j )OFFICIAL TFOt 10l DOCUMENTS The World Bank Tel (Office): 02-236-6500 INTERNATIONAL BANK FOR RECON:;TRLICTIOr AND DEVELOPMENT Fax (Office): 02-236-6543 INTERNATIONAL DEVELOPMENT AS SOC ATION Mariam Sherman, Country Directcr msherman@wodbank.org P.O. Box 54842, Jerusdlem February 28, 2013 Mr. Junya Matsuura Anbassador for Palestinian Af'air; Representative of Japan to the Pal:stinian Authority Trust Fund Administration Arrangement between the Government of Japan and the Internaticnal'3ank for Reconstruction and Development and the International Dowelopment Association for the contribution to the Palestinian Recovery and )evelopment Plan Multi-Donor Trust Fund ("PRDP-TF") - Trusl Fund I o. TF071607 (Successor to TF 071011) Dear Mr. Matsuura: We are pleascd to acbnowledl,e on behalf of the International Bank for Reconstruction aid Development ("IBRD" I and the International Development Association ("IDA") ((:,llectively, the "Bank") the in:ention of the Government of Japan (the "Donor") to make available as a grant the sun -quivalent to ten million US Dollars ($ 10,000,000) (the "Contribution") to the Pales,:inian Recovery and Development Plan Multi-Donor Trust Fund (,PRDP-TF") for the West BE.nk and 11aza (the "Project") in line with the terms and conditions s:,ecified in this Arraigement (the "Arrangement") and the "Standard Provisions Applicable to the Palestinian Recovery and De,lelor ment Plan Multi-Donor Trust Fund ("PRDP-TF") for the Vest Bank and Gaza"(the "Standtrd P -ovision") attached hereto as Annexl . The Donor tray from time to time make one or more additional contributions (each a "Supplemental Contr,bution"' to the PRDP-TF, by completing and submitting to the Bank a contribution letter in the fonnat as rroposed in Annex 3 to this Arrangement ("Contribution Letter"). By issuing the call o funds r,-ferred to in the Contribution Letter ("Call of Funds"), the Bank will be deemed to (i) a.knowle ige, on behalf of the Bank, the intention of the Donor to r:ake a Supplemen:al Conribitior and (ii) consent to administer such Supplemental Contribution under the terms and conditions in the Annexes to this Arrangement. In response to the Call of Funds sent by the Bank, a id upon receipt of the Supplemental Contribution into the account designated by the Ba ik i.nder the Call of Funds, the term "Contribution" or 'Contribution funds" will be .eeried to include such Supplemental Contribution. The Contribution wil' be usec to finance the activities and the categories of expenditure i-i Section 1 (Objeclives) and Secticn 2 (Eligible Expenditures) of the "Standard Provisions Applicable to the Palestinian Ilecoveri and Development Plan Multi-Donor Trust Fund ("PRDP- TF") for the West Bank and 3aza" (t ie "Standard Provisions") attached hereto as Annex I and subject to Annex 2 (Items not eligible for financing under the PRDP-TF). -2- The Contribution will be edmiiiistered by the Bank on behalf of the Donor in line with the terms of this Arrangement ind the :tandard Provisions. The Standard Provisions constitute an integral part of this Arrangerient. The Donor will deposit the Cor tribution into such bank account designated in a payment request by the Bank promptly iollowini countersignature of this Arrangement by the Donor and su:.mission of a paymernt reque:.t b'i the Bank. When making the dep osil, the Donor will instruct its bank to include in its payment details information (remittance zdvic.-) field of its SWIFT payment message, information incicating: the amount paid, ihat the payment is made by Donor for TF071607 (Palestinian Recovery and Development P an Mull i-Donor Trust Fund (Successor to TFO7 1011)), and the dale of the deposit. In addition, the Do ior will provide a copy of the Donor's deposit instruction to the Bank's Accounling Trust Finds Division by e-mail sent to tfremitadvice&worldbank.org ot by fax sent to (202) 614-1315. Immediately upon reccipt of the Contribution funds, the Bank will convert such funds into United States dollars. The offices responsibl- fcr coordination of all matters related to the implementation of this Arrangement as or the date hereof are as follows. Either side may notify the other in writing o a change in responsible officer. For the Bank: West Bank and Gaza Country Management Unit Middle East a -d Nortl Af rica R egion The World Bank 1818 H Street, NW Washington, DC 2040 3 U.S.A. Tel:+1 202 4'Y3 4746 Fax:+1 202 477 7511 For the Donor: Office of the Represen tative o 'lapan to the Palestinian Authority VIP 2 Center Bldg., 3' floor 200 Yazour St., Al-Bireh, Ranallah Tel: +02 241 3120 Fax: +02 241 3123 This Arrangement m.y te modified only by written consent between the Bank and the L.onor; provided, however, tl'at ianne t I (Standard Provisions) and Annex 2 (Items not eligible for financing under the PRDP-TF) to Ihis Arrangement may only be modified with the consent of a I Donors contributing to this trust fu id. -3 - It is hereby confirmed that tl is Arrangement and attached annexes is not a legally binding document and does aot create between the Bank and the Donor any rights and obligations under international law The terms of tais Arra ige nent will commence on the date confirmed in writing by the Ba ik of acceptance of :his Arrzngemen. Sincerely, INTERNATIONAL BANK FOA RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Mariam Sherman Country Director Confirmed: COVERNMENT OF JAPAr By,: KA~ V\- TN me: Junya atsuura I itle: Ambassador for Pales inian Al fairs Representative of Jap.n to the Palestinian Authority Date: 2.0 -4- ANNEX I Standard Provisions 4pplica le to the Palestinian Recovery and Development Plan Multi- Donor Trust Find ("PRDP-TF") for the West Bank and Gaza The following provisiois (here nafter referred to as the "Standard Provisions") will be app licable to and form an integ al part (f all agreements and/or Arrangements made between the Inlernational Bank fcr Reconstrictioi and Development ("IBRD") and the International D'velopment Associa:ion ("IDA") (collectively, the "Bank") and donor countries and/or or!anizations (hereinafter refei red to s the "Donors") that provide grants (referred to as the "Donors' Contributions") to Ue admir istered by the Bank for the Palestinian Recovery and Development Plan Multi-Donor Trust Fund ("PRDP-TF") for the West Bank and Gaza (the "Project"). Defnitions "Grant" means a gran1 made cr to be made by the Bank, out of the PRDP-TF, to the Palestine Liberation Organizat on, for he benefit of the Palestinian Authority, for the purposes and on terms and cond.tions sel forth in the Grant Agreement (as defined in Section 6). "PRDP" means the Palestinian Reform and Development Plan (PRDP 2008-2010) dated D:cember 17, 2007, prepared ty the Palestinian Authority, containing a 3-year fiscal framework, or. the basis of which donors -onimittad their support at the Paris pledging conference or any subsequent development plan rrepared by the Palestinian Authority for these purposes. "Single Treasury Accouni" m(ans the bank account of the Ministry of Finance of the P ilestinian Authority. 1. Objectives The objective:; of the PR)P-T F are to provide budget and development support for the Palestinian Authority's policy agerida a.s expressed in the PRDP, and include, but are not limited to. the following aims: (a) pooling different ilono funds into one administrative mechanism that will reduce the transaction co ;ts fc r the Palestinian Authority; and (b) helping to al evi ite t[e Palestinian Authority's fiscal pressure by providing reliable disbutsenients on a regular basis. 2. Eligible Expenditures Grants made from 1he PRD1P-TF will finance the recurrent expenditures by the Palestinian Authority with the exception of items described in Annex 2 which will not be eligible fcr financing. In addition, the PRDP-TF will finance the cost to the Bank to prepare and sapervise the implementatior of the Project, namely staff costs, consultants' fees and travel e,penses relating to the PR)P-rF. For the avoidance of doubt the terms "staff costs" and 'consultants' fees" irclude the followAing expense categories: (a) direct and indirect staff costs; (,) fees and benefits of exterdec -tern consultants; and (c) temporary staff costs. Accordingly, -5- the PRDP-TF will finance the fllovring cost of the Bank to prepare and supervise the implementation of the Project: 1. Staff costs; 2. Short term consultanis' fees; 3. Extended term consultant fee!; 4. Temporary staff cost:; and 5. Travel exper.ses. 3. Administration of the Dlonors' Contributions The Bank will Le respo isit le oily for performing those functions specifically set forth in this Arrangement and will not be subjcct to any other duties or responsibilities to the Donors, including, without limitation, aiiy dutie:; or obligations that might otherwise apply to a fiduciary or irustee under general principles :f trust or fiduciary law. Nothing in this Arrangement will be considered a waiver of any priNileEes oi immunities of the IBRD and IDA under their Articles of Agreement or any applicable law, Ill of which are expressly reserved. 4. Commingling, Exchan.e a id Investment of the Contributions 4.1. The Contribution funcs will be accounted for as a single trust fund and will be kept separate and apart from the funds of the Bank. The Contribution funds may be commingled with o -er trust fund assets maintain d by th, Bank. 4.:. The PRDP-TF will be rna ntained in United States dollars. The Contribution funds may b freely exchanged by the Bar k into o her currencies as may facilitate their disbursement. 4 " The Bank will invest and reim est the Contribution funds pending their disbursement in li ie with the Bank's policies and proce. lures for the investment of trust funds administered by the Bank. The Bank will credit al, in.omc from such investment to the trust fund established under this Arrangement to be used fo, the same purposes as the Contribution funds. 5 Administrative Cost R co /gry In order to assist in t ie defraiment of the costs of administration and other expenses i,:urred by the Bark unde: tl is A rrangement, the Bank may, following deposit of the Contribution, deduct and retaii1 fcr its own account an amount equal to one percent (1%) of the Contribution. In addi:ion, costs lor trast fund administration and program management in the amount of $2,741,775 will be chirget to the Trust Fund. If the Contributions increase beyond viat was originally expecte. at the time of countersignature of this Arrangement, and the a:ministrative costs increas, Es a result, the Donor acknowledges that an additional acministrative fee may be app ied to s. ch new Contribution. 6. Grants to Recipient: ole of tl e Bank: Governance Structure of the PRDP-TF 6.1. The Bank wi,l, as ad:ninistrator of the PRDP-TF on behalf of the Donors, enter into a grant agreement (the "Gran Agreement") with the Palestine Liberation Organization (the "Recipient"), for the benefit of the Palestinian Authority, for the provision of Contribution funds for the purposes of 1his Arringc men and on the terms and conditions set forth in the Grant Agreement. The Bank will funish a copy of the Grant Agreement to the Donors. -6- 6.2. The Bank, in consultation with he International Monetary Fund ("IMF"), will be solely responsible for the surervision and mcnitoring of the progress towards implementation of the PR DP financed under the Grant Ag-eem-nt. 6.3 In carrying out its respc nsibilitics, the Bank will call consultation meetings with the IMF, the Donors, and the Palestinian Au hori y. Such meetings will be called at least quarterly in each calendar year. 7. Disbursements Disbursements of the Grait will be made on a quarterly basis only after the Bank, in consultation with the IMF, has de ermined that the Palestinian Authority has made satisfactory pri:gress towards the implemenation ol the PRDP (as further specified in the Grant Agreement), unless the Bank has granted a waiver following consultations with the IMF and the Donors. Additional disbursements may be made if upon request by the Recipient in writing in the case of ar extraordinary situation the Bank is cf the opinion that an additional disbursement is justified. Disbursements will be made into a sep irate deposit account under the Single Treasury Account opened by the Palestinian Authority for the purposes of the PRDP-TF (the "Deposit Account"). 8. Accounting and Financial Reg rting 8.'. The Bank will maintain s.parzte records and ledger accounts in respect of the Donors' Cr.ntributions deposited in the :rust funJ account and disbursements made therefrom. 8 2. The Bank will furnisi to the Donor current financial information relating to receipts, d sbursements and fund balanc.e i i United States dollars with respect to the Contribution funds vi:i the World Bank's Trust F indi Dolor Center secure website. Within six (6) months of the final disbursement date specilied in paragraph 10.1, the final financial information relating to receipts, disbursemenis and fu id tialan:e in United States dollars with respect to the Contribution funds will be made available to the )onor via the World Bank's Trust Funds Donor Center sicure website. 8.3. The Bank will providi tc the Donors, within six (6) months following the end of each E ink fiscal year, a management asser ion together with an attestation from the Bank's external a iditors concerning the adequacy of it ternal control over cash-based financial reporting for trust fEnds as a whole. The cost of such attostations will be borne by the Bank. 8.4. If a Donor wishes to 'equest, n an exceptional basis, a financial statement audit by the Bank's external auditDrs of the tr ist find established under this Arrangement, the Donor and the Bank will first consult as to whethei such an external audit is necessary. The Bank and the Donor will decide the most appr)priate scope and terms of reference of such audit. Following de,cision of the scope and terms cf ref -rence, the Bank will arrange for such external audit. The (:)sts of any such audit, including the internal costs of the Bank with respect to such audit, will b- paid by the Donor, -7- 9. Coordination and Proie -t Fepor ting 9... The Bank will maintai.i c ose :onsultation and coordination with the Donors, and will m,,nitor, in close consiltation with the IMF, on a quarterly basis, the progress achieved by the Plestinian Authority in implementing :he PRDP. The Bank will provide the Donors after each supervision mission with a prcgre;s re ort on the implementation of the PRDP. Within six (6) mi:nths of the final d'sburserrent date specified in Section 10, the Bank will provide a final rel:ort on the Project tc each Dono:. 9.... The Bank will prompt*y inform the Donors of any significant modification to the terms of the Grant Agreement and o any co ltractual remedy that is exercised by the Bank under the Grant Agreement. To the exteit Fractizable, the Bank will afford the Donors the opportunity to exchange views before effecting alny suzh modification or exercising any such remedy. 10. Disbursement Deadlinc: T-rmi iation: Cancellation: Refund 10.1. It is expected :hat the Contribution funds will be fully disbursed by the Bank in with the provisions of this Arrangemert by At gust 1, 2014. The Bank will only disburse Contribution funds for the purposcs of thi3 Arrangement after such date with the written approval of the Donors. 10.2. Any Donor or the Bark may, ipon three (3) months' prior written notice, cancel all or part of the Donor's pro rata slare of any remaining balance of the Contribution funds that is not committed pursuant tc any agr,,err ents entered into between the Bank and any consultants and/or ol'er third parties for the purpo3es (f this Arrangement prior to the receipt of such notice, including the Grant Agreemen. 1"..3. Upon the final disbur!ernmnt cate specified in paragraph 10.1, the Bank will return any rnmaining balance of the Coniribution funds to the Donors on a pro rata basis. In the event of a c;mcellation of an individual Doror's pro rata share of uncommitted Contribution funds in line w th paragraph 10.2, the Bank will rett rn such cancelled balance to the Donor. 11. Disclosure The Bank may disclose t[ is A Tangement and information on this trust fund in line with tie Bank's policy on disclosur. of'infcrmation. 12. Use of funds Recognizing the obligat ons of the Bank's member countries under various United Nations Security Council Resolution:. to take measures to prevent financing of terrorists, the Bank commits to making reasonablc efforts, consistent with IBRD's and IDA's Articles of Agreement and policies, inc uding f iose pertaining to combating financing for terrorists, to ensure that the funds provide.] under his Arrangement are used for their intended purposes and are not diverted to terrorists o, their as ents. -8- ANNEX 2 Items not eligible for finaicing under the PRDP-TF for the Palestinian Recovery and Develo)ment Plan for the West Bank and Gaza "I >xcluded Expenditure" meanm anY exr enditure: (a) for goods or se-vices supplied under a contract which any national or international f nancing institution or agency other than the IBRD or IDA has financed or ag eec to f nance, or which the IBRD or IDA has financed or agreed to finance unde.-r a iothcr trust fund credit, or trust fund grant; (b) for goods inc lud,d ii the following groups or sub-groups of the Standard International Trace Clissification, Revision 3 (SITC, Rev.3), published by the United Nation; in Stat stical Papers, Series M, No. 34/Rev.3 (1986) (the SITC), or any succesior groups or subgroups under future revisions to the SITC, as designated by ;he Bani by notice to the Recipient: Group Sub-group Description of Item 112 Alcoholic beverages 121 Tobacco, un-manufactured, tobacco refuse 122 Tobacco, manufactured (whether or not containing tobacco substitutes) 525 Radioactive and associated materials 667 Pearls, precious and semiprecious stones, unworked or worked 718 718.7 Nuclear reactors, and parts thereof; fuel elements (cartridges), non-irradiated, for nuclear reactors 728 728.43 Tobacco processing machinery 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or -9- GrouP Sub-group Description of Item silversmiths' wares (including set gems) 971 Gold, non-monetary (excluding gold ores and concentrates) (c) for goods intended ior a military or paramilitary purpose or for luxury consumption; (d) for en vironmei ital y ha zardous goods, the manufacture, use or import of which is prohibited under tie laws in effect in the parts of the West Bank and Gaza under the jurisdictioi of the Palestinian Authority or international agreements to which the Rccipient or the Pa estinian Authority is a party; (e) in the territores (othtr than the parts of the West Bank and Gaza under the jurisd ction of the Paltstinian Authority) of any country which is not a member of the Bank or for goods procured in, or services supplied from, such territories; (f) on account ol any payment prohibited by a decision of the United Nations Security Courcil taker, under Chapter VII of the Charter of the United Nations; and (g) with respect to w iich the Bank determines that corrupt, fraudulent, collusive or coerc ve prac ice:; we -e engaged in by representatives of the Recipient or the Paleslinian Aithcrity or of a beneficiary of a Grant without the Recipient having taken timely and app -opriate action satisfactory to the Bank to address such practices whe: th -y oc cur. - 10 - ANNEX 3 CONTRIBUTION LETTER [Date] [Insert the name Ccuntry Director W,st Bank and Gaza IV'ddle East and Nortf Africa Reg,on TIe World Bank 1818 H Street, NW W3shington, DC 20413] rrust Fu id Adm nistration Arrangement between the [Donor] and the Internationa Bank ftr Reconstruction and Development and the International Dtvel pmnrt Association concerning the Palestin an Recc very anc Development Plan Multi-Donor Trust Fund ("PRDP-TF") 'rust Fuind No. TF071607 (Successor to TFO71011) Su peinent 1 Contribution to the PRDP-TF fDear :] 1. We refer to the Administrat on Arrangement dated , 2013 between the [Donor] and the Internation;tl Bank for Reconstruction and Development (IBRD) and the I itemational Development Assoc atioi (IDA) (collectively, the "Bank") regarding the PRDP-TF (TF07 1011), as modified, and to -disc ssions/ exchange of correspondences] on [date] in which the Donor has indicated its int,ntion tc provide additional funding for the PRDP- TF. 2. We are pleased to confirm o the Bank the [Donor's name]'s intention to make a Supplemental Contribution to tfe P'DP-TF in the amount of [currency+ amount in words] (currency+ amount in numbe;s]) We request the Bank to process the Call of Funds for the Supplemental Contribution specifying the bank account irito which the Supplemental Contribution should be deposited. ZI We will deposit the Supplenental Contribution into such bank account as may be (.cesignated by the Bank in the Call of Funds promptly following receipt of the Call of Funds from the Bank. All terms defined in thc Administration Arrangement will have the same meanings in this Contribution Letter. 6. All other terris of the Admini;tration Arrangement will remain the same. 7. We consent to disclo,:ure of ti is Contribution Letter and related information on this Trust Fund in line with the World Bark Policy on Access to Information. -11- Si nicerely, [D>nor address/signature]