LOAN NUMBER 8217-ID Loan Agreement (National Program for Community Empowerment in Rural Areas 2012-2015) between RE?PU 3LIC OF INDONESIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dal:ed 30UA1Y 7. , 2013 LOAN NUMBER 8217-ID LOAN AGREEMENT Agreement dated 7'VAP-Y 7z , 2013, between REPUBLIC OF INDONESIA ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank'). The Borrower and the Bank hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral 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 - LOAN 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of six hundred fifty million United States Dollars ($650,000,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.07 of this Agreement ("Loan"), to assist in financing the project described in Schedule I to this Agreement ("Project"). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount. The Borrower shall pay the Front-end Fee not later than 60 days after the Effective Date. 2.04. The interest payable by the Borrower for each Interest Period shall be at a rate equal to the Reference Rate for the Loan Currency plus the Variable Spread; provided, that upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02 (e) of the General Conditions. 2.05. The Payment Dates are June I and December I in each year. Page 2 of 31 2.06. The principal amount of ,he Loan shall be repaid in accordance with the provisions of Schedule 3 to this Agreeiment. 2.07. (a) The Bcrrower may at at y time request any of the following Conversions of the terms of the Loan in ordcr to lacilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of the interest rate basis applicable to: (A) ill or any portion of the principal amount of the Loan withdrawn and outstanding from alariable Rate to a Fixed Rate, or vice versa; or (B) all or any portion of the principa. amount of the Loan withdrawn and outstanding from a Variable Rate based on i Reference Rate and the Variable Spread to a Variable Rate based cn a Fixed R-fere ace Rate and the Variable Spread, or vice versa; or (C) all of the principal amout of the Loan withdrawn and outstanding from a Variable Rate based cn a Variabl: Spr:-ad to a Variable Rate based on a Fixed Spread; and (iii) the setting of limits on the lariable Rate or the Reference Rate applicable to all or any portion of the pricipa amount of the Loan withdrawn and outstanding by the establishment o an Inte est Rate Cap or Interest Rate Collar on the Variable Rate or the Ref :rence Rate. (b) Any conversion rec uestod pursuant to paragraph (a) of this Section that is accepted by the Bank ;hall be considered a "Conversion", as defined in the General Conditins, and sh ll be effected in accordance with the provisions of Article IV of the General Cotditi mns E nd of the Conversion Guidelines. ARTICLE III - PROJECT 3.01. The Borrower declares its com nitment to the objectives of the Project To this end, the Borrower shall carry out thte Pr ject in accordance with the provisions of Article V of the General Condit Ions. 3.02. Without limitation upon the pro isions of Section 3.01 of this Agreement, and except as the Borrower and the Bank shadl ot erwise agree, the Borrower shall ensure that the Project is carried out in accordance with tl D provisions of Schedule 2 to this Agreement ARTICLE IV - I FFECTIVENESS; TERMINATION 4.01. The Effectiveness Dead ine is th. date ninety (90) days after the date of this Agreement. Page 3 of31 ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Borrower's Representative is the Minister of Finance. 5.02. The Borrower's Address is: Directorate General of Debt Management Ministry of Finance Gedung Frans Seda Jalan Dr. Wahidin Raya No. 1 Jakarta 10710 Indonesia Cable address: Facsimile: FINMINISTRY 45799 (21) 381 2859 Jakarta 5.03. The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Facsimile: INTBAFRAD 1-202-477-6391 Washington, D.C. Page 4 of 31 AGREED at Jakarta, Indonesia, as ofth: day and year first above written. REPUBLIC OF INDONESIA By Authorized Representative Name: Robert Pakpahan Title: Expert Staff of the MOF on State Revenue With Full Mandate as DG of Debt Management INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Adth6rized Representative Name: 'A,4'r /odeu&- Title: 6 of31r -4 Pagoe5 of 31 SCHEDULE 1 Project Description The objective of the Project is for villagers in PNPM-Rural locations to benefit from improved local governance and socio-economic conditions. The Project consists of the following parts: Part 1: Kecamatan Grants (a) provision of Kecamatan Grants to Beneficiaries to support the provision of basic social and economic infrastructure and services, including: (i) planning for and preparation of Sub-Project proposals; (ii) training and capacity building for communities (Beneficiaries); (iii) construction of socio-economic infrastructure identified through community development planning; (iv) investing in activities using Revolving Loan Funds for women's savings and loan groups and productive activities developed under Pat 2(c) of the Project; and (v) preparing for and responding to disaster, emergency or catastrophic events; and (b) provision of Kecamatan Grants to Beneficiaries to support Pilots or Special Programs. Part 2: Community Empowerment and Facilitation Provision of technical assistance to support: (a) community empowerment and facilitation, including training related to technical support and facilitation of central or local government activities, as well as Pilots or Special Programs; (b) strengthening the existing Revolving Loan Funds scheme to improve operational and fiduciary management; and (c) rural economic empowerment, through the development of a viable strategy and piloting and subsequent mainstreaming implementation arrangements for economic inclusion of women's groups through participation in private and institutional markets, including development of business plans for rural producer organizations. Part 3: Implementation Support and Technical Assistance Provision of oversight, technical advisory services, training and other support for: (a) PNPM at the National and sub-national levels; (b) strengthening the Directorate General for Community Empowerment (PMD); and (c) supporting the management of the incremental activities generated by the Project Page 6 of 31 SCHEDULE 2 Project Execution Section I. Implementatlain Arran gements A. Institutional Arrangements. At the National level, the Ilorro wer shall: (a) ensure that the Prject shall be implemented under the umbrella of PNPM, and subject to the overall gu: dance of Pokja Pengendali PNPM; (b) through MOHA, dsign ite PMD 'to be responsible for the overall management and monitoring of ti.e Projec t; and (c) except as the B,ink nd t ie Borrower may otherwise agree in writing, cause PMD to: (i) maintain unil the completion of the Project, the PNPM Rural Secretariat, with a mandate, 3taff composition, filled staff positions and terms of reference acceptab:e lo tie Bank and the Borrower, to be responsible for the management and nonitoring of the Project; (ii) ensure that the .'INPM Rural Secretariat shall be provided with adequate resourcer, aid sipported by qualified personnel in adequate numbers as needed tc o comr lish the objectives of the Project; (iii) onsure that he I roject shall be supported by a suitably qualified Project Manager and b;' National Management Consultants to oversee Project acilitation a x te hnical assistance in accordance with the Operations Manual, in each case with terms of reference satisfactory to Borrower, through PMD, and the lanl; (iv) onsure ccord ination, as necessary, with the Pokja Pengendali PNPM; and (v) establish the Job t Secretariat comprised of representatives of the relevant directoraes in P 41D to improve coordination and programming, including budget, of th- PN ' activities by July 1, 2013. 2. At the Regional level, th. Bc rrower shall, except as the Borrower and the Bank may otherwise agree in wriling, ens are that the Project is supported by Regional Management Consultants to oversee the qua ity of Project implementation in the Provinces assigned by PMD to each rDspectivo regions I grouping in accordance with the Operations Manual, and in each case with terms of'ref renc - satisfactory to PMD and the Bank. 3. At the Provin>e level th. Bc rrower shall, except as the Bank and the Borrower may otherwise agrei in writing: Page 7 of 31 (a) cause to be established in each Province prior to the disbursement of any Kecamatan Grant in such Province, and thereafter maintained until the completion of the Project a Provincial Satker, to be responsible for the day-to-day implementation of the Project at the Province-level, with a mandate, composition, filled staff positions and terms of reference acceptable to the Bank and the Borrower, through PMD, and set out in the Operations Manual; (b) ensure that each Provincial Satker shall be provided with adequate resources, and supported by qualified personnel in adequate numbers as needed to accomplish the objectives of the Project, including, a Province-level PJOProv, and Province-level Oversight Consultants under the supervision of the Regional Management Consultants responsible for the relevant Province; (c) ensure that each Provincial Satker shall coordinate Project activities, as necessary, with the Provincial Poverty Alleviation Coordination Team responsible for its respective Province; and (d) ensure that the appointment letter (surat keputusan) for each Provincial Satker is issued in a timely manner early in each fiscal year of Project implementation. 4. At the District (Kabupaten) level, the Borrower shall, except as the Bank and the Borrower may otherwise agree in writing: (a) cause to be established in each Project Kabupaten prior to the disbursement of any Kecamatan Grant in such Project Kabupaten, and thereafter maintained until the completion of the Project, a Kabupaten Satker, to be responsible for the day-to-day implementation of the Project at the Kabupaten and Kecamatan levels, with a mandate, composition and terms of reference acceptable to the Bank and the Borrower, as set out in the Operations Manual; (b) ensure that each Kabupaten Satker shall be provided with adequate resources, and supported by qualified personnel in adequate numbers as needed to accomplish the objectives of the Project, including, a Kabupaten-level PJOKab and Facilitators (including at least one engineer, one social Facilitator and one financial Facilitator, and, in selected Kabupaten (as determined in the Operations Manual), one Revolving Loan Fund economic empowerment Facilitator), except as may be otherwise agreed in writing on a case by case basis between PMD and the Bank; (c) ensure that each Kabupaten Satker shall coordinate Project activities, as necessary, with the Kabupaten Poverty Alleviation Coordination Team responsible for its respective area; and (d) ensure that the appointment letter (surat keputusan) for each Kabupaten Satker is issued in a timely manner early in each fiscal year of Project implementation. Page 8 of 31 5. At the Sub-District (Kecunatin) level, the Borrower shall, except as the Bank and the Borrower may otherwie agee n writing, ensure through PMD that all Sub-project activities are supported by at Ieat two Ft cilitators (one social Facilitator and one technical Facilitator) and, when nDcessary, a as istant Facilitator to support communities with Project implementation in the lell, except as may be otherwise agreed in writing on a case by case basis between PMD an: th- Bank. 6. At the Sub-District (Kecimatin) and Village level, the Borrower, through PMD, shall, except as the Bank and th . Borrower may otherwise agree in writing, maintain implementation and im titu.iona. arrangements in accordance with the Operations Manual. 7. The Borrower, through PMD, s all ensure that the ASF-RMCs and the NMC are in place in a timely manner as necssery to facilitate implementation of the Project. B Implementation Arraigeaent: The Borrower thall, tinoug h the PMD: (a) implement the ]roje-ct ii. accordance with Operations Manual, including all annexes and surplement: th reto acceptable to the Bank and the Borrower, giving details of: (i) implementaton uran 3ements; (ii) procurement procedures as set forth in Section m of this Scliedle md standard procurement documentation; (iii) reporting requirements, finanzial ianagement procedures and audit procedures as set forth in Section I.B of ihis Schedule; (iv) project performance indicators; (v) the Implementation Guidelnes on Social and Environmental Safeguards, which constitutes a supplhmen: to the Operations Manual; (vi) Eligibility Criteria for the selection of Sub-prject: and the terms and conditions of governing the Kecamatan Grants and Local Govei nment Participation, including the terms and conditions set forth in the Annex 1 to this Schedule; (vii) maintenance provisions for works to be carried out und r a Sub -project; (viii) the Better Governance Action Plan; (ix) the Managcment Inbrmiatio i System description and procedures; and (x) the Complaints Handling Systerma descril tion and procedures; (b) adopt, prior to the :omn iencement of Sub-project selection for any Pilot or Special Program or Sub-pr pject and thereafter implement such Sub-project in accordance with a SupplemntEl Me anal, acceptable to the Borrower and the Bank, as necessary to set out the incemeital scope of activities, eligibility criteria, implementation arrangeanents ar.d d sbur ;ement mechanisms; (c) adopt, prior to the Bor ower undertaking any activities under Part l(a)(v) of the Project with respe:t to any natural disaster, emergency or catastrophic event a Supplemental Mamal, is necessary to set out the incremental scope of activities, eligibility criteria, iple nentation arrangements and disbursement mechanisms; (d) not amimd, suspeni, atrogate, repeal or waive any provisions of the Operations Manual or any Supplen tal Manual without the prior written agreement of the Bank and the Borrowcr; Page 9 of3l (e) ensure that the Operations Manual including all annexes and supplements thereto, and each Supplemental Manual, as applicable, is made available, at all times until completion of the Project, to each Local Govermnent and all National Management Consultants, Regional Management Consultants, Oversight Consultants and Facilitators, and applied in the carrying out of Sub-projects; and (f) with the prior written agreement of the Bank, update the Operations Manual, and each Supplemental Manual, as necessary, at all times ensuring compliance thereof with the terms of this Agreement 2. In the event of any conflict between the provisions of the Operations Manual or any Supplemental Manual and the provisions of this Agreement, the latter shall prevail. 3. The Borrower, through PMD, shall ensure that, prior to the Borrower undertaking any activities under Part 1 (a)(v) of the Project with respect to any natural disaster, emergency or catastrophic event, the Bank and the Borrower have agreed in writing that a disaster, emergency and/or catastrophic event requiring support for such activities has occurred and, when needed in the opinion of the Borrower and the Bank, at least one additional technical Facilitator shall have been appointed for each disaster-affected Kecamatan. 4. The Borrower, through PMD, shall ensure that only Sub-projects prepared, selected and implemented in accordance with the Eligibility Criteria and the terms and conditions for Sub-Projects and Kecamatan Grants set forth in Annex I to this Schedule 2, the Operations Manual, and any applicable Supplemental Manual shall be financed out of the proceeds of the Loan. 5. The Borrower, through PMD, shall ensure that: (a) Facilitators are assigned and trained by no later than April 30 in each year of Project implementation in accordance with the Operations Manual; (b) during Project implementation, adequate budget is made for training of Facilitators and Oversight Consultants based on a training plan agreed in writing between the Bank and the Borrower; and (c) prior to the commencement of each Sub-project, the technical Facilitator(s) for the Kahupaten or Kecamatan of the Beneficiaries responsible for such Sub-Project shall have completed a technical review of each such Sub-project in accordance with the Operations Manual and Supplemental Manual, as applicable, and the requirements of Annex 1 to this Schedule 2. The Borrower, through PMD, shall ensure that the applicable Kabupaten Satker shall retain records of each such review. 6. The Borrower, through PMD, shall, during implementation of the Project, continue to develop an updated Management Information System based on perfbrmance indicators and control data agreed in writing between the Borrower and the Bank. 7. The Borrower, through PMD, shall ensure that a list of Project Kecamatan, a list of amounts of each Kecamatan Grant and the Operations Manual re made available to the public through the PNPM Website, at all times until completion of the Project Page 10 of 31 8. The Borrower, through th. PWD, shall ensure that the relevant Camat and Bupati in each Project Kecaniatan ard Iroje t Kabupaten shall make publicly available, in a manner acceptable to the Borrowe- and the Bank, a report on the results of Project implementation and accounts fbr fund us -d di ring each year of Project implementation, by no later than May 15 of each subseqaen yeaj. 9. The Borrower, through PID, 5hall ensure that: (a) all annual audit reports referred to in Section IB of this Scl,edle 2, including Kabupaten audit reports, shall be published on the PNPM Website by no later than September 30 in each year of Project implementation for the prior year annual audil: re orts commencing on September 30, 2013 for the 2012 annual audit reports; and (b) appropri te action to follow up on any audit findings is taken at the National, Provincial, Kabupatei or Kecamatan level, as applicable, and reported as part of the regular quarterly report and nade available on the PNPM Website. 10. The Borrower shall enure that except as the Bank and the Borrower shall otherwise agree in writing: (a) BPKP :;hal can y out a continuous audit of the Project in partnership with Local Government inspect>rate; and (b) on terms of reference agreed among PMD, BPKP and the Bank, BPKP ,hal, aft:r PMD has compiled each interim financial report, review such interim financial .:epcrt fo each calendar semester during Project implementation and shall provide to the Bznk its rt port of each such review not later than forty-five (45) days after the end of each cal.ent ar se nester. 1]. The Borrower shall enure that all PNPM Rural sub-projects, whether financed by the Loan or by other sources, siall undt:rtake such sub-projects in accordance with the Operations Manual. 12. The Borrower shall ensure thi t expenditures financed out of the proceeds of the Loan, including Sub.-projects:, shall ikot have been financed by sources other than the Loan, including from the bud, :et of tht Borrower or from grant funding development partners. 13. The Borrower and the Bak t ay, from time to time agree in writing that the transfer of Kecamatan Grnits may be excli ided from the Project on an interim basis, including, without limitation, in situations where: 'a) one or more Facilitator position has remained vacant for more than four mont s; (b) a problem related to fraud or corruption as defined in the Operations Manual remains T resolved for more than the period specified in paragraph 15(c)(i) of Section I.B of his Ichedule; and (c) decisions with respect to the allocation of Kecamatan Grants or any acti ities related thereto are not taken in accordance with the eligibility, the Kecamaitan Gra t size formula and/or the selection criteria set out in the Operations Manual or in ano- her relevant policy document of the Borrower regarding PNPM. Upon such an agreement between the Borrower and the Bank, the Borrower, through MOHA, shall not tran:fer funds to the Kecamatans which have been temporarily excluded by written agr cenent Ibetween the Borrower and the Bank. 12.. Complaints Handling. 'he Bon ower, through PMD, shall ensure that: (a) the Complaints Ha idlin 3 System is operated, maintained and consistently updated throughout Project imp]-mentation in accordance with the Operations Manual and terms o freferen::e agreet. in writing between the Borrower and the Bank; Page 11 of 31 (b) tracking of all active complaints cases continues to be made available on the PNPM Website; (c) the service standard and mechanism for its implementation includes the following except as may be otherwise agreed in writing between PMD and the Bank and reflected in the Standard Operating Procedures: (i) with respect to Kecamatan Grants, if a problem related to fraud or corruption (as defined in the Operations Manual) is reported to the PMD in Jakarta by any Oversight Consultant Facilitator or official of the Borrower charged with supervising the Project and no appropriate response (as determined by reference to the Standard Operating Procedures) is taken by PMD within thirty (30) days after the report thereof then the Provincial Coordinator shall ensure that disbursement and transfer of Kecamatan Grant funds is excluded on an interim basis in the location in question until further notice issued by PMD; (ii) with respect to any Facilitator, if a problem related to fraud, corruption or a breach of the code of ethics (as defined in the Standard Operating Procedures) is reported to the Provincial Satker and Central Satker and no decision on appropriate action (as determined by reference to the Standard Operating Procedures). is taken by the relevant Provincial Satker within thirty (30) days after the report thereof, the Facilitator shall be automatically released from all duties without pay on an interim basis until a final decision related to the Facilitator is reached by the ethics tribunal (as defined in, and operating in accordance with, the Standard Operating Procedures); and (iii) these arrangements shall not be construed to waive any rights that the Bank or the Borrower may otherwise have under the terms of this Agreement with respect to the ensuring that the proceeds of the Loan are used for the purposes of the Project and for Eligible Expenditures; and (d) each Provincial Satker and Kabupaten Satker arranges for the local public disclosure of complaints and cases related to the Project if any, and their handling and resolution. C. Anti-Corruption 1. The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines and the Better Governance Action Plan, which reaffirms the Borrower's commitment to good governance in PNPM. 2. The Borrower shall ensure that no activities under the Project shall involve activities related to political practices or parties. Page 12 of31 D. Environmentgl and Social Saf ,guards 1. (a) The Borrower, th-ougli PMD, shall ensure that each Sub-Project is prepared, implenented and i2onil ared in accordance with the Implementation Guidelines for Social and Environmen al Safeguards, which form a supplement to the Operations Manual, and all gu:delir es and checklists set out therein, including those specifically provided for Indigenous Peoples and land donation, and the Negative List (b) In the event of iny conf ict between the provisions of the Implementation Guidelines for Social and Environa ental Safeguards and those of this Agreement, the latter shall prevail 2. The Borrower, through PMD, tball apply the section of the Implementation Guidelines for Social and Environmenta Salbguards in each Sub-Project that may affect Indigenous Peoples, in a manner to ensure ftat the Sub-Project shall: (a) avoid, and, if not possib e, minimize cultural, social and economic adverse effects on Indigerous Pecples, ciused or likely to be caused by the Project, by taking appropriate miti gati ng tr easures; and (b) through a process of 5ree, prior and informed consultation, involve concerned Indigenous Peoples in th Le design and implementation of Sub-projects in which such people reside oi make th ir living and design and implement measures so as to ensure that the benefitc receivet by the Indigenous Peoples under the Project are in harmony with their economic, scial and cultural preferences, and likely to protect their customary user rig its a id reduce, mitigate and offset any adverse impacts of Sub- projectM. 3. The Borrower, through ?MD, stall ensure that the proceeds of Kecamatan Grants shall not be used to finance the acqisil ion< f land or compensation for involuntary resettlement and that no Sub-Project shall riquire oi permit the involuntary acquisition of land or involuntary resettlement The Bonowir, tl rough PMD, shall ensure that in any Sub-Project involving land donation, the planning and verification procedures for land donation (voluntary donation and donation with compersatioa) set out in the Implementation Guidelines for Social and Environmental Safeguads ihall have been followed and documented in a manner satisfactory to the Bank and PMD pior to th - commencement of the Sub-Project. 4. The Borrower thall ens.are :hat t 2e proceeds of the Loan are not used to finance any activities or materials on the Neg:tiv, Lis as set out in Section A.2 of Annex 1 to this Schedule 2. 5. Without limiting the obligation; under Section ll.A of this Schedule 2, the Borrower shall include in each Proje:.t ILepoi t: (a) information on the status of compliance with the Implementation Guidel:nes for ' ocial and Environmental Safeguards; (b) details of measures taken for each Sub-Project m th: implementation of such guidelines; (c) conditions, if any, in any Sub-Project which interfer . or threaten to interfere with the implementation of such guidelines; and (d) reineial neasures taken or required to be taken to address such conditions. Page 13 of 31 Section H. Project Monitoring Reporting and Evaluation A. Project Reports 1. The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of indicators acceptable to the Bank. Each Project Report shall cover the period of one calendar quarter, and shall be furnished to the Bank not later than forty-five (45) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1. The Borrower shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. 2. Without limitation on the provisions of Part A of this Section, the Borrower shall prepare and furnish to the Bank as part of the Project Report not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Bank. 3. The Borrower shall have its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period. Section III. Procurement A. General 1. Goods, Works and Non-consulting Services. All goods, works and non-consulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the 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. Page 14 of 31 B. Particular Methods o Pro!gur' ment of Goods, Works and Non-consulting Services 1. International Competitivo Bic ding. Except as otherwise provided in paragraph 2 below, goods, works and non-:om ultir g services shall be procured under contracts awarded on the basis of International C:ml etiti' 'e Bidding. 2. Other Methods of Procuremnt of Goods, Works and Non-consulting Services. The following methods, olher thai International Competitive Bidding, may be used for procurement ol' goods, wor.rt i. vestment proposals presented on behalf of communities to finance Sub-pro;iect, oth r than those which are prohibited pursuant to paragraphs 2-6 of this Section A, provid xd, however, that such Sub-projects: (i) are tech:iically aid financially feasible, and capable of being implemented by the com nur ities themselves with only locally available technical assistance; (ii) are of benef it to ihe communities, and to the poor in particular; and respond to a public needI; an i (iii) are in act orda ice with the Operations Manual and any applicable Supplen i ent il M; Lual. (b) The arnount of each K( camatan Grant shall be calculated in accordance with the Circular Letter No. B./MffENKO/KESRA/X/2012 on indicative allocation for block grants Ibr PNPM Rural, dated October 5, 2012, as such letter may be revised or re- issued from time to time with the concurrence of the Bank. 2. Negative List No KecnEtan Orant shall be made to finance expenditures pertaining to or involving the f6llowing: (a) Activit'es related to the military or army; activities related to political practices or parties. (b) Building/rehabilitation c f government offices or religious facilities. (c) Purchase of chansav s, weapons, explosive materials, asbestos, or other envirormental dostrui tive materials (such as pesticides, herbicides, prohibited drugs). (d) Purchase of any fishing )oat with capacity above 10 tons and any related equipment. (e) Government officeis' sa ary. (f) Activities using child lal or below working age per regulations of the Borrower. (g) Activities related tc the ] iroduction, storage or sale of goods with tobacco content. (h) Activities in loc atic ns w ich are stated as a natural preserve per the regulations of the Borrouer, except ia an' case in which there is a written permit from the official responsible for:nar agen Lent of any such locations. Page 17 of31 (i) Activities for mining or collecting or usage of reefs. j) Activities related to management of water resources from any river that flows from or to a country other than the territory of the Borrower. (k) Activities related to relocating river lines. (1) Activities related to reclamation of land of more than 50 hectares. (m) Building any new irrigation network with an area of more than 50 hectares. (n) Activities to build a dam or water tank with large capacity of more than 10,000 cubic meters. 3. No Kecamatan Grant shall finance the acquisition of land or the resettlement or the compensation therefore. No Kecamatan Grant shall require or permit involuntary land acquisition or involuntary resettlement. 4. No Kecamatan Grant shall be eligible for financing out of the proceeds of the Loan unless Facilitator(s) are engaged and carry out their functions in such Kecamatan in accordance with the Operations Manual, for a cumulative period of at least eight (8) months in each Fiscal Year. 5. The Borrower shall implement the additional fiduciary safeguards for Revolving Loan Funds, agreed in writing between PMD and the Bank on October 1, 2012 and included in the Operations Manual, in all Kecamatan Grants which allow Revolving Loan Funds. 6. No Kecamatan Grant shall be eligible for financing out of the proceeds of the Loan for a Pilot or Special Program unless the Borrower shall have adopted a Supplemental Manual for such Pilot or Special Program acceptable to the Borrower, through PMD, and the Bank, or the Borrower, through PMD, and the Bank shall have agreed in writing that a Supplemental Manual is not required for such Pilot or Special Program. 7. No Kecamatan Grant shall be eligible for financing out of the proceeds of the Loan for Part 1 (a)(v) of the Project with respect to any natural disaster, emergency or catastrophic event unless: (a) the Bank and the Borrower have agreed in writing that a disaster, emergency and/or catastrophic event requiring support for such activities has occurred; and (b) the Bank and the Borrower, through PMD, have adopted a Supplemental Manual, if necessary, which defines the scope of such activities, and their implementation and disbursement arrangements; and, when needed in the opinion of the Borrower and the Bank, at least one additional technical Facilitator shall have been appointed for each disaster-affected Kecamatan. 8. No Kecamatan Grant shall be eligible for financing out of the proceeds of the Loan for a Sub- project with a value higher than the Sub-project ceiling set out in the Operations Manual. Page 18 of 31 B. Sub-project Review arid Select ion 1. The Borrower, througA PMD, shall ensure that each Sub-project is the subject of a corresponding proposa- for a Kecamatan Grant that has been prepared, submitted and reviewed in accordance with the guidelines, procedures and selection criteria set forth in the Operations Manual, any Suppler Lental Manual and this Annex. 2. The Borrower, through ?MD, st all ensure that, with respect to each Sub-project and prior to the carrying oul of Sub-project v orks, a technical Facilitator shall have completed a technical review of each Sub-project in ac,:ordance with the Operations Manual and any Supplemental Manual and the requiremcnts )f this Annex to ensure that all requirements have been complied with, incIudin;,, excepi as may be otherwise agreed in writing by the Bank and the Borrower, though PMD: (a) necessary funding :o filly fmance the proposed Sub-project has been obtained, including a Kecamatar Grant, any Local Government Participation and any additional contributions to be made by communities themselves or from other sources; (b) the provisions > the I uplementation Guidelines for Social and Environmental Safeguards have been co nplied with and appropriate measures adopted in design of the Sub-Project and in implementation and monitoring planning prior to the commercement :>f the Su:D-Project; (c) the requirements for undrtaking and documenting land donation (voluntary donation and donation with compe asation) set out in the Implementation Guidelines for Social and Enironmer tal Safeguards have been complied with, and where any land has been donated, th:: dcnatic n has been verified to be voluntary and documented as such prior to -he commen.eme at of the Sub-Project; (d) the provisions of the Inplementation Guidelines for Social and Environmental Safeguards pertaining to Indigenous Peoples, if applicable, have been followed and free, pjior anc hiforried consultation has been documented prior to the commencement of tle Su )-Project; and (e) a maintenance piogrun, E ad the budget therefor, for works to be carried out under the Sub-project and relaled gi iods has been prepared. The Borrower s;hall enure that the Kabupaten Satker shall retain records of each such review. C. Terms and Cor ditions :f Sub-p roject Agreements 1. Prior to the commencemnt >f an y Sub-project or the disbursement of any Kecamatan Grant, each of the following Sul-project Agreements shall be signed: Page 19 of31 (a) between the relevant PJOK, on behalf of the Local Government, and the Project Kecamatan, through the UPK, with respect to the transfer of funds from the central government account to the UPK, and (b) between the UPK and the Beneficiary, setting forth the respective obligations of the parties thereunder, including: (i) that the Beneficiary shall carry out the Sub-project in accordance with this Agreement, the Operations Manual including the Implementation Guidelines for Social and Environmental Safeguards, any Supplemental Manual, the provisions of the Better Governance Action Plan, and the provisions of the Anti-Corruption Guidelines applicable to recipients of Loan proceeds other than the Borrower; (ii) the requirement that each Beneficiary procure the goods, works and services to be financed out of the Sub-project in accordance with provisions that are fully consistent with the provisions of Section III of Schedule 2 to this Agreement; (iii) that the Beneficiary shall monitor and evaluate the progress of the Sub-project in accordance with the Operations Manual; (iv) that the Beneficiary shall maintain a financial management system in accordance with the Operations Manual and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Bank and the Borrower; in a manner adequate to reflect the operations, resources and expenditures related to the Sub-Project and at the Bank's or the Borrower's request, have such financial statements audited by independent auditors acceptable to the Bank and the Borrower in accordance with consistently applied auditing standards acceptable to the Bank, and promptly furnish the statements as so audited to the Borrower and the Bank, (v) that the Beneficiary shall enable the Borrower and the Bank to inspect the Sub-project, its operation and any relevant records and documents; and prepare and furnish to the Borrower and the Bank all such information as the Borrower or the Bank shall reasonably request relating to the foregoing; and (vi) rights adequate to protect the interests of the Borrower and the Bank, including the right of the PJOK to: (A) suspend or terminate the right of the UPK or the Beneficiary to use the proceeds of Kecamatan Grant; or (B) obtain a refund of the Kecamatan Grant upon the failure of the UPK or the Beneficiary to perform any of its obligations under the Sub-project Agreement. Page 20 of 31 AN EX 2 to SCHEDULE 2 National Competiti-e Bidding: Modifications to Procedures The procedures applicable to th - procurement of goods, works, and non-consulting services urder contracts awared on the basii of National Competitive Bidding shall be those of the Pelelangan Umum (Pu lic Ten:leri ag) z nd Pemilihan Langsung / Pelelangan Sederhana (Simplified Tendering) methods a set for:h ti the Borrower's Presidential Regulation No. 54/2010, with the modifications set out below 'n order to ensure economy, efficiency, transparency, and broad consistency with the p:-ovision.; of Seci ion I of the Procurement Guidelines, pursuant to paragraph 3.3 of said Guidelines. The Pemilinan I angsung /Pelelangan Sederhana method shall apply to such procurement up to the financial. th-eshc Ids specified in said Regulation. In the event of a conflict between the Borrower's procedures and hese modifications, the latter shall govern. (i) Procuring entites shall usc the appropriate standard bidding documents acceptable to the Borrower and le Bank. The provisions of Section 1.16 (Fraud and Corruption) of the Procurement Guidelines she1 1ap >ly, and each bidding document and contract financed out of the proceeds of the Loan sha I include provisions on matters pertaining to fraud and corruption as defined in pai agra ,h 1.16(a) of said Guidelines and the contract provisions set out in paragraph 1.16(e) of i.aid Guidelines. (ii) Foreign bidders shall not be pro dluded from bidding. If a registration process is required, a foreign firm determined to be th: lowest evaluated bidder shall be given reasonable time for registration. Foreign bidders sha [l not be required to form a joint venture or sub-contract part of the supply of goods, non- cons ating services, and works as a condition for submitting bids or the award o: the coatra:t. I lidding documents shall be made available, by mail or in person, to all iniernational biddej s who are willing to pay the required fee. (iii) No preference of any kind shall I e given to any bidders. (iv) Under the Pelel2ngan Lrnun me thod, bidders shall be allowed at least twenty-one (21) days from the date of the invitation to bid or the date of availability of bidding documents, whichever is laler, to prepare atd submit bids; this period shall be ten (10) days under the Pemilihan Lang rung /Pdle nga i Sederhana method. (v) Bids invited untder the Ilel2ngaz Umum method shall be submitted in one (1) envelope and evaluated using post-qut lificatioi. (vi) No bidder shall be rejected menly on the basis of a comparison with the owner's estimate and budget ceiling witho at tie B nk's prior written concurrence. (vii) Bid security, at the biddcr's optic n, shall be in the form of a letter of credit or guarantee from a reputable bank or othcr reputa 3le financial institution and shall without exception follow the form provided for this ptrpos, in the bidding documents. (viU) All bids shall not be rejected md new bids solicited without the Bank's prior written concurrence. Page 21 of31 (ix) Government-owned enterprises in Indonesia shall be eligible to participate in bidding only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Borrower or sub-borrower. Page 22of31 SCHEDULE 3 A nortization Schedule The following table sets forth th Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). If the proceels cf tht Loan have been fully withdrawn as of the first Principal Payment Date, -he principal amc int of the Loan repayable by the Borrower on each Principal Payment Date shall be d etenmin d by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principil Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) 01 Jun 2022 2.17% 01 Dtc 2022 2.22 % 01 Jtn 2023 2.28 % 01 Dic 2023 2.34% 01 Jn 2024 2.40% 01 Dec 2024 2.46% 01 Jun2025 2.52% 01 Dec 2025 2.58% 01 Jun2026 2.64% 01 Dec 2026 2.71 % 01 Jun 2027 2.78% 01 Dec 2027 2.85% 01 Jun 2028 2.92% 01 Dec 2028 2.99% 01 Jun 2029 3.07% 01 Dec 2029 3.14% 01 Jun 2030 3.22% 01 Dec 2030 3.30% 01 Jun 2031 3.38% 01 D:c 2031 3.47% 01 Jun 2032 , 3.56% 01 Dc 2032 3.65% 01 Jun 2033 3.74% 01 Dec 2033 3.83% 01 Jun 2034 3.93 % 01 Dec 2034 4.02% 01 Jun 2035 4.12% 01 Dec 2035 4.23 % 01 Jun2036 4.33% 01 Dec 2036 4.44% 01 Jun 2037 4.71 % Page 23 of 31 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph I of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date ("Original Installment Share") and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. 3. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system, 4. Notwithstanding the provisions of paragraphs I and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Page 24 of 31 APPENDIX Section I. Definitions 1. "Anti-Corruption Guidi,lin!s" n eans the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Fin Lnced by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and rovis A in January 2011. 2. "ASF-RMC" means the admin strative services firms for regional management consulting services financed by the proce( ds of the Loan, assigned at the Regional level to assist in Project implementation and mor itoring. 3. "Bappenas" means Badan Perincanaan Pembangunan Nasional, the Borrower's National Development Planning Agency, )r any successor thereto. 4. "Beneficiary" means L Xillag,, represented by its PNPM implementation team (tim pelarsanaan Igiatan, or TPK or other entity meeting the requirements set out in the Operations Manual whih i; the beneficiary of a Kecamatan Grant and party to a Sub-project Agreement, and. "Benef.cialies" neans more than one (1) Beneficiary. 5. "Better Governance Actioi. Pla " means a stand-alone chapter of the Operations Manual designed to integrate the )ontents of the Anti-Corruption Guidelines and to give effect thereto, and giving details cf a p.-ogram of actions, measures and policies designed to reduce or eliminate fraud and coiruptin in all its forms under the Project, including enhanced information disclosure proNision, civil society oversight provisions, mitigation measures to deal with the risks astociated with collusion, forgery and fraud, a complaints handling mechanism, and an appiopr ate r!gime of sanctions and remedies, and included as applicable in each Sub-prcject Agreement, as such chapter may be revised from time to time with the prior written agreement of the Bi nk and the Borrower, and such term includes any annexes or schedules to such chapter. 6. "BPKP" means Badan Pengawaan Keuangan dan Pembangunan, the Borrower's Financial and Developmeat Superviscry A rency, or any successor thereto. 7. "Bupati" means the head of a Ka mpaten. 8. "Camat" means the Kab%ipalen o: ficial who is the head of the Kecamatan. 9. "Category" means a categ )ry i et forth in the table in Section IV of Schedule 2 to this Agreement. 10. "Complaints Handling E:ystem" neans the system described in the Operations Manual and related annexestStandard Operati g Procedures, and the technical system it describes, designed to track complaints regardi2g tl.e use of Kecamatan Grant finds at any level of PNPM implementation, guide rcsohtion of such complaints, track resolution of such complaints, and if warranted in accordance -% ith s ich system, as an interim measure exclude use of Kecamatan Grants in a partcular KIbulaten Kecamatan or Province, or the participation of responsible individuals or oher actions authoirized by the Complaints Handling System, as such system Page 25 of 31 may be updated from time to time by written agreement between the Borrower, through PMD, and the Bank 11. "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. 12. "Eligibility Criteria" means the criteria for a Kecamatan Grant, as set out in this Agreement, the Operations Manual and any Supplemental Manual. 13. "Facilitator" means a technical or social specialist financed by the proceeds of the Loan and assigned to work with Villages to facilitate their participation in the Project, and "Facilitators" means more than one Facilitator. 14. "Fiscal Year" and "FY" mean the Borrower's fiscal year commencing January 1 and ending December 31. 15. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for Loans", dated March 12, 2012. 16. "Implementation Guidelines for Social and Environmental Safeguards" means the supplement to the Operations Manual, including all annexes thereto, containing standard operating procedures, technical guidelines and Sub-Project checklists (Panduan Penerapan Keb#akan Pengamanan Sosial dan Lingkungan Hidup Dalam PNPM Mandid Perdesaan), including references as required to the main text of the Operations Manual, for environmental and social assessment and management designed to maximize the benefits of the Project, eliminate, offset or mitigate any adverse environmental or social impacts, or reduce such impacts to acceptable levels, including: the Negative List; specific procedures applicable to Sub-Projects involving or affecting Indigenous Peoples; and procedures related to undertaking and documenting the voluntary nature of any land donation, as such guidelines may be amended from time to time with the prior written agreement of the Bank and the Borrower, through PMD. 17. "Indigenous Peoples" means those social groups in Indonesia that have a distinct social and cultural identity, and that are susceptible to being disadvantaged in the development process affected by the Project or any part thereof as follows: (a) masyarakat adat (customary law communities) based on lineage or locality and bound by customary law with characteristics including: (i) self identification as a distinct indigenous cultural group; (ii) collective attachment to ancestral territories and to the natural resources in the territories; and (iii) customary cultural, economic, social, or political institutions; and (b) Komunitas Adat Terpencil (KAT) (Isolated and Vulnerable communities), a category of customary law communities designated by the Borrower that live in isolated areas with characteristics including: (i) collective attachment to ancestral territories and to the natural resources in the territories; (ii) customary cultural, economic, social, or political institutions; (iii) an indigenous language; (iv) having a subsistence economy, (v) using simple tools and technology, (vi) having a high dependence on the environment and local natural resources, and (vii) having restricted access to social, economic, and political services. Page 26 of 31 18. "Joint Secretariat" means the seo etariat, established by PMD, to coordinate PNPM activities across PMD directors, as cescr bed in paragraph 1(c) of Section I.A of Schedule 2 to this Agreement. 15. "Kabupateif' means a d..stri:t, ai administrative sub-division of a Province. 2C. "Kabupaten Pcverty A.UeAiatio i Coordination Team" means the local government-level working group establkhe. under Perpres 15/2010 in each Project Kabupaten, Project Kecamatan or Project Vilage, oi any successor thereto. 21. "Kabupaten Sarker" me ans eacl project management unit established and operating at the Kabupaten level in accorcance with paragraph 4 of Section I.A of Schedule 2 to this Agreement. 22. "Kecamatan" means a sub-c istri t, an administrative sub-division of a Kabupaten. 23. "Kecamatan Grant" a grant male or to be made out of the proceeds of the Loan for the purposes of Par 1 of tho Project and meeting the requirements set out in this Agreement, the Operations Manual and iny Sup; lemental Manual, and "Kecamatan Grants" means more than one Kecamatan 3rant. 24. "Local Government" means the g vernment of a Project Kabupaten or a Project Kecamatan, as applicable, and "Local Gove anne ats" means more than one Local Government. 25, "Local Government Par:iciy atior " means Local Government funding contributed to the total Sub-project cos: for paricipatini; in the Project, to be made available by the government of the relevant Province c:r P ojec Kabupaten to a Project Kecamatan for a Sub-project in accordance with the fortrule set iorth in the Operations Manual. 26 "Management 1iformati:n 3yste in" means the technical system, designed and operated as described in the Opertliors Manual for recording, tracking and publishing information pertaining to the implementtion f PNPM, as such system may be redesigned and updated as part of ongoing :NPM developm at as agreed in writing between the Borrower, through PMD, and the Bank. 27. "Menko Kesra" means :he Borr wer's Coordinating Ministry for Peoples' Welfare, or any successor thereto. 28. "Ministry of Finance" mean; the Borrower's Ministry of Finance, or any successor thereto. 29. "Ministry of Piblic Worki" r eans the Borrower's Ministry of Public Works, or any successor thereto. 30. "MOHA" means the BorroA er's Vfinistry of Home Affairs, or any successor thereto. 31. "National" refer to activitie; tak ng place at the central government level of the Borrower. Page 27 of 31 32. "National Management Consultants" and "NMCs" means the consultants, financed by the proceeds of the Loan, assigned at the central level to assist in Project implementation and monitoring. 33. "Negative List" means the list of activities and inputs for which the proceeds of the Loan shall not be used, as set out in Section A.2 of Annex 1 to Schedule 2 to this Agreement. 34. "Operations Manual" means the Operations Manual dated November 8, 2008 and further updated pursuant to Section I.B.1(f) of this Agreement, including all annexes and supplements thereto, which: (a) is used by the Borrower for all of PNPM including the Project; (b) has been revised and updated as necessary to reflect the Project; (c) meets the requirements of paragraph I of Section LB of Schedule 2 to this Agreement; and (d) consists of: (i) the main text of the Operations Manual (Petunjunk Teknis Operasional Program Nasional Pemberdayaan Masyrakat (PNPM) Mandiri Perdesaan); (ii) Standard Operating Procedures (SOP); (iii) the elucidation/detailed technical guidelines (Penjelasan); (iv) the collection of checklists and forms (Formulir); (v) the Implementation Guidelines for Social and Environmental Safeguards (Panduan Penerapan Safeguards Sosial dan Lingkungan Dalam PNPMMandiri Perdesaan); and (e) such other supplements, annexes or schedules as may be agreed in writing from time to time by the Bank and PMD, as such Operations Manual may be amended or updated from time to time with the prior written agreement of the Bank and PMD. 35. "Oversight Consultants" means consultants, financed by the proceeds of the Loan, assigned at the Province level to assist in Project implementation and monitoring. 36. "Part" means a part of the Project described in Schedule 1 to this Agreement. 37. "Perpres" means a Peraturan Presiden, a presidential regulation. 38. "Pilots or Special Program" means each Sub-project under Part 1(b) of the Project, which will provide planning, training and investment related to defined activities of particular interest agreed in writing between the Borrower, through PMD, and the Bank, which may include, but is not limited to PNPM Generasi; PNPM Green; supporting community activities in national border areas; supporting area specific programs; and supporting Papua and West Papua activities in nutrition and food security, education, primary health care, village infrastructure, and economic livelihoods, in each case subject to the terms and conditions set out in the Operations Manual and any applicable Supplemental Manual. 39. "PJOK" means a Project operations officer at the Kecamatan level, established in accordance with the Operations Manual. 40. "PJOKab" means a Project operations officer at the Kabupaten level, established in accordance with paragraph 4(b) of Section I.A of Schedule 2 to this Agreement, and "PJOKabs" means more than one PJOKab. 41. "PJOProv" means a Project operations officer at the Province established in accordance with paragraphs 3(b) of Section LA of Schedule 2 to this Agreement, and "PJOProvs" means more than one PJOProv. Page 28 of31 42. "PMD" means Pembrdeyaa Masyarakat dan Desa, the Directorate General for Community and Village Err pow rment of MOHA, or any successor thereto. 43. "PNPM" means Progr:an Nasinal Pemberdayaan Masyarakat Mandiri, the Borrower's National Program for Commun ty Empowerment, as described in Perpres 15/2010, as the same may be ar2ended er update I from time to time. 44. "PNPM GenerEsi" mea:s Iealti and education-related activities under the PNPM Program for a Bright and Healt!iy i3enc ration, or PNPM Mandiri Perdesaan Generasi Sehat dan Cerdas). 45. "PNPM Green" means activiti:s under PNPM that support community investments in environmental and natural nsou e management, or PNPM Linkungan MandiriPerdesaan. 46. "PNPM Rural" means he Run1 section of PNPM, or Program Nasional Pemberdayaan Masyarakat Mandiri Perdaaan. 47. "PNPM Rural Secretarial," means the PNPM Rural Secretariat referred to in paragraph l(c)(i) of Section LA of Schedt le 2 to tf is Agreement. 48, "PNPM Webs ite" meas the Project website maintained by PMD, (www.pnpm- perdesaan.or.id) or such other w bsite as may be established from time to time and agreed in writing between the Bornow,r, th ough PMD, and the Bank. 49 "Pokja Pengend ali PNPM" Imea is the national-level working group of PNPM, chaired by Menko Kesra, with represeatati-es of relevant ministries, including BAPPENAS, MOHA, Ministry of Firance, Ministry (if Public Works, and State Ministry for Development of Disadvantaged Regions, or any si ccessor thereto. 50. "Procurement Guidelinea." riean: the "Guidelines: Procurement of Goods, Works and Non- consulting Senices under IBR) Loans and IDA Credits and Grants by World Bank Borrowers" dated Januaxy 2011. 51. "Procurement Plan" means tie B )rrower's procurement plan for the Project, dated October 8, 2012 and referred to in Iara raplL 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelincs, a; the same shall be updated from time to time in accordance with the provisions ofsaid paragraphs 52. "Project KabupEten" melns a Ka bupaten which is selected by the Borrower for participation in the Project in accordance with he provisions of the Operations Manual. 53. "Project Kecamitan" means a K ,camatan located in a Project Kabupaten which is selected by the Borrower for participatic a in the Project in accordance with the provisions of the Operations Manial. 54. "Project Managoe means a 4;uital dy qualified person appointed by the Directorate General of PMD to be responsible f:>r the m; nagement and monitoring of the Project in accordance with paragraph 1 (c)(ii) of Section I.A of Schedule 2 to this Agreement. Page 29 of 31 55. "Project Village" means a Village selected by the Borrower for participation in the Project in accordance with the provisions of the Operations Manual. 56. "Province" means an administrative sub-division of the Borrower's territory at the first level below the national level, and "Provinces" means more than one Province. 57. "Provincial Coordinator" means the head of the Oversight Consultants team at the Provincial level. 58. "Provincial Poverty Alleviation Coordination Team" means the province-level working group established under Perpres 13/2009 in each Province, or any successor thereto. 59. "Provincial Satker" means each Province level project management unit established and operating in accordance with paragraph 3 of Section LA of Schedule 2 to this Agreement. 60. "Regional" refers to activities taking place at the level of a group of two or more Provinces designated in accordance with the Operations Manual. 61. "Regional Management Consultants" means the consultants, financed by the proceeds of the Loan, assigned at the level of a cluster of Provinces as designated in the Operations Manual to assist in Project implementation and monitoring at the Regional level. 62. "Revolving Funds" means funds made available under Part 1 (a)(iv) of the Project, subject to the conditions for revolving funds set out in Annex 1 to Schedule 2 to this Agreement and the Operations Manual. 63. "Rupiah" and "Rp" mean the currency of the Borrower. 64. "Satker" means satuan kerja, a Project management unit, whether at central level or at the level of the Province or Kabupaten. 65. "Standard Operating Procedures" means the sections of the Operations Manual and its annexes setting out details of procedures for management of the PNPM Rural between and among the National, Regional, Provincial, Kabupaten and Kecamatan levels, including for example, lines of decision making, resolution of disputes or complaints. 66. "State Ministry for Development of Disadvantaged Regions" means the Borrower's State Ministry for Development of Disadvantaged Regions, or any successor thereto. 67. "Sub-project" means an activity qualifying for financing by a Kecamatan Grant in accordance with the terms of this Agreement, the Operations Manual and any Supplemental Manual, and "Sub-projects" means more than one Sub-project. 68. "Sub-project Agreement" means an agreement between a PJOK and a UPK or between a UPK and a Beneficiary for purposes of a Sub-project, and referred to in Section C of Annex 1 to Schedule 2 to this Agreement, and "Sub-project Agreements" means more than one Sub- project Agreement. Page 30 of 31 6S. "Supplemental Manual" me.ans each Supplemental Manual for a Pilot or Special Program under Part 1(b) and eacli ntural disaster, emergency or catastrophic event under Part 1(a)(v) of the Project meeting the requir !ments of paragraph 1(b) and paragraph 1(c), respectively, of Section LB of Schedul! 2 to t1is Agreement, as each such Supplemental Manual may be amended from time to tii e wi th the prior written agreement of the Borrower Bank and includes any annexes or schedults to such Manual. 70. "UPK" means unit peigebla kegiatan, a Kecamatan management unit established and operating in a Kecamatgn, and'9 JPKs" means more than one UPK. 71. "Village" means desa, the small :st administrative division of the Borrower, as defined in the Borrower's Law No.32/1004. Page 31 of 31