OFFICIAL DOCUMENTS GRANT NUMBER D410-TV Financing Agreement (Maritime Investment in Climate Resilient Operations Project under the Pacific Climate Resilient Transport Program) between TUVALU and INTERNATIONAL DEVELOPMENT ASSOCIATION FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between TUVALU ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01. The Association agrees to extend to the Recipient a grant, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to fourteen million five hundred thousand Special Drawing Rights (SDR14,500,000) ("Financing"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section m of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.04. The Payment Dates are February 15 and August 15 in each year. 2.05. The Payment Currency is Dollar. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objectives of the Project and the Program. To this end, the Recipient shall carry out the Project through the Ministry -2- of Communications and Transport in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV - EFFECTIVENESS; TERMINATION 4.01. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 4.02. For purposes of Section 10.05 (b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the Signature Date. ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Recipient's Representative is the minister at the time responsible for finance. 5.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance and Economic Development Vaiaku Funafuti Tuvalu (b) the Recipient's Electronic Address is: E-mail: sec.fin@gov.tv; tiona@gov.tv; or talavai@gmail.com 5.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: E-mail: 248423 (MCI) 1-202-477-6391 cdpngpacific@worldbank.org -3- AGREED as of the Signature Date. TUVALU By Authorized Representative Name: OON- MAT/A 7OAFA Title: M I N 'U 6lZt~ R r aN 4AI C ' E( N CCLM(1C Date: tJ-'F-eK A 21 cvc-Lopewi r INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: vl'ci4 rcL "c A. Title: Coa v o .rp.L Date: !Zj SAuuA&1 t.o -4- SCHEDULE 1 Project Description The objectives of the Project are to improve the climate resilience of Nanumaga harbor and Funafuti port, and in the event of an Eligible Crisis or Emergency, to provide an immediate response to the Eligible Crisis or Emergency. The Project constitutes a phase of the Program, and consists of the following parts: Part 1. Sectoral and Spatial Plannin2 Tools (a) Carrying out a program of activities designed to improve the Recipient's preparedness and post-disaster response for persons with disabilities and the elderly in Select Outer Islands, including: (i) undertaking geographic information systems ("GIS") mapping activities to record the location and needs of vulnerable populations; (ii) incorporating GIS data on vulnerable populations as a register in the Recipient's existing GIS platform; and (iii) conducting training and capacity building activities in the areas of data collection, storage, mapping, and system maintenance. (b) Carrying out a program of activities designed to improve community resilience, including conducting a food and nutritional health outreach campaign. Part 2. Climate Resilient Maritime Infrastructure Solutions (a) Carrying out a program of activities designed to develop climate resilient and efficient maritime access infrastructure on Nanumaga, including: (i) constructing and equipping a workboat harbor with turning basin, breakwaters, wharf, jetties, and passenger and cargo loading facilities; (ii) constructing and equipping cargo and passenger holding areas; and (iii) upgrading existing island roads. (b) Carrying out a program of activities designed to develop climate resilient and efficient maritime access infrastructure at the Funafuti port, including: (i) paving the Funafuti container yard; (ii) upgrading the warehouse and maintenance shed facilities; (iii) increasing the energy efficiency of the wharf area including installation of energy efficient and solar lighting systems; and (iv) providing wharf operational equipment, including cargo handling equipment. Part 3. Strengthening the Enabling Environment (a) Providing technical assistance to the Ministry of Communications and Transport to: (i) design infrastructure required for the Project; (ii) supervise the civil works -5- on Nanumaga and Funanfuti; (iii) support port operations and improve safety oversight; and (iv) prepare and implement a gender based violence, violence against children and trafficking action plan to support implementation of the GBV-VACT Strategy, including providing training and support to community groups and non-government organizations selected in accordance with the criteria and procedures detailed in the Project Operations Manual to deliver gender based violence, violence against children and trafficking prevention training courses. (b) Providing technical and operational assistance to the Ministry of Communications and Transport on Project implementation and management. Part 4. Contin2ent Emergency Response Providing immediate response to an Eligible Crisis or Emergency, as needed. -6- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements Joint Task Force 1. The Recipient shall maintain, until the Closing Date, the Joint Task Force, with a mandate, composition and resources satisfactory to the Association, which shall be: (a) responsible for, inter alia, providing general sector oversight for Project; (b) chaired by the Permanent Secretary of the Ministry of Home Affairs and Rural Development, or his or her representative; and (c) comprised of representatives from, inter alia, the Ministry of Finance and Economic Development, the Ministry of Public Utilities, the Ministry of Communications and Transport, and the Department of Environment. Project Management Unit 2. The Recipient shall maintain, until the Closing Date, a Project Management Unit within the Ministry of Communications and Transport, with a mandate, composition and resources satisfactory to the Association, which shall be: (a) responsible for, inter alia, day-to-day implementation of the Project in accordance with the Project Operations Manual; (b) headed by a Project manager; and (c) comprised of, inter alia, a program manager, an accountant, a safeguards specialist, a technical advisor/contract manager, and a procurement specialist, each with terms of reference, qualifications and experience satisfactory to the Association. B. Project Operations Manual 1 . The Recipient shall ensure that the Project is carried out in accordance with the Project Operations Manual, and except as the Association may otherwise agree in writing, the Recipient shall not amend or waive, or permit to be amended or waived, any provision of the Project Operations Manual. 2. In the event of any inconsistency between the provisions of the Project Operations Manual and those of this Agreement, the provisions of this Agreement shall prevail. -7- C. Annual Work Plans and Budgets 1. The Recipient shall prepare and furnish to the Association, by not later than September 30 of each year during the implementation of the Project (or such later interval or date as the Association may agree), for the Association's review and no-objection, an Annual Work Plan and Budget containing all eligible Project activities and expenditures proposed to be included in the Project for the following fiscal year of the Recipient, including a specification of the source or sources of financing for all eligible expenditures, and environmental and social safeguard measures taken or planned to be taken in accordance with the provisions of Section I.D of this Schedule 2. 2. The Recipient shall ensure that the Project is implemented in accordance with the Annual Work Plans and Budgets accepted by the Association for the Recipient's respective fiscal year; provided, however, that in case of any conflict between the Annual Work Plans and Budgets and the provisions of this Agreement, the provisions of this Agreement shall prevail. 3. The Recipient shall not make or allow to be made any change to the Annual Work Plans and Budgets, unless the Association has provided its prior no-objection thereof in writing. D. Safeguards 1 . The Recipient shall ensure that the Project is carried out with due regard to appropriate health, safety, social, and environmental standards and practices, and in accordance with the Safeguards Instruments. 2. The Recipient shall ensure that the obligation to comply with the relevant Safeguards Instruments is incorporated: (a) in the contracts between the Recipient and the relevant contractors and any entity (including any engineer) supervising the Project's civil works; and (b) in the contracts between the relevant contractors and the contractors' subcontractors. 3. The Recipient shall ensure that all the bidding documents and contracts include the obligation of the relevant contractors and subcontractors to: (i) adopt and implement measures to assess and manage the risks and impacts of labor influx and workers' camps; and (ii) adopt and enforce codes of conduct that should be provided to and signed by all workers; as applicable to such civil works commissioned or carried out pursuant to said contracts. 4. The Recipient shall not amend, abrogate or waive, or permit to be amended, abrogated or waived any of the Safeguards Instruments, unless the Association has provided its prior no-objection thereof in writing, and the Recipient has ensured compliance with the same consultation and disclosure requirements as -8- applicable to the original adoption of the said instruments. In case of any inconsistencies between the provisions of any of the Safeguards Instruments and the provisions of this Agreement, the provisions of this Agreement shall prevail. 5. The Recipient shall ensure that: (a) all consultancies related to technical assistance, design and capacity building under the Project, the application of whose results could have environmental, social and health and safety implications, shall only be undertaken pursuant to terms of reference reviewed and found satisfactory by the Association; and (b) such terms of reference shall require the technical assistance, design and capacity building activities to take into account the requirements of the applicable Safeguards Policies and EHS Guidelines. 6. Without limitation upon its other reporting obligations under this Agreement, the Recipient shall: (a) take all measures necessary on its part to regularly collect, compile, and submit to the Association, as part of the Project Reports, and promptly in a separate report whenever the Association may require, information on the status of compliance with the Safeguards Instruments. Such information shall include: (i) measures taken in furtherance of the Safeguards Instruments; (ii) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguards Instruments; and (iii) remedial measures taken or required to be taken to address such conditions; (b) promptly furnish to the Association a copy of each monthly progress report prepared and submitted by any entity (including any engineer) supervising the Project's civil works, the Project's contractors and/or subcontractors; and (c) promptly upon receipt, the Recipient shall furnish to the Association any notification received from any entity (including any engineer) supervising the Project's civil works, the Project's contractors and/or subcontractors regarding any incident that have might occurred during Project implementation. 7. The Recipient shall maintain, throughout Project implementation, and publicize the availability of a grievance redress mechanism, in form and substance satisfactory to the Association, to hear and determine fairly and in good faith all complaints raised in relation to the Project, and take all measures necessary to implement the determinations made by such mechanism in a manner satisfactory to the Association. -9- E. Contingent Emergency Response 1. In order to ensure the proper implementation of contingent emergency response activities under Part 4 of the Project ("Emergency Response Part"), the Recipient shall: (a) prepare and furnish to the Association for its review and approval, a Contingent Emergency Response Component Project Operations Manual ("CERC POM") which shall set forth detailed implementation arrangements for the Emergency Response Part, including: (i) any special institutional arrangements for coordinating and implementing the Emergency Response Part; (ii) specific activities which may be included in the Emergency Response Part, Eligible Expenditures required therefor ("Emergency Expenditures"), and any procedures for such inclusion; (iii) financial management arrangements for the Emergency Response Part; (iv) procurement methods and procedures for Emergency Response Part; (v) documentation required for withdrawals of Emergency Expenditures; (vi) application of any relevant safeguards instruments to the Emergency Response Part; and (vii) any other arrangements necessary to ensure proper coordination and implementation of the Emergency Response Part; (b) afford the Association a reasonable opportunity to review the proposed CERC POM; (c) promptly adopt the CERC POM for the Emergency Response Part as shall have been accepted by the Association; (d) ensure that the Emergency Response Part is carried out in accordance with the CERC POM; provided, however, that in the event of any inconsistency between the provisions of the CERC POM and this Agreement, the provisions of this Agreement shall prevail; and (e) not amend, suspend, abrogate, repeal or waive any provision of the CERC POM without prior written approval by the Association. 2. The Recipient shall not undertake any activity under the Emergency Response Part, unless and until the following conditions have been met in respect of said activities: (a) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the Emergency Response Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof; -10- (b) the Recipient has ensured the preparation and disclosure of all safeguards instruments as may be required for said activities in accordance with the provisions of Section I.D of this Schedule 2 and the CERC POM, the Association has approved all such instruments, and the Recipient has ensured the implementation of any actions which are required to be taken under said instruments; (c) the Recipient has ensured that the entities in charge of coordinating and implementing the Emergency Response Part have adequate staff and resources, in accordance with the provisions of the CERC POM, for the purposes of said activities; and (d) the Recipient has adopted and maintained the CERC POM, in form and substance acceptable to the Association, and the provisions of the CERC POM remain, or have been updated in accordance with the provisions of this Section I.E so as to be, appropriate for the inclusion and implementation of the Emergency Response Part. Section H. Project Monitorin2, Reporting and Evaluation Project Reports 1 . The Recipient shall furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. Mid-Term Review 2. The Recipient shall carry out, jointly with the Association, not later than three (3) years after the Effective Date, or such other period as may be agreed with the Association, a mid-term review of the Project (the "Mid-Term Review") to assess the status of Project implementation, as measured against the Project indicators acceptable to the Association, and compliance with the legal covenants included or referred to in this Agreement. Such review shall include an assessment of the following: (a) overall progress in implementation; (b) results of monitoring and evaluation activities; (c) progress on procurement and disbursement; (d) progress on implementation of safeguards measures; (e) implementation arrangements and Project staff turnover; and (f) the need to make any adjustments to the Project to improve performance. To this end, the Recipient shall: (i) prepare and furnish to the Association, at least one (1) month before the date of the Mid-Term Review, a report, in scope and detail satisfactory to the Association and integrating the results of the monitoring and evaluation activities performed pursuant to Section H. 1 of this Schedule 2 - 11 - and the General Conditions, on the progress achieved in the carrying out of the Project during the period preceding the date of such report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof; and (ii) review, jointly with the Association, the report referred to in the preceding paragraph and thereafter take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of such report and the Association's views on the matter. Section I. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to: (a) finance Eligible Expenditures; and (b) repay the Preparation Advance; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Percentage of Financing Allocated Expenditures to be (expressed in SDR) Financed (inclusive of Taxes) (1) Goods, works, non- 13,630,000 100% consulting services, consulting services, Operating Costs, and Training and Workshops for the Project (2) Refund of Preparation 870,000 Amount payable Advance pursuant to Section 2.07 (a) of the General Conditions (3) Emergency Expenditures 0 100% under Part 4 of the Project TOTAL AMOUNT 14,500,000 - 12 - B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made: (a) for payments made prior to the Signature Date; and (b) for Emergency Expenditures under Category (3), unless and until the Association is satisfied that all of the conditions listed in Section I.E.2 of this Schedule 2 have been met in respect of said expenditures. 2. The Closing Date is January 31, 2024. - 13 - APPENDIX Definitions 1. "Annual Work Plan and Budget" means each annual work plan and budget (including related cash forecasts) for the implementation of the Project accepted by the Association, referred to in Section I.C of Schedule 2 to this Agreement; and "Annual Work Plans and Budgets" means, collectively, all such plans and budgets. 2. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, 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 and as of July 1, 2016. 3. "Cabinet" means the Recipient's Cabinet established under Section 73 of the Constitution of Tuvalu. 4. "Category" means a category set forth in the table in Section II.A of Schedule 2 to this Agreement. 5. "Contingent Emergency Response Component Project Operations Manual" or its acronym "CERC POM" means the manual referred to in Section I.E. 1 of Schedule 2 to this Agreement, to be adopted by the Recipient for the Emergency Response Part in accordance with the provisions of said Section. 6. "Department of Environment" means the Recipient's Department of Environment, within the Ministry of Foreign Affairs, Trade, Tourism, Environment and Labour, or any successor thereto. 7. "EHS Guidelines" means the World Bank Group Environmental, Health and Safety Guidelines published on www.ifc.org/ehsguidelines, as said guidelines are updated from time to time. 8. "Eligible Crisis or Emergency" means an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact to the Recipient, associated with a natural or man-made crisis or disaster. 9. "Emergency Expenditure" means any of the eligible expenditures set forth in the CERC POM in accordance with the provisions of Section I.E of Schedule 2 to this Agreement, and required for the Emergency Response Part. 10. "Emergency Response Part" means a specific activity or activities to be carried out in the event of an Eligible Crisis or Emergency under Part 4 of the Project. -14- 11. "Environmental and Social Impact Assessment" or "ESIA" means the document prepared and adopted by the Recipient, dated October 6, 2018, disclosed in- country, and on the Association's website on November 4, 2018, setting out details of potential environmental and social risks, including risks of gender-based violence and sexual exploitation and abuse, and adverse impacts associated with any Project activities, together with an Environmental and Social Management Plan defining measures to manage such risks and impacts, including measures that endeavor to prevent and respond to gender-based violence and sexual exploitation and abuse, and including any schedules to such assessment, and as such assessment may be amended from time to time in accordance with Section I.D.4 of Schedule 2 to this Agreement. 12. "Environmental and Social Management Plan" or "ESMP" means the plan prepared and adopted by the Recipient, dated October 2018, disclosed in-country, and on the Association's website on November 4, 2018, setting out details of the specific actions and measures including measures that endeavor to prevent and respond to gender-based violence and sexual exploitation and abuse, as well as policies designed to facilitate the achievement of the objectives of the ESIA under the Project, along with the procedural and institutional measures needed to implement such actions, measures and policies, including any schedules to such plans, and as such plan may be amended from time to time in accordance with Section I.D.4 of Schedule 2 to this Agreement. 13. "GBV-VACT Strategy" means the Recipient's strategy document titled 'GBV and VAC Strategy for Tuvalu Maritime Investment in Climate Resilient Operations', dated May, 2018. 14. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated July 14, 2017. 15. "Joint Task Force" means the Recipient's joint task force responsible for overseeing preparation and implementation of maritime infrastructure projects, established by Cabinet in February 2015, or any successor thereto as agreed in writing by the Association. 16. "Mid-Term Review" shall have the meaning ascribed to it in Section 11.2 of Schedule 2 to this Agreement. 17. "Ministry of Communications and Transport" means the Recipient's Ministry of Communications and Transport, or any successor thereto. 18. "Ministry of Finance and Economic Development" means the Recipient's Ministry of Finance and Economic Development, or any successor thereto. - 15 - 19. "Ministry of Home Affairs and Rural Development" means the Recipient's Ministry of Home Affairs and Rural Development, or any successor thereto. 20. "Ministry of Public Utilities" means the Recipient's Ministry of Public Utilities, or any successor thereto. 21. "Operating Costs" means the reasonable incremental expenses incurred by the Recipient on account of the implementation, management and monitoring and evaluation of the Project, based on the Annual Work Plans and Budgets accepted ex-ante by the Association, including rental of office space, office supplies, bank charges, communications, advertising expenses, utilities, stationery, vehicle operation, maintenance, insurance and transportation costs, but excluding salaries, fees, honoraria, bonuses, and any other salary supplements of the Recipient's civil servants. 22. "Participating Countries" means the Recipient and any other countries that may join the Program as agreed in writing by the Association. 23. "Preparation Advance" means the advance referred to in Section 2.07 (a) of the General Conditions, granted by the Association to the Recipient pursuant to the letter agreement signed on behalf of the Association on May 1, 2017 and on behalf of the Recipient on May 31, 2017. 24. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated July 2016, revised November 2017 and August 2018. 25. "Program" means the Pacific Climate Resilient Transport Program, a series of projects designed to finance activities to systematically improve the resilience of the Participating Countries' transport networks to natural hazards and climate change. 26. "Project Management Unit" means the Recipient's project management unit within the Ministry of Communications and Transport that is responsible for the day-to-day implementation of the Project, as detailed in Section I.A.2 of Schedule 2 to this Agreement. 27. "Project Operations Manual" means the Recipient's manual setting forth the detailed arrangements and procedures for: (i) institutional arrangements for day to day execution of the Project; (ii) the preparation of successive updates of the Procurement Plan and its implementation arrangements; (iii) implementation arrangements for the Safeguards Instruments; (iv) budgeting, disbursement and financial management arrangements; (v) Project monitoring, reporting, evaluation and communication arrangements; (vi) other administrative, financial, technical and organizational arrangements and procedures as shall be necessary for the -16- implementation of the Project and the achievement of its development objectives; (vii) details regarding the cooperative arrangements between the respective implementing agencies; and (viii) the criteria and procedures for identifying community groups or non-government organizations to be trained and supported to deliver gender based violence, violence against children and trafficking prevention training courses under Part 3(a) of the Project. 28. "Safeguards Instruments" means collectively, the ESIA and ESMP; and "Safeguards Instrument" means any of such Safeguards Instruments. 29. "Safeguard Policies" means the Operational Policies (OPs) and Bank Procedures (BPs) of the Bank, namely OP/BP 4.01 (Environmental Assessment), OP/BP 4.04 (Natural Habitats), OP/BP 4.09 (Pest Management), OP/BP 4.10 (Indigenous Peoples), OP/BP 4.11 (Physical Cultural Resources), OP/BP 4.12 (Involuntary Resettlement), OP/BP 4.36 (Forests), and OP/BP 4.37 (Safety of Dams); they can be found at https://policies.worldbank.org. 30. "Select Outer Islands" means the islands of Nanumaga, Nanumea, Vaitupu and Nui, and any other island within the Recipient's territory approved by the Joint Task Force. 31. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to "the date of the Financing Agreement" in the General Conditions. 32. "Training and Workshops" means the reasonable costs of training and workshop activities under the Project, based on the Annual Work Plans and Budgets accepted ex-ante by the Association, including preparation and reproduction of training materials, rental of facilities, reasonable transportation costs, per diem of trainers and trainees (if applicable), and any other expenses directly related to course preparation and implementation.