CREDIT NUMBER 6884-NP Financing Agreement (Nurturing Excellence in Higher Education Program) between NEPAL and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 6884-NP FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between NEPAL ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association 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 41,800,000 Special Drawing Rights (SDR forty one million eight hundred thousand) (variously, "Credit" and "Financing"), to assist in financing: (a) the program, as described in Schedule 1 to this Agreement ("Program"); and (b) the project, as described in Schedule 1 to this Agreement ("Project") (the Program and the Project hereinafter jointly referred to as the "Operation"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section IV of Schedule 2 to this Agreement. All withdrawals from the Financing Account to which the amount of the Credit allocated for the Program is credited shall be deposited by the Association into an account specified by the Recipient and acceptable to the Association. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. -2- 2.04. The Service Charge is three-fourths of one percent (3/4 of 1%) per annum on the Withdrawn Credit Balance. 2.05. The Payment Dates are February 15 and August 15 in each year. 2.06. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 4 to this Agreement. 2.07. The Payment Currency is Dollar. ARTICLE III - OPERATION 3.01. The Recipient declares its commitment to the objectives of the Operation. To this end, the Recipient shall carry out the Operation through UGC under the guidance of MOEST in accordance with the provisions of Article V of the Program General Conditions, Article V of the Project General Conditions and Schedule 2 to this Agreement. ARTICLE IV - EFFECTIVENESS; TERMINATION 4.01. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 4.02. 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 V - REPRESENTATIVE; ADDRESSES 5.01. The Recipient's Representative is its Secretary, Ministry of Finance, or its Joint Secretary of the International Economic Cooperation Coordination Division, Ministry of Finance. -3- 5.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance Government of Nepal Singha Durbar Kathmandu Nepal; and (b) the Recipient's Electronic Address is: Facsimile: E-mail: (977-1) 4211-164 secretary@mof.gov.np 5.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 -4- AGREED as of the Signature Date. NEPAL By Authorized Representative Name: Madhu Kumar Marasini Title: Finance Secretary Date: August 19, 2021 INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: Faris Hadad-Zervos Title: Country Director for Maldives, Nepal and Sri Lanka Date: August 19, 2021 -5- SCHEDULE 1 Operation Description The objectives of the Operation are to strengthen labor market relevance and quality of higher education, boost collaborative research and innovation, and enhance equitable access for underprivileged and disaster affected groups. The Operation consists of the following activities: Part 1: The ProjZram The Program consists of the following: Results Area 1 - Improved Labor-market Relevance, Entrepreneurship, and Collaborative Research Supporting the Recipient's plan to improve the overall graduate labor market relevance and boost research and innovation by HEls in Nepal through, inter alia: (a) strengthening academic autonomy and supporting competitively selected autonomous and accredited HEls to introduce and enhance their own autonomous academic programs that are aligned with local job market needs in the federal context, supporting the establishment of Continuous Professional Development (CPD) Programs for academic staff and academic leaders to promote teaching, including pre-service teacher preparation for prospective school teachers, leadership and excellence as well as providing training and sensitization for managers/principals of HEls and policy makers on academic management and leadership; (b) providing research funding to selected HEls, schools, Central Departments and Centers of Excellence (COE) for collaborative research and innovation with priorities on STEM disciplines as well as revising regulatory frameworks for collaborative research and patent management, including a national knowledge- sharing platform for research, innovation, and patent management and a system to curb plagiarism; and (c) encourage students, recent graduates, and young faculty members to pursue entrepreneurship and self-employment by providing competitively selected participants with entrepreneurship skills training, legal training, financial education, Seed Funds Grants and professional evaluations of their innovative ideas. -6- Results Area 2 - Strengthening Governance and Financing of Higher Education for Quality Enhancement Improving quality assurance, financing, and governance systems in the Recipient's higher education sector to strengthen its quality and labor market relevance through, inter alia: (a) expanding the existing Quality Assurance and Accreditation (QAA) Program nation-wide with the emphasis on Quality Enhancement (QE) activities, providing dedicated Performance-Based Grants to support the transition of five accredited and autonomous campuses to Deemed Universities with reasonable distribution across the Provinces; (b) supporting the expansion of the Performance-Based Grants system for HEls to high-performing campuses, schools, and departments based on Performance Criteria; and (c) strengthening the policy and regulatory systems to create a conducive environment for expanding technical education in higher education and developing guidelines to facilitate partnerships with non-governmental sectors. Results Area 3 - Widening Access to Quality Higher Education for Disadvantaged Students Supporting the Recipient's plan to enhance equitable access to higher education in Nepal, focusing on underprivileged students, particularly from lagging and/or disaster affected Provinces and Remote Regions through, inter alia: (a) implementing Proxy Means Testing (PMT) or a similar poverty targeting approach for need-based scholarship program, including students affected by disasters, such as the COVID-19 pandemic; and (b) supporting enrollment and continued education for disadvantaged women; and providing HEIs in lagging and/or disaster affected Provinces with Equity Grants and encouraging special arrangements to attract quality teachers and improve the teaching in these Provinces, including strengthening connectivity, conducting online courses, making peer learning arrangements from other HEIs/Provinces, and sharing resources for efficient use and capacity building. Results Area 4 - Extending Digitization of Higher Education Improving the Recipient's policy and governance system for digitization and connectivity and strengthening the institutional capacity to digitize teaching and learning and the administration of higher education through, inter alia: (a) supporting the preparation of a new ICT strategy for the higher education sector, including strategies to leverage the available broad-band connectivity facilities -7- under NREN or similar institutions and setting up more collaborative governance arrangements with these institutions; (b) strengthening campus networks and distance learning capabilities by supporting competitively selected HEls with Digitization Grants; and (c) supporting the digitization of UGC and University administration, including establishing a resource planning system to manage the Universities' human resources, finances and procurement tasks, student administration, and the efficient management of monitoring and evaluation activities. Part 2: The Project The Project consists of the following activities: Capacity Building, Program Management, Monitoring and Evaluation (a) Supporting the capacity development of MOEST, UGC and TU (through the provision of Grants) in strengthening their core regulatory and financing functions of the higher education sector, including capacity building activities for, inter alia, QAA/QE systems; autonomy and affiliation; research, innovation and patents; standardization of teaching/learning; accountability and competitive financing; digitization and connectivity; establishing partnership; and twinning arrangements with international universities. (b) Supporting the implementation of all activities under Part 1, including fiduciary and safeguard management, monitoring and evaluation, strengthening the Higher Education Management Information System (HEMIS), undertaking assessments and evaluation studies, and commissioning the Independent Verification Agency. -8- SCHEDULE 2 Operation Execution Section I. Implementation Arran2ements A. Operation Institutions 1. The Recipient shall vest the responsibility for the implementation of the Operation in UGC. To this end: (a) No later than fifteen (15) days after the Effective Date, the Recipient shall establish and maintain, throughout the period of implementation of the Operation, the UGC Secretariat within UGC with responsibilities, including, inter alia, planning, budgeting, monitoring, procurement, financial management and safeguards, with membership, powers, functions and competencies acceptable to the Association. (b) The Recipient shall maintain, throughout the period of implementation of the Operation, the Central Office to support the implementation of the Operation under the guidance of the UGC. (c) No later than fifteen (15) days after the Effective Date, the Recipient shall establish and maintain, throughout the period of implementation of the Operation, a Program Support Unit within the UGC Secretariat to provide expert advice and support to the UGC Secretariat and the Central Office for the implementation of the Operation, with membership, functions and competencies acceptable to the Association. B. Additional Program Implementation Arrangements 1 . The Recipient shall carry out the Program Action Plan, or cause the Program Action Plan to be carried out, in accordance with the schedule set out in the said Program Action Plan in a manner satisfactory to the Association. 2. The Recipient shall: (a) No later than thirty (30) days after the Effective Date, appoint and thereafter maintain, at all times during the implementation of the Program, independent verification agency under terms of reference acceptable to the Association ("Independent Verification Agency"), to verify the data and other evidence supporting the achievement of one or more DLIs as set forth in the table in Section IV.A.2. of this Schedule 2 and recommend corresponding payments to be made, as applicable in accordance with the -9- terms of the MoU between UGC and the Independent Verification Agency. (b) (i) Ensure that the Independent Verification Agency carry out verification and process(es) in accordance with the Verification Protocol; and (ii) submit to the Association the corresponding verification reports in a timely manner and in form and substance satisfactory to the Association. (c) In the event there is a need for verification services prior to the appointment of the Independent Verification Agency in accordance with sub-paragraph (a) above, put in place adequate interim arrangement satisfactory to the Association and approved in writing by the Association for verification of the DLIs. C. Grants 1 . In carrying out the Project, the Recipient, through UGC, shall provide Grants to TU in accordance with the provisions of this Agreement and the Operations Manual. 2. The Recipient shall, through UGC, ensure that TU carries out the activities under the Project (a) with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social standards and practices satisfactory to the Association, including the provisions of the Anti- Corruption Guidelines applicable to recipients of the proceeds of the Grant other than the Recipient; and (b) consistent with the requirements set forth in this Agreement and the Operations Manual. 3. If TU fails to perform any of its obligations, UGC has the right to suspend or terminate TU's right to use the proceeds of the Grant, or to obtain a refund of all or any part of the amount of the Grant then withdrawn. D. Environmental and Social Standards for the Project 1 . The Recipient shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 2. Without limitation upon paragraph I above, the Recipient shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan ("ESCP"), in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; - 10- (c) 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 (d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. 3. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 4. The Recipient shall ensure that: (a) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, 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 Association, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association 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 in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 5. The Recipient shall 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 Association. - 11 - E. Operations Manual 1 . The Recipient shall: (a) prepare and furnish to the Association for its review, an Operations Manual, setting out detailed institutional, administrative, financial, technical and operational guidelines and procedures for the implementation of the Program, the Project, Program Action Plan, and including: (i) detailed safeguards, financial management (including funds flow and budgeting) and procurement arrangements; (ii) a monitoring and verification system for the Program; and (iii) provision of Grants to TU under the Project, including the implementation arrangements and reporting requirements; and (b) within forty-five (45) days after the Effective Date, adopt (through UGC) such Operations Manual as shall have been agreed by the Association and thereafter, implement the Program and Project in accordance with the Operations Manual. 2. The Recipient shall not amend, abrogate or suspend, or permit to be amended, abrogated or suspended any provision of the Operations Manual without the prior written agreement of the Association. 3. Notwithstanding the foregoing, if any provision of the Operations Manual is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall prevail. F. Annual Work Plan and Budget for the Project 1 . For purposes of implementation of the Project, the Recipient shall: (a) prepare and furnish to the Recipient for review by no later than May 15 of each year of Project implementation (or such later date as the Association may agree), a consolidated Annual Work Plan and Budget for the Project, containing details of the Project activities proposed to be carried out during the next Fiscal Year, as well as the respective eligible expenditures and budgetary requirement; (b) promptly thereafter discuss each such Annual Work Plan and Budget with the Recipient; and (c) thereafter implement each such Annual Work Plan and Budget as reviewed by and discussed with the Recipient. - 12 - Section II. Excluded Activities The Recipient shall ensure that the Program excludes any activities which: A. in the opinion of the Association, are likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people; or B. involve the procurement of: (1) works, estimated to cost seventy-five million United States dollars ($75,000,000) equivalent or more per contract; (2) goods, estimated to cost fifty million United States dollars ($50,000,000) equivalent or more per contract; (3) non-consulting services, estimated to cost fifty million United States dollars ($50,000,000) equivalent or more per contract; or (4) consulting services, estimated to cost twenty million United States dollars ($20,000,000) equivalent or more per contract. Section III. Operation Monitoring, Reporting and Evaluation The Recipient shall furnish to the Association each Program Report and Project Report not later than forty-five (45) days after the end of each Fiscal Quadrimester, covering the Fiscal Quadrimester. Section IV. Withdrawal of Financing Proceeds A. General 1. Without limitation upon the provisions of Article II of the Program General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to (a) with respect to the Program, finance Program Expenditures (inclusive of Taxes), on the basis of the results ("Disbursement Linked Results" or "DLRs") achieved by the Recipient, as measured against specific indicators ("Disbursement Linked Indicators" or "DLIs") (b) with respect to the Project, finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against Category (7) of the below table; all as set forth in the table in paragraph 2 of this Part A. 2. The following table specifies each category of withdrawal of the proceeds of the Financing (including the Disbursement Linked Indicators as applicable) ("Category"), the Disbursement Linked Results for each Category (as applicable), and the allocation of the amounts of the Financing to each Category: - 13 - Category (including Disbursement Amount of the Percentage of Eligible Linked Indicator, as applicable) Financing allocated Expenditures to be (expressed in SDR) financed (inclusive of taxes) (1) DLI #1: Labor market-driven 7,700,000 Not applicable autonomous programs, faculty members training and academic leaders' sensitization (2) DLI#2: Collaborative research 6,950,000 Not applicable and entrepreneurship program (3) DLI #3: Quality Assurance and 6,950,000 Not applicable Accreditation, and Quality Enhancement (4) DLI#4: Performance Based 6,950,000 Not applicable Grants (5) DLI #5: Enrollment of 6,950,000 Not applicable disadvantaged students and in lagging and/or disaster affected Provinces and Remote Regions (6) DLI #6: Online teaching, 4,200,000 Not applicable learning and digitized administration (7) Grants, goods, non-consulting, 2,100,000 consulting services, Training and 100% Incremental Operating Costs TOTAL AMOUNT 41,800,000 B. Withdrawal Conditions for the Program 1. Notwithstanding the provisions of Part A of this Section, with respect to Categories (1) through (6), no withdrawal shall be made: (a) on the basis of DLRs achieved prior to the Signature Date. (b) for any DLR under Category (1) to (6), until and unless the Recipient has furnished evidence satisfactory to the Association that said DLR has been achieved. - 14 - 2. Notwithstanding the provisions of Part B.1(b) of this Section, if any of the DLR(s) under Categories (1) to (6) has not been achieved, the Association may, by notice to the Recipient: (a) authorize the withdrawal of such lesser amount of the unwithdrawn proceeds of the Financing then allocated to said Category which, in the opinion of the Association, corresponds to the extent of achievement of said DLR, said lesser amount to be calculated in accordance with the formula set out in Schedule 3 to this Agreement; (b) reallocate all or a portion of the proceeds of the Financing then allocated to said DLR to any other DLR; and/or (c) cancel all or a portion of the proceeds of the Financing then allocated to said DLR. C. Withdrawal Conditions for the Project Notwithstanding the provisions of Part A of this Section, with respect to Category (7), no withdrawal shall be made for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed SDR69,650may be made for payments made prior to this date but on or after January 1, 2021, for Eligible Expenditures under Category (7). D. Operation Withdrawal Period The Closing Date is July 15, 2026. и х �w '�� N ° � ° й и � � � ш '"' й � J J ;� W : а U � �' д � .� .а �- � ш о � Oi+ о о � .° ° и� oQ� � � F z N и о° й � °р °' �" � w с�° о� F д � v; .-. >�, Я р" �" s. о�б � CL и о ,.,.� �, р .. � О а� 7� У�, м-� � и v? й� о� и w° � г'? а°i � �, и `7 .� .: м > ° г� и W W =� `: � � � ° с�а °о Е � °о � � � +, ai " v ti с4 о ол �� о•_� °q °�в а.� � д' А� с°с д. 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О i� Q �' G г�0 `w а' GQ 'С �а Г� ш °' еа '� L � � - 19- SCHEDULE4 Repayment Schedule Principal Amount of the Date Payment Due Credit repayable (expressed as a percentage)* On each February 15 and August 15, commencing 1.5625% August 15, 2027 to and including February 15, 2059 *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. - 20 - APPENDIX Definitions 1. "Academies" means the academic degree awarding autonomous institutions that function under separate legislative acts but do not provide affiliations to other academic institutions. 2. "Allocated Amount(s)" means the amount allocated to each individual DLR, or determined for each DLR pursuant to the formula detailed in Schedule 3 to this Agreement, as such amount might be increased, reallocated and/or cancelled (whether partially or in its entirety) by the Association, from time to time as the case may be, in accordance with the provisions of Section IV.B.2 of Schedule 2 to this Agreement. 3. "Annual Work Plan and Budget" means each of the annual work plans detailing the Project activities proposed for each Fiscal Year of Project implementation and their respective budget, to be prepared by the Recipient pursuant to Section I.F of Schedule 2 to this Agreement. 4. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the Program General Conditions, the Association's "Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing," dated February 1, 2012, and revised July 10, 2015. 5. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the Project General 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. 6. "Category" means a category set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 7. "Centers of Excellence" means an academic unit, which provides shared facilities for and brings together faculty members from different disciplines to promote teaching excellence, research, innovation, products and patent management. 8. "Central Departments" mean academic units at universities that provide for academic programs at master's levels and above with a separate administrative provision. 9. "Central Office" means the Central Administrative Office of the Tribhuvan University. -21 - 10. "Continuous Professional Development (CPD) Programs" means learning activities for education professionals, including faculty members, academic leaders and administrative staff, to develop and enhance their abilities for HEls management and academic program implementation. 11. "Deemed Universities" mean institutions that enjoy academic status and privileges of a University, except for the authority to provide affiliations; TU at Province level will also be regarded as a Deemed University. 12. "Disbursement Linked Indicator" or "DLI" means in respect of a given Category, the indicator related to said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 13. "Disbursement Linked Result" or "DLR" means in respect of a given Category, the result under said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement, on the basis of the achievement of which, the amount of the Financing allocated to said result may be withdrawn in accordance with the provisions of said Section IV. 14. "Digitization Grants" means grants supporting Universities/HEls for the digitization of higher education, including e-leaming, research, collaboration and resource sharing as set out in the Operations Manual. 15. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated May 12, 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. 16. "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 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 Association. - 22 - 17. "Equity Grants" means grants supporting HEls in lagging and or disaster affected Provinces as set out in the Equity Grants Manual. 18. Equity Grants Manual means guidelines setting out a framework to support HEls in lagging and or disaster affected Provinces and Remote Regions. 19. "Fiscal Quadrimester" means, each of the following four (4) month periods within the same Fiscal Year, namely on or around: (a) July 16 to November 15; (b) November 16 to March 15; and (c) March 16 to July 15. 20. "Fiscal Year" or "FY" mean the twelve-month period corresponding to the Recipient's fiscal year, commencing on or around July 16 of a calendar year and concluding on or around July 15 of the next calendar year. 21. "General Conditions" means collectively, the Program General Conditions and the Project General Conditions. In some cases, capitalized definitions are the same in both sets of General Conditions. In cases where the same capitalized term has a different definition in the Program General Conditions and the Project General Conditions, the definition provided in the Program General Conditions applies if the term relates to the Program, whereas the definition provided in the Project General Conditions applies if the term relates to the Project, as the context may require. In other cases where the same capitalized term has a different definition in the Program General Conditions and the Project General Conditions, and the term is used in this Agreement to refer to the overall Operation, the term is defined in this Appendix to this Agreement. 22. "Grants" mean grants disbursed by UGC to TU under the Project in support of the implementation of the Program in accordance with the Operations Manual. 23. "HEls" mean units of higher education institutions that have separate academic and administrative functional units. 24. "Higher Education Management Information System" or "HEMIS" means a system of higher education data collection, analysis and reporting in the form of an annual report. 25. "ICT" means Information, Communication and Technology. 26. "Incremental Operating Costs" means reasonable costs incurred by the Recipient for purposes of the management and supervision of the Project, including costs of office utilities and supplies, communication, printing services, bank charges, advertising expenses, vehicle rental, operation and maintenance of vehicles, office equipment and facilities, travel, lodging and per diem expenses, and salaries and allowances of contractual staff (other than consultants) for the Project; but excluding salaries and allowances of the Recipient's civil servants or other regular government staff. - 23 - 27. "Independent Verification Agency" means an independent institution which has been selected based on established criteria set out in the terms of reference acceptable to the Association to verify the achievement of the DLI based on a detailed DLI verification protocol jointly endorsed by the UGC and the Association. 28. "Local Government" means one of the three levels of government, as described under Article 56 of the Recipient's Constitution, and "Local Governments" means more than one local government. 29. "Memorandum of Understanding" or "MoU" means the memorandum of understanding between UGC and the Independent Verification Agency, setting out the terms of reference and operational modality of DLI verification under the Program. 30. "MOEST" means the Recipient's Ministry of Education, Science and Technology, or any successor thereto. 31. "NREN" means Nepal Research and Educational Network. 32. "Operation" means, collectively, all activities described under the Program and the Project as set forth in Schedule 1 to this Agreement. 33. "Operations Manual" means the manual referred to in Section I.E. of Schedule 2 to this Agreement to be prepared and adopted by the Recipient in a manner and substance satisfactory to the Association for the purposes of carrying out the Operation. 34. "Performance-Based Grants" means grants linked to the Performance Criteria as set out in the Operations Manual. 35. "Performance Criteria" are the performance indicators against which the HEls would be supported under the Program, which include, among others (i) the merit-based selection of HEls' leadership and excellence-based recruitment of faculty; (ii) student centric teaching and learning process; (iii) evaluation of classes and campuses by students, teachers, and other stakeholders; (iv) student and faculty mobility; (v) academia-employer collaboration; (vi) distance learning practices and digitization; (vii) graduate tracking and employability; and (viii) research outputs including action research in accordance with the Operations Manual. 36. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the Project General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 37. "Program" means the activities described in Part 1 of the Operation. 38. "Program Support Unit" means a unit in the UGC Secretariat, and in the Central Office to support the UGC Secretariat and the Central Office with additional experts/staffs for the implementation of the Operation. - 24 - 39. "Program Action Plan" means the Recipient's plan dated May 12, 2021 and referred to in Section I.B.1. of Schedule 2 to this Agreement, as may be amended from time to time with the agreement of the Association. 40. "Program General Conditions" means the "International Development Association General Conditions for IDA Financing, Program-for-Results Financing", dated December 14, 2018 (revised on August 1, 2020 and April 1, 2021). 41. "Project" means the activities described in Part 2 of the Operation. 42. "Project General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated December 14, 2018 (revised on August 1, 2020 and April 1, 2021). 43. "Province" means one of the three levels of government, as described under Article 56 of the Recipient's Constitution; and "Provinces" means more than one Province. 44. "Proxy Means Testing" means a testing method in which information on household or individual characteristics correlated with welfare levels is used in a formal algorithm to proxy household income, welfare or need. 45. "QAA" means a framework for quality assurance and accreditation for HEls. 46. "Quality Assurance and Accreditation (QAA) Program" means a program that maintains and measures minimum level of quality performance of HEIs as defined in the QAA Guidelines under implementation by the UGC. 47. "QAA Guidelines" means the guidelines containing a detailed framework and implementation arrangements for the QAA of HEls. 48. "Quality Enhancement" or "QE" means a framework, which includes indicators in addition to QAA indicators to encourage and measure transformational reforms of HEIs. 49. "Remote Regions" means remote areas of different districts in Nepal as classified by the Government of Nepal. 50. "Seed Fund Grants" means the grants provided to the competitively selected entrepreneurs to carry out the activities set out in the proposals submitted as per the Operation Manuals. 51. "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. 52. "STEM" means science, technology, engineering, and mathematics. - 25 - 53. "Tribhuvan University" or "TU" means one of the public Universities established under the Tribhuvan University Act (1959) and responsible for implementing the aspects related to TU under the Operation with UGC guidance. 54. "TU Chapter" means an autonomous TU on the Province level which is equivalent to a Deemed University. 55. "Training" referred to in Category (7) of Section IV.A.2. of Schedule 2 means the training, workshops and conferences provided/undertaken under the Project to the public officials of the Recipient and/or Project beneficiaries, including expenditures for the cost of design, planning and implementation of training, training materials, facilities, course fees, travel, accommodation, allowances and subsistence for trainees in connection with these activities. 56. "UGC" means University Grants Commission of the Recipient responsible for funding higher education, including distribution of government grants to universities, or any successor thereto. 57. "Universities" means the academic degree awarding institutions that function under separate legislative acts and possess the authority of providing affiliations to other academic institutions.