-4- December 21, 2021 the mitigation actions set forth in the form of an ESMP; such ESIA, including relevant annexes, shall be satisfactol)' to the Bank. (i) "Environmental and Social Management Framework" or "ESMF" means the environmental and social management framework prepared and adopted by the Recipient and disclosed on October 27, 2021, acceptable to the World Bank, that sets forth policies and procedures for environmental and social screening of Development Subprojects, for conducting environmental assessments and specifying requirements for environmental mitigation measures to be included in ESMPs. (i) "Environmental and Social Management Plan" or "ESMP" means a site-specific environmental and social management plan comprised of an environmental and social mitigation plan and environmental and social monitoring plan to be prepared and adopted by a Geothermal Developer pursuant to the ESMF and to be implemented by the Geothermal Developer in accordance with the provisions of Schedule 2, Section I, Part D, paragraph 2 of this Agreement, satisfactory to the Bank, wherein are set forth specific details of measures to manage identified or potential environmental and social risks and to avoid, mitigate, reduce and/or offset adverse environmental and social impacts associated with the implementation of activities under Part B. l of the Project, together with an environmental and social baseline for each site, details of the relevant environmental and social legislative framework, adequate institutional, monitoring and reporting arrangements capable of ensuring proper implementation of, and regular feedback on compliance with, its terms, as the same may be amended and supplemented from time to time with the Bank's prior written approval. (k) "Exploration Subproject" means any exploration of geothermal energy resources investment which has met the criteria set forth in the POM for benefitting from the RSM under Part A of this Project. (I) "Geothermal Developer" means any private developer of renewable geothermal energy which has met the criteria set forth in the POM to earl)' out a Development Subproject. (m) "Geothermal Explorer" means any private developer of renewable geothermal energy which has met the criteria set forth in the POM to earl)' out an Exploration Subproject. (n) "Original Loan" means the financing provided under the Original Loan Agreement. (o ) "Original Loan Agreement" means the financing agreement for the Turkey Geothermal Development Project between the Bank and the Recipient, dated November 30, 2016 (Loan No. 8652-TR), as amended to the date of this Agreement. (p) "Origi11al Loan Dt:vdopment Subproject" means any investment, financed by the Original Loan, in the development of geothenna I energy resources that has met the criteria set forth in the POM for benefitting from financing under Part B. l(a) of this Project. (q) "Original Project" means the Project described in Schedule 1 to the Original Loan Agreement as amended to the date of this Agreement. (r) "Procurement Regulations" means, for purposes of paragraph 20 of the Appendix to the Standard Conditions, the "World Bank Procurement Regulations for IPF Recipients", dated November 2020. -5- December 21, 2021 (s) "Project Implementation Unit" or "PIU" means the unit referred to in Section 2.03(1) of this Annex. (t) "Project Operations Manual" or "POM" means the project operations manual, satisfactory to the World Bank, describing and setting forth procedures for implementation of the Project and related institutional arrangements, and including, inter alia, timetables of actions required to be carried out under the Project, the respective roles and responsibilities of the agencies involved in the implementation of the Project, staffing, the fiduciary, technical and operational aspects and procedures for implementation of the Project, including the financial management procedures (budgeting, accounting and internal control, disbursement and flow of funds, financial reporting, annual reports, internal and external audit arrangements procedures and including the Project specific chart of accounts), procurement procedures, monitoring and evaluation arrangements, and other fiduciary and administrative arrangements and necessary terms of reference, as the same may be amended from time to time by agreement with the World Bank. (u) "Resettlement" means the impacts of an involuntary taking of land under the Project, which taking causes affected persons to have their: (i) standard of living adversely affected; (ii) right, title or interest in any house, land (including premises, agricultural and grazing land) or any other fixed or movable asset acquired or possessed, temporarily or permanently; (iii) access to productive assets adversely affected, temporarily or permanently; or (iv) business, occupation, work or place of residence or habitat adversely affected, temporarily or permanently. (v) "Resettlement Action Plan" or "RAP" means a resettlement action plan, satisfactory to the Bank, to be prepared in accordance with the RPF and implemented by the applicable Geothermal Developer for carrying out the corresponding Development Subproject, setting forth, inter alia, the principles and objectives, the Affected Persons' eligibility criteria, compensation, assistance and rehabilitation entitlements, as well as the monitoring and reporting arrangements. (w) "Resettlement Policy Framework" or "RPF" means the resettlement policy framework prepared by the Recipient and disclosed on October 27, 2021, satisfactory to the Bank, and defining the modalities for Resettlement under the Project and describing the policies, procedures, plans and actions (including the guidelines for the preparation and implementation of resettlement action plans), and institutional measures related to Resettlement and other social impacts that may arise during the implementation of the Project. (x) "Risk Sharing Mechanism" or "RSM" means the mechanism created under Part A of the Project. (y) "Safeguard Instruments" means, collectively, the environmental and social instruments prepared by the Recipient, Geothermal Explorers, and Geothermal Developers for the purposes of the Project and corresponding Development Subprojects, namely the Environmental and Social Management Framework and Resettlement Policy Framework prepared by the Recipient, and the Environmental and Social Impact Assessments, the Environmental and Social Management Plans, the Resettlement Action Plans, and the Stakeholder Engagement Plans prepared, as relevant, by Geothermal Explorers and Geothermal Developers. -6- December 21, 2021 (z) "Signature Date" means the later of the two dates on which the Recipient and the Bank signed this Agreement and such definition applies to all references to "the date of the Grant Agreement" in the Standard Conditions. (aa) "Significant Event" means: (i) any significant social, labor, health and safety, security or environmental incident, accident, or circumstance involving the Project (or individual Development Subprojects), including, without limitation, explosions, spills, and any workplace accidents that result in death, serious or multiple injury, material pollution, or any violent labor unrest or dispute between the Recipient or security forces (assigned to protect the Project or individual Development Subprojects) and local communities; or (ii) any other event or circumstance having, or which could reasonably be expected to have, a material adverse effect on the implementation or operation of the Project in accordance with the Safeguards Instruments. (bb) "Stakeholder" means an individual or group who (i) is affected or likely to be affected by a Development Subproject, and (ii) may have an interest in the Development Subproject (other interested parties); "Stakeholders" means collectively such individuals and groups. (cc) "Stakeholder Engagement Plan" or "SEP" means the plan prepared and adopted by a Geothermal Developer to engage with Stakeholders of a corresponding Development Subproject, throughout the respective Development Subproject implementation, in a timeframe that enables meaningful consultations with the Stakeholders on the respective Development Subproject design, in view of the nature and scale of the respective Development Subproject and its potential risks and impacts; said plan shall be in form and substance satisfactory to the Bank; "Stakeholder Engagement Plans" means collectively all such plans. (dd) "Standard Conditions" means the "International Bank for Reconstruction and Development and lnternational Development Association Standard Conditions for Grant Financing Made by the Bank out of Trust Funds", dated February 25, 2019. (ee) "Subgrant" means a grant to be provided by TKYB under Part B.2 of the Project, selected in accordance with the criteria set out in the POM, to be used for technical assistance to support preparation of feasibility studies for potential Development Subprojects under Part B.1(b)(ii) of the Project. (ff) "Subgrant Agreement" means the agreement to be entered into between TKYB and a proposed Geothermal Developer as described in Section 2.03 (3) of this Agreement. (gg) "Sub-loan" means a loan lo bt: provit!et! by TKYB to a Geothermal Developer to carry out a Development Subproject under Part B.1 of the Project. (hh) "Ttirkiye Kalkmma ve Yatmm Bankasi A.�." or "TKYB" means the development and investment bank of the Republic of Turkey, also known as Development and Investment Bank of Turkey, originally founded as a Joint Stock Company and with the name of State lndustry and Laborer Investment Bank (DESIYAB) pursuant to the Decree numbered 13 and dated 27.11.1975, and renamed as Tlirkiye Kalkmma ve Yatmm Bankasi A.�., pursuant to Law No. 7147, published in the Republic of Turkey's Official Gazette No. 30575, dated October 24, 2018 (Trade Registry No. 1988985); such shall include any legal successor or successors thereto acceptable to the World Bank. -7- December 21, 2021 (ii) "TSKB" means Ttirkiye Smai Kalkmma Bankasi A.S. or Industrial Development Bank of Turkey, a joint-stock company established pursuant to the statutes published in Trade Registry Gazette no. 7046 dated June 2, 1950 (Trade Registry No. 42527), or any legal successor or successors thereto acceptable to the World Bank. Article II Project Execution 2.01. Project Objectives and Description. The objective of the Project is to scale up private sector investment in geothermal energy development in the Republic of Turkey's territory. The Project consists of the following parts: Part A. Risk Sharing Mechanism for Resource Validation 1. Risk Sharing Mechanism for Resource Validation - establishing a mechanism to promote private sector development of renewable geothermal energy investments in the early stage of geothermal exploratory and confirmation drilling stages ("Exploration Subprojects") by sharing the risk with Geothermal Explorers of failing to validate a geothermal energy resource through said Risk Sharing Mechanism. 2. Technical Assistance for TKYB strengthening capacity of TKYB to supervise implementation of the RSM. Part B. Loan Facility for Resource Development I. Providing Sub-loans: (a) financed by the Original Loan, to Geothermal Developers, to support license holders and financiers investing in geothermal project development at (i) the capacity drilling (also referred to as production drilling) stage, and (ii) the steam gathering, power plant, or direct use facility construction stage (collectively, "Original Loan Development Subprojects"); and (b) financed by the Additional Financing, to Geothermal Developers, to support license holders and financiers investing in geothermal project development at (i) the capacity drilling (also referred to as production drilling) stage, and steam gathering and/or power plant construction stage, for power generation facilities, and (ii) the capacity drilling (also referred to as production drilling) stage, and steam gathering and/or construction stage, for direct use facilities (collectively, "AF Development Subprojects"); and 2. Providing Subgrants, financed by the ESMAP Grant, to potential Geothermal Developers for technical assistance to deliver on-demand suppott for the preparation of pre-feasibility studies and market analysis, and the development of business plans or feasibility studies, for potential AF Development Subprojects under Part B. l (b)(ii) that specifically involve direct use applications. 2.02. Project Execution Generally. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall carry out Part B.2 of the Project in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) the Anti-Corruption Guidelines; and (c) this Article II. -8- December 21, 2021 2.03. Institutional and Other Arrangements. (I ) Project Implementation Unit. (a) For purposes of carrying out Part B.2 of the Project, the Recipient shall operate and maintain, until the completion of the Project, its Project Implementation Unit ("PIU") with functions, responsibilities, and adequate staffing and budgetary resources necessary and appropriate for implementation of Part B.2 of the Project, all satisfactory to the Bank. (b) Without limitation to the generality of Section 2.03(1)(a) above, the Recipient shall ensure that the PIU includes the following minimum personnel throughout the Project implementation period (i) one environmental safeguard specialist, (ii) one social safeguard specialist, and (iii) one occupational and health and safety specialist; each with terms of reference, qualifications, and experience satisfactory to the Bank. (2) Subg,ranl. (a) For the purposes of carrying out Part B.2 of the Project, the Recipient shall, in accordance with the criteria set forth in the POM and the provisions set forth below, ensure that: (i) the proposed Subgrant activity is for the preparation of pre-feasibility reports, business plans, market analysis and feasibility reports for potential AF Development Subprojects under Part B. l (b)(ii) of the Project that specifically involve direct use applications; (ii) Subgrants shall be made available, on a first-come-first-served basis, to Geothermal Developers serviced by either TSKB or TKYB under Part B. 1 (b)(ii) of the Project; (iii) at least three (3) of the Subgrant recipients, serviced by either TKYB or TSKB, shall be Geothermal Developers that are owned by women and/or are managed by women in senior management positions; and (iv) any proposed Subgrant shall cover a maximum of fifty percent (50%) of the estimated cost of the proposed preparatory activities referred to in subsection (2)(a)(i) above, with an aggregate limit of fifty thousand Dollars (USD 50,000) per such potential AF Development Subproject. (3) Subgrant Agreement. The Recipient shall on-grant a portion of the Grant to the pertinent Geothermal Developer pursuant to a Subgrant Agreement, to be entered into between the Recipient and said Geothermal Developer on terms and conditions acceptable to the Bank, including the following provisions: (a) The Geothermal Developer shall carry out the activities financed by the Subgrant with due diligence and efficiency and in accordance with sound technical, financial -9- December 2 1, 2021 and managerial standards, and in accordance with the Anti-Corruption Guidelines applicable to recipients of loan proceeds other than the Recipient, and to maintain adequate records; (b ) The Geothermal Developer shall carry out the preparation of the studies and analyses financed by the Subgrant with due regard to applicable social impact, ecological, environmental and pollution control standards and in accordance with the POM, the ESMF, the applicable ESIA and/or EMP, and the RPF and RAP, if applicable; (c) The Recipient shall retain the right to inspect, by itself or jointly with representatives of the Bank, if the Bank so requests, such any relevant documents and records of the Geothermal Developer or its contractors or consultants in connection with the Subgrant; (d ) The Geothermal Developer shall (i) maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Bank, both in a manner a