OFFICIAL 2 DOCUMENTS The World Bank 1818 H Street N.W. (202) 473-1000 ITERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington. D.C. 20433 Cable Address; INTaAFRAD KrERNATIONAL DEVELOPMENT ASSOCIATION USA Cable Address: INDEVAS May 11, 2016 Hon. Sili Epa Tuioti Minister of Finance Ministry of Finance Government of Samoa Private Bag Apia Independent State of Samoa Dear Minister, PRIF Grant No TFOA2332 - Samoa Connectivity Project Letter Agreement In response to the request for financial assistance made on behalf of the Independent State of Samoa ("Recipient"), I am pleased to inform you that the International Development Association ("World Bank"), acting as administrator of grant funds provided under the Pacific Region Infrastructure Facility ("PRIF"), proposes to extend to the Recipient a grant in an amount not to exceed one million five hundred thousand United States Dollars ($1,500,000) ("Grant") on the terms and conditions set forth or referred to in this letter agreement ("Agreement'), which includes the attached Annex, to assist in the financing of the project described in the Annex ("Project"). This Grant is funded out of the abovementioned trust fund for which the World Bank receives periodic contributions. In accordance with Section 3.02 of the Standard Conditions (as defined in the Annex to this Agreement), the Recipient may withdraw the Grant proceeds subject to the availability of such fumds. The Recipient represents, by confirming its agreement below, that it is authorized to enter into this Agreement and to carry out the Project in accordance with the terms and conditions set forth or referred to in this Agreement. RCA 248423 LJ WUI 64145 LJ FAX (2D2) 477-6391 Hon. Sili Epa Tuioti -2- May 11, 2016 Please confirm the Recipient's agreement to the foregoing by having an authorized official of the Recipient sign and date the enclosed copy of this Agreement, and returning it to the World Bank. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION Franz R. Drees-Gross Country Director Timor-Leste, Papua New Guinea & Pacific Islands East Asia and Pacific Region AGREED: Independent State of S a By: A orized Representative Name: 4Lfa ( qk M64" JlaJ La"e& Title: MJAH-VI jhvr 1A 6ff, 40 W~ Date: 3o M D( Enclosures: (1) Standard Conditions for Grants Made by the World Bank Out of Various Funds, dated February 15, 2012 (2) Disbursement Letter of the same date as this Agreement, together with World Bank Disbursement Guidelines for Projects, dated May 1, 2006 PRIF Grant No. TF0A2332 ANNEX Article I Standard Conditions; Definitions 1.01. Standard Conditions. The Standard Conditions for Grants Made by the World Bank out of Various Funds dated February 15, 2012 ("Standard Conditions") constitute an integral part of this Agreement. 1.02. Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Standard Conditions, in this Agreement, or in the financing agreement, dated August 11, 2015, between the Recipient and the International Development Association providing a grant (DO63-WS) in support of the Project (as the same may be amended from time to time, "Financing Agreement"). Article II Project Execution 2.01. Project Objectives and Description. The objective of the Project is to reduce the cost and increase the availability of internet services in the Recipient's territory. The Project consists of the following parts: The Project, which forms part of the third Phase of the Program, consists of the following parts: Part 1: Samoa-Fiji Cable (a) Submarine Cable System Design, supply and installation of a submarine cable system to connect Samoa (Upolu and Savai'i) to Fiji (Suva), including undertaking a marine survey, financing the cable manufacture and cable deployment-marine operations. (b) Landing stations and ancillary equipment Construction of landing stations and ancillary facilities in Savaii and Upolu, including acquisition and installation of onshore equipment. (c) Additional costs Financing of indefeasible rights of use (including the acquisition of long-term landing services in Fiji and capacity) and management costs associated with the operation of the SSCC. Part 2. ICT Regulatory Technical Assistance Carrying out a program of activities designed to enhance regulatory capacity of the Office of the Regulator, such program to include, inter alia: (a) review, development and implementation of effective regulation for the ICT sector with a particular focus on wholesale markets; (b) review and update of existing legal regulatory framework; and (c) carrying out a nationwide consumer survey on the benefits of ICT. Part 3. Project implementation and administration Carrying out a program of activities designed to strengthen the capacity of the Recipient to handle Project transactions, implementation and management, such program to include: (a) Project finance and transactional assistance in connection with the institutional design and operationalization of the SSCC pursuant to public private partnership arrangements, including independent appraisal of the proposed structure of the SSCC; (b) overall Project coordination, financial and contract management, procurement, communications and outreach plus reporting, audit, monitoring and evaluation. 2.02. Project Execution Generally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out Part l(b) of the Project through Samoa Submarine Cable Company (variously referred to as "SSCC" or "Project Implementing Entity") in accordance with the provisions of: (a) Article 11 of the Standard Conditions; (b) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by 1BRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011 ("Anti-Corruption Guidelines"); (c) the Financing Agreement; and (d) this Article 11. 2.03. Institutional and Other Arrangements. The Recipient shall carry out Part 1(b) of the Project in accordance with the implementation arrangements set forth in Section I of Schedule 2 to the Financing Agreement. 2.04. Project Monitoring, Reporting and Evaluation. The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Conditions and on the basis of indicators acceptable to the World Bank. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the World Bank not later than 45 days after the end of the period covered by such report. 2.05. Financial Management. (a) The Recipient shall ensure that a financial management system is maintained in accordance with the provisions of Section 2.07 of the Standard Conditions. (b) The Recipient shall ensure that interim unaudited financial reports for the Project are prepared and furnished to the World Bank not later than 45 days after the end of each calendar quarter, covering the quarter, in form and substance satisfactory to the World Bank. (c) The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the World Bank not later than six months after the end of such period. 2.06. Procurement (a) General. All goods, works, non-consulting services, and consultants' services required for the Project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in: (i) Section I of the "Guidelines: Procurement of Goods, Works and Non- consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014) ("Procurement Guidelines"), in the case of goods, works and non-consulting services; (ii) Sections I and IV of the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014) ("Consultant Guidelines") in the case of consultants' services; and (iii) the provisions of this Section, as the same shall be elaborated in the procurement plan prepared and updated from time to time by the Recipient for the Project in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines ("Procurement Plan"). (b) Definitions. The capitalized terms used in the following paragraphs of this Section to describe particular procurement methods or methods of review by the World Bank of particular contracts, refer to the corresponding method described in (Sections II and III of the Procurement Guidelines, or] Sections II, III, IV and V of the Consultant Guidelines, as the case may be. (c) Particular Methods of Procurement of Goods, Works and Non-consulting Services (i) Except as otherwise provided in sub-paragraph (ii) below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. (ii) The following methods, other than International Competitive Bidding, may be used for procurement of goods, works and non-consulting services for those contracts which are specified in the Procurement Plan: (A) Shopping; and (B) Direct Contracting. (d) Particular Methods of Procurement of Consultants' Services (i) Except as otherwise provided in item (ii) below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. (ii) The following methods, other than Quality- and Cost-based Selection, may be used for the procurement of consultants' services for those assignments which are specified in the Procurement Plan: (A) Quality-based Selection; (B) Selection under a Fixed Budget; (C) Least Cost Selection; (D) Selection based on Consultants' Qualifications; (E) Single-source Selection of consulting firns; (F) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines for the Selection of Individual Consultants; and (G) Single-source procedures for the Selection of Individual Consultants. (e) Review by the World Bank of Procurement Decisions. The Procurement Plan shall set forth those contracts which shall be subject to the World Bank's Prior Review. All other contracts shall be subject to Post Review by the World Bank. Article III Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) Article III of the Standard Conditions; (b) this Section; and (c) such additional instructions as the World Bank may specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the World Bank and as made applicable to this Agreement pursuant to such instructions), to finance 100% of Eligible Expenditures consisting of goods, works and services under Part 1(b) of the Project, exclusive of Taxes. 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawal shall be made for payments made prior to the date of this Agreement. 3.03. Withdrawal Period. The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is July 31, 2020. Article IV Additional Remedies 4.01. Additional Events of Suspension. The Additional Events of Suspension referred to in Section 4.02 (k) of the Standard Conditions consists of the following: (a) the Telecommunications Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Recipient, GoTR and/or the Project Implementing Entity (as the case may be) to perform any of their respective obligations under this Agreement or the Project Agreement; or (b) the Establishment Documents for the Project Implementing Entity have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Project Implementing Entity to perform any of its obligations under the Project Agreement. Article V Effectiveness 5.01. This Agreement shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that the conditions specified below have been satisfied: (a) the SSCC Project Agreement has been entered into, and the Association has received a legal opinion or opinions satisfactory to it of counsel acceptable to the Association, or if the Association so requests, a certificate or certificates satisfactory to the Association of a competent official or officials, attesting that the SSCC Project Agreement has been duly executed and delivered on behalf SSCC, ratified by all necessary governmental or corporate action, and is legally binding upon the SSCC in accordance with the terms thereof; (b) (i) the SSCC Subsidiary Agreement has been entered into in accordance with the provisions of Section I.B.2 of Schedule 2 to the Financing Agreement; (ii) Recipient has made the proceeds of the Grant available to the Project Implementing Entity pursuant to the SSCC Subsidiary Agreement; and (iii) the Association has received a legal opinion or opinions satisfactory to it of counsel acceptable to the Association, or if the Association so requests, a certificate or certificates satisfactory to the Association of a competent official or officials, attesting that the SSCC Subsidiary Agreement has been duly executed and delivered on behalf of the parties thereto, ratified by all necessary governmental or corporate action, and is legally binding upon the parties thereto in accordance with the terms thereof; and (c) the Project Implementing Entity has: (i) entered into Landing Party Agreement(s) and obtained all necessary authorizations and permits for landing of the cable in Fiji; (ii) secured adequate capacity for the cable system via the landing station in Suva, Fiji, from a third-party provider. 5.02. Termination for Failure to Become Effective. This Agreement and all obligations of the parties under it shall terminate if it has not entered into effect by the date 120 days after the date of this Agreement, unless the World Bank, after consideration of the reasons for the delay, establishes a later date for the purpose of this Section. The World Bank shall promptly notify the Recipient of such later date. Article VI Recipient's Representative; Addresses 6.01. Recipient's Representative. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is Minister of Finance. 6.02. Recipient's Address. The Recipient's Address referred to in Section 7.01 of the Standard Conditions is: Private Bag Apia Samoa Facsimile: +685 21312 6.03. World Bank's Address. The World Bank's Address referred to in Section 7.01 of the Standard Conditions is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Telex: 248423 (MCI) or 64145 (MCI) Facsimile: 1-202-477-6391