U~MENT
CREDIT NUMBER 5564-MG
Financing Agreement
(Second Intigrated Growth Poles and Corridor Project)
between
REPUBLIC OF MADAGASCAR
and
INTERNA7IONAL DEVELOPMENT ASSOCIATION
Dated December 18, 2014


CREDIT NUMBER 5564 -MG
FINANCING AGREEMENT
AGREEMENT dat!d December 18, 2014, entered into between the REPUBLIC
OF MADAGASCAR ("Recipient") and INTERNATIONAL DEVELOPMENT
ASSOCIATION ("Associa ion"). The Recipient and the Association hereby agree as
follows:
ARTICLE I - - GENERAL CONDITIONS; DEFINITIONS
1.01.  The General Condil ions (as defined in the Appendix to this Agreement) constitute
an integral part of tiis Agreement.
1.02.  Unless the context r ,quires otherwise, the capitalized terms used in this Agreement
have the meanings iscribed to them in the General Conditions or in the Appendix
to this Agreement.
ARTICLE II - FINANCING
2.01.  The Association ag,ees to extend to the Recipient, on the terms and conditions set
forth or referred to in this Agreement, a credit in an amount equivalent to thirty
three  million  eight  hundred   thousand   Special  Drawing   Rights
(SDR 33,800,000) 1 variously, "Credit" and "Financing"), to assist in financing the
project described it Schedule I to this Agreement ("Project").
2.02.  The Recipient ma3 withdraw the proceeds of the Financing in accordance with
Section IV of ScheJule 2 to this Agreement.
2.03. The Maximum C )mmitment Charge Rate payable by the Recipient on the
Unwithdrawn Fina icing Balance shall be one-half of one percent (1/2 of 1%) per
annum.
2.04.  The Service Charge payable by the Recipient on the Withdrawn Credit Balance
shall be equal to th-ee-fourths of one percent (3/4 of 1%).
2.05.  The Payment Date; are April 15 and October 15 in each year.
2.06.  The principal am )unt of the Credit shall be repaid in accordance with the
repayment schedul, set forth in Schedule 3 to this Agreement.
2.07.  The Payment Curr ncy is the Dollar.


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ARTICLE III - PROJECT
3.01.  The Recipient dech res its commitment to the objective of the Project. To this end,
the Recipient shall carry out the Project in accordance with the provisions of
Article IV of the G,neral Conditions.
3.02.  Without limitation upon the provisions of Section 3.01 of this Agreement, and
except as the Recipient and the Association shall otherwise agree, the Recipient
shall ensure that tl-e Project is carried out in accordance with the provisions of
Schedule 2 to this / kgreement.
ARTICLE IV - EFFECTIVENESS; TERMINATION
4.01.  The Additional Coiiditions of Effectiveness consist of the following:
(a)    The Recip ent has revised the PICl Project Manuals for the Project, in
form and s ibstance acceptable to the Association and the revised manuals
include a complaint management system for procurement acceptable to the
Associatio I.
(b)    The Recipi -nt has adopted the Institutional Decree for the Project, in form
and substance acceptable to the Association, and established both the
Steering C,mmittee and the PIU with mandates, compositions, staff and
resources satisfactory to the Association, as further set out in Section L.A
of Schedul, 2 to this Agreement.
4.02.  The Effectiveness Deadline is the date one hundred and twenty days (120) days
after the date of this Agreement.
4.03.  For purposes of Section 8.05(b) of the General Conditions, the date on which the
obligations of the Recipient under this Agreement (other than those providing for
payment obligaticns) shall terminate is twenty years after the date of this
Agreement.


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ARTICLH V - REPRESENTATIVE; ADDRESSES
5.01.  The Recipient's Re)resentative is its minister responsible for finance.
5.02.  The Recipient's Ac dress is:
Ministry of Finance and Budget
B.P. 61
Antananarivo 101
Madagascar
Cable address:             Facsimile:
MFB                        (261) 20 22 34530
Antananarivo
5.03.  The Association's Address is:
International Deve opment Association
1818 H Street, N.P'.
Washington, D.C. 10433
United States of America
Cable:               Telex:              Facsimile:
INDEVAS              248423 (MCI)        1-202-477-6391
Washington, D.C.


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AGREED at Antan marivo, Republic of Madagascar, as of the day and year first
above written.
REPUBLIC OF MADAGASCAR
By
Authorized Representative
Name:
law RAA*;AjNPOO3
Title: 1Ma                                     .
INTERNATIONAL DEVELOPMENT ASSOCIATION
By
Authorized Representative
ame:
Title:


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SCHEDULE 1
Project Description
The objective of th Project is to contribute to increased economic opportunities
and access to enabling infiastructure services, as measured by an increase in jobs and
formal firms, in Targeted R,-gions.
The Project consist:. of the following parts:
Component 1. Strengthen ng the Enabling Environment for Entrepreneurship and
Investment
1.1   Improving the investment climate, through the provision of technical assistance,
capacity building atnd equipment to: (a) design and implement an investment
climate reform proE ram through inclusive public-private dialogue; (b) facilitate the
operations of one ;top shops for the delivery of various permits and licenses,
through procedura reforms and improved information and communications
technology systems and services; and (c) improve dispute resolution and
streamline tax adm nistration.
1.2    Promoting private investment, through the provision of training, technical
assistance, capacit, building and equipment to: (a) build capacity of EDBM for
investment promotion; (b) establish an institutional, legal and regulatory
framework for pulblic private partnerships and build public capacity to design
public private partr erships; (c) support the development of the Ehoala Park public-
private joint venture as well as improve solid waste and water pipes management;
and (d) provision, through a catalytic fund, of Matching Grants for private
investment in the 'argeted Regions for the financing of: (i) eligible commercial
subprojects, and (ii) subprojects proposed by young adults.
Component 2. Sector Based Growth in the Targeted Regions
2.1    Strengthening locel governance: (a) at the urban and rural commune level to
increase institution il capacity (implementation of participatory budgeting, revenue
management and ocal public service delivery linked to management of land
records and justice including one stop shops and decentralized technical services)
through the provi;ion of: (i) technical assistance, training, capacity building,
equipment and wc rks; and (ii) grants; and (b) at the regional level through the
provision of techni -al assistance, training, capacity building, equipment and small
works (implement tion of regional development plans, facilitation of construction
permits and business licenses issuing, and development of cross-regional
coordination of d welopment projects); and at the national level through the
provision of technical assistance and capacity building to share Project
achievements.


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2.2    Improving service delivery and shared infrastructure, through the provision of
technical assistanc(, equipment and civil works to: (a) upgrade urban roads in or
around Toliara and Antsiranana, including side-road drains and feasibility studies
for future works; , nd (b) improve access to water and sanitation in or around
Toliara and Antsi -anana, including: (i) repairing and equipping boreholes,
(ii) constructing or rehabilitating pipelines, standpipes and storage, (iii) carrying
out feasibility stuc ies and works for a water treatment plant, (iv) providing
technical assistance to improve water plant management and financial
sustainability, and iv) providing assistance for the drafting and implementation of
a JIRAMA quality nanagement plan at the local level.
2.3    Promoting sustainble tourism development, through the provision of technical
assistance, capacit" building, equipment and civil works to: (a) strengthen the
enabling environr ent for tourism development by: (i) building capacity for
strategic tourism <evelopment; and (ii) improving competitiveness in the air
transport sector, bUilding capacity for the ministry in charge of transport and the
authority for civil ;viation (ACM), the development of a national airport master
plan and developrr ent of the National Air Transport Strategy; and (b) promote
regional tourism sictor development by: (i) improving management of popular
tourist attractions, diversifying tourism value propositions and enhancing local
value addition; (ii) promoting and marketing regional destinations; and (iii)
preparing feasibilily studies for improved access by road, air and sea to main
tourist attractions.
2.4    Promoting sustair able agribusiness development, through the provision of
technical assistance, capacity building and equipment to: (a) strengthen the
enabling environient for agribusiness value chains; and (b) strengthen
information, coord nation and linkages in the Targeted Value Chains.
Component 3. Project Im glementation, Monitoring and Evaluation, Safeguards, Impact
Assessmen'
Provision of tech iical assistance, training, capacity building, equipment and
supporting operatii ig expenses related to the coordination and implementation of
Project activities, monitoring and evaluation, implementation of safeguard
requirements and Essessment of the impacts of the Project activities.


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SCHEDULE 2
Project Execution
Section I.    Implement ation Arrangements
A.     Institutional Arra igements
The Recipient sha I maintain the following institutional arrangements, further
described in the Project Ma iuals, throughout the implementation of the Project.
1 .    Steering Committei
(a)    The Recipi,-nt shall establish and maintain the Steering Committee, with
compositio i and mandate acceptable to the Association.
(b)    Without li nitation to the generality of the foregoing provisions of
paragraph (a) immediately above, the Steering Committee shall be chaired
by the Ministry of State and include at a minimum high level
representat ves of the Recipient's ministries responsible for tourism,
commerce, agriculture and rural development, and water, as well as a
representat ve of the Office of the President.
(c)    Without limitation to the generality of the foregoing provisions of
paragraph (a) immediately above, the Steering Committee shall be
responsible for the provision of strategic guidance and overall oversight of
the Project and support for its effective implementation and shall meet at
least twice a year to review Project progress reports provided by the PIU.
2.     PlU
(a)    The Recipient shall establish and maintain the Project Implementing Unit
(PIU) und .r the responsibility of the Ministry of State, with mandate,
compositicn and resources acceptable to the Association. In particular, the
Recipient : hall maintain at all times sufficient staff, each with adequate
terms of reference, qualifications and experience for the Project.
(b)    Without lii nitation to the provisions of paragraph (a) immediately above,
the PIU shill be responsible for the day to day management of the Project
and the ccordination of its activities including, inter alia, procurement,
disbursem,!nt, accounting, reporting, social  and  environmental
manageme nt, communication, monitoring and evaluation, in close
interaction with the private sector and provide Project progress reports to
the Steerirg Committee at least twice a year.


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(c)    Without li iitation to the provisions of paragraph (a) immediately above,
the PIU shzll include, inter alia:
(i)    at the central level: (A) a coordinator; (B) a procurement
specialist; (C) a financial manager; (D) an accountant; (E) a
monitoring and evaluation specialist; (F) an environmental and
social safeguard specialist; and (G) an accounts assistant;
ree-uited in accordance with the provisions of Section III of
Schedule 2 to this Agreement, and on the basis of terms of
ref.rence, qualifications and experience acceptable to the
As ;ociation. In addition, no later than three (3) months after the
Eflective Date, the Recipient shall recruit an internal auditor
wilhin the PIU in accordance with the provisions of Section III of
Schedule 2 to this Agreement, and on the basis of terms of
ref,-rence, qualifications and experience acceptable to the
As ;ociation, to be assigned at the central level; and
(ii)   in each Targeted Region: No later than six (6) months after the
Ef ective Date, the Recipient shall recruit: (a) a coordinator; and
(b) one (1) account assistant, all in accordance with the provisions
of Section III of Schedule 2 to this Agreement, and each on the
ba:'is of terms of reference, qualifications and experience
acieptable to the Association, to be assigned one in each Targeted
Re aion.
3. Investment Climate Reft rm Committee
(a)    No later th in three (3) months after the Effective Date, the Recipient shall
establish a id thereafter maintain a structure satisfactory to the Association
to lead an J manage the investment climate reform process within the
country of the Recipient to be established under the control of the Office
of the President, with mandate, composition and resources acceptable to
the Associ ition.
(b)    Without Imitation to the generality of the foregoing provisions of
paragraph (a) immediately above, the Investment Climate Reform
Committec shall include key line ministries, including, for example, the
Recipient' i ministries responsible for finance, justice, commerce,
industry, F DBM, and private sector representatives.


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B.     Grants
1. To facilitate the car -ying out of subcomponent 1.2(d) of the Project, the Recipient
shall enter into an agreement (the "Fund Management Agreement") under terms
and conditions ap )roved by the Association, with a consultant selected in
accordance with the provisions of Section III of Schedule 2 to this Agreement and
on the basis of tern s of reference, qualification and experience acceptable to the
Association (the "F ind Manager").
2.     For the implement ition of subcomponent 1.2(d) of the Project, the Recipient,
acting through the Fund Manager, shall extend grants (each a "Matching Grant"):
(a)    up to a maximum amount of $150,000 each and representing no more than
50% of the :otal cost of a Sub-Project, to eligible private sector entity (each
a "Benefi iary") for the financing of eligible private commercial
subprojects generating benefits in terms of employment, business linkages
or technok gy spill-over effects within a Targeted Region (each set of
activities a "Sub-Project"), pursuant to eligibility criteria and under terms
and conditions acceptable to the Recipient and the Association and
described i 1 the Project Manuals; and
(b)    up to a ma::imum amount of $10,000 each, to eligible young adults (each
a "Benefic ary") for the financing of eligible subprojects across sectors
(each set o 'activities a "Sub-Project"), pursuant to eligibility criteria and
under term; and conditions acceptable to the Recipient and the Association
and descrit ed in the Project Manuals.
3.     For the implemeniation of subcomponent 2.1(a) of the Project, the Recipient,
acting through the I1IU with the support of FDL, shall extend small grants (each an
"OCAI Grant") tD eligible Communes within Targeted Regions (each a
"Beneficiary").
4.     Each OCAl Grant and each Matching Grant (collectively, the "Grants") shall be
extended pursuant :o an agreement (each a "Grant Agreement") to be entered into
between the Recip ent (through the Fund Manager or PIU, as applicable) and the
relevant Beneficia-y, on the basis of the model form attached to the Project
Manuals, which sh ill, inter alia, include the following provisions:
(a)    the Benefi-iary shall carry out the Sub-Project with due diligence and
efficiency in accordance with appropriate administrative, financial,
technical, -ngineering and environmental standards, including local and
national environmental requirements, acceptable to the Association,
including, without limitation to the generality of the foregoing, in
accordance with the provisions of the Anti-Corruption Guidelines


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applicable t) recipients of Financing proceeds other than the Recipient, the
Project Ma iuals and the relevant Safeguard Documents;
(b)    the Beneficiary shall provide, promptly as needed, the resources required
for the purf ose, if any;
(c)    the Beneficiary shall procure the goods, works and services to be financed
out of the Grant in accordance with the provisions of this Agreement and
use such gcods, works and services exclusively for the carrying out of the
Sub-Projec concerned;
(d)    the Beneficiary shall maintain policies and procedures, adequate to enable
the Recipient, acting through the Fund Manager or the PIU, as applicable,
to monitor and evaluate in accordance with indicators acceptable to the
Associatioi, the progress of the activities carried out under the Sub-Project
and the aclievement of its objectives;
(e)    the Benefi:iary shall: (i) maintain a financial management system and
prepare financial statements in accordance with consistently applied
accounting standards acceptable to the Association, both in a manner
adequate to reflect the operations, resources and expenditures related to
the activiti s carried out under the Project; and (ii) at the Fund Manager's,
the PIU's, ihe Recipient's or the Association's request, have such financial
statements audited by independent auditors acceptable to the Association,
in accorda ice with consistently applied auditing standards acceptable to
the Associ ition, and furnish promptly to the Fund Manager, the PIU, the
Recipient , nd the Association the financial statements as so audited;
(f)    the Benefi(iary shall enable the Fund Manager, the PIU, the Recipient and
the Associ ition to inspect the activities carried out under the Sub-Project,
its operation and any relevant records and documents and prepare and
furnish to he Fund Manager, the PIU, the Recipient and the Association
all such irformation as the Fund Manager or the PIU, shall reasonably
request rel iting to the foregoing; and
(g)    the Recipiint, acting through the Fund Manager or the PIU, as applicable,
shall have the right to suspend or terminate the right of the Beneficiary to
use the proceeds of the Grant, or obtain a refund of all or any part of the
amount ol the Grant then withdrawn, upon the Beneficiary's failure to
perform at y of its obligations under the Grant Agreement.
5.     The Recipient shell exercise its rights and carry out its obligations under each
Grant Agreement n such manner as to protect the interests of the Recipient and
the Association at d to accomplish the purposes of the Financing. Except as the


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Association shall ol herwise agree, the Recipient shall not assign, amend, abrogate
or waive any of the Grant Agreements or any of their provisions.
C.     Anti-Corruption
The Recipient shal ensure that the Project is carried out in accordance with the
provisions of the A iti-Corruption Guidelines.
D.     Safeguards
1. The Recipient shall ensure that all terms of reference for any technical assistance
or studies carried oit under the Project are consistent with, and pay due attention
to, the Bank Polici s, as well as the Recipient's own laws relating to environment
and social aspects.
2.     The Recipient shall ensure that the Project shall be implemented in accordance
with the guidelines procedures, timetables and other specifications set forth in the
Safeguard Docume its. In particular, the Recipient shall ensure that:
(a)    for each activity under the Project of a type for which the Environmental
and Social Management Framework provides that an Environmental and
Social Ma iagement Plan should be prepared, such Environmental and
Social Ma riagement Plan, in form and substance satisfactory to the
Associatio i, is effectively prepared and locally disclosed, before the
implement ition of such activity, in accordance with the provisions of the
Environmental and Social Management Framework, and the relevant
activity is mplemented in accordance with its Environmental and Social
Managemc nt Plan; and
(b)    for each activity under the Project of a type for which the Resettlement
Policy Fra nework provides that a Resettlement Action Plan should be
prepared, such Resettlement Action Plan, in form and substance
satisfactor, to the Association, is effectively prepared and locally
disclosed, )efore the implementation of such activity, in accordance with
the provis ons of the Resettlement Policy Framework, and the relevant
activity is mplemented in accordance with its Resettlement Action Plan.
3.     Except as the A:,sociation shall otherwise agree in writing and subject to
compliance with applicable consultation and public disclosure requirements of the
Association, the R:cipient shall not abrogate, amend, repeal, suspend or waive any
provisions of any (f the Safeguard Documents, nor shall it permit any other entity
participating in the implementation of the Project to do so.
4.     Without limitation upon its other reporting obligations under this Agreement, the
Recipient shall reg ilarly collect, compile and submit to the Association, on a semi-


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annual basis, reporis on the status of compliance with the Safeguard Documents,
giving details of: (E) measures taken in furtherance of the Safeguard Documents;
(b) conditions, if any, which interfere or threaten to interfere with the smooth
implementation of he Safeguard Documents; and (c) remedial measures taken or
required to be taker to address such conditions.
5.    In the event that an:' provision of the Safeguard Documents shall conflict with any
provision under thi:. Agreement, the terms of this Agreement shall prevail.
E.     Annual Work Plaiis and Budgets
1      Each year the Recipient shall prepare:
(a)    a draft annual work plan and budget for the Project (including Training
and Operat ng Costs) for each subsequent year of Project implementation,
of such scope and detail as the Association shall have reasonably
requested; md
(b)    the evidence, in form and substance satisfactory to the Association, that
all Safeguird Documents required prior to the implementation of the
activities i icluded in the draft annual work plan and budget have been
prepared o are in the process of being prepared so as to be available in
form and substance acceptable to the Association and disclosed in
accordance with the Bank Policies before approval by the Association of
the biddinj documents for each activity.
2.     The Recipient shal furnish to the Association, as soon as available, but in any case
not later than No ember 30 of each year, the annual work plans and budgets
approved by the Sti ering Committee and the evidences referred to in subparagraph
1(b) above, for the Association's review and approval; except for the annual work
plan and budget foi the Project for the first year of Project implementation, and the
evidence which m,.y be required for the implementation of the activities included
in the draft annual work plan and budget for such period which shall be furnished
no later than one (1) month after the Effective Date. Only the activities included in
an annual work pl in and budget expressly approved by the Association (each an
"Annual Work Pla i and Budget") are eligible to a financing from the proceeds of
the Financing.
3.     Training shall be :arried out on the basis of Annual Work Plans and Budgets,
which shall, inter 2lia, identify: (a) particulars of the training envisaged; (b) the
personnel to be tr, ined; (c) the selection method of the institution or individuals
conducting such tr iining; (d) the institution conducting such training if identified;
(e) the purpose an Ijustification for such training; (f) the location and duration of
the proposed training; and (g) the estimate of the cost of such training.


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4.     The Recipient shal ensure that the Project is carried out in accordance with the
Annual Work Plans and Budgets.
5.     Annual Work Plaits and Budgets may be revised as needed during Project
implementation sutject to the Association's prior approval.
F.     Manuals
1.    (a)    The Recipi-nt shall ensure that the Project is carried out in accordance
with the Prject Manuals.
(b)    Except as ihe Association shall otherwise agree, the Recipient shall not
assign, am nd, abrogate, or waive any of the Project Manuals, or any
provision t iereof.
2.    In the event of any conflict between the provisions of any of the Project Manuals
and those of this Agreement, the provisions of this Agreement shall prevail.
Section II.  Project M )nitoring, Reporting and Evaluation
A.     Project Reports
1 .    The Recipient shal monitor and evaluate the progress of the Project and prepare
Project Reports in iccordance with the provisions of Section 4.08 of the General
Conditions and on the basis of indicators acceptable to the Association. Each
Project Report sh,11 cover the period of one calendar semester, and shall be
furnished to the As 3ociation not later than forty-five (45) days after the end of the
period covered by ! uch report.
2.     Twenty-four (24) r ionths after the Effective Date, or at any other date agreed with
the Association, the Recipient shall, in conjunction with the Association, carry out
a mid-term review of the Project (the "Mid-term Review"), covering the progress
achieved in the ir plementation of the Project. The Recipient shall prepare and
furnish to the Assc ciation not less than three (3) months prior to the beginning of
the Mid-term Review, a report integrating the results of the monitoring and
evaluation activiti:s performed pursuant to this Agreement, on the progress
achieved in the car -ying out of the Project during the period preceding the date of
such report, and s.tting out the measures recommended to ensure the efficient
carrying out of the Project and the achievement of the objective of the Project
during the period following such date. Following the Mid-term Review, the
Recipient shall act promptly and diligently in order to take, or cause to be taken,
any corrective ac:ion deemed necessary by the Association to remedy any
shortcoming noted in the carrying out of the Project in furtherance of the objective
of the Project.


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3.     For purposes of S,ection 4.08(c) of the General Conditions, the report on the
execution of the Pr(ject and related plan required pursuant to that Section shall be
furnished to the As! ociation not later than six months before the Closing Date.
B.     Financial Manage nent, Financial Reports and Audits
1.     The Recipient shal maintain or cause to be maintained a financial management
system in accordE nce with the provisions of Section 4.09 of the General
Conditions.
2.     Without limitation )n the provisions of Part A of this Section, the Recipient shall
prepare and furnisY to the Association not later than forty-five (45) days after the
end of each calendar quarter, interim unaudited financial reports for the Project
covering the quarte -, in form and substance satisfactory to the Association.
3.     The Recipient shal have its financial statements audited in accordance with the
provisions of Seclion 4.09(b) of the General Conditions. Each audit of the
Financial Statemen s shall cover the period of one fiscal year of the Recipient. The
audited Financial Statements for each such period shall be furnished to the
Association not lati!r than six months after the end of such period.
4.     In order to ensure t ie timely carrying out of the audits referred to in Section II. 13.3
of this Schedule, tt e Recipient shall engage independent auditors for the purpose
not later than six '6) months after the Effective Date, in accordance with the
provisions of Secti )n III of this Schedule.
Section III.  Procurem nt
A.     General
1.     Goods, Works and Non-consulting Services. All goods, works and non-
consulting services required for the Project and to be financed out of the proceeds
of the Financing st all be procured in accordance with the requirements set forth or
referred to in Section I of the Procurement Guidelines, and with the provisions of
this Section.
2.     Consultants' Sen ices. All consultants' services required for the Project and to be
financed out of the proceeds of the Financing shall be procured in accordance with
the requirements et forth or referred to in Sections I and IV of the Consultant
Guidelines, and w th the provisions of this Section.
3.     Definitions. The capitalized terms used below in this Section to describe particular
procurement met[ ods or methods of review by the Association of particular
contracts, refer to he corresponding method described in Sections II and III of the
Procurement Guid -lines, or Sections II, Ill, IV and V of the Consultant Guidelines,
as the case may bc.


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B.     Particular Methot s of Procurement of Goods, Works and Non-consulting
Services
1.    International Coni petitive Bidding. Except as otherwise provided in paragraph
2 below, goods, v orks and non-consulting services shall be procured under
contracts awarded (n the basis of International Competitive Bidding.
2.     Other Methods (of Procurement of Goods, Works and Non-consulting
Services. The follo wing methods, other than International Competitive Bidding,
may be used for p ocurement of goods, works and non-consulting services for
those contracts spec ified in the Procurement Plan:
(a)    National ( ompetitive Bidding: procurement shall be carried out in
accordance with the "Open Competitive Bidding" method (Appel d'offres
ouvert) set forth in the Recipient's law no. 2004-009 of July 2004 on the
Public Pro< urement Code, subject to the following additional provisions
listed in (i) through (xv) below to conform to the provisions of the
Procureme t Guidelines:
(i)    No bidder or potential bidder shall be declared ineligible for
coi tracts financed by the Association for reasons other than: (i) its
capability and resources to successfully perform the contract; (ii)
a c )nflict of interest situation, or (iii) an accepted prohibition.
(A i   Firms of a country or goods manufactured in a country
may be excluded if: (AA) as a matter of law or official
regulation, the Recipient's country prohibits commercial
relations with that country, provided that the Association
is satisfied that such exclusion does not preclude effective
competition for the supply of goods, works, and non-
consulting services required; or (BB) by an act of
compliance with a decision of the United Nations Security
Council taken under Chapter VII of the Charter of the
United Nations, the Recipient's country prohibits any
import of goods from, or payments to, a particular
country, person, or entity. Where the Recipient's country
prohibits payments to a particular firm or for particular
goods by such an act of compliance, that firm may be
excluded.
(B)    Government-owned enterprises or institutions of the
Recipient shall be eligible to participate in the bidding
process in their country, only if they can establish that
they are legally and financially autonomous, ope-ate


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under commercial law, and are not dependent agencies of
the Recipient or the Project Implementing Entity.
(C)    A firm sanctioned by the Association in accordance with
paragraph 1.16(d) of the Procurement Guidelines, or the
Anti-Corruption Guidelines, shall be ineligible to be
awarded or to benefit from an Association- or Bank-
financed contract, financially or in any other manner,
during the period of time determined by the Association.
(D)    The requirement of producing a registration number
(Numero d Tmmatriculation) for any bidder to participate
in the bidding process shall not be interpreted as a prior
requirement to any sort of local registration, license or
authorization.
(ii)   Sta idard bidding documents acceptable to the Association shall
be used so as to ensure economy, efficiency, transparency and
cor sistency with the provisions of Section I of the Procurement
Gu delines.
(iii)  Paiticipation from joint ventures shall be allowed on condition
tha: such joint venture partners will be jointly and severally liable
for their obligations under the awarded contract. Therefore, the
"G -oupement Conjoint", described under the Recipient's law no.
2004-009 of July 2004 on the Public Procurement Code, shall not
be illowed under National Competitive Bidding.
(iv)   No domestic/regional preference, or any other kind of preferential
tre itment, shall be given for domestic/regional bidders, and/or for
doi nestically/regionally  manufactured  goods,  and/or  for
do nestically/regionally originated related services.
(v)    Th - qualification criteria shall be clearly specified in the bidd,ng
do.:uments, and all criteria so specified, and only such criteria so
sp cified shall be used to determine whether a bidder is qualified.
QL alification criteria shall be assessed on a "pass or fail" basis,
an I merit points shall not be used. Bidders' qualifications shall be
ass essed by post-qualification.
(vi)   In case a fee is charged for the bidding documents, it shall be
re, sonable and reflect only the cost of their typing, printing or
pu )lishing, and delivery to prospective bidders, and it shall not be
so high as to discourage bidders' participation in the bidding
process. Bids may be submitted by electronic means only


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provided that the Association is satisfied with the adequacy of the
sys em, including, inter-alia, that the system is secure, maintains
the integrity, confidentiality, and authenticity of the bids
sutmitted, and uses an electronic signature system or equivalent
to Veep bidders bound to their bids.
(vii)  Tho bid validity period required by the bidding documents shall
be sufficient to complete the evaluation of bids and obtain any
apf royal that may be required (at least four (4) weeks). Ifjustified
by :xceptional circumstances, an extension of the bid validity may
be requested in writing from all bidders before the original bid
val dity expiration date, and it shall cover only the minimum
period required to complete the evaluation and award of the
cot tract. The extension of the bid validity requires the
As ociation's no objection for those contracts subject to prior
rev iew, if it is longer than four (4) weeks, and for all subsequent
rec uests for extension, irrespective of the period.
(viii)  Bi( Evaluation:
(A,    Evaluation of bids shall be made in strict adherence to the
evaluation criteria declared in the bidding documents.
(B     Evaluation criteria other than price shall be quantified in
monetary terms and the manner in which they will be
applied for the purpose of determining the lowest
evaluated bid shall be established in the bidding
documents. A weighting/scoring system shall not be used.
(C i   A contract shall be awarded to the qualified bidder
offering  the   lowest-evaluated  and  substantially
responsive bid. No negotiations shall be permitted.
(D)    Bidders shall not be eliminated on the basis of minor, non-
substantial deviations.
(E     In case of requests for clarifications, bidders shall nol be
asked or permitted to alter or complete their bids.
(ix)   All bids shall not be rejected, the procurement process shall not be
caicelled, and new bids shall not be solicited without the
A! sociation's prior concurrence.


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(x)    Securities shall be in the format included in the bidding
doc uments. No advance payment shall be made without a suitable
adv ance payment security.
(xi)   Infrmation on contract award shall be published at least in a
nat onal newspaper of wide circulation within two (2) weeks of
rec-iving the Association's no objection to the award
rec )mmendation for contracts subject to prior review, and within
tw( (2) weeks from the award decision for contracts subject to
post review. Publication shall include the following information:
(A, the name of each bidder which submitted a bid; (B) bid prices
as : ead out at bid opening; (C) evaluated prices of each bid that
wa: evaluated; (D) the names of bidders whose bids were rejected
an( the reasons for their rejection; and (E) the name of the winning
bid Jer, the final total contract price, and the duration and summary
scc pe of the contract.
(xii)  In 1he case of contracts subject to prior review, the Association's
no objection shall be obtained before agreeing to: (A) a material
ext -nsion of the stipulated time for performance of a contract; (B)
an, substantial modification of the scope of services or other
sig lificant changes to the terms and conditions of the contract; (C)
an, variation order or amendment (except in cases of extreme
urg ency) which, singly or combined with all variation orders or
am andments previously issued, increases the original contract
am ount by more than 15 percent; or (D) the proposed termination
of the contract. A copy of all contract amendments shall be
furnished to the Association for its record.
(xiii)  In accordance with the Procurement Guidelines, each bidding
do ument and contract financed from the proceeds of the
Fit ancing shall provide that bidders, suppliers, and contractors,
an-I their subcontractors, agents, personnel, consultants, service
providers or suppliers, shall permit the Association, at its request,
to nspect their accounts, records and other documents relating to
th( submission of bids and contract performance, and to have them
au lited by auditors appointed by the Association. Acts intended
to materially impede the exercise of the Association's inspection
an I audit rights constitute an obstructive practice as defined in the
Pr )curement Guidelines.
(xiv)  Ee ch bidding document and contract financed from the proceeds
of the Financing, and as deemed acceptable by the Association,
sh ill include provisions stating the Association's policy to


-19-
san -tion firms or individuals found to have engaged in fraud and
cor -uption as defined in the Procurement Guidelines.
(xv)   Th(: Association may recognize, if requested by the Recipient,
exclusion from participation as a result of debarment under the
nat onal system, provided that the debarment is for offenses
invlving fraud, corruption or similar misconduct, and further
prcvided that the Association confirms that the particular
det arment process afforded due process and the debarment
decision is final.
(b)    Shopping;
(c)    Direct Con racting; and
(d)    Procuremeit from a UN Agency (UNOPS).
C.     Particular Metho( s of Procurement of Consultants' Services
1.     Quality- and Cost. based Selection. Except as otherwise provided in paragraph 2
below, consultants' services shall be procured under contracts awarded on the basis
of Quality- and Co! t-based Selection.
2.     Other Methods cf Procurement of Consultants' Services. The following
methods, other tlan Quality- and Cost-based Selection, may be used for
procurement of cor sultants' services for those contracts which are specified in the
Procurement Plan (a) Quality-based Selection; (b) Least Cost Selection;
(c) Selection based on Consultants' Qualifications; (d) Single-source Selection of
consulting firms; e) Procedures set forth in paragraphs 5.2 and 5.3 of the
Consultant Guideli ies for the Selection of Individual Consultants; and (f) Single-
source procedures 'or the Selection of Individual Consultants.
D.     Review by the As! ociation of Procurement Decisions
The Procurement I Ian shall set forth those contracts which shall be subject to the
Association's Priot Review. All other contracts shall be subject to Post Review by
the Association.
Section IV.   Withdram al of the Proceeds of the Financing
A.     General
1. The Recipient may withdraw the proceeds of the Financing in accordance with the
provisions of Artic e II of the General Conditions, this Section, and such additional
instructions as the Association shall specify by notice to the Recipient (including
the "World Bank Disbursement Guidelines for Projects" dated May 2006, as


-20-
revised from time to time by the Association and as made applicable to this
Agreement pursuart to such instructions), to finance Eligible Expenditures as set
forth in the table in paragraph 2 below.
2.     The following table specifies the categories of Eligible Expenditures that may be
financed out of the proceeds of the Financing ("Category"), the allocations of the
amounts of the Fin, ncing to each Category, and the percentage of expenditures to
be financed for Elij ible Expenditures in each Category:
Amount of the      Percentage of
Financing      Expenditures to be
Allocated          Financed
Categoi y               (expressed in SDR)  (inclusive of Taxes)
(1) Goods, works, non-c )nsulting services,  5,100,000  100%
and consultants' services including
Operating Costs end Training for
Component 1 of the Project, except
Matching Grants un Jer subcomponent
1.2(d) of the Project
(2) Goods, works, non-consulting services,  24,700,000  100%
and consultants' services including
Operating Costs , nd Training for
Component 2 and 3 of the Project,
except goods, works, non-consulting
services, and con sultants' services
under subcomponen: 2.1(a) (ii) of the
Project
(3) Matching Grants.                     2,400,000      100% of amounts
disbursed by the
Recipient under the
Matching Grant
(4) OCAI Grants                            300,000      100% of amounts
disbursed
(5) Refund of Preparation Advance        1,300,000      Amount payable
pursuant to Section
2.07 of the General
Conditions
TOTAL AMOUNT                            33,800,000      _


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B.     Withdrawal Cond tions; Withdrawal Period
1.     Notwithstanding th provisions of Part A of this Section, no withdrawal shall be
made for payments
(a)    made prior to the date of this Agreement, except that withdrawals up to an
aggregate Emount not to exceed SDR 6,760,000 equivalent may be made
for paymerts made prior to this date but on or after January 1, 2014, for
Eligible Ex penditures;
(b)    under Category 1 unless and until the Association is satisfied, and has
notified the Recipient of its satisfaction, that the Recipient has adopted a
revised EDBM   Decree in form  and substance satisfactory to the
Associatioi i;
(c)    under Category 3 unless and until the Association is satisfied, and has
notified the Recipient of its satisfaction, that all of the following conditions
have been net in respect of said activities:
(i)    the Recipient has entered into the Fund Management Agreement
in iccordance with Section I.B.1 of Schedule 2 to this Agreement;
(ii)   the Fund Manager has established an investment committee for
the review of the Sub-Projects in accordance with the provisions
of :he Matching Grant Manual; and
(iii)  the Recipient has adopted a Matching Grant Manual for the
Project, in form and substance acceptable to the Association; or
(d)    under Cat( gory 4 unless and until the Association is satisfied, and has
notified th! Recipient of its satisfaction, that all of the following conditions
have been met in respect of said activities:
(i)    thc Recipient has entered into an agreement with FDL setting forth
FDL's role in the selection and monitoring and evaluation process
of Sub-projects financed out of OCAl Grants; and
(ii)   th, Recipient has adopted an OCAI Grant Manual for the Project,
in form and substance acceptable to the Association.
2.     The Closing Date s September 30, 2019.


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SCHEDULE 3
Repayment Schedule
Principal Amount of the Credit
repayable
Date Paymen: Due                 (expressed as a percentage)*
On each April 15 and Octc ber 15,                   1.5625%
commencing April 15, 2021, to and
including October 15, 205:
* The percentages represent the percentage of the principal amount of the Credit to be
repaid, except as the Associ ition may otherwise specify pursuant to Section 3.03(b) of the
General Conditions.


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APPENDIX
Definitions
1.    "ADEMA" means Aeroports de Madagascar, the entity which manages the
Recipient's airports
2.     "Air Madagascar" neans the Recipient's national airline.
3.     "Annual Work Plar s and Budgets" means the annual work plans and budgets for
the implementatior of the Project approved by the Association, referred to in
Section I.E.2 of Scl edule 2 to this Agreement.
4.     "Anti-Corruption  :;uidelines" means 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.
5.     "Bank Policies" mcans the World Bank's operational policies as set forth on the
following     we bsite:   http://web.worldbank.orci-1/WBSI'[E/EXTERNAL/
PROJECTS/EXTP)LICIES/EXTOPMANUAL/0,,menuPK:64701637-pagePK:
51628525-piPK:6z 857279-theSitePK:502184,00.html
6.     "Beneficiary" means a legal entity or individual which meets the eligibility
requirements listed in the Project Manuals and to which the Recipient has made a
Grant for a Subpro,ect in accordance with Section I.B.2 or 3 of Schedule 2 to this
Agreement.
7.     "Category" means a category set forth in the table in Section IV of Schedule 2 to
this Agreement.
8.     "Consultant Guidelines" means the "Guidelines: Selection and Employment of
Consultants under IBRD Loans and IDA Credits and Grants by World Bank
Borrowers" dated . anuary 2011 and revised July 2014.
9.     "Displaced Person" means a person who, on account of the execution of an activity
under the Project, I as experienced or would experience direct economic and social
impacts caused by: (a) the involuntary taking of land, resulting in:
(i) relocation or lo: s of shelter; (ii) loss of assets or access to assets, or (iii) loss of
income sources or means of livelihood, whether or not such person must move to
another location; c r (b) the involuntary restriction of access to legally designated
parks and protected areas, resulting in adverse impacts on the livelihood of such
person "Displaced Persons" means all such persons.


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10.   "EDBM" means E:onomic Development Board of Madagascar, a legally aid
budgetary autonom us agency established by the Recipient's arrt6/decree no.
2006-382 dated Ma/ 31, 2006.
11.   "EDBM Decree" n eans Recipient's arrete/decree no. 2006-382 dated May 31,
2006, as revised in::008 and to be further revised pursuant to Section IV.B.1(b)of
Schedule 2 to this A greement.
12.   "Environmental and Social Management Framework" means the Recipient's
document entitled "Cadre de Gestion Environnementale et Sociale (CGES)"
disclosed at the As: ociation's Infoshop on November 5, 2014 and in the counry
of the Recipient or November 3, 2014, detailing: (a) the measures to be taken
during the implem.ntation and operation of the Project to eliminate or offset
adverse environmental and social impacts, or to reduce them to acceptable levels;
and (b) the actions ieeded to implement these measures, including monitoring and
institution strength( ning.
13.   "Environmental an I Social Management Plan" means the Recipient's document
prepared and disclosed in accordance with the Environmental and Social
Management Fram,-work with respect to an activity included under an Annual
Work Program anc Budget, that details: (i) the measures to be taken during the
implementation an d operation of such activity to eliminate or offset adverse
environmental or s(cial impacts, or to reduce them to acceptable levels, and (ii) the
actions needed to ii nplement these measures.
14.   "FDL" means the Fonds de Developpement Local of the Recipient established
Decree No. 2007-:;30 dated June 11, 2007, revised by Decree 2009-814 dated
June 9, 2009, and Decree 2010-746 dated July 27, 2010.
15.   "Fund Managemer t Agreement" means the agreement referred to in Secion 1.B.1
of Schedule 2 to th s Agreement.
16.   "Fund Manager" rr eans the party with whom the Recipient has entered into a Fund
Management Agre :ment.
17.   "General Conditio is" means the "International Development Association General
Conditions for Credits and Grants", dated July 31, 2010.
18.   "Grant" means col ectively the Matching Grants and the OCAI Grants.
19.   "Grant Agreement' has the meaning set forth in Section 1.B.4 of Schedule 2 to this
Agreement.
20.    "Institutional Deci ee" means the decree establishing the Steering Committee and
the PIU, in form and substance satisfactory to the Association, to be adopted
pursuant to Sectio i 4.01(b) of this Agreement.


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21.    "Investment Climate Reform Committee" means the committee to be established
pursuant to Section 1.A.3 of Schedule 2 to this Agreement.
22.    "JIRAMA" means the Recipient's utility company for water and electricity.
23.    "Matching Grant" :neans a grant extended by the Recipient, acting through the
Fund Manager, to a Beneficiary in accordance with Section 1.B.2 of Schedule 2 to
this Agreement.
24.    "Matching Grant M'anual" means the manual setting forth the procedures and
criteria applicable t the selection and implementation of Matching Grants, to be
adopted by the Recipient under Section IV.B.1(c) of Schedule 2 to this Agreement.
25.    "Ministry of State' means the Ministire d'Etat charge des Infrastructures, de
l'Equipement et dc l'Amenagement du Territoire, the Recipient's ministry in
charge of infrastructure, equipment and land planning.
26.    "OCAl Grant" mee ns a grant extended by the Recipient, acting through the Fund
Manager, to a Ben:ficiary in accordance with Section I.B.3 of Schedule 2 to this
Agreement.
27.    "OCAI Grant Man ual" means the manual setting forth the procedures and criteria
applicable to the sclection and implementation of OCAI Grants, to be adopted by
the Recipient unde Section IV.B.1(d) of Schedule 2 to this Agreement.
28.    "Office of the Pr( sident" means the office of the President of the Republic of
Madagascar.
29.    "Operating Costs' means the reasonable incremental operating expenses, based
on Annual Work P -ograms and Budgets approved by the Association, incurred by
the PIU or its rigional offices on account of the Project implementation,
management and n onitoring, including operation and maintenance costs of office,
vehicles and offic equipment ; water and electricity utilities, telephone, of-ice
supplies, bank charges, public awareness-related media expenditures, travel and
supervision costs, per diem, additional staff costs, but excluding the salaries of
officials and publii servants of the Recipient's civil service.
30.    "Pest Managemert Plan" means the Recipient's document entitled "Plan de
Gestion des Paras 'tes et des et Pesticides (PGPP)" disclosed at the Association's
Infoshop on Sept  mber 16, 2014, containing guidance on the manufacturing,
packaging, labelin ), handling, storage, disposition of pesticides financed under the
Project and the cai[cellation or mitigation to an acceptable level of adverse impact
these pesticides m iy have on the environment or on the population.
31.    "PICl Project Manuals" means, collectively, the Recipient's documents entitled
respectively "Proj2t Poles Intigres de Croissance "PIC" Credits IDA 4101-MAG


-26-
et 4399-MAG - M 2nuel d'Execution du Projet Rdvise" dated June 2008, and
"Projet Poles Integrds de Croissance "PIC" Credits IDA 4101-MAG et Fonds
Additionnel 2008 - Manuel de Procedures Administratives, Budgtaires,
Financieres et Coff otables" dated April 2008.
32.    "Preparation Adva ice" means the advance referred to in Section 2.07 of the
General Conditiom, granted by the Association to the Recipient pursuant to the
letter agreement signed on behalf of the Association on February 10, 2014, and on
behalf of the Recip ent on February 26, 2014.
33.    "Procurement Guid elines" means the "Guidelines: Procurement of Goods, Wo-ks
and Non-consultinl; Services under IBRD Loans and IDA Credits and Grants by
World Bank Borro,vers" dated January 2011 and revised July 2014.
34.    "Procurement Plan 'means the Recipient's procurement plan for the Project, dated
October 23, 2014, end referred to in paragraph 1.18 of the Procurement Guidelines
and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from
time to time in accordance with the provisions of said paragraphs.
35.    "Project Implemen ation Unit" or "PIU" means the project implementation unit for
the Project to be es ablished by the Institutional Decree pursuant to Section 4.01(b)
of this Agreement.
36.    "Project Manuals' means collectively the PICI Project Manuals revised in
accordance with Section 4.01(a) of this Agreement and the Matching Grant
Manual to be adop ed pursuant to Section IV.B. 1 of Schedule 2 to this Agreement.
37.    "Resettlement Ac:ion Plan" means the Recipient's document prepared and
disclosed in accordance with the Resettlement Policy Framework with respect to
an activity include I under an Annual Work Program and Budget, which, inter alia,
(i) contains a censi is survey of Displaced Persons and valuation of their assets, (ii)
describes comper sation and other resettlement assistance to be provided,
consultation to be conducted with Displaced Persons about acceptable alternatives,
institutional respoisibilities for the implementation and procedures for grievance
redress, and arrar gements for monitoring and evaluation, and (iii) contains a
timetable and bud get for the implementation of such measures.
38.    "Resettlement Poicy Framework" means the Recipient's document entitled
"Cadre de Politioue de Rdinstallation Involontaire (CPRI)" disclosed at the
Association's Inf6 shop on November 5, 2014 and in the country of the Recipient
on November 3, !014, containing guidelines, procedures, timetables and other
specifications for the provision of compensation, rehabilitation and resettlement
assistance to Disp aced Persons.


-27-
39.    "Safeguard Docum .nts" means, collectively, the Pest Management Plan, the
Environmental and ;ocial Management Framework, the Environmental and SocIal
Management Plans prepared in accordance with the Environmental and Social
Management Fram work, if any, the Resettlement Policy Framework, and the
Resettlement Actio i Plans prepared in accordance with the Resettlement Policy
Framework, if any.
40.    "Steering Committ .e" means the Recipient's committee referred to in Section
1.A.1(a) of Schedula 2 to this Agreement.
41.    "Sub-Project" mear s a set of activities financed or to be financed through a Grant
in accordance with Section I.B.2(a) or (b) or Section I.B.3 of Schedule 2 to this
Agreement.
42.    "Targeted Regions' means, collectively, the Atsimo-Andrefaca, Anosy and Diana
regions in the Re( ipient's territory, and any other region(s) proposed by the
Recipient and whic i the Association has confirmed in writing that it is acceptable
by the Association.
43.    "Targeted Value Chains" means, collectively, the cotton, pink pepper, dry bean
and cacao value ct ains, and any other value chain(s) proposed by the Recipient
and which the Ass:ciation has confirmed in writing that it is acceptable by the
Association.
44.    "Training" means the reasonable cost of training under the Project, based on
Annual Work Pla is and Budgets, including costs associated with seminars,
workshops, confer mce and study tours, travel and subsistence costs for training
participants, services of trainers, rental of training facilities, preparation and
reproduction of tr ining materials and other activities directly related to course
preparation and implementation.
45.    "UNOPS" means tfte United Nations Office for Project Services.