CREDIT NUMBER 6843-FJ Financing Agreement (Fiji Recovery and Resilience First Development Policy Financing) Between REPUBLIC OF FIJI and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 6843-FJ FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between REPUBLIC OF FIJI (“Recipient”) and INTERNATIONAL DEVELOPMENT ASSOCIATION (“Association”) for the purpose of providing financing in support of the Program (as defined in the Appendix to this Agreement). The Association has decided to provide this financing on the basis, inter alia, of: (i) the actions which the Recipient has already taken under the Program and which are described in Section I of Schedule 1 to this Agreement; and (ii) the Recipient’s maintenance of an adequate macroeconomic policy framework. The Recipient and the Association therefore hereby agree as follows: ARTICLE I — GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II — FINANCING 2.01. The Association agrees to extend to the Recipient a credit, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to seventy-six million four hundred thousand Special Drawing Rights (SDR 76,400,000) (variously, “Credit” and “Financing). 2.02. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.03. The Service Charge is three-fourths of one percent (3/4 of 1%) per annum on the Withdrawn Credit Balance. 2.04. The Payment Dates are February 15 and August 15 in each year. 2.05. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 2 to this Agreement. -2- 2.06. The Payment Currency is Dollar. 2.07. Without limitation upon the provisions of Section 5.05 of the General Conditions, the Recipient shall promptly furnish to the Association such information relating to the provisions of this Article II as the Association may, from time to time, reasonably request. ARTICLE III — PROGRAM 3.01. The Recipient declares its commitment to the Program and its implementation. To this end, and further to Section 5.05 of the General Conditions: (a) the Recipient and the Association shall from time to time, at the request of either party, exchange views on the Recipient’s macroeconomic policy framework and the progress achieved in carrying out the Program; (b) prior to each such exchange of views, the Recipient shall furnish to the Association for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Association shall reasonably request; and (c) without limitation upon the provisions of paragraphs (a) and (b) of this Section, the Recipient shall promptly inform the Association of any situation that would have the effect of materially reversing the objectives of the Program or any action taken under the Program, including any action specified in Section I of Schedule 1 to this Agreement. ARTICLE IV — REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension consists of the following: a situation has arisen which shall make it improbable that the Program, or a significant part of it, will be carried out. ARTICLE V — EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) The Association is satisfied with the progress achieved by the Recipient in carrying out the Program and with the adequacy of the Recipient’s macroeconomic policy framework. -3- (b) The Loan Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Financing Agreement) have been fulfilled. (c) The Cat-DDO Financing Agreement has been executed and delivered and all conditions precedent to its effectiveness (other than the effectiveness of this Financing Agreement) have been fulfilled. 5.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 5.03. For purposes of Section 10.05 (b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the Signature Date. ARTICLE VI — REPRESENTATIVE; ADDRESSES 6.01. The Recipient’s Representative is its Minister at the time responsible for finance. -4- 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient’s address is: Ministry of Economy Ro Lalabalavu House 370 Victoria Parade Suva, Fiji; and (b) the Recipient’s Electronic Address is: Facsimile: E-mail: 679-330-0834 dmu@economy.gov.fj 6.03. For purposes of Section 11.01 of the General Conditions: (a) The Association’s address is: International Development Association 818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association’s Electronic Address is: Telex: Facsimile: E-mail: 248423 (MCI) 1-202-477-6391 cdpngpacific@worldbank.org -5- AGREED as of the Signature Date. REPUBLIC OF FIJI By ____________________________________/s1/ Authorized Representative Hon. Aiyaz Sayed-Khaiyum Name: _____________________________/n1/ Attorney General & Minister for Economy Title: ______________________________/t1/ 28-Apr-2021 Date: ______________________________/d1/ INTERNATIONAL DEVELOPMENT ASSOCIATION By ____________________________________/s2/ Authorized Representative Paul Vallely Name: _____________________________/n2/ Acting Country Director, PNG and Pacific Title: ______________________________/t2/ 26-Apr-2021 Date: _____________________________/d2/ -6- SCHEDULE 1 Program Actions; Availability of Financing Proceeds Section I. Actions Taken under the Program The actions taken by the Recipient under the Program include the following: 1. To improve the efficiency of payment systems and foster digital solutions, the Recipient, through its Cabinet, has approved the National Payment System Bill 2020, as evidenced by: (a) the National Payment System Bill 2020; and (b) the letter from the Ministry of Economy of the Recipient to the International Bank for Reconstruction and Development, dated February 11, 2021, confirming the Cabinet approval of the National Payment System Bill 2020. 2. To develop wholesale corporate bonds market, the Recipient, through its Ministry of Economy, has approved the Companies (Wholesale Corporate Bonds) Regulations 2021, as evidenced by: (a) the Companies (Wholesale Corporate Bonds) Regulations 2021; and (b) the Government of Fiji Gazette Supplement No. 5, dated January 22, 2021. 3. To enhance resilience of coastal communities by protecting marine ecosystems the Recipient, through its Cabinet, has approved the National Ocean Policy 2020-2030, as evidenced by: (a) the National Ocean Policy 2020-2030; and (b) the letter from the Ministry of Economy of the Recipient to the International Bank for Reconstruction and Development, dated February 11, 2021, confirming the approval of the National Ocean Policy 2020-2030. 4. To improve the resilience of buildings to climate risks by specifying minimum requirements of structural materials, the Recipient, through its Ministry of Commerce, Trade, Tourism and Transport, has approved the Fiji Standard AS/NZS 4671 for Steel Reinforcing Materials, as evidenced by the Government of Fiji Gazette Supplement No. 4, dated January 20, 2021. 5. To better target social assistance programs and improve socioeconomic and climate resilience of the poor and vulnerable, the Recipient, through its Cabinet, has approved the Social Assistance Policy: Protecting the Poor and Vulnerable, as evidenced by: (a) the Social Assistance Policy: Protecting the Poor and Vulnerable; and (b) the letter from the Ministry of Economy of the Recipient to the International Bank for Reconstruction and Development, dated February 11, 2021, confirming the Cabinet approval of the Social Assistance Policy: Protecting the Poor and Vulnerable. -7- 6. To improve debt management, the Recipient, through its Cabinet, has approved Fiji’s first Medium Term Debt Management Strategy Fiscal Year 2021-2023 and made it publicly accessible on the Ministry of Economy's website, as evidenced by: (a) the Medium Term Debt Management Strategy Fiscal Year 2021-2023; and (b) the letter from the Ministry of Economy of the Recipient to the International Bank for Reconstruction and Development dated, February 11, 2021, confirming the Cabinet approval of the Medium Term Debt Management Strategy Fiscal Year 2021-2023. 7. To strengthen public financial management, the Recipient, through its Cabinet has: (i) approved the Financial Management (Amendment) Bill 2021; (ii) applied Gender Responsive Budgeting principles in its FY2020-2021 budget process with regard to two pilot ministries, namely, the Ministry of Commerce, Trade, Tourism and Transport and the Ministry of Fisheries; and (iii) agreed that Gender Responsive Budgeting principles will be rolled out to other ministries in the future; as evidenced by: (a) the Financial Management (Amendment) Bill 2021; and (b) the letter from the Ministry of Economy of the Recipient to the International Bank for Reconstruction and Development, dated February 11, 2021, 2021. Section II. Availability of Financing Proceeds A. General. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of this Section and such additional instructions as the Association may specify by notice to the Recipient. B. Allocation of Financing Amounts. The Financing is allocated in a single withdrawal tranche, from which the Recipient may make withdrawals of the Financing proceeds. The allocation of the amounts of the Financing to this end is set out in the table below: Allocations Amount of the Financing Allocated (expressed in SDR) (1) Single Withdrawal Tranche 76,400,000 TOTAL AMOUNT 76,400,000 -8- C. Withdrawal Tranche Release Conditions No withdrawal shall be made of the Single Withdrawal Tranche unless the Association is satisfied: (a) with the Program being carried out by the Recipient; and (b) with the adequacy of the Recipient’s macroeconomic policy framework. D. Deposit of Financing Amounts The Recipient, within thirty (30) days after the withdrawal of the Financing from the Financing Account, shall report to the Association: (a) the exact sum received into the account referred to in Section 2.03 (a) of the General Conditions; (b) the details of the Recipient’s account to which the Financing proceeds will be credited; (c) the record that an equivalent amount has been accounted for in the Recipient’s budget management system; and (d) the statement of receipts and disbursement of the account referred to in Section 2.03 (a) of the General Conditions. E. Audit. Upon the Association’s request, the Recipient shall: 1. have the account referred to in Section 2.03 (a) of the General Conditions audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association; 2. furnish to the Association as soon as available, but in any case not later than nine (9) months after the end of the Recipient’s fiscal year, a certified copy of the report of such audit, of such scope and in such detail as the Association shall reasonably request, and make such report publicly available in a timely fashion and in a manner acceptable to the Association; and 3. furnish to the Association such other information concerning the account referred to in Section 2.03 (a) of the General Conditions and their audit as the Association shall reasonably request. F. Closing Date. The Closing Date is March 25, 2024. -9- SCHEDULE 2 Repayment Schedule Date Payment Due Principal Amount of the Credit repayable (expressed as a percentage) * On each February 15 and August 15: commencing August 15, 2031 to and 1% including February 15, 2041 commencing August 15, 2041 to and 2% including February 15, 2061 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.05 (b) of the General Conditions. -10- APPENDIX Definitions 1. “Cat-DDO Financing Agreement” means the financing agreement for the Program between the Recipient and the Association, with a Catastrophe Deferred Drawdown Option, dated the same date as this Agreement, as such financing agreement may be amended from time to time. “Cat-DDO Financing Agreement” includes all appendices, schedules and agreements supplemental to the Cat-DDO Financing Agreement. 2. “General Conditions” means the “International Development Association General Conditions for IDA Financing, Development Policy Financing”, dated December 14, 2018 (revised on August 1, 2020). 3. “Loan Agreement” means the loan agreement for the Program between the Recipient and the Bank, dated the same date as this Agreement, as such loan agreement may be amended from time to time. “Loan Agreement” includes all appendices, schedules and agreements supplemental to the Loan Agreement. 4. “Ministry of Commerce, Trade, Tourism and Transport” means the Recipient’s Ministry of Commerce, Trade, Tourism and Transport, or any successor thereto. 5. “Ministry of Economy” means the Recipient’s Ministry of Economy, or any successor thereto. 6. “Program” means: the program of objectives, policies, and actions set forth or referred to in the letter dated February 11, 2021 from the Recipient to the Association declaring the Recipient’s commitment to the execution of the Program, and requesting assistance from the Association in support of the Program during its execution and comprising actions taken, including those set forth in Section I of Schedule 1 to this Agreement, and actions to be taken consistent with the program’s objectives. 7. “Signature Date” means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to “the date of the Financing Agreement” in the General Conditions. 8. “Single Withdrawal Tranche” means the amount of the Financing allocated to the category entitled “Single Withdrawal Tranche” in the table set forth in Part B of Section II of Schedule 1 to this Agreement.