OFFICIAL DOCUMENTS GRANT NUMBER D830 Financing Agreement (Community-Based Recovery:and Stabilization for the Sahel Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and THE STATES OF LJIPTAKO-GOURMA INTEGRATED DEVELOPMENT AUTHORITY GRANT NUMBER D830 FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") and THE STATES OF LIPTAKO- GOURMA INTEGRATED DEVELOPMENT AUTHORITY ("Recipient"). The Association and the Recipient 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. L02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01. The Association agrees to extend to the Recipient a grant, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to one million eight hundred thousand Special Drawing Rights (SDR 1,800,000) ("Grant"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Grant in accordance with Section Ill 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 Grant Balance. 2.04. The Payment Dates are June 15 and December 15 in each year. 2.05. The Payment Currency is Euro. ARTICLE III- PROJECT 3.01. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall carry out Part 3(a) of the Project, in collaboration with the Participating Countries, 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 Events of Suspension consist of the following, namely, that: -2- (a) the Recipient's Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Recipient to perform any of its obligations under the Project. (b) the security situation within the Project target area has deteriorated or escalated so as to affect materially and adversely the ability of the Recipient or any of its agencies to carry out any part of the Project. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) The Recipient has adopted the Project Implementation Manual ("PM") in accordance with the provisions of Section I.B.1 of Schedule 2 to this Agreement. (b) The Recipient has: (i) established and operationalized the Project Implementation Unit ("PIU") in accordance with the provisions of Section LA.I(a) of Schedule 2 to this Agreement; and (ii) appointed a Project coordinator, a procurement specialist and a senior accountant to said PIU, all in accordance with the provisions of the Procurement Regulations. (b) The Recipient and the Participating Countries have established the Regional Coordinating Committee, with resources, functions and terms of reference satisfactory to the Association. 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. Except as provided in Section 2.02 of this Agreement, the Recipient's Representative is Executive Secretary. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Association's Address is: International Development Association 1818 H Street, N.W. -4- AGREED as of the Signature Date. INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: Vijay Pillai Title: Interim Director, Regional Integration Date: July 19, 2021 THE STATES OF LIPTAKO-GOURMA INTEGRATED DEVELOPMENT AUTHORITY By Authorized Representative Tiled I L Date:,, & \~ ~ §2 -3- Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 6.03. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: 417 Avenue Kwame N'krumah P.O. Box 01 BP 619 Ouagadougou 0 Burkina Faso; and (b) the Recipient's Electronic Address is: Telex: Email: 0022625308588 dg@liptakogourma.org -5- SCHEDULE 1 Project Description The objective of the Project is to contribute to the recovery and resilience of communities in Target Areas of the Liptako-Gourma region of Burkina Faso, Mali and Niger through a regional approach supporting: (a) integrated socio-economic services and infrastructure; (b) livelihoods and territorial development; and (c) regional data and coordination. The Project consists of the following parts: Part 1: Resilient and Inclusive Recovery of Conflict-Affected Communities Supporting the resilient and inclusive recovery of conflict-affected communities in partially insecure communes ("Orange Zones"), in particular: (a) Strengthening short-term restoration of basic livelihoods for conflict- affected communities through: (i) provision of agricultural inputs such as seeds, fertilizers and manual tools; (ii) provision of livestock kits and animal feed to farmers and herders; (iii) provision of targeted extension services and Training as appropriate; (iv) provision of kits and extension services for poultry farming, aquaculture and fishing; and (v) (A) implementation of Community Subprojects designed to enhance environmental protection and climate resilience; and (B) provision of consulting services, non-consulting services, Training, payment of wages to laborers for Labor Intensive Public Works ("LIPW") if any works are carried out under the LIPW approach, and acquisition of goods for the purpose. (b) (i) Provision of basic necessity kits consisting of household supplies such as solar lighting kits, rainwater harvesting kits, kitchen sets, mosquito nets, plastic mats, blankets and hygiene kits among others; and (ii) (A) implementation of Community Subprojects designed to expand and improve service delivery and build integrated infrastructure for local development; and (B) provision of consulting services, non-consulting services, Training, payment of wages to laborers under the LIPW if any works are carried out under the LIPW approach, and acquisition of goods for the purpose. -6- Part 2: Transitional Support Towards Stabilization and Territorial Development of Communities Supporting territorial development and stabilization of both host and forcibly displaced populations in safer and more accessible secondary cities and surrounding areas ("Yellow Zones"), in particular (a) Strengthening access to resilient and inclusive socioeconomic infrastructure and local services, through: (i) implementation of Community Subprojects designed to, inter alia, expand and improve service delivery and build integrated infrastructure for local development; and (ii) provision of consulting services, non-consulting services, Training, payment of wages to laborers under the LIPW if any works are carried out under the LIPW approach, and acquisition of goods for the purpose. (b) Supporting access to climate-resilient livelihoods and management of environmental and natural resources, through (i) implementation of Community Subprojects designed to, inter alia, enhance inclusion of women, youth, displaced persons and people with disabilities in local development activities; and (ii) provision of consulting services, non- consulting services, Training, payment of wages to laborers under the LIPW if any works are carried out under the LIPW approach and acquisition of goods for the purpose. Part 3: Regional Dialogue, Coordination and Data and Capacity Building Enhancing regional, national and local collaboration on data collection and analysis and knowledge generation and dissemination, in particular: (a) Supporting regional collaboration for recovery and stabilization through: (i) establishment and operationalization of a Project Implementation Unit for the States of Liptako-Gourma Integrated Development Authority; (ii) development of a regional knowledge management platform for data collection, analysis and dialogue building, consisting of, inter alia: (A) a comprehensive database for the Liptako-Gourma region including provision of appropriate hardware and software; (B) analytics of collected data including development of a regional catalogue and various research and studies; and (C) dialogue building activities including regional workshops, all through the provision of consulting services, non-consulting services, Training, Operating Costs and acquisition of goods for the purpose. (b) Strengthening the capacities of national and local institutions for regional collaboration through: (i) supporting data collection activities such as: -7- establishment of national integrated data centers covering the Liptako- Gourma region; development and monitoring of indicators for the Liptako-Gourma region; carrying out of community panel perception surveys in priority localities; establishment of registries mapping out local investments; and provision of hardware and software solutions for the purpose; (ii) supporting knowledge generation and analytics activities such as: strengthening national research capacities through partnerships with local universities and think tanks and carrying out new research; supporting university-sponsored knowledge sharing events such as conferences, forums, field research among others; and provision of targeted training for Project staff, eligible civil service staff and selected stakeholders among others; and (iii) supporting dialogue building activities such as facilitation of an annual Liptako-Gourma region international conference, field visits, workshops, forums and studies documenting best practices on community driven activities, all through the provision of consulting services, non-consulting services, Training, Operating Costs and acquisition of goods for the purpose. (c) Supporting local level capacity building, citizen engagement and social inclusion through: (i) strengthening the capacities of key stakeholders (such as the targeted communities and local authorities) for implementation of Community Subprojects under the Project, all through the provision of consulting services, non-consulting services, Training and acquisition of goods for the purpose; (ii) supporting community monitoring and citizen engagement activities so as to improve community ownership of Community Subprojects as well as transparency and accountability, in particular: (A) establishment and operationalization of a two-pronged grievance redress mechanism (GRM) at the local and national levels; (B) establishment and operationalization of community level GRM committees; and (C) carrying out of inclusive communication campaigns and public awareness activities in local languages; (iii) design and implementation of a community-driven development application and provision of appropriate software and hardware for the purpose; and (iv) supporting youth mobilization as well as social inclusion and cohesion activities consisting of, inter alia, community-based psychosocial support initiatives, Sexual Exploitation and Abuse ("SEA")/Sexual Harassment ("SH") prevention sensitization training, campaigns on non-violent methods of resolving conflicts, violence prevention and de-stigmatization; cultural and sports events, all through the provision of consulting services, non-consulting services, Training, Operating Costs and acquisition of goods for the purpose. -8-. Part 4: Project Management Strengthening the capacity of the Project Implementation Unit for management and implementation of the Project activities, including planning, preparation of annual work plans and budgets, preparation of Project progress reports, communication, overall management of procurement and financial management including carrying out of audits, monitoring and evaluation of Project activities (including third-party monitoring), including setting-up management information systems, outcome/impact evaluations at mid-term and end-of-Project, management of environmental and social aspects, and measures for enhanced transparency and accountability, all through the provision of consulting services, non-consulting services, Training, Operating Costs and acquisition of goods for the purpose. Part 5: Contingent Emergency Response Component Providing immediate response to an Eligible Crisis or Emergency, as needed. -9- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1 Executive Secretariat The Recipient shall designate, at all times during the implementation of the Project, its Executive Secretariat to be responsible for prompt and efficient oversight, coordination and management of the regional activities under the Project, and shall take all actions, including the provision of funding, personnel and other resources necessary to enable its Executive Secretariat to perform these functions, in accordance with the provisions of the PIM. To this end, the Recipient, through the Executive Secretariat, shall: (a) establish and thereafter maintain, at all times during the implementation of the Project, a Project Implementation Unit ("PIU"), with terms of reference, qualified staffing and resources satisfactory to the Association, to be responsible for overall coordination as well as day-to-day management, supervision and administration of activities and results under Part 3(a) of the Project, preparation of and consolidation of the annual work plans and budgets, fiduciary aspects (financial management and procurement), environmental and social standards aspects, reporting and communication of said Project activities, and monitoring and evaluation of said Project activities, all in accordance with the provisions of the PIM; and (b) for the purpose of efficient finaicial management of said Part 3(a) of the Project appoint, not later than one month after the Effective Date, an external auditor in accordance with the provisions of the Procurement Regulations. 2. Regional Coordination Committee Without limitation upon the provisions of paragraph I immediately above, the Recipient shall, in collaboration with the Participating Countries, establish and thereafter maintain, at all times during the implementation of the Project, the Regional Coordination Committee. The Regional Coordination Committee shall hold annual and semi-annual meetings respectively, and provide overall guidance and oversight for the regional activities under the Project, including advocating for regional collaboration in knowledge development, and to act as a liaison - 10 - between the Project, regional leadership and the public at large, all in accordance with the provisions of the PIM. B. Implementation Arrangements 1. Project Implementation Manual (a) The Recipient shall prepare, in accordance with terms of reference acceptable to the Association and furnish to the Association for review, a Project implementation manual, which shall include provisions on the following matters: (i) capacity building activities for sustained achievement of the Project's objectives; (ii) arrangements on financial management, setting forth the detailed policies and procedures for financial management under the Project; (iii) procurement management procedures, including a manual to guide procurement at the national and local levels; (iv) institutional administration, coordination and day to day execution of Project activities; (v) monitoring and evaluation of Project activities and results; (vi) reporting arrangements; (vii) information, education and communication of Project activities and results; (viii) guidelines for assessing environmental and social impacts of Project activities and designing appropriate mitigation, management and monitoring measures in respect of said impacts; (ix) arrangements for the grievance redress mechanism under the Project; (x) Personal Data collection and processing arrangements in accordance with good international practices where applicable; and (xi) such other technical and organizational arrangements and procedures as shall be required for the Project. (b) The Recipient shall afford the Association a reasonable opportunity to exchange views with the Recipient on said Project implementation manual, and thereafter, shall adopt such Project implementation manual, as shall have been approved by the Association ("Project Implementation Manual] or "PIM"). (c) The Recipient shall ensure that the Project is carried out in accordance with the PIMvl; provided, however, that in case of any conflict between the provisions of the PIM and the provisions of this Agreement, the provisions of this Agreement shall prevail. (d) Except as the Association shall otherwise agree, the Recipient shall not amend, abrogate or waive any provision of the PIM. -ll- 2. Annual Work Plan and Budget (a) The Recipient shall prepare and furnish to the Association not later than November 30 of each Fiscal Year during the implementation of the Project, a work plan and budget containing all activities proposed to be included in said Part 3(a) of the Project (including environmental and social instruments applicable to said activities, if any, in accordance with the provisions of ESCP) during the following Fiscal Year, and a proposed financing plan for expenditures required for such activities, setting forth the proposed amounts and sources of financing. (b) Each such proposed work plan and budget shall specify any Training activities that may be required under the Project, including: (i) the type of Training; (ii) the purpose of the Training; (iii) the personnel to be trained; (iv) the institution or individual who will conduct the Training; (v) the location and duration of the Training; and (vi) the cost of the Training. (c) The Recipient shall afford the Association a reasonable opportunity to exchange views with the Recipient on each such proposed work plan and budget and thereafter ensure that the Project is implemented with due diligence during said following Fiscal Year in accordance with such work plan and budget as shall have been approved by the Association ("Annual Work Plan and Budgef' or "AWP&B"). (d) The Recipient shall not make or allow to be made any change(s) to the approved AWP&B without prior approval in writing by the Association. C. Environmental and Social Standards 1 . The Recipient shall ensure that Part 3(a) 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 said Part 3(a) of 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, as provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; - 12- (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 fonn 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 appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. Section H1. Project Monitoring, Reportina and Evaluation The Recipient shall furnish to the Association each Project Report not later than one month after the end of each calendar semester, covering the calendar semester. Except as may otherwise be explicitly required or permitted under this Agreement or as may be explicitly requested by the Association, in sharing any information, report or document related to the activities described in Schedule 1 -13- of this Agreement, the Recipient shall ensure that such information, report or document does not include Personal Data. Section flL Withdrawal of the Proceeds of the Grant A. General Without limitation upon the provisions of Article I of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Grant to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Grant Percentage of Allocated Expenditures to be (expressed in SDR) Financed (inclusive of Taxes) Goods, works, non- 1,800,000 100% consulting services, consulting services, Training and Operating Costs for Part 3(a) of the Project TOTAL AMOUNT 1,800,000 B. Withdrawal Conditions; Withdrawal Period 1I Notwithstanding the, provisions of Part A above, no withdrawal shall be made for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed SDR20,000 may be made for payments made prior to this date but on or after May 3, 2021, for Eligible Expenditures. 2. The Closing Date is December 31, 2026. -14- APPENDIX Section 1. Definitions 1 "Annual Work Plan and Budget" or "AWP&B" means the work plan and budget prepared annually by the Recipient in accordance with the provisions of Section 1.1.2 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 1I.A of Schedule 2 to this Agreement. 4. "Community Subproject" means a specific development activity to be implemented by a Participating Country under the Project in accordance with the provisions of the Participating Country's financing agreement for the Project, and "Community Subprojects" means, collectively, two or more such specific development activities. 5. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated April 29, 2021, 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. 6, "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 Resources"; (vii) "Environmental and Social Standard 7: Indigenous Peoples/Sub-Saharan Historically Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; -15- (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. 7. "Executive Secretariat" means the secretariat established and operating pursuant to the Recipient's Legislation. 8. "Fiscal Year" means the Recipient's twelve-month period starting January I and ending December 31 of the same calendar year. 9. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated December 14, 2018 (revised on August 1, 2020 and April 1, 2021), with the modifications set forth in Section II of this Appendix. 10. "Labor-intensive Public Works" or "LIPW" means a specific labor-intensive activity under the Project, to be implemented by a Participating Country under the Project, in accordance with the provisions of the Participating Country's financing agreement for the Project. 11. "The States of Liptako-Gourma Integrated Development Authority" or "LGA" means the Autorite de developpement integre des etats du Liptako-Gourna, a regional entity established by the Participating Countries and operating pursuant to the Recipient's Legislation. 12. "Operating Costs" means incremental expenditures incurred by the Recipient on account of Project implementation, management and monitoring, including: dissemination of Project related information, travel costs, lodging and per diem for field trips related to Project implementation; vehicle rent, supplies and utilities, salaries of support staff, mail, advertisement costs, translation costs, commercial bank charges, communication costs, office equipment and maintenance, hardware and software, as such costs shall be agreed with the Association on an annual basis. 13. "Orange Zones" means the areas designated from time to time as orange zones for purposes of implementing Project activities, all in accordance with the eligibility criteria, guidelines and detailed procedures set out in the PIM, and inclusive of the following: (a) security criteria; and (b) degree of access criteria. 14. "Participating Countries" means collectively, Burkina Faso, Republic of Mali and Republic of Niger, and the term "Participating Country" means any of the Participating Countries. -16- 15. "Personal Data" means any information relating to an identified or identifiable individual. An identifiable individual is one who can be identified by reasonable means, directly or indirectly, by reference to an attribute or combination of attributes within the data, or combination of the data with other available information. Attributes that can be used to identify an identifiable individual include, but are not limited to, name, identification number, location data, online identifier, metadata and factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of an individual. 16. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 17. "Project Implementation Manual" or "PIM" means the Recipient's manual referred to in Section I.B.I of Schedule 2 to this Agreement. 18. "Project Implementation Unit" or "PIU" means the Recipient's unit referred to in Section I.A. 1(a) of Schedule 2 to this Agreement. 19. "Recipient's Legislation" means the traite revise de I 'autorile de developpement integre des etats du Liptako-Gourma (ALG), dated January 24, 2017. 20. "Regional Coordination Committee" means the committee referred to in Section 1.A.2 of Schedule 2 to this Agreement. 21. "Sexual Exploitation and Abuse" or "SEA" means any actual or attempted abuse of position of vulnerability, differential power or trust, for sexual purposes, including, but not limited to, profiting monetarily, socially or politically from the sexual exploitation of another. 22. "Sexual Harassment" or "SH" means unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. 23. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applied to all references to "the date of the Financing Agreement" in the General Conditions. 24. "Target Areas" means, for purposes of the Project, the following administrative areas in the Liptako-Gourna region: (a) in Mali: Gao; M6neka; Mopti; Tombouctou; Douentza; and Bandiagara; (b) in Burkina Faso: Sahel; Centre- Nord and Nord; and (c) Tillaberi in Niger. 25. "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 - 17- or workshop, honoraria for the presenters, rental of facilities, materials, supplies and translation and interpretation services. 26. "Yellow Zones" means the areas designated from time to time as yellow zones for purposes of implementing Project activities, all in accordance with the eligibility criteria, guidelines and detailed procedures set out in the PIM, and inclusive of the following; (a) security criteria; and (b) degree of access criteria, Section H. Modifications to the General Conditions The General Conditions are hereby modified as follows: 1. Section 2.06 is modified to read as follows: "Section 2.06. Financing Taxes The use of any proceeds of the Grant to pay for Taxes levied by, or in the territory of, the Member Country on or in respect of Eligible Expenditures, or on their importation, manufacture, procurement or supply, if permitted by the Legal Agreements, is subject to the Association's policy of requiring economy and efficiency in the use of the proceeds of its credits and grants. To that end, if the Association at any time determines that the amount of any such Tax is excessive, or that such Tax is discriminatory or otherwise unreasonable, the Association may, by notice to the Recipient, adjust the percentage of such Eligible Expenditures to be financed out of the proceeds of the,Grant." 2. Paragraphs (b) and (c) of Section 3.18 are modified to read as follows: "(b) All Financing Payments shall be paid without restrictions of any kind imposed by, or in the territory of, the Member Country, and without deduction for, and free from, any Taxes levied by, or in the territory of, the Member Country. (c) The Legal Agreements shall be free from any Taxes levied by, or in the territory of the Member Country, or in connection with their execution, delivery or registration." 3. In Section 5.11, paragraph (a) is modified to read as follows, "Section 5.11. Visits (a) The Recipient shall take all action necessary or useful to ensure that the Member Country affords all reasonable opportunity for representatives of the Association to visit any part of their territories for purposes related to the Grant or the Project." -18- 4. Section 6.01 is deleted in its entirety and the remaining section in Article VI is renumbered accordingly. 5. Section 8.02 is modified as follows: (a) Paragraph (j) on Membership is modified to read as follows: "(j) Membership. The Member Country or any member of the Recipient: (i) has been suspended from membership in or ceased to be a member of the Association; or (ii) has ceased to be a member of the International Monetary Fund." (b) Paragraph (in) is renumbered as paragraph (n), and a new paragraph (in) is added to read as follows: "(in) Inteiference. The Member Country: (i) has taken or permitted to be taken any action which would prevent or interfere with the execution of the Project or the performance by the Recipient of its obligations under the Financing Agreement; or (ii) has failed to afford a reasonable opportunity for representatives of the Association to visit any part of its territory for purposes relating to Grant or the Project." 6. The Appendix (Definitions) is modified as follows: (a) Paragraph 79 (Member Country) is modified to read as follows: "79. "Member Country" means the member of the Association in whose territory the Project is carried out or any such member's political or administrative subdivisions. If such activity is carried out in the territory of more than one such member, "Member Country" refers separately to each such member." (b) Paragraph 94 (Recipient) is modified to read as follows: "94. "Recipient" means the party to the Financing Agreement to which the Grant is extended."