OFPMCAL *CWnT8j The Worl,d Bank 1818 H StreedN.W. (202) 477-1234 INTERNATIONAL BANK FOR RECONSTRUCTION AlD DEVELPMENT VVa1fll§ffr.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS February 27, 2013 H. 3. Dr. Nkosazana Dlamini-;'ura Cl airperson African Union Commission Rcosevelt Street P.O. Box 3243 AdJis Ababa Et-iopia Re: Afric in Union Commission: Building Capacity for a Results- Orier ted Engagement between African Union Commission and Regitnal Economic Communities - World Bank Supported Econ )mic Development Areas Project 'DF Grant No. TF014039 Excellency: In response to the rei luet foi financial assistance made on behalf of the African Union Commission ("Recipient" or "AU Cor umission"), I am pleased to inform you that the International Bank for Reconstruction and De velopment ("World Bank") proposes to extend to the Recipient for the benefit of AU Member Stat s ("AU Member States"), a grant from the World Bank's Irstitutional Development Fuid "'ID -") in an amount iot to exceed one million United States Dollars (U.S.$1,000,000) ("Giant') or the terms and conditions set forth or referred to in this letter agreement ("Agreement"), w,iicli inc udes the attached Annex, to assist in the financing of the project described in the Anne): ("Proje:t"). The Recipient represents, by :onfirming its agreement below, that it is authorized to enter into this Agreement and to c,irry out the Project in accordance with the terms and conditions set forth or referred to in this Agr,en ent. 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. Upon receipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date of the countersignature; provided, however, that the offer of this Agreement shall be deemed withdrawn if the World Bank has not received the countersigned copy of this Agreement within ninety (90) days after the date of signature of this Agreement by the World Bank, unless the World Bank shall have established a later date for such purpose. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT "Yong Kim President World Bank AGREED: AFRICAN UNION COMMISSION By W , '& 7 t 144 ta Name: H. E. Dr. Nkosazana Dlamini-Zuma Title: Chairperson Date: February 27, 2013 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 2 IDF Grant No. TF014039 ANNEX Article I Si and ird Conditions; Definitions 1.C. Standard Conditions Tie S andard Conditions for Grants Made by the World Bank Out of Various Funds daled Febtuary 15 2012 ("Standard Conditions"), with the modifications set forth in Section II of the kppend x to this Agreement, constitute an integral part of this Agreement. 1.02. Definitions. Unless the con ext requires otherwise, the capitalized terms used in this Agreement have the meanin&s a ;crib ed to them in the Standard Conditions or in this Agreement (including the Appendix to this Agret ment) (as the case may be). Article H Project Execution 2.01. Project Objectives and Desci 'iption. The objective of the Project is to enhance institutional capacity for collaboration between the Recipient and the Regional Economic Communities ('RECs") to advance on growth ind development in AU Member States. The Project consists of the fol owing r arts: Component 1: Stakeholder Consult tions and Development of a Results Oriented Engagement Framework Development of a results ori:ntd er gagement framework to facilitate the monitoring of regional development programs, thrcug: (a carrying out stakeholder consultations and reviewing the existing information sharing .rran:yements between AU Commission, RECs, and selected stakeholders; (b) identifying oppo -tunities and constraints of information flows including preparation of an integrated poli -y fr imework. Component 2: Pilot Iest of Rest Its Orientated Engagement and Knowledge Outreach Pilot testing a program fcr result -oriented engagement between the AU Commission and participating RECs on regic nal dev .lopment programs, through carrying out: (a) workshops to discuss key sectors on priority Lreas of investments and or policy development; and (b) capacity building activities on selected a -eas including technical visits by the AU Commission's staff and participating stakeholders to sister oi ganizations within and outside Africa. Component 3: Capacity Developmer t, Communication, and Project Monitoring and Evaluation Carrying out capacity building activities for AU Commission and RECs selected staff to use result oriented engagement inforr ation, channels, and networks, through: (a) designing of engagement training modules; (b) carrying out workshops for the selected participants on engagement and outreach concepts and methods; (c) supporting communication and dissemination for tl-e Proje;ct; [d) procurement of media and survey tools; and (e) supporting monitoring and evaluation a..:tivities and audits for the Project. 3 2.02. Project Execution Generally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out the Project through its offices of chairperson and the deputy chairperson in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) 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 ("Anti-Corruption Guidelines"); and (c) this Article II. 2.03. Institutional and Other Arrangements. Without limitation to the provisions of Section 2.02 of this Annex to the Agreement, the Recipient shall maintain, at all times during the implementation of the Project, at its chairperson and deputy chairperson's offices, staff in numbers and with qualifications, experience, and functions acceptable to the World Bank, for the purpose of effective and efficient implementation of the Project. 2.04. Project Monitoring, Reporting and Evaluation. (a) The Recipient shall monitor and evaluate the progress of the Project and, upon the World Bank's request, 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 such period as shall be indicated in the World Bank's request and shall be furnished to the World Bank not later than one (1) month after the date of such request. (b) The Recipient shall, upon the World Bank's request, prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than five (5) months after the Closing Date. 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 forty-five (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 such 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 (6) months after the end of such period. 2.06. Procurement (a) General. All goods, 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 Procurement Guidelines, in the case of goods and non- consulting services; 4 (ii) Secti,ns I an IV of the Consultant Guidelines in the case of consultants' servi.:es: and (iii) the frovisiot s of this Section, as the same shall be elaborated in the Proci irer ient Plan. (b) Definitions. Thc cal iitalized terms used in the following paragraphs of this Section to describe particular procurment methods or methods of review by the World Bank of particular contracts, :efer to the cor -esponding method described in Sections II and III of the Procurement Guidelines, or Secfions II, III, IV and V of the Consultant Guidelines (as the case may be). (c) Particular Mothc ds o 'Procurement of Goods and Non-consulting Services Goods and n,n-cons ilting services shall be procured under contracts awarded on the basis of Shoppinj,. (d) Particular M,..thods of Procurement of Consultants' Services (i) Exc pt is o herwise provided in item (ii) below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost.-ba:;ed 5 election. (ii) The followit g methods may be used for the procurement of consultants' serv ces foi assignments as specified in the Procurement Plan: (A) Quality. based Selection; (B) Selection under a Fixed Budget; (C) Least C )st S election; (D) Selection based on Consultants' Qualifications; (E) Sir gle- ource Selection of consulting firms; (F) Selection of Indi,idual Consultants; and (G) Single-source Procedures for the Sele;-ticn of Individual Consultants. (e) Review by_1 he Wor d Bank of Procurement Decisions. The Procurement Plan slall set forth those contract.: which ;hall be subject to the World Bank's Prior Review. All other contracts shall be subject to 'osi ReN iew by the World Bank. Article III Wit idrawal of Grant Proceeds 3.01. Eligible Expenditures. TI e Recipient may withdraw the proceeds of the Grant in accordance with the provisic ns of: (, ) Article III of the Standard Conditions; (b) this Section; and (c) such additional instruct on; as the World Bank may specify by notice to the Recipient (including the "World Bank Di;bur ement Guidelines for Projects" dated May 2006, as revised from time to time by the World Ban , and as made applicable to this Agreement pursuant to such instructions), to finance Eligible E penditures as set forth in the following table. The table specifies the categories of Eligible Lxpenditures that may be financed out of the proceeds of the Grant ("Category"), the allocation. of the amounts of the Grant to each Category, and the percentage of expenditures t0 be fin, nced for Eligible Expenditures in each Category: 5 Percentage of Amount of the Grant Expenditures to be Category Allocated Financed (expressed in USD) (inclusive of Taxes) (1) Goods 75,000 100% (2) Consultants' Services 515,000 100% (including audits, travel, and per diem) (3) Training 410,000 100% TOTAL AMOUNT 1,000,000 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 countersignature of this Agreement by the Recipient. 3.03. Withdrawal Period The Closing Date referred to in Section 3.06(c) of the Standard Conditions is three (3) years after the date of countersignature of this Agreement by the Recipient. Article IV Additional Remedies 4.01. Additional Event of Suspension. The Additional Event of Suspension consist of the following, namely that the Constitutive Act establishing Africa Union or the AU Commission shall have been amended, abrogated, repealed, or waived so as, in the opinion of the World Bank, to materially or adversely affect the ability of the Recipient to perform any of its obligations in the pursuit of the objective of the Project. 6 Article V Ieci pier t's Representative; Addresses 5.01. Recipient's Representiat've. The Recipient's Representative referred to in Section 7.02 of the Standard Cond tions is its Thai -person. 5.02. Recipient's A ddress. TIe Re cipient's Address referred to in Section 7.01 of the Standard Conditions is: African Union Comniiss on Roosevelt Stteet P.O. Box 3243 Addis Ababa Ethiopia Facsimile: +251 11 552 5627 5.03. World Bank's Address. Th. World Bank's Address referred to in Section 7.01 of the Standard Conditions .s: International Bank fc r R -con ;truction and Development 1818 H Street, N.W. Washington, D.C. 20431 United States of Amcrica Cable: Tele : Facsimile: INTBAFRAD 248L 23 (MCI) or 1-202-477-6391 Washington, D.C. 641z 5 (MCI) 7 APPENDIX Modifications to the Standard Conditions I. Definitions 1. "African Union Commission" or "AU Commission" means the executive, administrative organ/secretariat of the African Union. 2. "African Union" or "AU" means the legal entity established through Article 2 of the Constitutive Act. 3. "AU Member States" means Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Cote d'Ivoire, Congo, Congo Brazzaville, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Slo Tom6 and Principe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, South Sudan, Swaziland, Tanzania, Togo, Tunisia, Uganda, Sahrawi Arab Democratic Republic, Zambia, and Zimbabwe. 4. "Constitutive Act" means the Constitutive Act of the African Union, adopted by the AU Member States, on July 11, 2000, in Lome, Republic of Togo. 5. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers," dated January 2011. 6. "Procurement Guidelines" means 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. 7. "Procurement Plan" means the procurement plan prepared and updated from time to time by the Recipient for the Activities in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines. 8. "Training" means the reasonable costs associated with training and workshop participation under the Project, consisting of travel and subsistence costs for training participants, costs (other than consulting services) associated with securing the services of trainers and presenters, rental of training facilities, translation and interpretation services, preparation and reproduction of training materials. II. Modifications to the Standard Conditions Paragraphs 17 and 18 of the Appendix (Definitions) to the Standard Conditions are modified to read as follows: "17. "Member Country" means the member of the World Bank in whose territory the Project is carried out or any of such member's political or administrative subdivisions. If 8 the Grant is extended by th [e World Bank to such member as a party to the Grant Agreement, the term "V emb -r Country" and "Recipient" refer to the same entity. If the Project is carried ott in the territory of more than one member of the World Bank, "Member Country" r.:fers sel arately to each such member. 18. "Project" means i:he Proj ct for which the Grant is made. If the Project is carried out in the territory of more tha one Member Country, "Project" refers separately to the Project of each such vleinbet, 9