. (i i) All invitations to prequalify or bid shall be advertised in a national newspaper of wide circulation in the Borrower's country, or on a widely used website / electronic portal with free national and international access acceptable to the Bank except for goods or non-consulting services contracts that are estimated to cost less than $300,000 equivalent each, or works contracts that are estimated to cost less than $2,000,000 each, which may be advertised in a provincial daily newspaper. Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum of thirty (30) days shall be given to bidders between the date of such advertisement (or. the date of availability of bidding documents, whichever is later) and the deadline for the submission of bids, and the advertisement and bidding documents shall specify the deadline for the submission of bids. In the case of such advertisement on a website / electronic portal, the notice shall remain readily accessible nationally and internationally until at least the deadline for the submission of bids. Potential bidders shall be allowed to inspect and purchase bidding documents at any time prior to the deadline for the submission of bids. (iii) Standard Bidding Documents acceptable to the Bank shall be used. (iv) Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents. (v) Prequalification procedures and documents acceptable to the Bank shall be used for large, complex and/or specialized works. Verification of the information upon which a bidder was prequalified, including current commitments, shall be carried out at the time of contract award, along with the bidder's capability with respect to personnel and equipment. All bidders that meet the qualification criteria set out in the pre- qualification documents shall be allowed to bid, and there shall be no limit on the number of pre-qualified bidders. Where pre-qualification is not used, the qualification of the bidder who is recommended for award of contract shall be assessed by post-qualification, applying the qualification criteria stated in the bidding documents. (vi) Registration shall not be used to assess bidders' qualifications. A bidder shall not be required to register as a condition for inspecting or purchasing bidding documents, submitting its bid or receiving contract award. A bidder determined to be the lowest evaluated responsive bidder, shall be given reasonable opportunity of registering (if required) before contract signing without any let or hindrance. Bidding shall not be restricted to any particular class of contractors, and non-classified - 10 - contractors shal also be eligible to bid. (vii) No margins of 1ireference of any sort shall be given to bidders, such as on the basis oft ieir location, place of incorporation, or affinity with the geographical ar a in which the Project activities will take place. (viii) All bidders % ho are awarded contracts for works and single- responsibility ontracts shall be required to provide performance security in an a nount sufficient to protect the Borrower or the Project Implementing E rtity / Entities, as the case may be, in case of breach of contract by the :ontractor, and the bidding documents shall specify the required form .nd amount of such security and any other potential damages for suc h breach. (ix) Bidders shall be allowed to submit bids by mail or in person. (x) All bids shall >e opened in public; all bidders shall be offered an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be pi esent at the bid opening. (xi) All bid evaluatin criteria shall be disclosed in the bidding documents and quantified i a monetary terms or expressed in the form of pass/fail requirements. (xii) No bid may be rejected solely on the basis that the bid price exceeds any cost estimate or falls outside any margin or bracket of prices or average bids es ablished by the Borrower or the Project Implementing Entity / Entities as the case may be. Rejection of all bids or re-bidding shall not be allo wed solely because the number of bids is less than three (3), and rejecti(-n of all bids or rebidding shall not take place without the Bank's prioi written agreement. (xiii) Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and r -sources and whose bid has been determined: (A) to be substantially re, ponsive to the bidding documents; and (B) to offer the lowest evaluate I cost. The winning bidder shall not be required, as a condition of avy ard, to undertake responsibilities for work or to assume other obligatior s not stipulated in the bidding documents or otherwise to modify the 1 hid as originally submitted. No negotiations shall be permitted excer t with the Bank's no-objection. (xiv) In accordance with the Procurement Guidelines, each bidding document and contract s iall include provisions stating the Bank's policy to sanction firms or individuals found to have engaged in fraud and - 11 - corruption as set forth in the Procurement Guidelines. (xv) In accordance with the Procurement Guidelines, each bidding document and contract shall include provisions stating the Bank's policy with respect to inspection and audit of accounts, records and other documents relating to the submission of bids and contract performance. (xvi) Government-owned enterprises in the Borrower's country may be permitted to bid or submit a proposal of goods, works, or non- consulting services if they can establish that they: (A) are legally and financially autonomous; (B) operate under commercial law; and (C) are not a dependent agency of the agency conducting the procurement. (xvii) Matters such as subcontracting, joint venture relationships and assignment of contract shall be handled in accordance with the bidding documents. (xviii) The results of bid evaluation and contract award shall be published in the national or provincial press (as provided under paragraph (ii) above) or official gazette or a free and open-access website and shall identify: (A) the name of each bidder who submitted a bid; (B) bid prices as read out at bid opening; (C) the name of the bidder, and the evaluated price, of each bid that was evaluated; (D) the names of bidders whose bids were either rejected as non-responsive or not meeting qualification criteria, or not evaluated, with the reasons therefor; and (E) the name of the winning bidder and the final total contract price, as well as the duration and summary scope of the contract. Such publication shall be within two (2) weeks of receiving the Bank's no-objection to the award recommendation for contracts subject to the Bank's prior review, and within two (2) weeks of the Borrower or the Project Implementing Entity's award decision for contracts subject to the Bank's post review. The bidding documents shall disclose the newspaper in which and / or the electronic means by which the information on contract award will be published. (xix) The Borrower or the Project Implementing Entity / Entities, as the case may be, shall have in place an effective and independent protest mechanism for bidders to protest. The bidding documents shall provide the professional title and address of the official to whom such protests should be sent. - 12 - C. Particular Methods of Procurement of Consultants' Services Quality- and Cost-b ased 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 P -ocurement of Consultants' Services. The following table specifies the methods of procurement, other than Quality- and Cost-based Selection, which ma3 be used for consultants' services. The Procurement Plan shall specify the circu mnstances under which such methods may be used: Procurement Mf thods (a) Quality-Ba, ed Selection (b) Selection B ised on the Consultants' Qualifications (c) Selection oJ Individual Consultants (d) Single Sour :e Selection (Firm and Individual) D. Review by the Bank if 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 or Loan Proceeds A. General 1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article H 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 par; tgraph 2 below. 2. The following table sp(cifies the categories of Eligible Expenditures that may be financed out of the pi oceeds of the Loan ("Category"), the allocation of the amounts of the Loan tc each Category, and the percentage of expenditures to be financed for Eligible E? penditures in each Category. - 13 - Amount of Percentage of Category the Loan Allocated Expenditures to be (Expressed in Financed Dollars) (inclusive of Taxes) (1) Works for Subprojects under: (a) Part 1(a) of the Project 53,210,000 (Anji County) (b) Part 1(b) of the Project 35,670,000 (Fuyang City) 85% (c) Part 1(c) of the Project 43,540,000 (Tiantai County) (d) Part 1(d) of the Project 38,700,000 (Longquan City) (2). Goods for the Fuyang WWTP 22,380,000 100% Subproject - Phase 4 (under Part 1(b) of the Project) (3) Goods (except for those covered 6,000,000 100% under Category (2) herein), consultants' services, non- consulting services and Training (4) 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 (5) Interest Rate Cap or Interest 0 Amount due pursuant to Rate Collar premium Section 2.07(c) of this Agreement TOTAL AMOUNT 200,000,000 -14- B. Withdrawal Conditions; Wi :hdrawal Period 1. Notwithstanding the provisior s of Part A of this Section, no withdrawal shall be made: (a) for payments made -rior to the date of this Agreement, except that withdrawals up to a i aggregate amount not to exceed $20,000,000 equivalent may be m de for payments made prior to this date but on or after May 15, 2014, fc r Eligible Expenditures; (b) under each of Categc ries (1)(a) through (1)(d), and (2), until the Bank shall have notified th Borrower and the Project Implementing Entity of its receipt of a copy of the Subsidiary Loan Agreement enteed into between the Project Participant concerned and its Respective Project Company, satisfactor3 to the Bank and in accordance with the provisions of Section I.E. 1 of the Schedule to the Project Agreement; and (c) under Category (1)(b until the Bank shall have notified the Borrower and the Project Impl -menting Entity of its receipt of a copy of the environmental acceptance certification issued by the competent Environment Protccti,n Department, satisfactory to the Bank, regarding the Fuyang WWTP pk ase 3 expansion. 2. The Closing Date is Decembei 31, 2020. - 15 - SCHEDULE 3 Amortization 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"). 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, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) 15 March 2021 1.61 15 September 2021 1.65 15 March 2022 1.69 15 September 2022 1.73 15 March 2023 1.78 15 September 2023 1.82 15 March 2024 1.87 15 September 2024 1.91 15 March 2025 1.96 15 September 2025 2.01 15 March 2026 2.06 15 September 2026 2.11 15 March 2027 2.17 15 September 2027 2.22 15 March 2028 2.27 15 September 2028 2.33 15 March 2029 2.39 15 September 2029 2.45 15 March 2030 2.51 15 September 2030 .2.57- 15 March 2031 2.64 15 September 2031 2.70 15 March 2032 2.77 15 September 2032 2.84 15 March 2033 2.91 15 September 2033 2.98 15 March 2034 3.06 15 September 2034 3.14 -16- 15 March 2035 3.21 15 September 2035 3.29 15 March 2036 3.38 15 September 2036 3.46 15 March 2037 3.55 15 September 2037 3.64 15 March 2038 3.73 15 September 2038 3.82 15 March 2039 3.92 15 September 2039 3.85 2. If the proceeds of the Loan I iave not been fully withdrawn as of the first Principal Payment Date, the principa. amount of the Loan repayable by the Borrower on each Principal Payment Dat. 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 Bi lance as of such date in accordance with paragraph I of this Schedule. (b) Any amount withdi awn after the first Principal Payment Date shall be repaid on each Pri icipal Payment Date falling after the date of such withdrawal in amc unts determined by the Bank by multiplying the amount of each suci withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph I of this Schedule for said Pi incipal Payment Date ("Original Installment Share") and the denominator of which is the sum of all remaining Original Installment Shares :or Principal Payment Dates falling on or after such date, such amounts -epayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. 3. (a) Amounts of the Loa 1 withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts p iyable on any Principal Payment Date, be treated as withdrawn and ou standing on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment I late commencing with the second Principal Payment Date following the c ate of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the BE nk adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of sucl sub-paragraph shall no longer apply to any withdrawals made a ter the adoption of such billing system. -17- 4. Notwithstanding the provisions of paragraphs I and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. -18- APPENDIX Definitions 1. "Anti-Corruption Guidelines " means the "Guidelines on Preventing and Combating Fraud and Corrup:ion in Projects Financed by IBRD Loans and IDA Credits and Grants", dated Oc:ober 15, 2006 and revised in January 2011. 2. "Category" means a category 3et forth in the table in Section IV of Schedule 2 to this Agreement. 3. "Consultant Guidelines" mea is the "Guidelines: Selection and Employment of Consultants under IBRD Lo,.ns and IDA Credits and Grants by World Bank Borrowers" dated January 2011. 4. The acronym "CPMO" mean s the Project management offices established and maintained by each Project Participant in accordance with the provisions of Section I.A.1(c) of the Schec ule to the Project Agreement, and any successors thereto. 5. "Dam Safety Action Plan" m -ans the Project Implementing Entity's plan, dated May 2014, setting forth the p -ovisions to be followed with regard to dam safety standards and dam manageme it under the Project. 6. "Displaced Persons" means persons who, on account of the execution of the Project, have experienced o.- would experience direct economic and social impacts caused by: (a) the in, oluntary 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 means of liveliht od, whether or not such persons must move to another location; or (b) the in foluntary restriction of access to legally designated parks and protected areas, res ilting in adverse impacts on the livelihood of such persons; and a "Displaced Per ion" means any of such Displaced Persons. 7. The acronym "EMP" means tie Borrower's plan dated May 2014, which set out the environmental protection measures in respect. of the Project, as well as administrative and monitorinE arrangements to ensure the implementation of said plan, as such plan may be re ised from time to time with the agreement of the Bank. 8. "Fiscal Year" means the fiscaL year of the Project Implementing Entity, covering the period January 1 through December 31. 9. "Fuyang WWTP" means Fuy; ng Municipality's wastewater treatment plant built in May 2000, located in No. (8 Jiangbindong Avenue, Fuyang City, including its three expansions as of June 2( 07. -19- 10. "Fuyang WWTP Subproject - Phase 4" means the fourth expansion of the Fuyang WWTP, to be financed as a Subproject under Part 1(b) of the Project, following the eligibility criteria, technical standards and procedures set forth in this Agreement, the Project Agreement and the Operations Manual. 11. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for Loans", dated March 12, 2012. 12. "Operations Manual" means the manual dated July 25, 2014, referred to in Section I.A.2 of the Schedule to the Project Agreement, prepared and adopted by the Project Implementing Entity, the Project Participants and Project Companies, and which sets forth the operational arrangements for the Project, including, inter alia: (a) the Project's performance indicators; (b) financial management, disbursement and audit procedures; (c) technical models and procurement procedures; (d) procedures for the selection, implementation and monitoring of Subprojects, including procurement procedures, monitoring arrangements, and technical and eligibility criteria; (e) safeguards procedures and safeguards instruments, including the RPF, RAPs, EMP and the Dam Safety Action Plan; and (f) provisions to be followed with regard to dam safety standards and dam management under the Project, as the same may be revised from time to time with the prior written agreement of the Bank. 13. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. 14. "Procurement Plan" means the Borrower's procurement plan for the Project, dated July 25, 2014, and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 15. The acronym "PPMO" means the Project management office established and maintained by the Project Implementing Entity in accordance with the provisions of Section I.A. 1(b) of the Schedule to the Project Agreement, and any successors thereto. 16. "Project Company" means, individually, each of the Project companies set forth in the second column of the table in Appendix 2 to this Agreement and identified also by the acronym set forth in the third column of the same table, which company is established and operating pursuant to its: (a) Charter issued on the date specified in said table; specifically, in the fifth column of the same row as the Project Company concerned; and (b) Business license issued by the relevant Municipal Industrial and Commercial Administration Bureau on the date and with the license -20- number specified in s id table; specifically, in the fifth and sixth columns of the same row as tho Project Company concerned, and any successor thereto; an i "Project Companies" means, collectively, all such companies. 17. "Project Implementing Entity' means the Borrower's Zhejiang Province and any successor thereto. 18. "Project Participants" means, collectively, the Borrower's municipalities and counties set forth in the fi -st column of the table in Appendix 2 to this Agreement, and any other nunicipalities or counties selected by agreement among the Borrower, Zhejia ig and the Bank and any successors thereto; and "Project Participant" means, i tdividually, any of such Project Participants. 19. "Provincial Leading Group" i aeans the provincial leading group established and maintained by the Project Iml lementing Entity in accordance with the provisions of Section I.A. 1 (a) of the Sol edule to the Project Agreement, and any successor thereto. 20. The acronym "RAPs" means, collectively, the following plans which set out the principles and procedures gov erning the acquisition of land and other assets, and the resettlement, compensat on and rehabilitation of Displaced Persons on account of Project execution, as well as monitoring and reporting arrangements to ensure compliance with sa d plans, as the same may be revised from time to time with the prior agreement of the Bank: (a) the four (4) resettlei ient action plans, all dated June 2014, for the carrying out of Subpi ojects under Part I of the Project in Anji County, Fuyuan City, Tiantai County and Longquan City; and (b) any resettlement actic n plans to be prepared by the Project Participants pursuant to Section 1,C.1(c) of the Schedule to the Project Agreement and agreed to by the I ank. The acronym "RAP" means, i idividually, any such plan. 21. "Resettlement Policy Framew irk" and the acronym "RPF" mean the resettlement policy framework dated June 2014, which framework sets out the policies and procedures for the acquis tion of land. and other assets, resettlement, compensation and rehabilitati )n of Displaced Persons, and for the preparation of resettlement action plans wh mever required during the implementation of the Project, as said framework n Lay be amended from time to time with the prior concurrence of the Bank. 22. "Respective Parts of the I roject" means in respect 6f: (a) each Project Participant, activities under tie Project to be carried out within its jurisdiction; -21- and (b) each Project Company, activities under the Project to be carried out by said Project Company within the jurisdiction of the Project Participant concerned. 23. "Respective Project Company" means in respect of each Project Participant, the Project Company set forth in the same row as the Project Participant, in the table in Appendix 2 to this Agreement, and any successor thereto acceptable to the Bank. 24. "Safeguards Instruments" means, collectively, the EMP, the RAPs and the RPF, and the Dam Safety Action Plan, and such term includes any annexes or schedules to such instruments. 25. "Subprojects" means any of the activities under Part 1 of the Project, to be carried out by the Project Participants and/or the Project Companies, all under terms and conditions acceptable to the Bank, and in accordance with the eligibility criteria, technical standards and procedures set forth to that effect in the Operations Manual. 26. "Subsidiary Loan Agreements" means, collectively, the agreements to be entered into between each Project Participant and its Respective Project Company pursuant to Section LE.1 of the Schedule to the Project Agreement and Section IV.B.1(b) of Schedule 2 to this Agreement, as the same may be amended from time to time, and such term includes all schedules and agreements suppleiental to said agreements; and "Subsidiary Loan Agreement" means, individually, any of said Subsidiary Loan Agreements. 27. "Training" means the costs of training activities under the Project, based on annual work plans and budgets approved by the Bank, and attributable to seminars, workshops, and domestic and overseas study trips, 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 28. "Zhejiang" means the Borrower's Province of Zhejiang, and any successor thereto.