Vd3fiWOLL BANK L,;MI EAN CRDUP MCKLLKER C>ntaj raca and Li DominxKan Republc Latr k :.- and the Caritbean Region 26-Aug-2021 His Excellency Mr. Hector Alexander Minister of Economy and Finance Ministry of Economy and Finance OGAWA Buildmg. Via Espaila and Calle 52E Corregimiento de Bella Vista. Province of Panama Republic of Panama Open Government Pzrtnership G7-znt No.TFOB6270 Panama Open Contracting and Public nfrastructure T ra7Nparency Project Lemer Areement Excellency: In response to the request for financial assistance made on behalf of the Republic of Panama "Recipient"). I am pleased to inform you that the International Bank for Reconstruction and Development (-Bank"), acting as administrator of grant funds provided by multiple donors ("Donors") under the Open Government Partnership Trust Fund ("Trust Fund"), proposes to extend to the Recipient a grant ('"Grant") in an amount not to exceed two hundred and eighty thousand L nited States Dollars (USD 280,000) on the terms and conditions set forth or referred to in this letter agreement ("Agreement"), which includes the attached Annex, to assist in the financing of the project desenbed in the Annex ("Project"). This Grant is funded out of the abovementioned Trust Fund for which the Bank receives periodic contributions from the Donors. In accordance with Section 3.02 of the Standard Conditions (as defined in the Annex to this Agreement), the Bank's payment obligations in connection with this Agreement are limited to the amount of funds made available to it by the Donors under the abovementioned trust fund, and the Recipient's nght to withdraw the Grant proceeds is subject to the availability of such funds. The Recipient represents, by confirming its agreement below, that it is authonzed to enter into this Agreement and to carry out the Project in accordance with the terms and conditions set forth or referred to in this Agreement. -2- Please confirm the Recipient's agreement to the foregoing by having an authorized official of the Recipient sign and date this Agreement and returning one duly executed copy to the Bank. Upon receipt by the Bank of this countersigned copy, this Agreement shall become effective in accordance with Article IV of the Annex of this Agreement; provided, however, that the offer of this Agreement shall be deemed withdrawn if the World Bank has not received the countersigned copy of this Agreement within ninety (90) days after the date of signature of this Agreement by the World Bank, unless the World Bank shall have established a later date for such purpose. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Michel Kerf Central America and the Dominican Republic Latin America and the Caribbean Region AGREED: REPUBLIC OF PANAMA By Authorized Representative ( " International Bak for Reconstruction ad Development and rntemational Developent Association Standard Conditions for Grant Finacing Made by the Ba out of Trst Funds" dated Febmay 25, 2019 2) Disbursement ad Financial Infomation Letter of the same date as this Ageement together with the "'Disbursement Guidelines for nvestment Proect Financing"', dated Febru 2017 Ms( nlaMd2n)eG iez ieMnstro cnm -3- ANNEX Article I Standard Conditions; Definitions 1.01. Standard Conditions. The Standard Conditions (as defined in Section 1.02 below) constitute an integral part of this Agreement. 1.02. Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Standard Conditions or in this Section: (a) "AIG" means "AutoridadNacionalpara la Innovaci6n Gubernamental", the Recipient's "Government Innovation Authority" or any successor thereto. (b) "ANTAI" means "Autoridad Nacional de Transparencia y Acceso a la Informacidn", the Recipient's "National Authority on Transparency and Access to Information" or any successor thereto. (c) "Anti-Corruption Guidelines" means, for purposes of paragraph 2 of the Appendix to the Standard Conditions, the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, and revised in January, 2011, and as of July 1, 2016. (d) "Category" means a category set forth in the table in Section 3.01 of this Agreement. (e) "CoST IDS" means an infrastructure data standard designed to put data into a format that is accessible, understandable and applicable for both policy-makers and the public. The CoST IDS requires procuring entities to disclose 40 data points or 'items' across key stages of the infrastructure project cycle. (f) "CoST Panama" means a multi-stakeholder group that promotes the Recipient's infrastructure transparency initiative. (g) "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated June 23, 2021, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. (h) "Environmental and Social Standards" or "ESSs" means, collectively: (i) "Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts"; (ii) "Environmental and Social Standard 2: Labor and Working Conditions"; (iii) "Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management"; (iv) "Environmental and Social Standard 4: Community Health and Safety"; (v) "Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement"; (vi) "Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources"; (vii) "Environmental and Social Standard 7: Indigenous Peoples/Sub-Saharan Historically -4- Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; (ix) "Environmental and Social Standard 9: Financial Intermediaries"; (x) "Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure"; effective on October 1, 2018, as published by the Bank. (i) "General Directorate for Public Contracting" or "DGCP" means the Recipient's Direcei6n General de Contrataciones Publicas, or any successor thereto. DGCP is the Project Implementing Entity (as defined in the Standard Conditions). (j) "Inter-Institutional Agreements" means the agreements referred to in Section 2.03(d) of this Annex, acceptable to the Bank, as such agreement may be amended from time to time. (k) "ISTMO" means an integrated financial management information system developed by the Government of Panama which automates all core public financial management processes related to budgeting and treasury for both central and decentralized government. (1) "Ministry of Economy and Finance" or "MEF" means the Recipient's Ministry of Economy and Finance, or any successor thereto. (m) "OCDS" means Open Contracting Data Standard, a non-proprietary international open data standard for the publication of information related to the planning, procurement, and implementation of public contracts that describes how to publish data and documents at all stages of the contracting process, and which was created to support organizations to increase contracting transparency and enable deeper analysis of contracting data by a wide range of users (n) " Open Contracting for Infrastructure Data Standard" or "OC4IDS" means a data standard for publishing open data about infrastructure projects and contracts that builds on the OCDS and the CoST IDS, combining contracting level disclosures with information at the project level, and defines a set of common data elements which apply to all sectors and types of projects, and which are important for a wide range of use cases. (0) "Operating Costs" means reasonable incremental recurrent expenditures that would not have been incurred absent the Project, for implementation, management, monitoring and evaluation costs incurred by the Recipient, consisting of vehicle operation and maintenance, communication and insurance costs, banking charges, rental expenses, support for information systems, office (and office equipment) maintenance and repairs, utilities, document duplication/printing, and travel cost and per diem for Project staff for travel linked to the implementation of the Project (excluding consultants' services and salaries of civil service officials of the Recipient). (p) "Operational Manual" means the Project operational manual referred to under Section 2.03(b) of the Annex to this Agreement. (q) "PanamaCompra" means the Recipient's electronic public contracting system in which all proposals for all types of contracting are submitted, including, inter alia, PanamaCompra 3. (r) "PanamaCompra 3" means the Recipient's updated electronic public procurement system designed to reduce costs, increase efficiency in the use of public funds, and allow online transactions with better controls for tracking and execution of contracts. -5- (s) "PanamaCompra en Cifras" means an updated digital version of the Public Procurement Observatory that integrates the open and standardized data published by PanamaCompra, PanamaenObras and ISTMO. (t) "PanamaenObras" means a governmental platform that shows the data of the public infrastructure projects in the Republic of Panama (available at www.panamaenobras.gob.pa). (u) "Personal Data" means any information relating to an identified or identifiable individual. An identifiable individual is one who can be identified by reasonable means, directly or indirectly, by reference to an attribute or combination of attributes within the data, or combination of the data with other available information. Attributes that can be used to identify an identifiable individual include, but are not limited to, name, identification number, location data, online identifier, metadata and factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of an individual. (v) "Procurement Regulations" means, for purposes of paragraph 20 of the Appendix to the Standard Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. (w) "Project Implementing Entity" or "PIE" means the DGCP. (x) "Project Implementing Unit" or "PIU" means a unit within DGCP referred to under Section 2.03(a) of the Annex to this Agreement. (y) "Public Procurement Observatory" means a space established by the Recipient's Public Procurement Directorate where its citizens can monitor procurement made by procuring entities at all stages of the process and contractor selection procedures carried out by bidding entities, as well as file complaints. (z) "Signature Date" means the later of the two dates on which the Recipient and the Bank signed this Agreement and such definition applies to all references to "the date of the Grant Agreement" in the Standard Conditions. (aa) "Standard Conditions" means the "International Bank for Reconstruction and Development and International Development Association Standard Conditions for Grant Financing Made by the Bank out of Trust Funds", dated February 25, 2019. (bb) "Subsidiary Agreement" means the agreement referred to in Section 2.03(c) of this Annex, acceptable to the Bank, as such agreement may be amended from time to time. (cc) "Training and Workshops" means the reasonable costs, as shall have been approved by the Bank, for training conducted under the Project, including tuition, travel and subsistence costs for training participants, costs associated with securing the services of trainers speakers, rental of training facilities, preparation and reproduction of training materials, and other costs directly related to training course preparation and implementation (but excluding goods and consulting services). -6- Article II Project Execution 2.01. Project Objectives and Description. The objective of the Project is to support the implementation of an open contracting approach that strengthens availability and use of data on public procurement, with an emphasis on public infrastructure. The Project consists of the following parts: Part 1: Strengthening Transparency in Public Procurement. (a) Carrying out capacity building activities for staff in agencies responsible for publishing data in PanamaenObras to accelerate and standardize uploading of quality information to the plaform; (b) Provision of support for the adoption of OCDS and OC4IDS to publish open data from PanamaCompra, as well as from PanamaenObras and the Ministry of Economy and Finance's data on budget registrations and payments from ISTMO; and (c) Provision of support for the development and deployment of PanamaCompra en Cifras to track public procurement from planning to implementation. Part 2: Capacity Building for Data Use. (a) Provision of support in establishing partnerships with: (i) universities and training institutions to develop curricula content to enable the introduction of open data, open contracting and data use in their academic programs; and (ii) public entities. (b) Carrying out workshops and other training events for relevant stakeholders on developing skills to reuse and analyze published data for, inter alia: (i) improving decision-making processes; (ii) identify business opportunities, particularly for small and medium enterprises; (iii) monitoring government expenditures and service provision; (iv) mine data and targeting risk more effectively in audit processes; (v) reporting and investigative journalism; (vi) academic research; and (vii) creating applications and services based on open data. (c) Facilitating the organization of roundtable discussions and forums to articulate a network of government and non-state actors to discuss how to strengthen the public procurement system based on the use of the data as part of the Public Procurement Observatory, and establishing a space for citizen monitoring of procurement made by the procuring entities. Part 3: Accountability for Public Infrastructure Projects. (a) Provision of support in the production of annual assurance reports to analyze data/information available in PanamaenObras on infrastructure projects selected by CoST Panama and collect feedback from the communities benefited or affected by the projects. (b) Carrying out of workshops to disseminate results of annual assurance reports to promote knowledge on the management of public infrastructure, and on CoST Panama and its progress in the Recipient's territory. (c) Facilitating dialogue through roundtable discussions with relevant key stakeholders on policies and actions necessary to improve performance and prioritization of public infrastructure projects. (d) Provision of technical assistance to CoST Panama in identifying and developing key -7- instruments for its sustainability, including, inter alia, relevant statutes, regulations, code of ethics, proposed strategic plan and fundraising strategies. Part 4: Communications and Project Management. Provision of support for: (i) effective project management (including fiduciary responsibilities); (ii) monitoring and evaluation of Project activities; (iii) communications activities to disseminate the Project's objectives and generate trust and commitment among citizens and stakeholders around the Project's activities and products. 2.02. Project Execution Generally. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall, and shall cause the Project to be carried out by the Project Implementing Entity in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) the Anti-Corruption Guidelines; and (c) this Article II. 2.03. Institutional and Other Arrangements. (a) For purposes of the implementation of the Project the Recipient shall cause DGCP to: (i) operate and maintain, throughout Project implementation, a unit with technical and fiduciary functions, staffing, and responsibilities satisfactory to the Bank, as set forth in the Operational Manual; (ii) no later than one hundred and twenty (120) days after the Effectiveness Date, select a monitoring and evaluation specialist in a manner acceptable to the Bank and based on terms of referenced set forth in the Operational Manual; and (iii) starting in calendar year 2022 or any other date as agreed by the Bank, allocate timely and thereafter maintain throughout each calendar year of Project implementation, an approved budget with a specific budget line entry for DGCP's annual budget in order to not delay the Project implementation and to keep track of the corresponding expenditures incurred. (b) Operational Manual. (i) For purposes of carrying out the Project, the Recipient shall cause DGCP to prepare and adopt and carry out the Project in accordance with the Operational Manual, which shall set forth, inter alia: (i) a detailed description of Project activities and institutional arrangements for the Project; (ii) the Project administrative, budgeting, accounting, auditing, reporting, financial, procurement and disbursement procedures, including a template for interim financial statement reports; (iii) the monitoring indicators for the Project; (iv) the detailed procedures for coordination and collaboration among the relevant Recipient's institutions, and other stakeholders in the carrying out of the Project; (v) the Anti-Corruption Guidelines; and (vi) procedures to ensure that the collection, use, and processing of any Personal Data collected under the Project is done in accordance with the best international practice, ensuring legitimate, appropriate, and proportionate treatment of such data. (ii) Except as the Recipient and the Bank may otherwise agree in writing, the Recipient shall cause DGCP not to abrogate, amend, suspend, terminate or waive the Operational Manual or any provision thereof. -8- (iii) In case of a conflict between the terms of the Operational Manual and those in this Agreement, the terms of this Agreement shall prevail. (c) Subsidiary Agreement. (i) To facilitate the carrying out of the Project, the Recipient, through MEF, shall make the proceeds of the Grant available to DGCP on a grant basis, under a subsidiary agreement between the Recipient, through MEF, and DGCP, under terms and conditions approved by the Bank, which shall include, inter alia, DGCP's obligation to carry out the Project in accordance with the provisions of this Agreement, including the provisions set forth in the Standard Conditions, the Operational Manual, the Environmental and Social Commitment Plan ("ESCP"), the Procurement Regulations and the Anti-Corruption Guidelines ("Subsidiary Agreement"). (ii) The Borrower, through MEF, shall exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Bank and to accomplish the purposes of the Grant. Except as the Bank shall otherwise agree, the Recipient, through MEF, shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. (d) Inter-institutional Agreements. No later than thirty (30) days after the Effective Date (unless the Bank, after consideration of the reasons for the delay, establishes a later date by written notification to the Project Implementing Entity and the Recipient), the Recipient shall cause DGCP to enter into an inter-institutional agreement with ANTAI and AIG, under terms and conditions approved by the Bank, to ensure sustainability and adequate coordination in Project implementation (the "Inter-institutional Agreements), including, inter alia, the obligation of ANTAI and AIG to comply with the environmental and social instruments as provided under the ESCP. 2.04. Environmental and Social Standards (a) The Recipient shall, and shall cause the Project Implementing Entity to, ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Bank. (b) Without limitation upon paragraph (a) above, the Recipient shall, and shall cause the Project Implementing Entity to, ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan ("ESCP"), in a manner acceptable to the Bank. To this end, the Recipient shall, and shall cause the Project Implementing Entity to, ensure that: (i) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, and provided in the ESCP; (ii) sufficient funds are available to cover the costs of implementing the ESCP; -9- (iii) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (iv) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Bank shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. (c) In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. (d) The Recipient shall, and shall cause the Project Implementing Entity to, ensure that: (i) all measures necessary are taken to collect, compile, and furnish to the Bank through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Bank, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Bank, setting out, inter alia: (A) the status of implementation of the ESCP; (B) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (C) corrective and preventive measures taken or required to be taken to address such conditions; and (ii) the Bank is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, including, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. (e) The Recipient shall, and shall cause the Project Implementing Entity to, establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Bank. 2.05. Project Monitoring, Reporting and Evaluation. The Recipient shall ensure that each Project Report is furnished to the Bank not later than forty-five (45) days after each calendar semester, covering the calendar semester. Except as may otherwise be explicitly required or permitted under this Agreement or as may be explicitly requested by the Bank, in sharing any information, report or document related to the activities described in Section 2.01 of the Annex to this Agreement, the Recipient shall cause DGCP to ensure that such information, report or document does not include Personal Data. Article III Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) Article III of the Standard Conditions; and (b) this Section; to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: -10- Category Amount of the Grant Percentage of Allocated Expenditures to be (expressed in USD) Financed (inclusive of Taxes) (1) Consulting services, non-consulting services, Operating Costs, Training and Workshops. TOTAL AMOUNT 280,000 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawal shall be made for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed $56,000 equivalent may be made for payments made prior to this date but on or after February 1, 2021 (but in no case more than one year prior to the date of this Agreement), for Eligible Expenditures under Category (1). 3.03. Withdrawal Period. The Closing Date is December 31, 2023. Article IV Effectiveness; Termination 4.01 The Additional Condition of Effectiveness consist of the following, namely, that: (a) the Operational Manual has been prepared and adopted by the Recipient in form and substance satisfactory to the Bank; (b) The Subsidiary Agreement has been signed and delivered by the Recipient, through MEF, and the DGCP, and any conditions precedent to its effectiveness have been fulfilled; and (c) the execution and delivery of this Agreement on behalf of the Recipient has been dully ratified by the Comptroller General of the Republic of Panama. 4.02. Except as the Recipient and the Bank shall otherwise agree, this Agreement shall enter into effect on the date upon which the Bank dispatches to the Recipient notice of its acceptance of the evidence required pursuant to Section 4.01 ("Effective Date"). If, before the Effective Date, any event has occurred which would have entitled the Bank to suspend the right of the Recipient to make withdrawals from the Grant Account if this Agreement had been effective, the Bank may postpone the dispatch of the notice referred to in this Section until such event (or events) has (or have) ceased to exist. 4.03. Termination for Failure to Become Effective. This Agreement and all obligations of the parties under it shall terminate if it has not entered into effect by the date ninety (90) days after the date of the countersignature of this Agreement, unless the Bank, after consideration of the reasons for the delay, establishes a later date for the purpose of this Section. The Bank shall promptly notify the Recipient of such later date. Article V Recipient's Representative; Addresses 5.01. Recipient's Representatite. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is its Minister of Economy and Finance, its Vice Minister of Finance or its Vice Minister of Economy. 5.02. Recipient's Address. For purposes of Section 7.01 of the Standard Conditions: (a) the Recipient's Address is: Ministry of Economy and Finance OGAWA Building, Via Espafia and Calle 52E Corregimiento de Bella Vista-Province of Panama Republic of Panama; and (b) the Recipient's Electronic Address is: Telephone: E-mail: (507) 507-7000 to 7005 (507)507-7015 5.03. Bank's Address. For purposes of Section 7.01 of the Standard Conditions: (a) the Bank's address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank's Electronic Address is: Telephone: E-mail: 1-202-473-4166 io"