CREDIT NUMBER 6685-DM Financing Agreement (Caribbean Digital Transformation Project) between COMMONWEALTH OF DOMINICA and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 6685-DM FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between COMMONWEALTH OF DOMINICA (-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. 1i nless the context requires otherwise. the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01. The Association agrees to extend to the Recipient a credit, which is deemed as Concessional Financing for purposes of the General Conditions. in an amount equivalent to twenty million five hundred thousand Special Drawing Rights (SDR 20,500,000) (variously, '-Credit" and -Financing"). to assist in financing the project described in Schedule I to this Agreement ("Project"). 2,02. The Recipient may withdraw the proceeds of the Financing in accordance with Section III of Schedule 2 to this Agreement. 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 The Service Charge is three-fourths of one percent (3.4 of 1%) per annum on the Withdrawn Credit Balance. 2.05. The Payment Dates are June 15 and December 15 in each year. 2.06. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.07. The Payment Currency is Dollar. -2- ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall carry out Parts: 1.3(a). (b), and (c); 2.1(a), (b). (c), (d), (e), and (g); 2.2(a), (b), (c), (g), (h), and (i); 3.1(c); 3.2(a), (c), (d). and (e); and 4 of the Project (its "Respective Parts of the Project") in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV -EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (a) the Project Operational Manual has been prepared and adopted by the Recipient in respect of its Respective Parts of the Project, all in a manner acceptable to the Association. (b) the PIU has hired in a manner, with terms of reference and resources all satisfactory to the Association, a financial management specialist and a procurement specialist. 4.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 4.03. 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 years after the Signature Date. ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Recipient's Representative is its Minister of Finance. 5.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance Financial Centre Kennedy Avenue, Roseau Commonwealth of Dominica: and (b) the Recipient's Electronic Address is: Facsimile: E-mail: -3- 1-767-448-0054 financialsecretarn a dorninica.go.dm fi nsecfinance a dominica.iov.dm 5.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 -4- AGREED as of the Signature Date. COMMONWEALTH OF DOMINICA By Authorized Representative Name: / JV A~vA ,'5) C I Title: ,i V,'S ,9' Date: ~t/ ~ 2 INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: Tahseen Sayed Title: Director, Caribbean Date: July 24, 2020 SCHEDULE 1 Project Description The objective of the Project is to increase access to digital services. technologies and skills by governments, businesses, and individuals in the Participating Eastern Caribbean Countries. The Project consists of the following parts: Part 1: Digital Enabling Environment Support the development of a positive enabling environment for the Caribbean region's digital economy that drives competition, investment and innovation while promoting trust and security of online transactions, through: 1.1. Telecommunications: Legal and Regulatory Environment, Institutions and Capacity Support: Support greater telecommunications sector competition, affordability and service quality across the Caribbean region as well as enhancing resilience and emergency response capabilities for critical communications infrastructure through modernization of the legal, regulatory and institutional frameworks governing the telecoms sector and the capacity to implement them at regional and national level, including: (a) carrying out a review of the legal and regulatory frameworks covering telecommunications and provision of support for drafting proposals for new or amending legislation and regulations as necessary at regional and national levels, paired with a review of telecom sector governance and institutional structures, procedures, and authority at regional and national levels; (b) establishment of a quality of service monitoring and enforcement methodology and capacity; and (c) development of action plans to improve network resilience and post disaster recovery and emergency communications, and implementation ofcommunications infrastructure disaster response and recovery drills in partnership with the private sector. 1.2. Digital Financial Services: Legal and Regulatory Environment, Institutions and Capacity Support: Support innovation, investment and adoption of digital financial services across the Caribbean region through: -6- (a) (i) proposing updates to the Payment System Act and Money Services Business Act and corresponding regulations and (ii) designing an oversight framework for digital financial services, with corresponding support for adoption and implementation of the harmonized regional legislation and regulations at the national level; (b) undertaking demand-side surveys on financial access and usage to inform policy making and monitor progress toward financial inclusion goals; (c) development of an overarching payment system strategy for the Caribbean region; and (d) technical design of a Caribbean regional instant payment system open to banks, non-banks and ECCU governments to reduce the costs and time required for payment transfers. 1.3. Cybersecurity, Data Protection and Privacy; Legal and Regulatory Environment, Institutions and Capacity: Build trust in online transactions and strengthen the security and resilience of digital infrastructure and systems through: (a) reviewing and updating of national and regional cybersecurity policies, proposals for legislation, regulation, and institutional and coordination structures; (b) establishing of a computer emergency response team or a cybersecurity agency at the national level in line with a regionally agreed model and providing support for regional threat intelligence sharing, incident escalation and support protocols; (c) regionally coordinated capacity building and networking for civil servant cyber professionals and cyber awareness campaigns for civil servants and general public; and (d) reviewing and proposing updates for regional and national data protection and privacy laws and data access and exchange policies. Part 2: Digital Government Infrastructure, Platforms and Services Support public sector modernization, resilience and delivery of digital public services to individuals and businesses through: 2.1 Development of Cross-Cutting Enablers of Digital Government Operations and Services. Support the development of key enablers of digital government services and operations, in line with regionally harmonized standards and frameworks. through: -7- (a) developing and implementing a digital transformation strategy or information and communications technology policy, enterprise architecture and interoperability framework, and continuity of operations plan; (b) reviewing and updating of proposed legislation, regulations or policies covering e-transactions, digital signature, identification, as required; (c) establishing or reinforcing digital government infrastructure. equipment and software, including extension of last mile access to high-speed broadband networks to support remote work, expansion of local area networks/wifi for government offices and service centers, datacenters or data hosting services, government cloud, digital devices and enterprise communications and productivity software; (d) developing a digital identification system or user authentication platform with privacy by design features. based on an agreed regional framework for assignment of unique identification number; (e) establishing electronic document management, authentication, and digital signature capabilities; (f) developing a digital payment platform to send and receive payments for, inter alia, public services, taxes, payroll. vendors, social protection schemes; and (g) supporting capacity building of the centralized information technology workforce and change management across the public service. 2.2. Government Productivity Platforms and Citizen-Centric Digital Services. Support the development of priority government productivity platforms and citizen-centric digital public services through: (a) digitization and integration of key registries and information systems and establishment of a data exchange platform (enterprise service bus); (b) business process re-engineering and end-to-end digitization of common government to citizen transactions and public services such as issuance of birth, death and marriage certificates. drivers' license and motor vehicle registration, passport applications, and tax filings; (c) establishing of an online web and mobile portal for accessing public services and information; (d) developing a geographic information system and electronic single-window for land and property information and transactions; (e) establishing an electronic single-window for customs clearance and administration; (f) developing an electronic tax administration system; (g) digitizing and increasing automation of tourism and immigration administration for ports of entry; (h) digitizing health information and administration, including connectivity for health centers and support for other COVID- 19 health related response needs; and (i) digitizing social cash transfers and recurrent government payment streams. Part 3: Digital Skills and Technology Adoption Better equip individuals and businesses across the region for the jobs and economy of the future and to spur innovation and productivity growth through: 3.1. Workforce-Ready Digital Skills. Support training to employment opportunities in digitally-enabled professions through: (a) carrying out a survey and assessment to identify the technical and soft skills in greatest demand in the regional and global market among digitally enabled industries and conducive to remote working arrangements; (b) designing and implementing a regional level advanced digital skills development and job coaching program, including the provision of Digital Skills Stipends; and (c) designing and implementing national level digital skills development and job coaching programs. 3.2. Technology Adoption. Increase adoption of digital technologies, platforms and digitally enabled business models by small and medium enterprises and access to digital devices for students, teachers and vulnerable groups through: (a) designing and implementing a program to accelerate the adoption of digital technologies within priority sectors (including tourism, agriculture, and other sectors determined pursuant to criteria set out in the Project Operational Manual) by providing (i) managerial training, business advisory services and (ii) Matching Grants; (b) facilitating acceptance of electronic payments by merchants and promoting cash reduction in the economy; -9- (c) designing and implementing an internship or apprenticeship program to facilitate job placements, including the provision of Internship Stipends, pursuant to criteria set out in the Project Operational Manual; (d) supporting innovation programs and co-working spaces; and (e) acquiring digital devices and associated digital content and providing training to support access among vulnerable groups and remote learning by students. Part 4: Project Implementation Support Provision of support to the P1U to assist the Recipient in the management and implementation of the Recipient's Respective Parts of the Project and associated Project activities. -10- SCHEDULE 2 Project Execution Section I. Implementation Arraneements A. Institutional Arrangements. I. Without limitation to the provisions of Section 3.01 of this Agreement, the Recipient shall implement its Respective Parts of the Project through the MPWDE which shall be responsible for providing oversight, monitoring and evaluation and overall management thereof and guidance to the PIU and any agencies of the Recipient supporting the implementation of Project activities thereunder. 2. The Recipient shall maintain the PIU under its under the MPWDE at all times during implementation of its Respective Parts of the Project in a manner, with resources, functions, and responsibilities, including the day to day coordination of the implementation of the Recipient's Respective Parts of the Project, all satisfactory to the Association, including, a Project manager, a financial management specialist, a procurement specialist, and, no later than 30 days after the Effective Date, an environmental and social specialist. 3. No later than 60 days after the Effective Date. the Recipient shall establish and thereafter maintain in form and manner satisfactory to the Association a committee (the "Project Steering Committee"), with resources and functions and responsibilities (including the responsibility to provide overall oversight of Project implementation progress, including review of annual implementation plans and progress reports and coordinate between the different ministries and regional implementation mechanism and address policy issues impacting Project implementation. all satisfactory to the Association, including, representatives of the MPWDE; MoF; and MoG. 4. The Recipient shall ensure adequate coordination between the PIU, the Project Steering Committee and the Regional Project Oversight Committee in accordance with procedures set forth in the Project Operational Manual. 5. The Recipient shall take the necessary actions (including appointment of a duly authorized representative) to enable the OECS to comply with its obligation of establishing the Regional Oversight Committee. B. Environmental and Social Standards. I. The Recipient shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 2. Without limitation upon paragraph I above. the Recipient shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan ("ESCP"), in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency. and provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP: and (d) the ESCP, or any provision thereof, is not amended. repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. 3. In case of any inconsistencies between the ESCP and the provisions of this Agreement. the provisions of this Agreement shall prevail. 4. The Recipient shall ensure that: (a) all measures necessary are taken to collect, compile. and furnish to the Association through regular reports. with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the ESCP, (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 5. The Recipient shall establish. publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and -12- appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. 6. The Recipient shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, and subcontractors and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts. C. Project Operational Manual 1I The Recipient shall carry out its Respective Parts of the Project in accordance with the provisions of a manual, acceptable to the Association (the "Operational Manual"), which shall include, in respect of the Recipient's Respective Parts of the Project, inter alia: (i) the procurement, financial management and disbursement requirements and procedures (including standard bidding documents) for the Project; (ii) the indicators to be used for monitoring and evaluating the Project; (iii) the functions, responsibilities, structure and key staff composition of the PIU; (iv) the policies and procedures for the coordination of the implementation, monitoring and evaluation of the Project; (v) the eligibility criteria and procedures applicable to the financing of Internship Stipends; and (vi) the selection criteria for the activities, sectors and areas in which Project activities will be implemented. 2. Except as the Association shall otherwise agree, the Recipient shall not amend, abrogate, waive or fail to enforce the Operational Manual, or any provision thereof. In case of any conflict between the terms of this Agreement and those of the Operational Manual, the terms of this Agreement shall prevail. D. Grants Manual 1 . The Recipient shall carry out Part 3.2(a) of the Project in accordance with a manual (the "Grants Manual"), satisfactory in form and substance to the Association setting forth the procedures for selecting, appraising, and approving Matching Grants and for supervising implementation of Subprojects financed under Matching Grants which shall describe the basic guiding principles and acceptable procedures for the Matching Grants mechanism, which shall, inter alia, include: (a) the eligibility criteria and amounts for the Matching Grants,; and (b) mandatory provisions that: (i) no civil works shall be financed by the Matching Grants; (ii) that no Subproject shall involve land acquisition or Involuntary Resettlement; (iii) Beneficiaries of the Matching Grants shall not award contracts to their subsidiary -13- or affiliated companies unless there is an established arms-length arrangement satisfactory to the Association; (iv) Matching Grants will be provided, and Subprojects implemented in accordance with the ESCP and any applicable EMP thereunder; and (v) selection committee selection mechanisms are used for Matching Grant awards. 2. The Grants Manual may be amended from time to time in consultation with, and only after approval of, the Association. In case of any conflict between the terns of the Matching Grants Manual and those of this Agreement, the terms of this Agreement shall prevail. 3. Upon approval of any given Subproject. the Recipient shall enter intoan agreement (the "Subproject Agreement") with the corresponding Beneficiary under terms and conditions acceptable to the Association, 4. The Recipient shall exercise its rights and carry out its obligations under each Subproject Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate, waive or fail to enforce any Subproject Agreement or any of its provisions Section II. Project Monitoring, Reporting and Evaluation The Recipient shall furnish to the Association each Project Report not later than forty-five days after the end of each calendar semester, covering the calendar semester. Section III. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article 11 of the General Conditions and in accordance with the Disbursement and Financial Information Letter. the Recipient may withdraw the proceeds of the Financing to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: -14- Percentage of Amount of the Credit Expenditures to be Allocated Financed Category (expressed in SDR) (inclusive of Taxes) (1) Goods, works, 20,135,000 100% non-consulting services, consulting services, Internship Stipends, Training and Operating Costs for the Recipient's Respective Parts of the Project, except Matching Grants. (2) Matching Grants 365,000 TOTAL AMOUNT 20,500,000 B. Withdrawal Conditions; Withdrawal Period I1. Notwithstanding the provisions of Part A above, no withdrawal shall be made: (a) for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed SDR4,100.000 may be made for payments made up to the date one year prior to this date, for Eligible Expenditures under Category (1).; or (b) under Category (2) until the Recipient shall have adopted the Grants Manual in a manner satisfactory to the Association. 2. The Closing Date is June 22, 2026. -15- SCHEDULE 3 Repayment Schedule Principal Amount of the Credit Date Payment Due repayable (expressed as a percentage)* On each June 15 and December 15: commencing December 15, 2030 to and 1% including June 15, 2040 commencing December 15, 2040 to and 2% including June 15, 2060 1 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.05 (b) of the General Conditions. -16- APPENDIX Definitions "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the 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. 2. "Beneficiary" means the recipient of a Matching Grant for the carrying out of a Subproject as provided under Section I.D.3 of Schedule 2 to this Agreement. 3. "Category" means a category set forth in the table in Section lIl.A of Schedule 2 to this Agreement. 4. "COVID-1 9" means the coronavirus disease caused by the 2019 novel coronavirus (SARS-CoV-2). 5. "Digital Skills Stipends" means a grant made pursuant to the provisions of the OECS Agreement to finance the program activities under Part 3.1 (b) of the Project. 6. "Eastern Caribbean Currency Union" or 'ECCU" means the group of Eastern Caribbean Countries members of OECS which use the Eastern Caribbean dollar as their official currency. 7. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated May 12, 2020, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. 8. "Environmental and Social Standards" or "ESSs" means, collectively: (i) "Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts": (ii) "Environmental and Social Standard 2: Labor and Working Conditions"; (iii) "Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management"; (iv) "Environmental and Social Standard 4: Community Health and Safety"; (v) "Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement"; (vi) "Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural -17- Resources"; (vii) "Environmental and Social Standard 7: Indigenous Peoples/Sub- Saharan Historically Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; (ix) "Environmental and Social Standard 9: Financial Intermediaries"; (x) "Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure-; effective on October 1. 2018, as published by the Association. 9. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated December 14, 2018. 10. "ICT" means information and communication technology. I1. "Internship Stipends" means a grant made out of the proceeds of the Credit to finance the program activities under Part 3.2 (c) of the Project. 12. "Matching Grants" means a grant made out of the proceeds of the Credit to competitively selected SMEs to finance any given Subproject. 13. "MoF" means the Ministry of Finance -conomic Affairs, Investment. Planning, Sustainable Development Telecommunications and Broadcasting of the Recipient, or any successor thereto acceptable to the Association. 14. "MoG" means the Ministry of Governance, Public Service Reform, Citizen Empowerment, Social Justice and Ecclesiastical Affairs of the Recipient, or any successor thereto acceptable to the Association. 15. "MPWDE" means the Ministry of Public Works and Digital Economy of the Recipient, or any successor thereto acceptable to the Association. 16. "Grants Manual" means the manual for the provision of Matching Grants, referred to in Section L.D. of Schedule 2 to this Agreement. 17. "Money Services Business Act" means Act No. 8 of 2010 of the laws of the Recipient. 18. "OECS" means the Organisation of the Eastern Caribbean States established under the Treaty of Basseterre dated 1981, and operating also under the Revised Treaty of Basseterre dated 2010. 19. "OECS Agreement" means the financing agreement for the Project between the Association and OECS, as such financing agreement may be amended from time to time. "OECS Agreement" includes all appendices, schedules and agreements supplemental to the OECS Agreement, -18- 20. "Operating Costs" means the reasonable incremental expenses incurred in connection with implementation of the Recipient's Respective Parts of the Project, including consumable materials and supplies, utilities, fuel and oil, communications, administrative fees, mass media and printing services, vehicle rental, operation and maintenance, charges for the opening and operation of bank accounts required for the Respective Part of the Project. travel, lodging and per diems, but excluding salaries of officials of the Recipient's civil service 21, 'Participating Eastern Caribbean Countries" means the Commonwealth of Dominica, Grenada, Saint Lucia and Saint Vincent and the Grenadines. 22, "Payment System Act" means Act No. 8 2010 of the laws of the Recipient. 23. "PlU" means the Project Implementation Init in charge of carrying out the implementation of the Recipient's Respective Parts of the Project, referred to in Section I.A.2. of Schedule 2 to this Agreement. 24. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated July 2016. revised November 2017 and August 2018. 25. "Project Steering Committee" means the steering committee referred to in Section I.A.3 of Schedule 2 to this Agreement. 26. "Regional Project Oversight Committee" means the steering committee established under the OECS, in charge of coordinating the implementation of Parts 1, 3.1, and 4.1 of the Project pursuant to the OECS Agreement. 27. "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. 28. "Subproject" means any investment to promote digital technology and marketing under Part 3.2(a) of the Project and partially financed by a Matching Grant. 29. "Subproject Agreement" means the agreement referred to in Section I.D.3 of Schedule 2 to this Agreement. 30. "Training" means the expenditures incurred in connection with Project related training activities, including seminars, workshops, knowledge-sharing and study tours, and the costs associated with such activities (travel and subsistence costs for training participants, training fees and costs associated with securing the services of trainers, rental of training facilities, preparation and reproduction of training materials, and other costs directly related to training preparation and implementation).