PPIUF GRANT NUMBER TFOB6580 Papua New Guinea and Pacific Islands Umbrella Facility Multi-Donor Trust Fund Grant Agreement (Additional Financing for the Community Access and Urban Services Enhancement Project) between SOLOMON ISLANDS and INTERNATIONAL DEVELOPMENT ASSOCIATION, acting as administrator of the Papua New Guinea and Pacific Islands Umbrella Facility Multi-Donor Trust Fund PPIUF GRANT NUMBER TFOB6580 PAPUA NEW GUINEA AND PACIFIC ISLANDS UMBRELLA FACILITY MULTI-DONOR TRUST FUND GRANT AGREEMENT AGREEMENT dated as of the Signature Date between SOLOMON ISLANDS ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Bank"), acting as administrator of the Papua New Guinea and Pacific Islands Umbrella Facility Multi-Donor Trust Fund. WHEREAS (A) under the Original Financing Agreement (as defined in the Appeudix to this Agreement), the Bank agreed to extend to the Recipient a grant in an amount equivalent to ten million four hundred thousand Special Drawing Rights (SDR 10,400,000)(Grant Number D292-SB) to assist in financing the project described in Schedule I to the Original Financing Agreement ("Original Project"); and (B) the Recipient has further requested the Bank to provide additional financing for activities related to the Original Project, and the Bank has agreed, on the basis, inter alia, of the foregoing, to extend an additional grant, upon the terms and conditions set forth in this Agreement. NOW, THEREFORE, the Recipient and the Bank hereby agree as follows: Article I Standard Conditions; Definitions 1.01. The Standard 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 Standard Conditions or in the Appendix this Agreement. Article II The Project 2.01. The Recipient declares its commitment to the objective of the project described in Schedule I to this Agreement ("Project"). To this end, the Recipient shall carry out: (a) Parts I and 3 of the Project through HCC; (b) Part 2 of the Project through MID; and (c) Part 4 of the Project jointly through HCC and MID, all in accordance with the provisions of Article II of the Standard Conditions and Schedule 2 to this Agreement. 2 Article III The Grant 3.01. The Bank agrees to extend to the Recipient a grant in an amount not to exceed seven million three hundred thousand Dollars ($7,300,000) ("Grant") to assist in financing the Project. 3.02. The Recipient may withdraw the proceeds of the Grant in accordance with Section III of Schedule 2 to this Agreement. 3.03. The Grant is funded out of the abovementioned trust fund for which the Bank receives periodic contributions from the donors to the trust fund. In accordance with Section 3.02 ofl th Sidiard Cunditions, 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 right to withdraw the Grant proceeds is subject to the availability of such funds. Article IV Effectiveness; Termination 4.01. This Agreement shall not become effective until evidence satisfactory to the Bank has been furnished to the Bank that the conditions specified below have been satisfied. (a) The execution and delivery of this Agreement on behalf of the Recipient have been duly authorized or ratified by all necessary governmental actions. (b) The Amendment Letter has been executed and delivered on behalf of the Recipient. 4.02. For the purpose of confirming that the condition specified in Section 4.0 1(a) above has been met, by signing this Agreement, the Recipient shall be deemed to represent and warrant that on the Signature Date, this Agreement has been duly authorized by, and executed and delivered on behalf of, the Recipient and is legally binding upon the Recipient in accordance with its terms, except where additional action is required to make this Agreement legally binding. Where additional action is required following the Signature Date, the Recipient shall notify the Bank when such additional action has been taken. By providing such notification, the Recipient shall be deemed to represent and warrant that on the date of such notification this Agreement is legally binding upon the Recipient in accordance with its terms. 4.03. 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 above ("Effective 3 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. 4.04. 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 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. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is its Minister at the time responsible for finance. 5.02. For purposes of Section 7.01 of the Standard Conditions: (a) the Recipient's address is: Ministry of Finance and Treasury P.O. Box 26 Honiara Solomon Islands; and (b) the Recipient's Electronic Address is: Facsimile: E-mail: 677-27855 mdentana@mof.gov.sb 5.03. For purposes of Section 7.01 of the Standard Conditions: (a) the Bank's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank's Electronic Address is: Telex: Facsimile: E-mail 248423 (MCI) or 1-202-477-6391 cdpngpacific@worldbank.org 64145 (MCI) 4 AGREED as of the Signature Date. SOLOMON ISLANDS By Ahniuthorized Representative Name: t-V cj!QeTJ ZiaOZ Date: INTERNATIONAL DEVELOPMENT ASSOCIATION, acting as administrator of the Papua New Guinea and Pacific Islands Umbrella Facility Multi-Donor Trust Fund By Authorized R'i7sentative Paul Vallely Name: ________________ Title: Acting Country Director, PNG and Pacifi Date: 08-sep-2021 5 SCHEDULE 1 Project Description The objective of the Project is to improve basic infrastructure and services for vulnerable urban populations in targeted urban centers of the Recipient. The Project consists of the Original Project. 6 SCHEDULE 2 Project Execution Section I. Institutional and Other Arrangements A. Institutional and General Implementation Arrangements 1I Section LA (Institutional Arrangements), Section I.B (Community Grants to Community Groups), Section J.C (Safeguards) and Section I.E (Annual Work Plans and Budgets) of Schedule 2 to the Original Financing Agreement are hereby incorporated by reference and shall apply, mutatis inutandis, to this Agreement, and the Recipient undertakes to comply with the provisions thereof to the same extent as if such provisions had been set out in full in this Agreement, provided that for the purposes of this Agreement: (a) the references to the "Association" in said Sections shall be construed as references to the Bank; (b) the references to the "General Conditions" in said Sections shall be construed as references to the Standard Conditions; and (c) the references to the "Financing" in said Sections shall be construed as references to the Grant. B. Project Operations Manual 1 . By not later than thirty (30) days after the Effective Date (or such other date which the Bank has confirmed in writing to the Recipient is reasonable and acceptable under the circumstances, as determined by the Bank in its sole discretion), the Recipient, through HCC and MID, shall prepare and adopt an updated Project Operations Manual, in form and substance satisfactory to the Bank. 2. The Recipient, through HCC and MID, shall thereafter ensure that the Project is carried out in accordance with the arrangements and procedures set out in the Project Operations Manual (provided, however, that in the event of any conflict between the arrangements and procedures set out in the Project Operations Manual and the provisions of this Agreement, the provisions of this Agreement shall prevail) and shall not amend, abrogate or waive any provision of the Project Operations Manual unless the Bank has provided its prior no-objection thereof in writing. Section I. Project Monitorini, Reporting and Evaluation A. Project Reports The Recipient shall ensure that each Project Report is furnished to the Bank not later than forty-five (45) days after the end of each calendar quarter, covering the calendar quarter. 7 Section III. Withdrawal of Grant Proceeds A. General 1. 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: Category Amount of the Grant Percentage of Allocated Expenditures to be Financed (expressed in USD) (inclusive of Taxes) (1) Goods, non-consulting 2,500,000 100% services, consulting services, Training and Incremental Operating Costs for the Project (2) Works for the Project and 4,800,000 100% of amounts Community Grants disbursed TOTAL AMOUNT 7,300,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for payments made prior to the Signature Date. 2. The Closing Date is April 30, 2024. 8 APPENDIX Definitions 1I "Amendment Letter" means the letter amending the Original Financing Agreement between the Recipient and the Bank, to reflect revisions as a result of additional activities supported under this Agreement, dated on or about the Signature Date (Grant Number D292-SB). 2. "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. 3. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 4. "Community Grant" means a grant made available by the Recipient, through HCC for Community Sub-Projects under Part 1 of the Project and through MID for Community Sub-Projects under Part 2 of the Project, to a Community Group out of the proceeds of the Grant, in accordance with the provisions of a Community Grant Agreement, for the purpose of financing costs of a Community Sub-Project; and the term "Community Grants" means, collectively, all such Community Grants. 5. "Community Grant Agreement" means an agreement to be entered into between: (a) the Recipient, through HCC for Community Sub-Projects under Part 1 of the Project and through MID for Community Sub-Projects under Part 2 of the Project; and (b) a Community Group, for the purpose of implementing and financing a Community Sub-Project, as referred to in Section I.B of Schedule 2 to the Original Financing Agreement, as incorporated and applied to this Agreement pursuant to Section I.A.1 of Schedule 2 to this Agreement; and the term "Community Grant Agreements" means collectively, all such Community Grant Agreements. 6. "Community Group" means a community group organized at the local level that meets the eligibility criteria specified in the Project Operations Manual for receiving a Community Grant and to which a Community Grant is made pursuant to a Community Grant Agreement; and the term "Community Groups" means, collectively, all such Community Groups. 7. "Community Sub-Project" means a set of specific activities to be carried out by a Community Group under Part I and/or Part 2 of the Project utilizing proceeds of a Community Grant in accordance with the terms of this Agreement, the Project Operations Manual and the relevant Community Grant Agreement; and the term "Community Sub-Projects" means all such Community Sub-Projects. 9 8. "Effective Date" means the date on which this Agreement enters into effect pursuant to Section 4.03 of this Agreement. 9. "Honiara City Council" or its acronym "HCC" means the local government body established under Section 4 of the Honiara City Act 1999 for the purpose of the administration of Honiara City, or any successor thereto. 10. "Incremental Operating Costs" means reasonable expenditures incurred by the Recipient on account of Project implementation and management (which expenditures would not have been incurred absent of the Project), including the Recipient's staff travel costs, allowances, costs of vehicle rental, fuel and maintenance, bank charges, communications costs, office supplies and equipment, office rental fees, advertising expenses, utilities and consumables required for holding meetings related to the Project, but excluding salaries of civil servants of the Recipient. 11. "Ministry of Infrastructure Development" or its acronym "MID" means the Recipient's ministry responsible for infrastructure development, or any successor thereto. 12. "Original Financing Agreement" means the financing agreement for a Community Access and Urban Services Enhancement Project between the Recipient and the Bank, dated April 18, 2018, as amended by the Amendment Letter and as such agreement may be further amended from time to time (Grant Number D292-SB). 13. "Original Project" means the Project described in Schedule I to the Original Financing Agreement. 14. "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. 15. "Project Operations Manual" means the Recipient's manual, referred to in Section I.B of Schedule 2 to this Agreement, in form and substance satisfactory to the Bank, to be adopted by the Recipient in accordance with the provisions of the said sections; as said manual may be modified from time to time with the prior written agreement of the Bank, and such term includes any schedules or annexes to the manual. 16. "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. 10 17. "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. 18. "Training" means the reasonable costs incurred by the Recipient for training under the Project, including purchase, translation and publication of materials, rental of facilities, course fees, workshop supplies, rental of equipment, reasonable honorarium/stipend of resource persons, and travel, accommodation and subsistence of participants. 11