THE WORLD BA IBRD * IDA I WORwBANKoROUP March 15, 2016 The Honourable Gaston Browne Prime Minister Minister of Finance & Corporate Governance Office of the Prime Minister Ministry of Finance Headquarters Antigua and Barbuda Dear Prime Minister: Re: SEMCAR Budget and Revenue Systems Enhancement Project SEMCAR Grant No.TF0A2238 In response to the request for financial assistance made on behalf of Antigua and Barbuda ("Recipient"), I am pleased to inform you that the International Bank for Reconstruction and Development/International Development Association ("World Bank"), acting as administrator of grant funds provided by the Canadian Department of Foreign Affairs, Trade and Development ("Donor") under the Multi-Donor Trust Fund Supporting Economic Management in the Caribbean, TF No. 071579, proposes to extend to the Recipient a grant in an amount not to exceed seven hundred thousand United States Dollars (U.S.$700,000) ("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 Part 2 of the project described in the Annex ("Project"). This Grant is funded out:of the ibovementioned trust fund for which the World Bank receives periodic contributions from the D6ft.*&xdance with Section 3.02 of the Standard Conditions (as defined in the Annex to thi. W 4;.W heWorld Bank's payment obligations in connection with this Agreement are limite&W thenourit of funds made available to it by the Donor under the abovementioned trust fund, and the Recipient's right to withdraw the Grant proceeds is subject to the availability of such funds. 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. 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. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT/INTERNATIONAL DEVELOPMENT ASSOCIATION Byy Sophie Sirtaine Country Director Caribbean Country Management Unit Latin America and the Caribbean Region AGREED: ANTIGUA AND BARBUDA By: thorized Representative Name: II ' Title: 'i1JW/,_!7c Date: _ _ _ _ _ _ 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. (3) "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. (4) "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers", dated January 2011 and revised July 2014. (5) "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers", dated January 2011 and revised July 2014. 2 SEMCAR Grant No. TF0A2238 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 or in this Agreement as follows: (a) "ASYCUDA World" means the Automated System for Customs Data that is produced by the vendor UNCTAD. (b) "Beneficiary Countries" means the countries of Antigua and Barbuda, Belize, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. (c) "BI" means Business Intelligence. (d) "Customs Excise Division of Antigua and Barbuda" means a department established within the Recipient's Ministry of Finance and Corporate Governance. (e) "ICT" means Information and Communication Technology. (f) "IRD" means Inland Revenue Department, the department established in each Beneficiary Country with the responsibility for tax administration. (g) "Operating Costs" means the incremental expenses incurred by the PIU's on account of Project implementation, management and monitoring, including dissemination of Project related information and publications, office rent and utilities, office equipment, insurance, maintenance and repair, vehicle insurance, local travel, communication, translation and interpretation, bank charges, salaries of contractual staff (excluding consultants services and salaries of officials of the Recipient's civil service) and other miscellaneous costs directly associated with the Project as agreed by the Bank and based on periodic budgets. (h) "PIU" means the Project Implementing Unit maintained within the Recipient's Ministry of Finance and Corporate Governance. (i) "Project" means the SEMCAR Budget and Revenue Systems Enhancement Project, described in Section 2.01 to this Agreement. (j) "SEMCAR" means Supporting Economic Management in the Caribbean. (k) "SIGTAS" means Standard Integrated Government Tax Administration System. (1) "SmartStream" means the Public Financial Management software used by the Beneficiaries Countries. 3 (m) "Training" means the reasonable costs, as shall have been approved by the World Bank, for training and workshops conducted under the Project, including tuition, visa, travel per diem and hotels and subsistence costs for training and workshop participants, and costs associated with securing the services of trainers and workshop speakers, rental of training and workshop facilities, preparation and reproduction of training and workshop materials, and other costs directly related to training and to workshop activities. Article II Project Execution 2.01. Project Objectives and Description. The objective of the Project is to upgrade or modernize selected Information Technology Systems of eligible public sector institutions of the Beneficiary Countries. The Project consists of the following parts: Part 1: Strengthenin2 the SIGTAS Tax Administration System Strengthening SIGTAS in selected Beneficiary Countries to support effective operational management and decision making by improving data quality and enabling the use of business intelligence through: (a) the designing, development and implementation of ICT applications to enable SIGTAS to perform BI and produce reliable performance management reports; (b) the purchasing of hardware, computers, servers, licenses, business intelligence applications and other related goods that are required to improve SIGTAS; and (c) provision of support for Part 1 of the Project to: (i) carry audits; (ii) carry out financial management and procurement; (iii) monitor and evaluate Project activities; (iv) provide Training and the required goods; and (v) financing of Operating Costs. Part 2: Infrastructure Equipment for the ASYCUDA World Customs Administration System (a) providing support to procure selected hardware and software equipment for the successful implementation of ASYCUDA World in Antigua and Barbuda; and (b) provision of support for Part 2 of the Project to: (i) carry out audits; (ii) carry out financial management and procurement; (iii) monitor and evaluate Project activities; (iv) provide Training and the required goods; and (v) financing of Operating Costs. Part 3: Strengythening the SmartStream Financial Mana2ement System Providing support to selected Beneficiary Countries to improve their public financial management operations and access to critical financial data by upgrading selected SmartStream components, through: (a) the provision of services required to migrate SmartStream to a higher version in selected Beneficiary Countries; (b) the procurement of hardware, computers, servers, licenses, production applications and other related goods that are required to improve SmartStream; 4 (c) the carrying out of training to improve utilization of SmartStream; and (d) provision of support for Part 3 of the Project to: (i) carry out audits; (ii) carry out financial management and procurement; (iii) monitor and evaluate Project activities; and (iv) provide Training and the required goods and (v) financing of Operating Costs. 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 2 of the Project through the Customs and Excise Division of Antigua and Barbuda with assistance of a PIU 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 The Recipient shall maintain, at all times during Project implementation, a PIU led by a Project Coordinator and assisted by adequate professional, technical and administrative staff (including procurement and accounting specialists); with experience, qualifications, responsibilities and resources satisfactory to the World Bank; and responsible for coordinating all activities under Part 2 of the Project including fiduciary support to the PIU. 2.04. Donor Visibility and Visit. (a) The Recipient shall take or cause to be taken all such measures as the World Bank may reasonably request to identify publicly the Donor's support for the Project. (b) For the purposes of Section 2.09 of the Standard Conditions, the Recipient shall, upon the World Bank's request, enable the representatives of the Donor to visit any part of the Recipient's territory for purposes related to the Project. 2.05. Project Monitoring, Reporting and Evaluation. (a) 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 the 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 one month after the end of the period covered by such report. (b) The Recipient shall 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 six months after the Closing Date. 2.06. 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. 5 (c) The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Such audit of the Financial Statements shall cover the entire period during which withdrawals from the Grant Account were made. The audited Financial Statements for such period shall be furnished to the World Bank not later than six months after the end of such period. 2.07. 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 "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 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 and Non-consulting Services (i) Except as otherwise provided in sub-paragraph (ii) below, goods and non- consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding subject to the following additional procedures: (ii) The following methods, other than International Competitive Bidding, may be used for procurement of goods 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) All consulting services for those contracts, which are specified in the Procurement Plan, may be procured through: (A) Least Cost Selection; (B) Selection based on Consultants' Qualifications; (C) Single-source Selection of consulting firms; (D) Selection of Individual Consultants; and (E) Single-source procedures for the Selection of Individual Consultants.. 6 (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) 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 Eligible Expenditures as set forth in the following table. The table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant ("Category"), the allocations of the amounts of the Grant to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Amount of the Grant Percentage of Expenditures Allocated to be Financed Category (expressed in USD) (inclusive of Taxes) (1) Goods, non-consulting 700,000 100% services, consultants' services, Training and Operating Costs under Part 2 of the Project TOTAL AMOUNT 700,000 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 this Agreement. 3.03. Withdrawal Period. The Closing Date referred to in Section 3.06(c) of the Standard Conditions is August 31, 2016. 7 Article IV Recipient's Representative; Addresses 4.01. Recipient's Representative. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is the Financial Secretary. 4.02. Recipient's Address. The Recipient's Address referred to in Section 7.01 of the Standard Conditions is: Office of the Prime Minister Ministry of Finance Headquarters Antigua and Barbuda Fax: (268) 462-9377 4.03. World Bank's Address. The World Bank's Address referred to in Section 7.01 of the Standard Conditions is: International Bank for Reconstruction and Development International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Telex: Facsimile: 248423 (MCI) or 1-202-477-6391 64145 (MCI) 8