OFFICIAL DOCUMENTS CREDIT NUMBER 6348-KE Financing Agreement (Kenya Social and Economic Inclusion Project) between REPUBLIC OF KENYA and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 6348-KE FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between the REPUBLIC OF KENYA (the "Recipient") and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the "Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01. The Association agrees to extend to the Recipient a credit, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount of two hundred fifteen million nine hundred thousand EUR (EUR 215,900,000) (variously, "Credit" and "Financing"), to assist in financing the project described in Schedule 1 to this Agreement (the "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 the greater of: (a) the sum of three-fourths of one percent (3/4 of 1%) per annum plus the Basis Adjustment to the Service Charge; and (b) three-fourths of one percent (3/4 of 1%) per annum; on the Withdrawn Credit Balance. 2.05. The Interest Charge is the greater of: (a) the sum of one and a quarter percent (1.25%) per annum plus the Basis Adjustment to the Interest Charge; and (b) zero percent (0%) per annum; on the Withdrawn Credit Balance. 2.06. The Payment Dates are April 15 and October 15 in each year. 2.07. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. -2- 2.08. The Payment Currency is Euro. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out Parts 1 and 2 of the Project through the State Department for Social Protection ("SDSP") and Part 3 of the Project through the National Drought Management Authority ("NDMA"), all in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV - REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension consists of the following, namely that the NDMA Law pursuant to which NDMA has been established and is operating has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the NDMA to perform any of its obligations under this Agreement. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following, namely that, the DFID Grant Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. 5.02. The Effectiveness Deadline is the date one hundred twenty (120) days after the Signature Date. 5.03. 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 (20) years after the Signature Date. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is the Recipient's Cabinet Secretary responsible for National Treasury. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: The National Treasury and Planning Treasury Building P.O Box 30007-00100 Nairobi, Kenya ... -3- (b) the Recipient's Electronic Address is: Facsimile: 254 20 330426; 254 20 218475 6.03. For purposes of Section 11.01 of the General Conditions: (a) the Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 -4- AGREED as of the Signature Date. REPUBLIC OF KENYA By INTERNATIONAL DEV ENT ASSOCIATION By Title: WUtJ\K._\.l b\ Q__fLiD(L Date: 22 j l \ }~D I 9 -5- SCHEDULE 1 Project Description The objective of the Project is to strengthen delivery systems for enhanced access to social and economic inclusion services and shock-responsive safety nets for poor and vulnerable households. The Project consists of the following parts: Part 1. Strengthening Social Protection Delivery Systems Carrying out a program of activities aimed at strengthening the Recipient's social protection delivery systems through, inter alia: (a) expanding and enhancing scope, functionality and coverage of the single registry ("SR"). (b) rolling out a new payment system to pay the beneficiaries of Three Cash Transfer Programs under the National Safety Net Program ("NSNP"). (c) enhancing the grievance and case management ("G&CM") and beneficiary outreach mechanisms, including strengthening citizen engagement across the NSNP and promoting measures to facilitate effective inclusion of vulnerable and marginalized groups ("VMGs") in the Project. (d) supporting institutional and capacity strengthening for SDSP for Project implementation, social and environmental safeguards, fiduciary oversight and management, beneficiary outreach and communications, and monitoring and evaluation. Part 2. Increasing Access to Social and Economic Inclusion Interventions Carrying out a program of activities designed to increase access of targeted households to social and economic inclusion interventions through, inter alia: (a) developing a structured referral mechanism between the National Hospital Insurance Fund ("NHIF") and the SDSP and strengthening the information system for data exchange and monitoring. (b) continuing the provision of nutrition sensitive safety net under the Nutrition Improvements through Cash and Health Education ("NICHE") and expanding it to additional Counties. -6- (c) testing of different approaches for the delivery of economic inclusion interventions to Targeted Households. Part 3. Improving the Shock Responsiveness of Safety Net System Carrying out a program of activities designed to improve shock responsiveness of the safety net system, such program to include, inter alia: (a) increasing financing and coverage of the Hunger Safety Net Program ("HSNP"), including: (i) continuing provision of regular cash transfers to existing beneficiary households; and (ii) expanding the HSNP into at least four additional drought affected Counties. (b) enhancing the scalability mechanism and predictable financing of emergency payments, including: (i) developing, adopting, and implementing a financing plan that meets the costs of emergency cash transfers; (ii) providing such emergency cash transfers to additional Targeted Households during the times of droughts; (iii) strengthening NDMA's capacity to store, analyze, and manage disaster affectedness data; and (iv) strengthening the decision-making process to trigger timely shock response cash transfers. (c) supporting institutional and capacity strengthening for NDMA for Project implementation, social and environmental safeguards, fiduciary oversight and management, beneficiary outreach and communications, and monitoring and evaluation. -7- SCHEDULE2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. National Social Protection Steering Committee To ensure proper and effective oversight of the Project, the Recipient shall maintain, throughout the Project implementation period, the National Social Protection Steering Committee, with composition, terms of reference and resources, satisfactory to the Association, to be responsible for providing oversight and policy guidance to the Project. 2. SDSP To ensure proper and effective implementation of the Project, the Recipient shall maintain, at all times during the implementation of the Project, the State Department of Social Protection ("SDSP") with resources and staffing satisfactory to the Association, to be responsible for implementation and coordination of Parts 1 and 2 of the Project. To this end, SDSP shall coordinate implementation of the said Parts 1 and 2 with other departments/units within the Ministry of Labour and Social Protection ("MLSP"), including Social Protection Secretariat ("SPS"), Social Assistance Unit ("SAU"), Department of Social Development ("DSD") and Department of Children Services ("DCS"). 3. NDMA To ensure proper and effective implementation of Part 3 of the Project, the Recipient shall maintain, at all times during the implementation of the Project, the NDMA with resources and staffing satisfactory to the Association, to be responsible for implementing Part 3 of the Project. To this end, the Recipient shall, prior to any disbursement under Category 3 of the Project, ensure that a Project Management Unit (PMU) is be established within the NDMA and thereafter maintained throughout the Project's implementation period, with terms of reference, qualified and experienced staff and resources satisfactory to the Association. B. Implementation Covenants 1. Management Information System To facilitate implementation of Part 1 and 2 of the Project, the Recipient shall, by not later than nine (9) months after the Effective Date, establish and operationalize -8- management information system modules for the: (a) NICHE; and (b) economic inclusion interventions, in form and substance satisfactory to the Association. 2. Project Operational Manual The Recipient shall ensure that the Project is carried out in accordance with the arrangements, procedures, and guidelines set out in the Project Operational Manual (provided, however, that in the case of any conflict between the arrangements, procedures, and guidelines set out in the said manual and the provisions of this Agreement, the provisions of this Agreement shall prevail) and, except as the Association shall otherwise agree, shall not amend, abrogate or waive any provision of the said manual. 3. Budgetary Allocation for the Project Without limitation on the provisions of Section 5.03 of the General Conditions, the Recipient shall ensure that no later than July 1 of each Fiscal Year of the Recipient; (a) the Project activities and expenditures for said Fiscal Year have been reflected in its national planning and expenditure framework and have been included in the Recipient's national budget as adopted for said Fiscal Year, in a manner satisfactory to the Association; and (b) all funds so provided are made available to SDSP and NDMA in a timely manner to ensure proper Project implementation. C. Annual Work Plans and Budgets 1. The Recipient shall, not later than April 30 of each year during the implementation of the Project, starting April 30, 2019, or such later date as the Association may agree, prepare and furnish to the Association for its approval, the annual work plan and budget containing all activities proposed for inclusion in the Project during the following calendar year, together with the financing plan for such activities and a timetable for their implementation. 2. The Recipient shall afford the Association a reasonable opportunity to exchange views with the Recipient on such proposed annual work plan and budget and thereafter ensure that the Project is implemented in accordance with such annual work plan and budget as shall have been approved by the Association ("Annual Work Plan and Budget" or "AWPB"). 3. The Recipient shall ensure that the Project is implemented in accordance with the AWPB (provided, however, that in the event of any conflict between the A WPB and the provisions of this Agreement, the provisions of this Agreement shall prevail). 4. The Recipient shall not make any change to the AWPB without prior no-objection in writing by the Association. -9- D. Safeguards 1. The Recipient shall carry out, the Project in accordance with the provisions of the Vulnerable and Marginalized Groups Framework (VMGF). The Recipient shall ensure that no provision of the VMGF is amended, suspended, abrogated, repealed or waived without the prior written approval by the Association. 2. The Recipient shall ensure that all technical assistance under the Project, shall only be undertaken pursuant to terms of reference reviewed and found satisfactory by the Association, such terms of reference to ensure that the technical assistance takes into account, and calls for application of the Association's environmental and social safeguards policies and the Recipient's own laws relating to the environment and social aspects including, but not limited to, national legislation enacted pursuant its obligations under the C138 - Minimum Age Convention, the Cl 82 - Worst Forms of Child Labor Convention, and the C029 -Forced Labor Convention). 3. The Recipient shall ensure that employees, agents, service providers, contractors and subcontractors carry out the Project in conformity with acceptable environmental and social standards, practices and codes of conduct (which shall, inter alia, contain measures that prohibit, endeavour to prevent and address Project-related gender based violence and sexual exploitation and abuse), the provisions of the Recipient's environmental and social laws (including, but not limited to, national legislation enacted pursuant its obligations under the C138 - Minimum Age Convention, the Cl82 - Worst Forms of Child Labor Convention and C029-Forced Labor Convention), and the VMGF. 4. Without limitation upon its other reporting obligations under this Agreement, the Recipient shall collect, compile and furnish to the Association on a calendar semester basis (or with more frequency or in a separate report whenever the circumstances warrant), reports in form and substance satisfactory to the Association, on the status of compliance with the VMGF, as part of the Project Reports, giving details of: (a) measures taken in furtherance of the VMGF including any Vulnerable and Marginalized Group Plan (VMGP); (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the VMGF including any VMGP; and (c) remedial measures taken or required to be taken to address such conditions including but not limited to the implementation of a grievance redress mechanism. -10- 5. The Recipient shall, throughout the Project implementation, maintain and publicize the availability of Project-level grievance and feedback and redress mechanism, in a form and substance satisfactory to the Association, to hear and determine fairly and in good faith all complaints and feedback raised in relation to the Project, and take all measures necessary to implement the determinations made by said grievance feedback and redress mechanism in a manner satisfactory to the Association. E. DLI Monitoring and Reporting 1. Without limitation on the provisions of Section II to this Schedule 2 to the Agreement, the Recipient shall prior to each payment under the Project: (a) carry out in accordance with the Verification Protocol, an assessment to determine the extent to which the Disbursement Linked Results ("DLR") in respect of which payment is requested has been achieved; and (b) furnish said assessment to the Association for review. 2. The Recipient shall ensure that the SPS shall be responsible for carrying out the verification of all the DLRs, except for DLR la and DLR4b, which shall be verified byNDMA. Section II. Project Monitoring, Reporting and Evaluation The Recipient shall furnish to the Association each Project Report not later than forty-five (45) 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 II 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: -11- Category Amount of the Percentage of Expenditures to be Credit Allocated Financed (expressed in Euro) (inclusive of Taxes) (1) Goods, non-consulting 47,500,000 100% services, consulting services, Training and Incremental Operating Costs for Parts 1 and 2 of the Project (2) Eligible Expenditure 105,300,000 100% of each DLI Amount set out in Programs under Parts 1 Schedule 4 (or such lesser percentage and 2 of the Project as represents the total Eligible Expenditures incurred by the Recipient under the Eligible Expenditure Program as of the date of withdrawal). (3) Eligible Expenditure 60,500,000 100% of each DLI Amount set out in Programs under Part 3 of Schedule 4 (or such lesser percentage the Project as represents the total Eligible Expenditures incurred by the Recipient under the Eligible Expenditure Program as of the date of withdrawal). (4) Goods, non-consulting 2,600,000 100% services, consulting services, Training and Incremental Operating Costs for Part 3 of the Project TOTAL AMOUNT 215,900,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made for payments: (a) made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed EUR 7,000,000 may be made for -12- payments made prior to this date but on or after September 1, 2018, for Eligible Expenditures; (b) under Categories (2) and (3) for Eligible Expenditures Program unless and until the Recipient has furnished evidence satisfactory to the Association that: (i) payments for Eligible Expenditures Program have been made in accordance, and in compliance, with the procedures set forth in the Verification Protocol and in the Recipient's applicable laws and regulations; and (ii) the DLis/DLRs set forth in Schedule 4 for which payment is requested have been met and verified in accordance with the Verification Protocol; and (c) under Category (3) unless and until the PMU referred to in Section I.A.3 of this Schedule 2 of the Agreement has been established in accordance with the said Section. 2. Notwithstanding the provisions of Part A of this Section, payments under Categories (2) and (3) shall not exceed the maximum amounts allocated to the respective DLis/DLRs as provided in Schedule 4. 3. Notwithstanding the provisions of paragraphs 1 and 2 of this Part B, if the Association shall determine based on the evidence provided by the Recipient under paragraph l(b) of this Part B, that any DLis/DLRs have not been achieved or have been partially achieved by the end of the year during which such DLis/DLRs were scheduled to be met in accordance with Schedule 4, the Association may in its sole discretion, by notice to the Recipient: (a) withhold in whole or in part the amount of the Financing allocated to such DLis/DLRs; (b) disburse in whole or in part the amount of the Financing allocated to such DLis/DLRs at any later time when such DLls/DLRs are met; and/or (c) reallocate in whole or in part any amount of the Financing allocated to such DLis/DLRs to other DLis/DLRs under Categories (2) and (3). 4. Notwithstanding the foregoing, if the Association determines, at any time, that any portion of the amounts disbursed by the Recipient under Categories (2) and (3) was made for reimbursement of expenditures that are not eligible under the Eligible Expenditures Program or not in compliance with the provisions of paragraphs 1(b) and 2 of this Part B, the Recipient shall promptly refund any such amount to the Association as the Association shall specify by notice to the Recipient. 5. The Closing Date is December 31, 2023. -13- Section IV. Other Undertaking A. Project Bank Accounts Without limitation upon the prov1S1ons of Section 2.0l(b) of the General Conditions, the Recipient shall, by not later than three (3) months after Effective Date, open bank accounts for the Project in accordance with detailed arrangements set out in the Disbursement and Financial Information Letter. -14- SCHEDULE3 Repayment Schedule Principal Amount of the Credit repayable Date Payment Due (expressed as a percentage)* On each April 15 and October 15: commencing April 15, 2024 to and including 1.65% October 15, 2043 Commencing April 15, 2044 to and including 3.40% October 15, 2048 * 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. SCHEDULE4 Disbursement Linked Indicators Matrix Year 1 (FY19/20) Year 2 (FY20/21) Year 3 (FY21/22) Year 4 (FY22/23) Year 5 (FY23/24) la (i) - Design and la (ii) - Roll out of la (iii) - Roll out of la (iv) - Roll out of la (v) - Roll out of implementation enhanced SR covers at enhanced SR covers enhanced SR covers enhanced SR covers arrangements for least 75% of targeted at least 75% of at least 75% of at least 75% of enhancements in SR households in 2 non- targeted households targeted households targeted households finalized (EUR HSNP Counties in 17 non-HSNP in 32 non-HSNP in 39 non-HSNP DLI 1: Scope, 5,200,000) (EUR 4,300,000) Counties Counties Counties coverage, and (EUR 12,900,000) (EUR 12,900,000) (EUR 3,500,000) functionality of Single I b (i) - Re-registration I b (ii) - Registration of Registry enhanced exercise in the four households in the four original HSNP expansion HSNP Counties completed Counties complete (EUR and beneficiary list 4,300,000) updated accordingly (EUR 3,500,000) DLI 2: New Inua Jamii 2a- 60% of 2b- 100% of Payment Mechanism beneficiaries beneficiaries receiving for three NSNP cash ยท receiving payments payments through the transfer programs is through the new new payment mechanism rolled out payment mechanism (EUR 4,300,000) (EUR 7,800,000) -16- 3a-G&CM 3 b - Enhanced mechanism is G&CM mechanism DLI 3: Integrated functional at all levels functional in all G&CM mechanism is for all four NSNP KSEIP Counties as strengthened and programs in 4 7 per revised design rolled out at Counties (EUR and implementation decentralized level 8,650,000) arrangements (EUR 8,650,000) 4a(i)- l,700 4a (ii) - 8,300 households 4a (iii) - 13,800 4a (iv) 19,400 4a (v) 23,500 households receiving receiving nutrition- households receiving households households receiving nutrition-sensitive sensitive cash transfer nutrition-sensitive receiving nutrition- nutrition-sensitive cash transfer (EUR (EUR 4,600,000) cash transfer sensitive cash cash transfer (EUR 1,200,000) (EUR3,800,000) transfer (EUR 2,900,000) 3,900,000) DLI 4: Increased 4b (i) - Tools 4b (ii) - 40% of NSNP 4b (iii) - 75% of access to social designed and formal beneficiaries enrolled in NSNP beneficiaries inclusion interventions agreement between the NHIF with enrolled in the NHIF SDSP, MoH and enrollment information with enrollment NHIF in place to available in the SR (EUR information available operationalize 4,300,000) in the SR (EUR -----~-~- ----- systematic enrollment 5,200,000) of NSNP beneficiaries into the NHIF (EUR 3,400,000) DLI 5: Increased 5a (i) - I 0,000 new 5a (ii) - 22,000 new coverage and HSNP households HSNP households government financing enrolled and paid for enrolled and paid for ofHSNP through the through the Government's budget Government's -17- in 2 expansion budget in 4 Counties (EUR expansion Counties 12,000,000) (EUR 13,000,000) Sb - 100% of existing HSNP households in the original four Counties financed by the Government by July 2019 (EUR 13,000,000) 6a (i) - Financing plan 6a (iv) Emergency 6a ( v) Emergency 6a (vi) Emergency for HSNP scalability, payments made in payments made in payments made in FY 19/20 adopted and FY20/21 for 100% of the FY21 /22 for 100% of FY22/23 for 100% financed (EUR total number of the total number of of the total number 865,000) households triggered in 4 households triggered of households Counties where HSNP is in 6 Counties where triggered in 8 6a (ii) Emergency functional and financing HSNP is functional Counties where DLI6: HSNP payments made in plan for FY21/22 and financing plan HSNP is functional scalability and FYI 8/19 for I 00% of updated (EUR for FY22/23 updated and financing plan financing the total number of 1,700,000) (EUR 7,800,000) for FY23/24 arrangements households triggered updated and enhanced in 4 Counties where financed (EUR HSNP is functional 5,200,000) (EUR 3,500,000) 6a (iii) Emergency payments made in FY 19/20 for 100% of the total number of -18- households triggered in 4 Counties where HSNP is functional and financing plan for FY20/21 updated (EUR I, 700,000) 6b (i)- HSNP 6b (ii) - Midterm scalability strategy review of HSNP reviewed, updated, scalability strategy and adopted (EUR complete and 865,000) recommendations adopted (EUR 870,000) APPENDIX Definitions 1. "Annual Work Plan and Budget" means each annual work plan, together with the related budget, for the Project approved by the Association pursuant to the provisions of Section l.C of Schedule 2 to this Agreement. 2. "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. 3. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 4. "Cash Transfer of Orphans and Vulnerable Children" or "CT-OVC, means the cash transfer program in the SDSP, providing cash transfers to targeted households with orphans and vulnerable children. 5. "Counties" mean the devolved government structures established under Article 176 of the Recipient's Constitution of 2010. 6. "DFID" means the United Kingdom's Department for International Development. 7. "DFID Grant" means an amount of about GBP 66 million to be provided by DFID to assist in financing the Project. 8. "DFID Grant Agreement" means the agreement to be entered into between the Recipient and the Association providing for the Co-financing. 9. "Department of Children Services" or "DCS" means the Recipient's department responsible for matters related to children services, as referred to in Section I.A.2 of Schedule 2 to this Agreement, or any successor thereto. 10. "Department of Social Development" or "DSD" means the Recipient's department within MLSP responsible for matters related to social development, as referred to in Section I.A.2 of Schedule 2 to this Agreement, or any successor thereto. 11. "Disbursement Linked Indicator" or "DLI" means in respect of Categories (2) and (3), each of the indicators related to said Category as set forth in the table in Schedule 4 to this Agreement, and "Disbursement Linked Indicators" or "DLis" means, collectively, more than one such Disbursement Linked Indicator or DLI. -20- 12. "Disbursement Linked Result" or "DLR" means in respect of Categories (2) and (3), each of the results related to said Category as set forth in the table in Schedule 4 to this Agreement, on the basis of the achievement of which, the amount of the Credit allocated to said result may be withdrawn in accordance with the provisions of Section III.B of Schedule 2 to this Agreement, and "Disbursement Linked Results" or "DLRs" means, collectively, more than one such Disbursement Linked Result or DLR. 13. "Eligible Expenditure Program" and the acronym "EEP" means the cash transfers under the CT-OVC, the Older Persons Cash Transfer ("OPCT") (excluding the cash transfers for beneficiaries of the 70 years and above) and the Persons with severe disabilities Cash Transfer ("PWSD-CT") in the MLSP and cash transfers under the HSNP in the NOMA provided by the Recipient to beneficiaries m accordance with the respective Recipient's program manuals. 14. "Fiscal Year" or "FY" means the Recipient's fiscal year commencing July 1 and ending June 30 of each year. 15. "G&CM" means grievance and case management. 16. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated July 14, 2017. 17. "Hunger Safety Net Program" or "HSNP" means the Recipient's program referred to in Schedule 1 of this Agreement. 18. "Incremental Operating Costs" means reasonable costs required for the day-to-day coordination, administration, operation and supervision of Project activities, including leasing and/or routine repair and maintenance of vehicles, equipment, facilities and office premises, fuel, office supplies, utilities, consumables, communication expenses (including postage, telephone and internet costs), translation, printing and photocopying expenses, bank charges, publications and advertising expenses, insurance, Project-related meeting expenses, Project-related travel, subsistence and lodging expenses, support staff and other administrative costs directly related to the Project, but excluding salaries, bonuses, fees and honoraria or equivalent payments of members of the Recipient's civil service. 19. "Ministry of Labor and Social Protection" or "MLSP" means the Recipient's ministry responsible for labor and social protection, or any successor thereto. 20. "M&E" means monitoring and evaluation. -21- 21. "National Drought Management Authority" or "NOMA" means the Recipient's agency established pursuant to the NOMA Law and responsible for matters related to drought management, or any successor thereto. 22. "NOMA Law" means the National Drought Management Authority Act, the Recipient's Law no. 4 of 2016. 23. "NICHE" means the Nutrition Improvement through Cash and Health Education, which is an existing program under the SDSP, providing nutrition-sensitive safety net to targeted households. 24. "National Hospital Insurance Fund" or "NHIF" means the Recipient's agency established pursuant to the National Hospital Insurance Fund Act, 1998 and responsible for matters related to the National Hospital Insurance Fund. 25. "National Safety Net Program" or "NSNP" means the Recipient's framework under which the four principle cash transfer programs, namely: (i) CT-OVC; (ii) HSNP; (iii) OPCT; and (v) PWSD-CT, are coordinated and harmonized. 26. "National Social Protection Steering Committee" means the existing steering committee established in the MLSP with mandate to oversee social protection related activities in the country. 27. "Older Persons Cash Transfer" or ("OPCT") means the cash transfer program in the SDSP, providing cash transfers to targeted households with older people above the age of 65. 28. "Persons with Severe Disability Cash Transfer" or "PWSD-CT" means the cash transfer program in the SDSP, providing cash transfers to targeted households with people with severe disabilities. 29. "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. 30. "Project Management Unit" or "PMU" means the PMU to be established pursuant to Section I.A.3 of Schedule 2 to this Agreement. 31. "Projects Operational Manual" means the manual dated October I 0, 2018 and referred to in Section 1.8.2 of Schedule 2 to this Agreement, containing detailed procedures for the implementation of the Project, and annexes containing guidelines for: (a) the expansion of NICHE; (b) the expansion of HSNP and (c) the financial management manual setting out EEP reporting requirements. -22- 32. "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. 33. "Social Assistance Unit" or "SAU" means the unit within MLSP responsible for the management and implementation of the three NSNP cash transfer programs under the MLSP, as referred to in Section I.A.2 of Schedule 2 to this Agreement. 34. "Social Protection Secretariat" or "SPS" means the Recipient's secretariat responsible for strategic and policy related matters on social protection and oversight of the sector, as referred to in Section I.A.2 of Schedule 2 to this Agreement. 35. "State Department of Social Protection" or "SDSP" means the State Department within MLSP responsible for matters related to social protection. 36. "Targeted Household" means a household identified to benefit from Parts I, 2 and 3 of the Project per the targeting guidelines in the Project Operational Manual. 37. "Three Cash Transfer Programs" means the Recipient's NSNP cash transfer programs under the SDSP, namely, CT-OVC, PWSD-CT, and OPCT, as referred to in Schedule l to this Agreement. 38. "Training" means the reasonable costs for the following expenditures incurred in providing training or workshops: travel by participants and presenters to the training or workshop site, per diem allowances of such persons during the training or workshop, honoraria for the presenters, rental of facilities, materials, supplies and translation and interpretation services. 39. "Verification Protocol" means the Recipient's protocol entitled "Disbursement Linked Indicators and Verification Protocols" dated October 25, 2018, detailing the means by which the fulfilment of the DLRs will be verified under the Project. 40. "VMGs" means Vulnerable and Marginalized Groups. 41. "Vulnerable and Marginalized Groups Framework" or "VMGF" means an instrument prepared by the Recipient, satisfactory to the Association, dated July, 2018, disclosed locally on July 10, 2018, and through the Association's Infoshop on July 18, 2018, outlining the basis for identifying vulnerable peoples and their rights, the appropriate consultative process as well as guidelines to avert, minimize, mitigate, or provide culturally appropriate compensation for any potentially adverse effects, as the same may be amended from time to time with the Association's prior written concurrence. 42. "Vulnerable and Marginalized Groups Plan" or "VMGP" means each of the plans to be prepared by the Recipient, satisfactory to the Association, which sets out the -23- measures to be carried out by the Recipient to ensure that: (a) VMGs affected by the project receive culturally appropriate social and economic benefits; and (b) when potential adverse effects on VMGs are identified, those adverse effects are compensated for, avoided, minimized, or mitigated.