IOFFICAL 00OCUMTI GRANT NUMBER H808-BI Financing Agreement (Second Additional Financing for the Health Sector Development Support Project) between REPUBLIC OF BURUNDI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated D ,e , 2012 GRANT NUMBER H808-BI FINANCING AGREEMENT AGREEMENT dated OCer-t'f AO , 2012, entered into between REPUBLIC OF BURUNDI ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for the purpose of providing a second additional financing for activities related to the Original Project (as defined in the Appendix to this Agreement). 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) constitt te an integrz 1 part of this Agreement. 1.02. Unless the contex: 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 ag,ees to extend to the Recipient, on the terms and conditions set fort i or referred to in this Agreement, a grant in an amount equivalent to sixteen million five hundred thousand Special Drawing Rights (SDR 16,500,000) (variously, "Grant" and "Financing") to assist in financing the project described in Schelule I to thi. Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section IV of Schecule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate payable by the Recipient on the Unwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) per annum. 2.04. The Payment Dates are April 15 and October 15 in each year. 2.05. The Payment Curre,icy is Dollars. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall carry out the Project through the Ministry of Public Health and Fight Against HIV/AIDS in accordance with the provisions of Article IV of tl e General Conditions. -2- 3.02. Without limitation ipon the provisions of Section 3.01 of this Agreement, and except as the Recipient and the Association shall otherwise agree, the Recipient shall ersure that the Project is carried out in accordance with the provisions of Schedu e 2 to this Agreement. ARTICLE IV - EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (a) The HRITF Second Financing Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Re-ipient to make withdrawals under it (other than the effectivene5s of this Agreement) have been fulfilled. (b) The Recipient has revised the Results-Based Financing Procedures Manual anc the Ministry of Public Health and Fight Against HIV/AIDS Administralive, Accounting, and Financial Procedures Manual in a manner sati ;factory with the Association. 4.02. The EFectiveness Deadline is the date ninety (90) days after the date of this Agreer ent. 4.03. For purooses of Section 8.05 (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 years after the date of this Agreerr ent. -3- ARTICLE V - REPRESENTATIVE; ADDRESSES 5.01. The Recipient's Representative is its minister at the time responsible for finance. 5.02. The Re-ipient's Address is: Ministry of Finance and Economic Development Planning P. 0. B)x 1830 Bujumbura Burundi Facsim' le: 257-22-22-38-27 5.03. The Association's Address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable: Telex: Facsimile: INDEVAS 248423 (MCI) 1-202-477-6391 Washington, D.C. -4- AGREED at tyu o& as ofthe day and year first above written. REPUBLIC OF BURUNDI By Authorized Representative Name: A t t Title: __ INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: i, -&IQ -' Title: - - HE=j 40 Ar~- Nt?- -5- SCHEDULE 1 Project Description The objective of thc Project is to increase the use of a defined package of health services by pregnant women, children under the age of five and couples of reproductive age. The Prcject consists of the following parts: 1 . Results-Based Financing Use of Results-Based Payments to: (a) supplement the provision of the Free Package of Health Services; principally to pregnant women and children under five; (b) provide contraceptives to couples of reproductive age and support to nutrition-related activities for pregnant women and children under five; and (c) support a program of specific activities by select supervisory units in the health sector to provide enhanced supervision and internal verification of the delivery of health se rvices under Parts 1(a) and (b). 2. Health Service Deli very Enhancement (a) Provision of nuiritional products to pregnant women and children under five. (b) Provision of sel-ct medical equipment to Health Facilities participating in the ProJect. (c) Construction of not less than 15 small-scale incinerators on the grounds of pre-identified hospitals within the Recipient's territory. 3. Institutional Strengthening Outreach and Education, and Project Implementation (a) Design and imr lementation of a program of activities, including inter alia, capacity buildiig of community-based organizations, training of health workers, and outreach and awareness-raising campaigns for the purpose of increasing demand, including access by vulnerable groups, to the health care services referreJ to under Parts 1(a) and (b) of the Project and stimulating positive health-related behavioral change. (b) Strengthening of the Ministry of Public Health and Fight Against HIV/AIDS' capacity to manage the public health sector through: (a) capacity building activities for tl e public health-related units within the Ministry of Public Health and Fight Against HIV/AIDS; and (b) Project management and coordination f5r the Project, including monitoring and evaluation, pro -urement, fi iancial management and audits, excluding activities defined under Part 4(a) )f the Project. -6- 4. Verification Activit es for Results-Based Payments (a) Carrying ott a program of activities to maintain and strengthen internal controls in relation to Free Package of Health Services-Related Activities. (b) Carrying ot t a program of activities to maintain and strengthen external controls in relation to, including carrying out of third-party verification of, Free Package of Health Services-Related Activities. -7- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institulional Arrarigements Ministry of Public Health and Fight Against HIV/AIDS 1. The Ministry of Public Health and Fight Against HIV/AIDS shall be responsible for overall Project implementation and management in accordance with the following institutional arrangements: Directorate Genera' ofHealth Services and Fight Against HIV/AIDS 2. The Directorate General of Health Services and Fight Against HIV/AIDS shall be responsible for overall coordination and technical supervision of the Project, with th- Directoratie of Health Promotion, Hygiene, and Sanitation specifically responsible for the Project's compliance with the plans referred to in paragraph G of this Section I. Directorate Genera' ofResources 3. The Directorate General of Resources shall be responsible for administrative and financial managemc nt, procurement, and disbursement under the Project, and, to this end, the Recipient shall maintain in said Directorate General, throughout Project implementa:ion, competent personnel in adequate numbers, particularly in the areas of financial management and procurement, all as satisfactory to the Association. The Directorate Geaeral ofPlanning 4. The Directorate General of Planning shall be responsible for monitoring and evaluation under tho Project and, to this end, the Recipient shall maintain in said Directorate General, throughout Project implementation, competent personnel in adequale numbers, all as satisfactory to the Association. B. Anti-Corruption The Re.ipient shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. -8- C. Manuals 1. The Recipient shall maintain the Results-Based Financing Procedures Manual in form arid substance satisfactory to the Association setting forth, inter alia, the detailed arrangements and procedures, in consideration of the Grant, including: (i) instit.itional coordination and day-to-day execution of the Project; (ii) disbursement and financial management; (iii) procurement; (iv) social safeguards management; and (vi) monitoring, evaluation, reporting and commu ication. 2. The Recipient shall maintain the Ministry of Public Health and Fight Against HIV/AIDS Administrative, Accounting, and Financial Procedures Manual in form and substance satisfactory to the Association. 3. The Rezipient shall carry out the Project in accordance with the provisions and requirements set foith or referred to in the Results-Based Financing Procedures Manual and the Ministry of Public Health and Fight Against HIV/AIDS Administrative, Act ounting, and Financial Procedures Manual; and except as the Association shall )therwise agree, the Recipient shall not assign, amend, abrogate or waive the Results-Based Financing Procedures Manual or the Ministry' of Public Health and Fight Against HIV/AIDS Administrative, Accounting, and Financial Procedures Manual, or any provisions thereof. Notwithstanding the foregoing, if any of the provisions of the Results-Based Financing Procedures Manual or the Ministry of Public Health and Fight Against HIV/AIDS Administrative, Accounting, and Financial Procedures Manual is inconsistent with 1he provisions of this Agreement, the provisions of this Agreement shall prcvail and govern. D. Results-Based Pay nents 1. Genera l Without prejudice to the provisions of Section LA of this Schedule, the Directorate General of Health Services and Fight Against HIV/AIDS shall review and approve, on behalf of the Recipient, applications for Results-Based Payments, in accorc ance with the provisions of this Part D and the Results-Based Financing Procedur,s Manual. 2. Results-Based Pa)ments Eligibility and Free Package of Health Services- Related Activities I mplementation Guidelines and Procedures No proposed Beneficiary shall be eligible for financing under Part 1 of the Project unless, on the basis of a review conducted in accordance with this Part D and the Results-Based Financing Procedures Manual, the proposed Beneficiary is deemed to satisfy t ie eligibility criteria specified below and in further detail in -9- the Results-Based Financing Procedures Manual, which shall include the following: (a) the propose i Beneficiary is a public or non-profit health service provider carrying out Free Package of Health Services-Related Activities or a unit within the Ministry of Public Health and Fight Against HIV/AIDS involved in the supervision of the Project; (b) the proposed Free Package of Health Services-Related Activities satisfy the requirerients of Part 1 of the Project as described in further detail in the Results-Based Financing Procedures Manual; (c) the proposed Free Package of Health Services-Related Activities comply with the Sp-cific Plan for Very Vulnerable Peoples, Including the Batwa and the Nat onal Biomedical Waste Management Plan; (d) the proposcd Free Package of Health Services-Related Activities are consistent with the relevant sectoral, environmental, and social standards and policies; and (e) the Beneficiary has put in place all necessary arrangements, including financial and human resources, for the management of the proposed Free Package of [lealth Services-Related Activities. 3. Terms and Conditions of Results-Based Payments Agreements (a) Free Package of Health Services-Related Activities shall be carried out pursuant to a results-based payments agreement ("Results-Based Payments A greement"), to be concluded between the Directorate General of Health Services and Fight Against HIV/AIDS on behalf of the Recipient and the respective Beneficiary, under terms and conditions, satisfactory to the Association, as further described in the Results-Based Financing Frocedures Manual, which shall include the following: (i) a description of the Free Package of Health Services-Related Activities, the applicable rates, and applicable performance ind cators; (ii) the obligation of the Beneficiary to: (A) carry out the Free Package of Health Services-Related Activities with due diligence and efficiency and in accordance with sound technical, financial, administrative, and environmental practices; (B) ensure that the resources required for the activities are provided promptly as needed; (C) maintain adequate records to reflect, in acc rdance with sound accounting practices, the resources, -10- operations, and expenditures relating to the Free Package of He,.Ith Services-Related Activities; and (D) at the request of the Association or the Recipient, have such records audited by indi.pendent auditors acceptable to the Association, in acc )rdance with consistently applied auditing standards acc ,ptable to the Association, and promptly furnish the records as so audited to the Recipient and the Association; (iii) the obligation of the Beneficiary to carry out the Free Package of He,.lth Services-Related Activities in accordance with the pro visions of the Anti-Corruption Guidelines; (iv) the obligation of the Beneficiary to carry out the Free Package of He-.Ith Services-Related Activities in accordance with the pro visions of the Ministry of Public Health and Fight Against HIV/AIDS Administrative, Accounting, and Financial Pro -edures Manual and the Results-Based Financing Procedures Ma iual; (v) the obligation of the Beneficiary to carry out the Free Package of HeE.lth Services-Related Activities in accordance with the pro visions of: (A) the Specific Plan for Very Vulnerable Peoples, Including the Batwa; and (B) the National Biomedical Waste Ma iagement Plan; (vi) the requirement that the goods and consultants' services to be finznced from the proceeds of the Results-Based Payment shall be )rocured in accordance with procedures ensuring efficiency and economy as further detailed in Section III of this Schedule, and shall be used exclusively in the carrying out of the Free Package of Health Services-Related Activities; and (vii) the right of the Directorate General of Health Services and Fig it Against HIV/AIDS, or the Ministry of Public Health and Fight Against HIV/AIDS, on behalf of the Recipient, and of the Recipient in its own right, to: (A) inspect by itself, or joirtly with the Association, if the Association shall so request, the goods and sites included in the Free Package of Health Services-Related Activities, the operations thereof, and any relevant records and documents; (B) obtain all information as it, or the Association, shall reasonably request regarding the administration, operation, and financial condition of the Free Package of Health Services-Related Activities; and (C) suspend or terminate the right of the Beneficiary to use the proceeds of the Results-Based Payment, or obtain a refund of all or any part - 11 - oft ie amount of the Results-Based Payment then withdrawn, as the case may be, upon failure by the Beneficiary to perform any of is obligations under the Results-Based Payments Agreement. (b) The Recipicnt, or the Directorate General of Health Services and Fight Against HlI/AIDS, or the Ministry of Public Health and Fight Against HIV/AIDS, as the case may be, shall exercise its rights and carry out its obligations under the Results-Based Payments Agreement in such manner as :o protect its interests and those of the Association and to accomplish the purposes of the Results-Based Payment, and, except as the Associttion shall otherwise agree, neither the Recipient nor the Directorate General of Health Services and Fight Against HIV/AIDS, nor the Ministry of Public Health and Fight Against HIV/AIDS, shall assign, amend, ab:ogate, or waive, or permit to be assigned, amended, abrogated, or walved, the aforementioned, or any provision thereof. 4. External Controls (a) The Recip 'ent shall maintain, throughout Project implementation, external auditors, with qualifications, experience, and terms of reference satisfactory to the Association, for purposes of the third-party verification of Free Package of Health Services-Related Activities to be carried out under Part 4 (b) of the Project. (b) The Recipient shall cause said auditors to carry out, throughout Project implementation, quarterly verification exercises of Free Package of Health Services-Related Activities, including community and focus group surveys, Beneficiary spot checks, verification of data provided and records kept by Beneficiaries in relation to Free Package of Health Services-Rclated Activities, and assessments of the quality of health services pi ovided under such Activities, in accordance with the provisions (f the Results-Based Financing Procedures Manual. E. Annual Work Plars and Budgets 1. Not later than Nov:mber 30 in each calendar year (or one (1) month after the Effective Date for The first year of Project implementation), the Recipient shall prepare and furnish to the Association a draft annual work plan and budget for the Pro ect (including Training and Operating Costs) for the subsequent calendar year of Project imp ementation, of such scope and detail as the Association shall have reasonably requested. 2. The Recipient shal afford the Association a reasonable opportunity to review such draft annual Nork plan and budget, and thereafter shall carry out such annual work plan and budget during such subsequent calendar year as shall have -12- been approved by :he Association ("Annual Work Plan and Budget"). Only those activities that are included in an Annual Work Plan and Budget shall be eligible for financin . out of the proceeds of the Financing. 3. For any training proposed to be included in an Annual Work Plan and Budget, the Recipient shall, inter alia, identify: (a) particulars of the training envisaged; (b) the criteria for selection of the personnel to be trained, and such personnel if known; (c) the selection method of the institution or individuals conducting such training; (d) the inslitution conducting such training if identified; (e) the purpose and justification for such training; (f) the location and duration of the proposed training; and (g) the estimate of the cost of such training. 4. Annual Work Plans and Budgets may be revised as needed during Project implementation sub ect to the Association's prior written approval. F. Semi-Annual Reviews The Recipient shall review with the Association, not later than one (1) month after the transmitta to the Association of every Project Report referred to in Section II.A of this Schedule, or such later date as the Association shall request, said Project Repori, and, thereafter, take all measures required to ensure the efficient completior of the Project and the achievement of the objective thereof, based on the conclusions and recommendations of said review and the Association's views on the matter. G. Safeguards 1. The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Specific Plan for Very Vulnerable Peoples, Including the Batwa and the National 3iomedical Waste Management Plan, and, except as the Association shall Atherwise agree, the Recipient shall not assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the aforementioned, or any provision thereof. 2. In the event of any conflict between the provisions of the Specific Plan for Very Vulnerable Peoples, Including the Batwa, or the National Biomedical Waste Management Plan, and those of this Agreement, the latter shall prevail. 3. Without limitation upon its other reporting obligations under Section II.A of this Schedu e, the Recipient shall take all measures necessary on its part to regularly collect, compile, ar.d submit to the Association, as part of the Project Report, information on the status of compliance with the Specific Plan for Very Vulnerable Peoples, Including the Batwa and the National Biomedical Waste Management Plan, giving details of: - 13 - (a) measures tacen in furtherance of said plans; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of said plans; and (c) remedial itr easures taken or required to be taken to address such conditions. 4. The Directorate Geieral of Health Services and Fight Against HIV/AIDS shall be responsible for the implementation and monitoring and evaluation of said plans. 5. To this end, and foi purposes of capacity building of said Directorate General in this regard, the Recipient shall maintain, throughout Project implementation, in said Directorate 3eneral an environmental and social specialist, with qualifications, experience, and terms of reference satisfactory to the Association. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. The Re-,ipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of indicators acceptable to the Association. Each Project Report shal cover the period of one (1) calendar semester, and shall be furnished to the Association not later than ninety (90) days after the end of the period covered by s ich report. 2. The Recipient sha 1 prepare the Completion Report in accordance with the provisions of Section 4.08 of the General Conditions. The Completion Report shall be furnished to the Association not later than six months after the Closing Date. B. Financial Management; Financial Reports; Audits 1. The Recipient shall, throughout Project implementation, maintain or cause to be maintained a financial management system in accordance with the provisions of Section 4.09 of the General Conditions. 2. The Re-ipient shall throughout Project implementation, maintain the Directorate Genera of Resources and the information system configured to interface with the accounting system of said Directorate. 3. Without limitations on the provisions of Part A of this Section II, the Recipient shall prepare and frnish to the Association, interim unaudited financial reports -14- for the Project covering the quarter, not later than forty-five (45) days after the end of te period, in form and substance satisfactory to the Association. 4. The Recipient shal[ have its Financial Statements for the Project audited in accordance with the provisions of Section 4.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one (1) fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished tc the Association not later than six (6) months after the end of such pe-iod. 5. To this end, the Recipient shall maintain, throughout Project implementation, external auditors, with qualifications, experience, and terms of reference satisfac:ory to the Association. Section III. Procurement A. General 1. Goods, Works a ad Non-consulting Services. All goods, works and non-consulting services required for the Project and to be financed out of the proceeds of the Financing 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 Sction. 2. Consultants' Services. All consultants' services required for the Project and to be financed out oft te proceeds of the Financing 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 Association of pailicular cont-acts, refer to the corresponding method described in the Procurement Guidelines, or the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1. Intern2tional Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under c:ntracts awarded on the basis of International Competitive Bidding. 2. Other Methods cf Procurement of Goods, Works and Non-consulting Services. The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods, works and non-consulting services. The Procurement Plan shall specify the circumstances under which such rr ethods may be used: -15- Procurement Method (a) Na:ional Comp -titive Bidding (b) Shopping (c) Direct Contracting (d) Procurement from United Nations Agencies (UNOPS, UNICEF) in accordance with p- ragraph 3.10 of the Procurement Guidelines C. Particular Method; of Procurement of Consultants' Services 1 Qualit)- and Cot-Based Selection. Except as otherwise provided in paragra:h 2 below, consultants' services shall be procured under contracts awarded on the basi; of Quality- and Cost-Based Selection. 2. Other Methods of Procurement of Consultants' Services. The following table specifies methods of procurement, other than Quality and Cost-Based Selection, which nay be used for consultants' services. The Procurement Plan shall specify the circ imstances u ider which such methods may be used: Procurement Method (a) Selection undei a Fixed Budget (b) Least Cost Selc ction (c) Selection Based on Consultants' Qualifications (d) Single Source Selection (e) Selection of Individual Consultants set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines (f) Single Source Selection of Individual Consultants set forth in paragraph 5.4 of the Consultant'! Guidelines D. Review by the Association of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Association's Prior Review. All other contracts shall be subject to Post Review by the Association. -16- Section IV. Withdraws I of Grant Proceeds A. General 1. The Re.ipient may withdraw the proceeds of the Financing in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructicns as the Association may specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as rev sed from time to time by the Association and as made applicable to this A greement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. 2. The foLowing table specifies the categories of Eligible Expenditures that may be financed out of the )roceeds of the Financing ("Category"), the allocations of the amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Amount of the Percentage of Grant Allocated Expenditures to be Category (expressed in Financed SDR) (inclusive of Taxes) (1) (a) Resulls-Based Payments under 700,000 50% Part 1(a) of the Project in the Fiscal Year 2014 (b) Resulls-Based Payments under 1,600,000 Part 1(a) of the Project in the Fiscal 50% Year 201:5 (c) Results-Based Payments under 1,800,000 Part 1(a) of the Project in the Fiscal Year 2016 50% (d) Results-Based Payments under Part 1(a) of the Project in the Fiscal Year 2017 (e) Results-Based Payments under 1,800,000 50% Part 1(a) of the Project in the Fiscal Year 201:3 (2) Results-Based Payments under Part 1,000,000 37.5% 1 (b) of the Project (3) Results-Based Paymeits under Part 4,500,000 100% I (c) of the Project -17- (4) Works, goods, non-corisulting 200,000 100% services and consultarts' services, under Par: 2 of the Project (5) Goods, ccnsultants' s(rvices, 3,000,000 100% Training and Operating Costs under Part 3 of the Project (6) Goods, ccnsultants' scrvices, 100,000 2.5% Training and Operating Costs under Part 4 of the Project TOTAL AMOUNT 16,500,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding thc provisions of Part A of this Section no withdrawal shall be made: (a) for paymeni s made prior to the date of this Agreement; or (b) under Category (1), unless the Recipient has: (i) exhausted the funds allocated ir Category 1 of Section IV.A.2 of Schedule 2 to the First Additional -inancing Agreement; and (ii) if after the Recipient's Fiscal Year 2014, exhausted, in compliance with Section V(B)(3) below in this Schedule 2, the funds allocated in the Counterpart Funds Account for the relevant ye-r of Project implementation; or (c) under Category (3), unless the Recipient has exhausted the funds allocated in Category 1 of Section IV.A.2 of Schedule 2 to the Original Financing Agreement; or (d) under Category (5), unless the Recipient has exhausted the funds allocated in Category 2 of Section IV.A.2 of Schedule 2 to the Original Financing Agreement; or (e) under Category (6), unless the Recipient has exhausted the funds allocated ir Category 2 of Section IV.A.2 of Schedule 2 to the First Additional -inancing Agreement. 2. The Closing Date is December 31, 2018. -18- Section V. Other Und,rtakings A. Results-Based FinE ncing (1) Unless oth,.rwise agreed with the Association, the Recipient shall, beginning in the Fiscal Year 2015 through the end of Project implementation, maintain its allocation to the annual budget of the Ministry of Public Health and Fight Against HIV/AIDS for the provision of the Free Package of Health Services to pregnant women and children under five at no less than 1.4 percent (1.4%) of the Recipient's total budget expenditures as approved under the Recipient's Budget Law of the applicat le year. (2) The Recipi,,nt shall on a semi-annual basis, upon agreement with the Association, fix the minimum payment percentage of Category I from the Grant and the Counterpart Funds to be allocated to Health Centers providing services under the Free Package of Health Services. (3) The Recip ent shall, throughout Project implementation, set forth measures to ensure post-Project sustainability of the Free Package of Health Ser vices in accordance with the guidance provided in the Results-Based Financing Procedures Manual. B. Counterpart Fund; In order to assist in -arrying out Part 1(a) of the Project, the Recipient shall, (1) maintain in the Bank of the Republic of Burundi, at all times throughout Project implementation, on terms and conditions acceptable to the Association, the Counterpart Funds Account into which it shall deposit all such alVocation referred to in paragraph (A)(1) of this Section V ("Counterpart Funds Account"); (2) no later th,.n end of February, end of April, end of June, and end of August of t ie relevant Fiscal Year, after the allocation of the percentage of its general expenditures to the budget of the Ministry of Public Health and Fight Against HIV/AIDS as required under paragraph (A)(1) of this Section V, md without limitation upon the provisions of Section 4.03 of the General Conditions, deposit into the Counterpart Funds Account, an amount in tie Recipient's currency, equivalent to twenty (25) percent of such budget allocation for each respective period listed above in this paragraph; nd -19- (3) ensure that all amounts deposited in the Counterpart Funds Account be used exclusively to pay for Eligible Expenditures required for Part 1(a) of the Proje,t. C. Other (1) No later than two (2) months after the Effective Date, the Recipient shall recruit in iccordance with the provisions of Section III.C of this Schedule 2, a financial management specialist, with qualifications, experience ind terms of reference acceptable to the Association. (2) No later thz.n six (6) months after the Effective Date, the Recipient has submitted 10 the Association a progress report, satisfactory to the Association, detailing the status of implementation of the Instruction Letter. (3) The Recipint shall, throughout Project implementation, carry out the training program referred to in Section V.E (a) of Schedule 2 to the First Additional Financing Agreement, for all staff involved in procurement processing within the Ministry of Public Health and Fight Against HIV/AIDS, in a manner acceptable to the Association. (4) The Recipi,-nt shall, throughout Project implementation, maintain the procurement complaint management system within the Ministry of Public Healh and Fight Against HIV/AIDS, as referred to in Section V.E (b) of Schc:dule 2 to the First Additional Financing Agreement, in a manner acc,ptable to the Association. (5) The Recipient shall ensure that the Financing shall be used exclusively for the financing of activities detailed in Schedule I of this Agreement and no po tion of the Financing shall be used for any applicable expenditure under the Project if such expenditure was reimbursed by the Original Gr int or the First Additional Financing. -20- APPENDIX Section I. Definitions 1. "Annual Work Plan and Budget" means each annual work plan, together with the related budget, for the Project approved by the Association pursuant to the provisions of Sectior I.E of Schedule 2 to this Agreement. 2. "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants" dated October 15, 2006. 3. "Bank of the Repu)lic of Burundi" or "Banque de la Ripublique de Burundi" means the Recipieni central bank. 4. "Beneficiary" mears an entity to which or for whose benefit a Results-Based Paymert (as herein.fter defined) is made or proposed to be made and which is a party to a Results-B ised Payments Agreement (as hereinafter defined). 5. "Budget Law" means the Recipient's annual Loi de Finance approved by the its legislature and pronulgated by the president in accordance with the Recipient's budget approval rules and regulations. 6. "Co-financier" means the World Bank acting as an administrator of the HRITF. 7. "Co-financing" means, for purposes of paragraph II of the Appendix to the General Conditions, an amount of twenty million dollars ($20,000,000), to be provided by the Co-financier to assist in financing the Project. 8. "Consultant Guidel nes" means the "Guidelines: Selection and Employment of Consultants under [BRD Loans and IDA Credits and Grants by World Bank Borrowers" dated J,.nuary 2011. 9. "Counterpart Funds Account" means the account maintained by the Recipient at the Bank of the Republic of Burundi for the purposes of the Project in accordance with the provisions f Section V.B of Schedule 2 to this Agreement. 10. "DirecOrate Gene al of Health Services and Fight Against HIV/AIDS" (Direction Giniraie de la Santi et de la lutte contre le Sida) means the Recipient's entity, under the supervisory authority of the Ministry of Public Health and Fight iAgainst HIV/AIDS (as hereinafter defined), responsible for health services. 11. "Directrate General of Planning" (Direction Ginirale de la Planification) means the Recipient's entity, under the supervisory authority of the Ministry of -21- Public Health and Fight Against HIV/AIDS (as hereinafter defined), responsible for overall planning as well as monitoring and evaluation activities. 12. "Directorate GenerEl of Resources" (Direction Ginirale des Ressources) means the Recipient's enti y, under the supervisory authority of the Ministry of Public Health and Fight Against HIV/AIDS (as hereinafter defined), responsible for resource manageme it for said Ministry and in the health sector. 13. "Directorate of Health Promotion, Hygiene, and Sanitation" (Direction de la Promot'on de la Santi, de 1'Hygine et de l'Assainissement) means the Recipient's entity, inder the supervisory authority of the Directorate General of Health Services and Fight Against HIV/AIDS, responsible for health promotion, hygiene, and sanitation. 14. "First Additional Financing" means the additional financing provided under the First Additional Fin incing Agreement. 15. "First Additional Financing Agreement" means the additional financing agreement for the Health Sector Development Support Project between the Recipient and the International Bank for Reconstruction and Development and International Development Association (collectively, "World Bank"), both acting as the administrator of the Multi Donor Trust Fund for Health Results Innovation (HRITF), dated July 25, 2012 as amended (MDTF-HRI Grant Number TF 012526). 16. "Fiscal Year" means the Recipient's fiscal year as determined by the Budget Law. 17. "Free Package of Health Services" means the Recipient's free package of health services, referred to under Part 1 (a) of the Project, procured in accordance with Section III of Schedule 2 to this Agreement, comprising preventive and curative services, including primary health care and preventive services for pregnant women. delivery an i post-partum care, care for children under the age of five. 18. "Free Package of Health Services-Related Activities" means the activities relating to supporting and promoting the provision of the Free Package of Health Services and in support of which a Results-Based Payment (as hereinafter defined) is made or proposed to be made. 19. "General Conditions" means the "International Development Association Genera Conditions for Credit and Grants, dated July 31, 2010. 20. "Health Centers" m,-ans the Recipient's health centers referred in the Presidential Decree on the Free Aealth Care Policy. - 22 - 21. "Health Facilities" means the Recipient's Hospitals and Health Centers referred to in the Presidentia Decree on the Free Health Care Policy. 22. "Health Norms" means tre Recipient's health norms specified in the manual for the implementation of the National Health Development Plan, dated June 2007 and revised in June, 2012. 23. "HIV/AIDS" meais Human Immunodeficiency Syndrome / Acquired Immunodeficiency Syndrome. 24. "Hospitals" means :he Recipient's hospitals referred in the Presidential Decree on the Free Health Care Policy. 25. "HRITF" or "Health Results Innovation Trust Fund" means the trust fund establis'ed in December 2007 by various donors to support results-based financing approaches in the health sector for the achievement of the health-related millennium development goals. 26. "HRITF Second Financing Agreement" means the agreement of even date herewit) between the Recipient and the Co-financier providing for the Co-financing. 27. "Instruction Letter' means the Recipient's Instructions sur l'application du systeme de referevce et contre-reference, No 630/1656, CAB/2012, dated June 8, 2012, issuec to implement articles 14 and 15 of the Ministerial Ordinance in accordance with Ihe Recipient's Health Norms. 28. "Ministerial Ordinance" means the ministerial ordinance 630/677, dated April 16, 2010 pursuant to the Presidential Decree on the Free Health Care Policy. 29. "Ministry of Public Health and Fight Against HIV/AIDS" (Minist re de la Santj Publiqt,e et de la lu'te contre le VIH/SIDA) means the Recipient's ministry at the time responsible for public health. 30. "Ministry of PubLc Health and Fight Against HIV/AIDS Administrative, Accounting, and Financial Procedures Manual" (Manuel des Procidures Admini.tratives, Cowptables et Financiares du Ministre de la Santj Publique et de la lutte contre le VIH/SIDA) means the Recipient's manual, dated October 2, 2008, agreed with the Association and revised in accordance with Article 4.01(b) of this Agreement, outlining implementation, organizational, administrative, mor itoring and evaluation, environmental and social monitoring and mitigation, inancial management, disbursement, and procurement arrangements for purposes of implementation of the activities of the Ministry of Public Health and Fight Against HIV/AIDS, including the activities of the - 23 - Project, as the same may be amended from time to time with the prior written agreement of the A:ssociation, and such term includes any annexes or schedules to said manual. 31. "National Biomedical Waste Management Plan" (Plan National de Gestion des Dichets Biomidicaux) means the Recipient's plan, disclosed in country and at the Wo-Id Bank's infoshop on August 1, 2012, setting out the measures to be taken for the development and implementation of biomedical waste management and safe handling o 'said waste, as the same may be modified from time to time with the prior written agreement of the Association, and such term includes any annexes or schedule3 to said plan. 32. "National Health Development Plan" (Plan National de Diveloppement Sanitaire) means th-, Recipient's plan, covering the period from 2006-2010 and revised to cover the period from 2011-2015, for the development of its health sector. 33. "Operating Costs" means the incremental operating costs under the Project, based on the Annual Work Plans and Budgets approved by the Association, and incurred by the M nistry of Public Health and Fight Against HIV/AIDS, on account of utilitie; and supplies, bank charges, communications, vehicle operation, mainten ince, and insurance, office space rental, building and equipment mainten ince, public awareness-related media expenses, travel and supervision, and salaries of contractual and temporary staff, but excluding salaries, fees, honor iria, and bonuses of members of the Recipient's civil service. 34. "Original Financini, Agreement" means the financing agreement for a Health Sector Developmen: Support Project between the Recipient and the Association, dated July 7, 2009 as amended (Grant No. H488-BI). 35. "Original Grant" means the grant provided under the Original Financing Agreerrent. 36. "Original Project" means the Project described in the Original Financing Agreement. 37. "Presid.ntial Decree on the Free Health Care Policy" means the Recipient's Decret no. 100/38 du 16 Mars 2010 Portant Revision de Subvention des Soins aux Enants de Mcins de 5 Ans et des Accouchements dans les Structures de Soins Publiques et Assimilees, as the same may be updated from time to time. 38. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. -24 - 39. "Procur.ment Plan' (Plan de Passation des Marchis) means the Recipient's pro(ure:nent plan for the Project, dated August 24, 2012 and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 40. "Results-Based Fine ncing Procedures Manual" (Manuel des Procidures relatives au Financement Ba d sur les Risultats) means the manual, dated September 2011 and revised in acco -dance with Article 4.01 (b) of this Agreement, as the same may be revised from time to time with the prior written agreement of the Association, and such term includes any schedules to said manual. 41. "Results-Based Pay nent" means a payment made or proposed to be made out of the proceeds of the Grant to finance the activities provided for under Part 1 of Schedule 1 of this A greement. 42. "Resulti-Based Payments Agreement" means an agreement between the Recipient, represenied by the Directorate General of Health Services and Fight Against HIV/AIDS, and a Beneficiary, setting forth the terms and conditions governing Results-Based Payments. 43. "Specific Plan f)r Very Vulnerable Peoples, Including the Batwa" (Plan Suicifique pour les Populations Trs Vulnerables, dont les Batwa) means the Recipient's plart, disclosed in country and at the World Bank's Infoshop on August 1, 2012, ottlining measures to ensure culturally appropriate social and econoir ic benefits 'or very vulnerable peoples, including the Batwa under the Project and avoidance, minimization, or mitigation of or compensation for any potential adverse e 'fects on them associated with activities to be implemented under the Project, a; shall have been agreed with the Association for purposes of Project implementa:ion, as the same may be updated from time to time with the prior written agreenent of the Association, and such term includes any annexes or schedules to said plan. 44. "Trainiag" means the costs of training under the Project, based on the Annual Work Plans and Budgets approved by the Association, and attributable to seminars, workshops, and study tours, along with travel and subsistence allowances for training participants, services of trainers, rental of training facilitic s, preparation and reproduction of training materials, and other activities directly related to course preparation and implementation. 45. "UNICEF" means the United Nations Children's Fund. 46. "UNOPS" or "Unit-d Nations Office for Project Services" means an independent self-financing member of the United Nations family serving as a central resource for the United Nations system in procurement and contracts management.