OFFICIAL DOCUMENTS CREDIT NUMBER 6350-NE GRANT NUMBER D4020-NE Financing Agreement (Second Fostering Rural Growth Reform Development Policy Financing) between REPUBLIC OF NIGER and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 6350-NE GRANT NUMBER D4020-NE FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between REPUBLIC OF NIGER ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for the purpose of providing financing in support of the Program (as defined in the Appendix to this Agreement). The Association has decided to provide this financing on the basis, inter alia, of: (i) the actions which the Recipient has already taken under the Program and which are described in Section I of Schedule I to this Agreement; and (ii) the Recipient's maintenance of an adequate macroeconomic policy framework. The Recipient and the Association therefore 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 grant and a credit, both deemed by the Association as Concessional Financing for purposes of the General Conditions (collectively, "Financing") in the following amounts: (a) an amount equivalent to Special Drawing Rights to thirty-nine million five hundred thousand Special Drawing Rights (SDR 39,500,000) ("Grant"); and (b) an amount equivalent to forty-seven million five hundred thousand Euros (EUR 47,500,000) ("Credit"). 2.02. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.03. 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plus the Basis Adjustment to the Service Charge; and (b) three-fourths of one percent (3/4 of 1%) per annum; on the Withdrawn Credit Balance.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- 2.04. The Payment Dates are March 15 and September 15 in each year. 2.05. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 2 to this Agreement. 2.06. The Payment Currency is Euro. 2.07. Without limitation upon the provisions of Section 5.05 of the General Conditions, the Recipient shall promptly furnish to the Association such information relating to the provisions of this Article II as the Association may, from time to time, reasonably request. ARTICLE III - PROGRAM 3.01. The Recipient declares its commitment to the Program and its implementation. To this end, and further to Section 5.05 of the General Conditions: (a) the Recipient and the Association shall from time to time, at the request of either party, exchange views on the Recipient's macroeconomic policy framework and the progress achieved in carrying out the Program. (b) prior to each such exchange of views, the Recipient shall furnish to the Association for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Association shall reasonably request; and (c) without limitation upon the provisions of paragraphs (a) and (b) of this Section, the Recipient shall promptly inform the Association of any situation that would have the effect of materially reversing the objectives of the Program or any action taken under the Program including any action specified in Section I of Schedule I to this Agreement. ARTICLE IV - REMEDIES OF THE ASSOCIATION 4.01, The Additional Event of Suspension consists of the following namely that a situation has arisen which shall make it improbable that the Program, or a significant part of it, will be carried out. 4.02. The Additional Event of Acceleration consists of the following, namely that the event specified in Section 4.01 of this Agreement occurs and is continuing for a period of sixty (60) days after notice of the event has been given by the Association to the Recipient. -3- ARTICLE V- EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following: namely that the Association is satisfied with the progress achieved by the Recipient in carrying out the Program and with the adequacy of the Recipient's macroeconomic policy framework. 5.02. The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement ARTICLE VI- REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its minister in charge of planning. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Minist&re du Plan B.P. 862 Niamey Republic of Niger (b) the Recipient's Electronic Address is: Facsimile: +227 20 72 53 22 or +227 20 72 40 20 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 NIGER Approved by: Authorized Representative, Ministry or Finance Name: LLA < -n A Title: . lia,, tm r- Date:ol - jL Signed by: Authorized Represent v Ministry of Planning Name: Wk-J9 Title: 11 tko Date: ri1 -iT kj INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: <~, O/ ;4/1/ Title: Date: 1 2-7 / 2-0(7 -5- SCHEDULE 1 Program Actions; Availability of Financing Proceeds Section 1. Actions under the ProLram Actions Taken Under the Program. The actions taken by the Recipient under the Program include the following: Increasing rural productivity growth I. To increase the availability of agricultural inputs, the Recipient*s Ministry of Agriculture and Livestock has scaled-up the E-voucher geographical coverage to 20 communes; set up mechanisms for community-based seed production, pursuant to Arrete No. 304, dated August 29, 2018, and operationalized its Seed Certification Division through the issuance of 30 certifications to community-based entities involved in modem seeds multiplication. 2. To strengthen govemance and improve private sector participation in the fertilizer markets, the Recipient's Ministry of Agriculture and Livestock has created: (i) the Niger Pprti7lier Markpt Obrrvvitorv ("AP'I in chnroe nf nromtinc thp r1oan1v Af u1ml;tv fertilizers by the private sector, and (ii) the Technical Committee for Fertilizers of Niger (-COTEN") in charge of monitoring the implementation of laws and regulations in the fertilizer sector by all stakeholders, pursuant respectively to Decree No. 2018-598, dated September 5, 2018, and Arrete No. 308, dated September 7, 2018. 3. To deepen the involvement of financial institutions and credit products in rural areas, the Recipient's Council of Ministers has adopted Decree No. 2018-458, dated July 6, 2018, regulating the warrant age system. 4. To start the implementation of a multi-year arrears clearance plan of revenue from the extractive industry to communities, the Recipient's Ministry of Finance has transferred five percent (5%) of the arrears to the concerned communes, as evidenced by payment receipts of mining revenues issued by the central accounting officer of the Treasury, dated September 4, 2018. Supporting growth enabling sectors 5. To promote rural access to internet and mobile services, the Recipient's "Agence Nationale pour la Societ de Iinformation ("ANSI") has implemented a pilot connectivity project targeting at least one rural area funded partially by the USF. -6- 6. To enhance transparency in the management of resources of the ICT sector, and to create an enabling environment for public-private partnership collaboration, the Recipient through its Regulatory Authority for Telecommunications and Post, has published its 2015- 2017 financial statements on the ARTP website, as well as the related financial report of the external auditor for the fiscal year ending on December 31, 2017, in the Official Journal. 7. To make the cost of energy reflective of pricing effective. the Recipient's Council of Ministers has implemented the first electricity tariff adjustment, pursuant to Decree No. 2017-796, dated October 6, 2017, approving the tariff methodology and the applicable tariff structure. 8. To allow NIGELEC to operate in the power sector and to improve the company's performance, NIGELEC and the Republic of Niger have signed a concession contract for the production, transport and distribution of electricity on June 13, 2018, approved by Decree No. 2018-321, dated May 14, 2018. 9. To reduce fraudulent manipulations and tax losses, and to increase taxpayers' compliance with payment schedules and rules, the Recipient"s Ministry of Finance has deployed ASYCUDA World in eight border posts and established an ASYCUDA connection between Niger's 'customs offices and Togo's and Benin's customs offices, digitalized all the payments at customs and tax offices, and created eleven new tax offices throughout the country and one property tax center in Niamey, pursuant respectively to Arrete No. 42 dated January 19, 2018. 10. To secure road maintenance funds and improve governance in their management, the Recipient's Council of Ministers has changed the status of the road maintenance fund into a second-generation road fund in charge of collecting revenue arising from the use of the road and dedicated to road maintenance, pursuant to Decree No. 2018-460 dated July 6, 2018. Section II. Availability of Financing Proceeds A. General. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of this Section and such additional instructions as the Association may specify by notice to the Recipient. B. Allocation of Financing Amounts. The Financing is allocated in a single withdrawal tranche, from which the Recipient may make withdrawals of the Financing proceeds. The allocation of the amounts of the Financing to this end is set out in the table below: -7- Amount of the Amount of the Credit Allocated Grant Allocated Allocations (expressed in Euro) (expressed in SDR) Single Withdrawal Tranche 47,500,000 39,500,000 TOTAL AMOUNT 47,500,000 39,500,000 C. Withdrawal Tranche Release Conditions No withdrawal shall be made of the Single Withdrawal Tranche unless the Association is satisfied: (a) with the Program being carried out by the Recipient; and (b) with the adequacy of the Recipient's macroeconomic policy framework. D. Deposit of Financing Amounts 1. The Recipient shall open, prior to furnishing to the Association the first request for withdrawal from the Financing Account, and thereafter maintain the following two deposit accounts on terms and conditions satisfactory to the Association: (a) a deposit account in Euro ("Foreign Currency Deposit Account"); and (b) a deposit account in the Recipient's currency ("Local Currency Deposit Account"). 2. All withdrawals from the Financing Account shall be deposited by the Association into the Foreign Currency Deposit Account Upon each deposit of an amount of the Financing into the Foreign Currency Deposit Account, the Recipient shall deposit an equivalent amount into the Local Currency Deposit Account. All amounts withdrawn from the Local Currency Deposit Account shall be used exclusively for the Program. E. Audit. Upon the Association's request, the Recipient shall: I. have the Deposit Accounts audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association; 2. furnish to the Association as soon as available, but in any case, not later than four months after the end of the Association*s fiscal year. a certified copy of the report of such audit, of such scope and in such detail as the Association shall reasonably request, and make such report publicly available in a timely fashion and in a manner acceptable to the Association and 3. fumish to the Association such other information concerning the Deposit Accounts and their audit as the Association shall reasonably request. F. Closing Date. The Closing Date is December 31, 2019. -9- SCHEDULE 2 Repayment Schedule Principal Amount of the Credit Date Payment Due repayable (expressed as a percentage)* On each March 15 and September 15, 1.5625% commencing March 15, 2025, to September 15, 2056 and including. * 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. -10- APPENDIX Section I. Definitions 1. "ANSI" means the Recipient's 'Agence Nationale pour la Soci&t de I In formation". 2. "ARTP" means the Recipients "Autorite de Regulation des Telcommunication et de la Poste". 3. "ASYCUDA" means Automated System for customs Data. 4. "Basis Adjustment to the Service Charge" means the Association's standard basis adjustment to the Service Charge for credits in the currency of denomination of the Credit, in effect at 12:01 a.m. Washington, D.C. time, on the date on which the Credit is approved by the Executive Directors of the Association and expressed either as a positive or negative percentage per annum. 5. "COTEN" means Technical Committee for Fertilizers of Niger established by Decree N.2018-598 dated 2018, as amended from time to time. 6. "Deposit Accounts" means both the Foreign Currency Deposit Account and the Local Currency Deposit Account.". 7. "Foreign Currency Deposit Account" means the account referred to in Part D. I(a) of Section H of Schedule I to this Agreement. 8. "General Conditions" means the "International Development Association General Conditions for IDA Financing. Development Policy Financing". dated July 14, 2017. 9. "Local Currency Deposit Account" means the account referred to in Part D. 1(b) of Section II of Schedule I to this Agreement. 10. "NIGELEC" means the Societe Nigerienne d'Electricite. established and operating pursuant to its By-laws dated September 8, 1968, as amended from time to time. IL -OMEN" means the Niger Fertilizer Market Observatory established by Decree No.2018- 580, dated September 5, 2018, as amended from time to time. 12. "Program" means the program of objectives. policies, and actions set forth or referred to in the letter dated October 26, 2018, from the Recipient to the Association declaring the Recipient's commitment to the execution of the Program, and requesting assistance from the Association in support of the Program during its execution and comprising actions taken, including those set forth in -11- Section I of Schedule I to this Agreement, and actions to be taken consistent with the program's objectives. 13. "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. 14. "Single Withdrawal Tranche" means the amount of the Financing allocated to the category entitled "Single Withdrawal Tranche" in the table set forth in Part B of Section II of Schedule I to this Agreement. 15. "USF' means the Recipient's Universal Service Fund established pursuant Ordinance No. 099/045 of 26 October 1999 replaced by Law No. 2018-45 dated July 12, 2018, on the regulation of telecommunications.