OFFICIAL DOCUMENTS GRANT NUMBER D262-ET Financing Agreement (General Education Quality Improvement Program for Equity) between FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA and INTERNATIONAL DEVELOPMENT ASSOCIATION GRANT NUMBER D262-ET FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA ("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 grant, deemed by the Association to be on concessional terms, as set forth or referred to in this Agreement, in an amount equivalent to two hundred thirteen million six hundred thousand Special Drawing Rights (SDR 213,600,000) ("Financing"), to assist in financing: (a) the program as described in Part I ("Program") of Schedule I to this Agreement; and (b) the project as described in Part 2 ("Project") of Schedule I to this Agreement, (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 Financing 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. 2.04. The Payment Dates are May I and November I in each year. 2.05. The Payment Currency is Dollar. -2- ARTICLE III - OPERATION 3.01. The Recipient declares its commitment to the objective of the Operation. To this end, the Recipient shall carry out, through MoE, the Operation 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 - REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension consists of the following, namely, the Recipient has adopted a successor program to ESDP V which will materially and adversely affect the ability of the Recipient to achieve the objective of the Program and/or perform any of its obligations under this Agreement. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 5.02. 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 VI - REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its Minister of Finance and Economic Cooperation. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance and Economic Cooperation P. O. Box 1905 Addis Ababa Federal Democratic Republic of Ethiopia; and (b) the Recipient's Electronic Address is: Telex: Facsimile: 21147 (251-11) 1551355 6.03. 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 AGREED as of the Signature Date. FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA The Fed Authorized Representative Abraham Tekeste (PhD) le: ate: ec eAydaer-PA cni " NJT&NAT AL DEVELOPMENT ASSOCIATION By Authorized Representative th'0OP.. ame: Cc LT(hfR- jr- le .-e: -Xe01cA- -1& 0m,po 1 ac ~yO~ ate: e Ley eQA Zz -;I=OLISc~I -4- SCHEDULE 1 Operation Description The objective of the Operation is to assist the Recipient in improving internal efficiency, equitable access, and quality in General Education. The Operation consists of the Program and the Project as follows: Part 1: The Program The Program consists of the following activities which form a subset of the ESDP V and the successor thereto: (a) Developing capacity for improved management in General Education by: (i) developing a relevant management structure in MoE, with a clear distribution of mandates and responsibilities at all levels and specifically, in managing the implementation of cross-cutting programs; (ii) regular gathering, processing and sharing of information to inform decision making, especially, education performance data and financial data; and (iii) promoting good coordination and communication within and across management levels through improved use of existing documentation centers and sharing platforms. (b) Improving the quality of General Education by: (i) strengthening teachers' and leaders' development and transforming teaching into a profession of choice; (ii) improving curriculum development and providing sufficient teaching and learning materials; (iii) supporting schools to develop and implement School Improvement Plans (SIP) with focus on the areas of community participation, school environment, teaching and learning and school leadership; and (iv) strengthening quality assurance systems with focus on school inspection, teacher and school leader licensing and assessment and examinations. (c) Improving access, equity and internal efficiency in General Education by: (i) increasing access to pre-primary education; (ii) increasing access to, and equity and internal efficiency of primary education; and (iii) providing special support programs for the Emerging Regions. (d) Providing support to address cross-cutting issues in General Education, specifically in the areas of gender, special needs and inclusive education. -5- Part 2: The Project The Project consists of the following activities to assist with implementation of the Program and to mitigate implementation risks: (a) Enhancing capacity for delivering sustained results in the Program by providing technical assistance to MoE for: (i) development of a national policy framework for expansion of early childhood education; and (ii) integration of information communication technology ("ICT") to improve education service delivery, including carrying out a study to review challenges, and assess the impact of introducing ICT in secondary schools, and making recommendations for policy reform and future interventions. (b) Carrying out the following activities to enhance emergency response preparedness: (i) Provision of technical assistance to enhance the capacity of the Ministry of Education and of the relevant regional and Woreda offices to prepare and implement an emergency strategy and plan for schools to cope with drought and other disasters; and (ii) providing immediate response to an Eligible Crisis or Emergency, as needed. (c) Provision of technical assistance to MoE, and responsible agencies in the Regions and Woredas, to improve Program management, implementation, monitoring and evaluation, and third party validation, as well as Project evaluations (including mid-term and end of Program evaluations). -6- SCHEDULE 2 Operation Execution Section I. Implementation Arrangements A. Operation Institutions 1. The Recipient shall maintain, during the period of implementation of the Operation, the Program Steering Committee established within MoE to oversee the coordination and monitoring, and to verify progress of implementation, of the Program and the Project. 2. The Recipient shall maintain, during the period of implementation of the Operation, the following with staffing and resources appropriate to fulfill their respective functions under the Program and/or the Project: (a) the Program Coordination Office, established under the Planning and Resource Mobilization Directorate of MoE, to oversee the implementation of the Program and the Project; (b) the agencies, offices, directorates, units, branches and universities within or under MoE and/or under other relevant ministries, each assigned with technical, social and environmental safeguards, fiduciary and other Program and Project related responsibilities for implementing the Program and the Project, all with powers, functions, capacity, staffing and resources appropriate to fulfill their respective functions under the Program and the Project; (c) the Channel One Program Coordination Directorate within MoFEC, with a mandate, adequate resources and staff satisfactory to the Association, to be responsible for financial coordination of the Program and the consolidation of financial reports related to the Program from the agencies, office, units and branches implementing the Program; and (d) at regional, Woreda, and community levels, Operation implementation arrangements (including by CTEs and public schools), satisfactory to the Association and as shall be further detailed in the Operations Manual. 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. -7- 2. The Recipient shall: (a) Appoint and thereafter maintain, at all times during the implementation of the Program, independent verification agents under terms of reference acceptable to the Association ("Verification Agents"), to verify the data and other evidence supporting the achievement of one or more DLls as set forth in the table in Section IV.A. I. of this Schedule 2 and recommend corresponding payments to be made, as applicable. (b) (i) Ensure that the Verification Agents 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 that there is a need for verification services prior to the appointment of the Verification Agents 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 DLls. C. Operations Manual 1. The Recipient, through MoE, shall: (a) prepare (in consultation with Channel One Program Coordination Directorate) 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; and (ii) a monitoring and verification system for the Program; and (b) within one (1) month after the Effective Date, adopt (through MoE) such Operations Manual as shall have been approved by the Association and thereafter, implement the Operation 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. -8- D. Safeguard Requirements for the Project In carrying out activities under the Project, the Recipient shall ensure that all technical assistance under the Project, application of whose results would have environmental or social implications, shall only be undertaken pursuant to terms of reference reviewed and found satisfactory by the Association, such terms of reference to ensure that the technical assistance takes into account, and calls for application of the Association's environmental and social safeguards policies and the Recipient's own laws relating to the environment and social aspects. E. Annual Work Plans and Budget for the Project 1 . For purposes of implementation of the Project, the Recipient shall: (a) prepare a draft annual work plan and budget ("AWPB") for each EFY, setting forth, inter alia: (i) a detailed description of the planned activities under the Project for the following EFY; (ii) the sources and proposed use of funds therefor; (iii) procurement arrangements therefor; and (iv) responsibility for the execution of said Project activities, budgets, start and completion dates, outputs and monitoring indicators to track progress of each activity; (b) not later than April 30h of each EFY, and after considering comments provided by the Program Steering Committee (referred to in Section I.A. I above), furnish the draft AWPB to the Association for its review, and promptly thereafter finalize the AWPB, taking into account the Association's comments thereon; and (c) by June 15th of each EFY, adopt and implement the final AWPB after obtaining the Association's approval thereon. F. Contingent Emergency Response In order to ensure the proper implementation of Part 2(b)(ii) of the Program ("Contingent Emergency Response") ("CERC Part"), the Recipient shall take the measures set for the below: 1 . The Recipient shall: (a) prepare and furnish to the Association for its review and approval, an operations manual which shall set forth detailed implementation arrangements for the CERC Part, including: (i) designation of, terms of reference for and resources to be allocated to, the entity to be responsible for coordinating and implementing the CERC Part ("Coordinating Authority"); (ii) specific activities which may be included in the CERC Part, Eligible Expenditures required therefor which are anticipated not to -9- exceed $5,000,000 equivalent ("Emergency Expenditures"), and any procedures for such inclusion; (iii) financial management arrangements for the CERC Part; (iv) procurement methods and procedures for Emergency Expenditures to be financed under the CERC Part; (v) documentation required for withdrawals of Emergency Expenditures; (vi) environmental and social safeguard management frameworks for the CERC Part, consistent with the Association's policies on the matter; and (vii) any other arrangements necessary to ensure proper coordination and implementation of the CERC Part; (b) afford the Association a reasonable opportunity to review said proposed operations manual; (c) promptly adopt such operations manual for the CERC Part as shall have been approved by the Association ("CERC Operations Manual"); (d) ensure that the CERC Part is carried out in accordance with the CERC Operations Manual; provided, however, that in the event of any inconsistency between the provisions of the CERC Operations Manual and this Agreement, the provisions of this Agreement shall prevail; and (e) not amend, suspend, abrogate, repeal or waive any provision of the CERC Operations Manual without prior approval by the Association. 2. The Recipient shall, throughout the implementation of the CERC Part, maintain the Coordinating Authority, with adequate staff and resources satisfactory to the Association. 3. The Recipient shall undertake no activities under the CERC Part (and no activities shall be included in the CERC Part) unless and until the following conditions have been met in respect of said activities: (a) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the CERC Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof; (b) the Recipient has prepared and disclosed all safeguards instruments required for said activities, in accordance with the CERC Operations Manual, the Association has approved all such instruments, and the Recipient has implemented any actions which are required to be taken under said instruments. -10- 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 $75,000,000 equivalent or more per contract; (2) goods, information technology, and non-consulting services estimated to cost $50,000,000 equivalent or more per contract; or (3) consultants' services, estimated to cost $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 two (2) months after the end of each EFY semester, covering the EFY semester. Section IV. Withdrawal of Financing Proceeds A. General 1. Without limitation upon the provisions of Article II of the Program General Conditions, and Article II of the Project General Conditions, and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to finance: (a) with respect to the Program, the results ("Disbursement Linked Results" or "DLRs") achieved by the Recipient, as measured against specific indicators ("Disbursement Linked Indicators" or "DLIs") in the amount allocated against Categories (1) through (8) of the below table; and (b) with respect to the Project, finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against Category (9) and (10) of the below table. -11- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) (1) DLI #1: Quality DLR #1.0: Quality 28,480,000 DLR#1.0: Not applicable Enhancement and enhancement materials SDR 3,560,000 Assurance Program developed and ("QEAP") for 0- translated; and training Class of trainers completed DLR #1.1: Inspection DLR# 1.1: framework developed SDR 3,560,000 for O-Class, validated and approved DLR #1.2: QEAP for DLR #1.2: O-Class implemented SDR 7,120,000 in Phase I schools (Baseline: 0) DLR #1.3: 20% Level I DLR #1.3: Performance O-Classes SDR 1,780,000 in Phase I Schools for every 10% upgraded to higher of O-Classes level upgraded to higher level (Baseline: 0) against approved inspection standards up to SDR 3,560,000 DLR #1.4: DLR #1.4: 90% Level I SDR 1,526,000 Performance O-Classes for every 10% in Phase I Schools of O-Classes upgraded to higher upgraded to level higher level against (Baseline 20%) approved inspection standards up to SDR 10,680,00 0 -12- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) (2) DLI#2: DLR #2.1: 60% of Best- 28,480,000 DLR #2.1: Not applicable Performance-based performing Schools SDR 7,120,000 Awards to school receive awards by on a timely basis to March 31, 2019 improve internal efficiency DLR #2.2: 70% of Best- DLR#2.2: performing Schools SDR 7,120,000 receive awards by March 31, 2020 DLR #2.3: 80% of Best- DLR #2.3: performing Schools SDR 7,120,000 receive awards by March 31, 2021 DLR #2.4: 90% of Best- DLR #2.4: performing Schools SDR 7,120,000 receive awards by March 31, 2022 (3) DLI #3: DLR #3.1: Gender- DLR #3.1: Not applicable Improved girls-to- sensitive SIP 21,360,000 SDR 1,780,000 boys ratio in Framework and for approved Grade 8 in Afar, Improved Girls' Clubs Gender- Ethiopia Somali Guidelines approved by sensitive SIP and Benishangul- MoE Framework; Gumuz Regions and SDR 1,780,000 for Improved Girls' Clubs Guidelines DLR #3.2: Girls-to-boys DLR #3.2: ratio in Grade 8 in Afar, SDR 3,560,000 Ethiopia Somali and million Benishangul-Gumuz Regions increases to 64% (Baseline: 63%) -13- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) DLR #3.3: Girls-to-boys DLR #3.3: ratio in Grade 8 in Afar, SDR 2,373,000 Ethiopia Somali and for every 1% Benishangul-Gumuz improvement Regions increases to in girls-to-boys 67% ratio up to SDR 7,120,000 (Baseline: 64%) DLR #3.4: Girls-to-boys DLR #3.3: ratio in Grade 8 in Afar, SDR 2,373,000 Ethiopia Somali and million for Benishangul-Gumuz every 1% Regions increases to improvement 70% in girls-to-boys ratio up to (Baseline: 67%) SDR 7,120,000 (4) DLI#4: DLR # 4.0: Formulas for DLR #4.0: Not applicable Improved Additional SG and 32,040,000 SDR 3,560,000 availability of revised School Grant Basic School guidelines developed Grants ("Basic and adopted SG") and Additional School DLR #4.1: 55% of DLR #4.1: Grants schools receive Basic SDR 7,120,000 ("Additional SG") SG and Additional SG in emerging by November 30, 2018 regions (baseline 50%) DLR #4.2: 60% of DLR #4.2: schools receive Basic SDR 7,120,000 SG and Additional SG by November 30, 2019 DLR #4.3: 65% of DLR #4.3: schools receive Basic SDR 7,120,000 SG and Additional SG by November 30, 2020 -14- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) DLR #4.4: 70% of DLR #4.4: schools receive Basic SDR 7,120,000 SG and Additional SG by November 30, 2021 (5) DLI #5: DLR #5.0: Framework 53,394,000 DLR #5.0: Not applicable Improved teachers' for school-based SDR 3,560,000 instructional continuous teacher activities professional development approved by the State Minister for General Education DLR #5.1: 95% of DLR #5.1: supervisors and key SDR 14,238,00 teachers in Phase 1 0 Schools are trained DLR #5.2: 80% of DLR #5.2: Phase I Schools are SDR 14,238,00 visited by cluster 0 supervisors and key teachers at least three times a year for school- based continuous teacher professional development DLR #5.3: 85% of DLR #5.3: Phase I Schools are SDR 3,560,000 visited by cluster supervisors and key teachers at least three times a year for school- based continuous -15- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) teacher professional development DLR #5.4: Score of a DLR #5.4: Composite Index of SDR 890,000 School Inspection for every Standards on teaching percentage practices in Phase I point increase schools reaches 62% in Composite Index Score up (Baseline: 54%) to SDR 7,l119,000 DLR #5.5: 90% of DLR #5.5: Phase I Schools are SDR 3,560,000 visited by cluster supervisors and key teachers at least three times a year for school- based continuous teacher professional development DLR #5.6: Score of a DLR #5.6: Composite Index of SDR 890,000 School Inspection for every Standards on teaching percentage practices in Phase I point increase schools reaches 70% in Composite Index Score up to SDR 7,119,000 (6) DLI #6: Timely DLR #6.1: At least 80% 28,480,000 DLR #6.1: Not applicable availability of of required textbooks SDR 7,120,000 textbooks available at regional centers or Woreda education offices by June 30, 2019 -16- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) DLR #6.2: Online DLR #6.2: textbook distribution SDR 3,56,000 and inventory management system operational in 1,000 Phase I Schools DLR #6.3: At least 65% DLR #6.3: of students in Target SDR 7,120,000 Grades have Target Textbooks by October 31, 2019 (Baseline: 58%) DLR #6.4: At least 75% DLR #6.4: of students in Target SDR 7,120,000 Grades have Target Textbooks by October 31, 2020 DLR #6.5: At least 80% DLR #6.5: of Target Schools have SDR 7,120,000 Target Textbooks by October 31, 2021 (7) DLI#7: DLR #7.0: School 10,680,000 DLR #7.0: Not applicable Improved identification ("ID") SDR 1,424,000 availability, quality guideline validated, and use of data approved by Minister of Education and notified to all regions and directorates and Unique School IDs issued by EMIS DLR #7.1: EGRA report DLR #7.1: of raw student test SDR 1,424,000 -17- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) scores available by June 30, 2018 DLR #7.2: ESAA DLR #7.2: reports and Annual SDR 712,000 Inspection Reports, using the new unique IDs, approved by the Minister and published by October 31, 2019 DLR #7.3: NLA report DLR #7.3: of raw student test SDR 712,000 scores available by September 30, 2019 DLR #7.4: Joint report DLR #7.4: published by EMIS, SDR 1,424,000 GElD and NEAEA on learning gaps by June 30, 2020 DLR #7.5: EGRA report DLR #7.5: of raw student test SDR 1,424,000 scores available by May 31, 2020 DLR #7.6: A strategic DLR #7.6: note for General SDR 1,424,000 Education curriculum development approved by the Minister by June 30, 2021 DLR #7.7: NLA report DLR #7.7: of raw student test SDR 1,424,000 scores available by September 30, 2021 -18- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) DLR #7.8: EGRA report DLR #7.8: of raw student test SDR 712,000 scores available by May 31, 2022 (8) DLI#8: DLR #8.0: Strategic 3,560,000 DLR #8.0: Not applicable Improved pre- framework for SDR 712,000 service teacher concurrent program training for English approved and adopted and Mathematics by the Minister of Grades 5-8 Education DLR #8.1: Teacher DLR #8.1: training curriculum for SDR 712,000 the Concurrent Program approved and adopted by the Minister of Education DLR #8.2: Teacher DLR #8.2: training modules for SDR 712,000 Concurrent Program approved by the Minister of Education DLR #8.3: Three DLR #8.3: Centers of Excellence SDR 712,000 start receiving new entrants for the Concurrent Program DLR #8.4: A progress DLR #8.4: evaluation report on the SDR 712,000 Concurrent Program approved by the Minister of Education -19- DLR allocation Percentage of and Eligible Category Amount of Disbursement Expenditures (including Financing Formula to be financed Disbursement Disbursement Linked (expressed (expressed in (inclusive of Linked Indicator, Result in SDR) SDR) taxes) as applicable) (9) Goods, non- consulting, Not applicable 7,126,000 Not applicable 100% consulting services, Training and Incremental Operating Costs (10) Emergency Not applicable 0 Not applicable 100% Expenditures under Part 2(b)(ii) of the Operation TOTAL 213,600,00 AMOUNT 0 B. Withdrawal Conditions for the Program 1. Notwithstanding the provisions of Part A of this Section, with respect to Categories (1) through (8), no withdrawal shall be made: (a) for purposes of Section 2.03 of the Program General Conditions, for DLRs achieved prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed SDR 18,600,000 may be made for such DLRs achieved prior to this date but on or after April 1, 2017; or/and (b) for any DLR until and unless the Recipient has furnished evidence satisfactory to the Association that said DLR has been achieved, including verification reports from the Verification Agent, based on reports prepared by the Recipient certifying the achievement of the DLRs in accordance with the Verification Protocol. -20- 2. Notwithstanding the provisions of Part B. 1(b) of this Section, with respect to the Program, the Recipient may withdraw an amount not to exceed SDR 28,500,000 as an advance; provided, however, that if the DLRs in the opinion of the Association, are not achieved (or only partially achieved) by the Closing Date, the Recipient shall refund such advance (or portion of such advance as determined with reference to the Verification Protocol) to the Association promptly upon notice thereof by the Association. Except as otherwise agreed with the Recipient, the Association shall cancel the amount so refunded. Any further withdrawals requested as an advance under any Category shall be permitted only on such terms and conditions as the Association shall specify by notice to the Recipient. Notwithstanding the provisions of Part B.1(b) of this Section, with respect to the Program, if any of the DLR has not been achieved by the date by which the said DLR is set to be 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 Disbursement Formula; and/or (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: (a) with respect to Categories (9) and (10), no withdrawal shall be made for payments made in respect of the Project prior to the Signature Date; and (b) with respect to Category 10, no withdrawal shall be made for Emergency Expenditures under Part 2(b)(ii) of the Operation, unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (i) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the CERC Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof; -21- (ii) the Recipient has prepared and disclosed all safeguards instruments required for said activities, and the Recipient has implemented any actions which are required to be taken under said instruments, all in accordance with the provisions of Section I.F.3(b) of Schedule 2 to this Agreement; (iii) the Recipient's Coordinating Authority has adequate staff and resources, in accordance with the provisions of Section I.F.2 of this Schedule 2 to this Agreement, for the purposes of said activities; and (iv) the Recipient has adopted a CERC Operations Manual in form, substance and manner acceptable to the Association and the provisions of the CERC Operations Manual remain, or have been updated in accordance with the provisions of Section I.F.1 of this Schedule 2 so as to be appropriate for the inclusion and implementation of said activities under the CERC Part. D. Operation Withdrawal Period The Closing Date is July 7, 2022. Section V. Other Undertakings 1 . Notwithstanding any provision to the contrary, Emergency Expenditures required for the CERC Part of the Project shall be procured in accordance with the procurement methods and procedures set forth in the CERC Operations Manual. -22- APPENDIX Definitions I. "Additional SG" means additional school grants for cluster resource centers, which are to be transformed into inclusive education resource centers, for the purpose of supporting education of students with special needs and additional grants to schools in four emerging Regions. 2. "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. 3. "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. 4. "Annual Inspection Reports" means the annual inspection reports issued by the General Education Inspection Directorate assessing school performance using twenty-six standards for inspection. 5. "AWPB" means the annual work plan and budget to be prepared and adopted in accordance with Section LE of Schedule 2 to this Agreement. 6. "Basic SG" means grants funds provided by GoE to alternative basic education centers and government schools in the Recipient's country, based on the number of students enrolled O-Class to Grade 12. 7. "Best-performing Schools" means the top 10 percent of schools in each Region that rank the highest in year-to-year improvement, as determined in accordance with the Operations Manual. 8. "Category" means a category set forth in the table in Section IV.A.1 of Schedule 2 to this Agreement. 9. "CDID" means the Curriculum Development and Implementation Directorate of the Ministry of Education. 10. "CERC Operations Manual" means the operations manual referred to in Section L.F of Schedule 2 to this Agreement, to be adopted by the Recipient for the CERC Part of the Project in accordance with the provisions of said Section. -23- 11. "CERC Part of the Project" or "CERC Part" means Part 2(b)(ii) of the Operation. 12. "Centers of Excellence" means the universities with teacher education/training institutions that meet the highest standards of teaching and research in the field of education, as more particularly set out in the Operations Manual. 13. "Cluster Center School" means a school better equipped with resources and staff and selected by a Woreda to provide administrative and pedagogical support to learners and teachers in three to five satellite schools. 14. "Composite Index of School Inspection Standards on Teaching Practice" or "Composite Index" means the composite index of school inspection standards on teaching practices, which is a simple average of scores in school inspection standards 11, 12, 13 and 18, as more particularly set out in the Operations Manual. 15. "Concurrent Program" means the four-year degree pre-service program that provides concurrent training to prospective primary and secondary school teachers on content and pedagogy. 16. "CTE" means College of Teacher Education established by the Regional government. 17. "Disbursement Formula" means the formula set forth in the table in Section IV.A. 1 of Schedule 2 to this Agreement. 18. "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. I of Schedule 2 to this Agreement. 19. "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.I 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. 20. "EFY" means the Ethiopian Fiscal Year, the fiscal year of the Recipient which commences on July 8 and ends on July 7. 21. "EGRA" means Early Grades Reading Assessment, a tool used to measure students' progress toward learning to read. 22. "Eligible Crisis or Emergency" means an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact to the Recipient, associated with a natural or man-made crisis or disaster. -24- 23. "Emergency Expenditure" means any of the Eligible Expenditures set forth in the CERC Operations Manual in accordance with the provisions of Section I.F. I of Schedule 2 to this Agreement and required for the activities included in the CERC Part of the Project. 24. "Emerging Regions" means Afar, Benishangul-Gumuz, Gambella, and Ethiopia Somali Regions. 25. "EMIS" means Education Management Information Systems. 26. "ESAA" means Education Statistics Annual Abstract, which aims to publicize national performance in education and training in General Education, based on the data gathered from the annual education census. 27. "ESDP V" means the Education Sector Development Program covering years 2015 through 2020 adopted by the Ministry of Education in 2015, setting out an overarching education framework for the country. 28. "Formulas for Additional SG" means the formula for additional school grants for cluster resource centers, which are to be transformed into inclusive education resource centers, for the purpose of supporting education of students with special needs, and the formula for additional grants to schools in emerging Regions, including Afar, Ethiopia Somali, Benishangul-Gumuz and Gambella and as more specifically set out in the Operations Manual. 29. "GEID" means the General Education Inspection Directorate of the Ministry of Education. 30. "Gender-sensitive SIP Framework" means the gender sensitive school improvement planning framework with updated descriptors to be validated and approved by the Ministry of Education. 31. "General Education" means the levels of school education, from O-Class to Grade 12. 32. "General Conditions" means the Program General Conditions and/or the Project General Conditions, as applicable. 33. "Improved Girls Club Guidelines" means girls club guidelines with defined technical and implementation aspects to be validated and approved by the Ministry of Education. 34. "Level I Performance O-Classes" means the O-classes whose weighted performance score of inspection standards is less than 50%. -25- 35. "MoE" means the Recipient's Ministry of Education, or any successor thereto. 36. "MoFEC" means the Recipient's Ministry of Finance and Economic Cooperation, or any successor thereto. 37. "MSIC" means the Mathematics and Science Improvement Center. 38. "MTELDD" means the Mother Tongue and English Language Development Directorate. 39. "NEAEA" means the National Education Assessment and Examinations Agency. 40. "NLA" means the National Learning Assessment which consists of nationally representative sample surveys of student performance in key subjects in Grade 4, 8, 10 and 12. 41. "O-Class" means the one-year reception class (nine-month program) based in government primary schools for children aged 6 years, before formal schooling starts at age 7. 42. "Operation" means, collectively, all activities described under the Program and the Project in Schedule I to this Agreement. 43. "Operations Manual" means the operations manual to be prepared and adopted in accordance with Section L.C of Schedule 2 to this Agreement. 44. "Performance-based Awards" means the monetary award disbursed directly to schools using the school bank account under the responsibility of the School Improvement Program Directorate, as more specifically set out in the Operations Manual. 45. "Phase 1 Schools" means a group of about 2,000 schools in randomly selected Woredas across all Regions that will benefit from the school-based teacher professional development program during the Program period, from 2019 through 2022. 46. "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 July 2016. 47. "Program" means the activities described in Part I of Schedule I to this Agreement. 48. "Program Action Plan" means the Recipient's Program Action Plan referred to in Section 1.C. 1(a) of Schedule 2 to this Agreement, as may be amended from time to time with the agreement of the Association. -26- 49. "Program General Conditions" means the "International Development Association General Conditions for IDA Financing, Program-for-Results Financing", dated July 14, 2017. 50. "Project" means the activities described in Part 2 of Schedule 2 to this Agreement. 51. "Project General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated July 14, 2017. 52. "QEAP" means the Quality Enhancement and Assurance Program that ensures quality enhancement and quality assurance for O-Class, including through in- service training of teachers, managers and supervisors, provision of materials, and school inspection. 53. "Region" means the second tier of government in the Recipient's administrative system as established under the Recipient's Constitution. 54. "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. 55. "Target Grades" means Grades I and 2 and Grades 7 and 8 in government primary schools. 56. "Target Textbooks" means with respect to Grades I and 2, Mother Tongue language textbooks and with respect to Grades 7 and 8, English language and mathematics textbooks. 57. "TELDD" means Teachers and Education Leaders Development Department of the MoE. 58. "Unique School IDs" means the unique and systematic school identifications to be developed by the Information and Communication Directorate for use in EMIS and nationally adopted. 59. "Verification Agents" means independent entities to be engaged by the Recipient for the purposes of certifying the achievement of the DLRs as referred to in Section I.B.2 of Schedule 11 to this Agreement. 60. "Verification Protocol" means the Recipient's Verification Protocol, acceptable to the Association, setting forth the means by which the achievement of DLRs will be verified under the Program, as such Verification Protocol may be amended from time to time with the prior written agreement of the Association. -27- 61. "Woreda" means the lowest administrative unit of government in the Recipient's territory as established pursuant to the relevant Regional legislation.