OFFICIAL DOCUMENTS LOAN NUMBER 8839-IN Loan Agreement (National Nutrition Mission (also known as Additional Financing for the ICDS Systems Strengthening and Nutrition Improvement Project)) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN AGREEMENT AGREEMENT dated as of the Signature Date between INDIA ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank") for the purpose of providing additional financing for activities related to the Original Project (as defined in the Appendix to this Agreement). 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) 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, the Original Financing Agreement (as defined in the Appendix to this Agreement), or the Appendix to this Agreement. ARTICLE I - LOAN 2.01. The Bank agrees to lend to the Borrower the amount of two hundred million dollars (USD 200,000,000). as such amount may be converted from time to time through a Currency Conversion ("Loan"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount. 2.04. The Commitment Charge is one quarter of one percent (0.25%).per annum on the Unwithdrawn Loan Balance. 2.05. The interest rate is the Reference Rate plus the Variable Spread or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions. 2.06. The Payment Dates are March 15 and September 15 in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement. 2.08 (a) If on any given day, the Total Exposure exceeds the Standard Exposure Limit (as said terms are defined in sub-paragraphs (b)(ii) and (bXiii) of this Section), the Borrower shall pay to the Bank a surcharge at the rate -2- of one half of one percent (0.5%) per annum of the Allocated Excess Exposure Amount (as defined in sub-paragraph (b)(i) of this Section) for each said day ("Exposure Surcharge"). The Exposure Surcharge (if any) shall be payable semi-annually in arrears on each Payment Date. (b) For purposes of this Section the following terms have the meanings set forth below: (i) "Allocated Excess Exposure Amount" means for each day during which the Total Exposure exceeds the Standard Exposure Limit, the product of: (A) the total amount of said excess; and (B) the ratio of all (or, if the Bank so determines, a portion) of the Loan to the aggregate amount of all (or the equivalent portions) of the loans made by the Bank to the Borrower and to other borrowers guaranteed by the Borrower that are also subject to an exposure surcharge, as said excess and ratio are reasonably determined from time to time by the Bank. (ii) "Standard Exposure Limit" means the standard limit on the Bank's financial exposure to the Borrower which, if exceeded, would subject the Loan to the Exposure Surcharge, as determined from time to time by the Bank. (iii) "Total Exposure" means for any given day, the Bank's total financial exposure to the Borrower, as reasonably determined by the Bank ARTICLE III - PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall carry out the Project 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 9.05 (b) of the General Conditions, the date on which the obligations of the Borrower 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 Borrower's Representative is any of the following officials acting severally: The Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary, or Under Secretary of the Department of Economic Affairs of the Borrower's Ministry of Finance. 5.02. For purposes of Section 10.01 of the General Conditions: (a) the Borrower's address is: Secretary Department of Economic Affairs Ministry of Finance Government of India North Block New Delhi 110 001, India; and (b) the Borrower's Electronic Address is: Facsimile: +91-11-23092883 5.03. For purposes of Section 10.01 of the General Conditions: (a) the Bank's address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank's Electronic Address is: Facsimile: 1-202-477-6391 -4- AGREED as of the Signature Date. INDIA By Au*rized Representative Name: -Af4 4 ufA 6 Title: roIer S Date: _44A - INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By'_ _ _ Authorized Representative Name: J1W/A th Title: & ,,1 Date: ' .0/5 -5- SCHEDULE I Project Description The objective of the Project is to improve the coverage and quality of ICDS nutrition services to pregnant and lactating women and children under three (3) years of age. The Project consists of the following parts: Part A. ICDS Institutional and Systems Strengthening 1. Introducing and/or strengthening an ICT based management and monitoring system contributing to improved service delivery. 2. Introducing and/or strengthening an Incremental Learning-by-Doing Approach (ILA) to improve the knowledge of ICDS functionaries. 3. Strengthening citizen engagement and grievance redress systems for the ICDS Program. Part B. Community Mobilization and Behavior Change Communication 1. Mobilizing tlhe cdbumity for behavior change, by critical messaging on maternal, infanrand.youlg child nutrition, through, including but not limited to. home visits and community-based events. 2. Designmg and deploying mass and mid-media campaigns targeting pockets with the highest burden of under-nutrition. Part C. Performance-Based Incentives 1. Developing and introducing a system of performance-based incentives for the ICDS Program functionaries; health fictionaries, including Anganwadi Workers (AWWs). auxiliary nurse midwives, and accredited social health activists; and States. Part D. Convergent Nutrition Actions 1. Developing and implementing convergent nutrition action plans at the State, district and block levels with the objective of promoting coordinated and cross- sectoral efforts to improve nutrition outcomes. 2. Promoting inter-state learning to facilitate cross-fertilization of best practices across States. Part E. Project Management, Monitoring and Evaluation 1. Strengthening the capacity of MWCD and State Directorates of Integrated Child Development Services to comply with their Project management and implementation responsibilities. 2. Institutionalizing quality assurance interventions, including by strengthening guidelines for effective supervision and streamlining quality supervision checklists. 3. Introducing a system of periodic surveys to critically assess gaps in service delivery and nutrition trends over time for programmatic decision-making. -7- SCHEDULE 2 Project Execution Section 1. Implementation ArraWrements A. Institutional Arrangements At the Central Level . The Borrower, through MWCD, shall, and shall cause each State to: (a) carry out the Project in accordance with the Operations Manual; and (b) not amend or waive any provision of the Operations Manual without the prior agreement of the Bank. In the event of a conflict between the provisions of the Operations Manual and those of this Agreement. the provisions of the latter shall prevail. 2. The Borrower shall protect the interests of the Bank to accomplish the purposes of the Loan. 3. The Borrower. through MWCD, shall: (a) maintain at all times during Project implementation, a central project management unit ("CPMU"), with adequate functions, responsibilities, staff and resources to ensure the smooth implementation of the Project at the central level, including, inter alia, the responsibility to coordinate and monitor the carrying out of the Project; and (b) ensure that at all times during Project implementation a Project director is maintained within the CPMU, who shall be responsible for leading the implementation of Project activities at the central level. At the State Level 4. The Borrower shall cause each State to: (a) maintain at all times during Project implementation the respective State's State Directorate for Integrated Child Development Services, with adequate functions, responsibilities, staff and resources to ensure the smooth implementation of the Project at the state level, including, inter alia, the responsibility to coordinate and monitor the carrying out of the Project within the respective State; and -8- (b) ensure that all times during Project implementation a state Project director is maintained within the respective State Directorate for Integrated Child Development Services, who shall be responsible for leading the implementation of Project activities within the respective State. B. Memoranda of Understanding L, To facilitate the carrying out of Project activities in the Priority States, the Borrower, through MWCD, shall enter into a memorandum of understanding ("MoU') with each Priority State, under terms and conditions satisfactory to the Bank. each of which shall include, inter alia, the following: (a) the DLIs, DLI Targets, DLI Values, and the end date of the period during which each such DLI Target is set to be achieved in accordance with Schedule 4 to this Agreement; (b) the respective Priority State's obligation to comply with the relevant provisions of the Operations Manual, including the verification protocol containing the technical standards and arrangements and procedures for the monitoring, reporting and verification of DLIs, as agreed with the Bank; and (c) the Borrower's obligation to provide all such resources as may be necessary for the respective Priority State to carry out aforesaid responsibilities, all in accordance with the provisions of this Agreement 2. The Borrower shall exercise its rights under the MoUs in such manner so as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan. Except as the Bank may otherwise agree, the Borrower shall not assign, amend, abrogate or waive any of the MoUs or any of their provisions. Section II. Project Monitorin, Repordpw and Evaluation I The Borrower shall furnish to the Bank each Project Report not later than one month after the end of each calendar semester, covering the calendar semester. -9- Section W. Withdrawal of Loan Proceeds A. General 1. Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Borrower may withdraw the proceeds of the Loan to: (a) finance Eligible Expenditures; and (b) pay: (i) the Front-end Fee; and (ii) each Interest Rate Cap or Interest Rate Collar premium; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Loan Percentage of Allocated Expenditures to be (expressed in USD) financed (inclusive of Taxes) (1) Eligible Expenditure 199.500,000 100% Program ("EEP") under the Project (2) Front-end Fee 500.000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions (3) Interest Rate Cap or 0 Amount due pursuant to Interest Rate Collar Section 4.05 (c) of the premium General Conditions TOTAL AMOUNT 200,000,000 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, except that withdrawals up to an aggregate amount not to exceed $20,000,000 may be made for payments made prior to this date but on or after January 1. 2018. for Eligible Expenditures under Category (1): or (b) under Category (1), until and unless the Borrower has: (i) complied with the instructions under the Disbursement and Financial Information Letter and any additional instructions specified in accordance with Section 2.01(b) of the General Conditions, including the submission to the Bank of the applicable interim unaudited financial reports evidencing the incurrence of EEP expenditures for which payment is requested; -10- (ii) furnished evidence satisfactory to the Bank, in accordance with the verification protocol as agreed between the Borrower and the Bank, that the DLI Target for which payment is requested has been achieved; and (iii) furnished to the Bank, for each Priority State, details of the respective budget head which corresponds to the EEP expenditures. 2. Notwithstanding the provisions of paragraph I above, the amount of the Loan to be withdrawn upon the verified achievement of any DLI Target shall not exceed the lesser of: (a) the DLI Value of such DLI Target: and (b) the amount of the EEP expenditures under Category I incurred but not yet paid by the proceeds of the Loan at the date of submission of such withdrawal application. 3. Notwithstanding the provisions of paragraphs I and 2 above, if any of the DLI Target(s) has/have not been achieved, the Bank may, by notice to the Borrower: (a) authorize the withdrawal of such lesser amount within the respective DLI Value(s) for such DLI Target(s), which, in the opinion of the Bank. corresponds to the extent of achievement of said DLI Target(s), said lesser amount to be calculated in accordance with the formula set out for said DLI Target(s) under Schedule 4: (b) reallocate no more than thirty (30) percent of the proceeds of the Loan allocated to said DLI Target(s) to any other DLI Target(s); and/or (c) cancel in whole or in part any withheld amount of the proceeds of the Loan allocated to said DLI Target(s). 4. The Closing Date is August 30. 2022. -ll- SCHEDULE 3 Commitment-Linked Amortization Repayment Schedule The following table sets forth the 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"). Level Principal Repayments Principal Payment Date Installment Share On each March 15 and September 15 Beginning September 15, 2022 3.23% through March 15, 2037 On September 15, 2037 3.10% SCHEDULE 4 Disbursement-Linked Indicators, Disbursement-Linked Indicator Targets, and Disbursement-Linked Indicator Values Applicable to the Project DLIs DLI T rgets DLI : _ICT .: MWCD has 1.2: MWCD has 1.3: Each Priority 1.4: At least 60% of 1.5: At least 40% 1.6: At least 50% based developed the ensured the inclusion State has signed the AWWs in the of AWCs in the of AWCs in the management and ICDS-CAS of monitoring contracts for ICT Participating Districts Participating Participating monitoring guideline and indicators on hardware, growth in each respective Districts in each Districts in each system issued it to all community-based monitoring devices Priority State have respective Priority respective strengthened, States. events, new ICDS- and supporting been trained on the State have Priority State contributing to CAS videos and consulting and non- ICT based delivered a have delivered a Improved service results framework consulting services management, minimunm set of minimum set of delivery indicators in the in accordance with monitoring and services every services every ICDS-CAS ICDS-CAS communication month for a month for any application and guidelines. system in accordance consecutive period consecutive developed user and with the Training Plan. of six months. period of twelve training manuals months after the accordingly. period of achievement of DLI Target 1.5. DLI Value USD 5,230,000 USD 5,230,000 USD 2,107,000 for USD 702,000 for each LISD 469,000 for USD 469,000 for each Priority State Priority State that each Priority State each Priority that achieves the achieves the DLI that achieves the State that DLI Target Target DLI Target achieves the DLI ____________ ___________Target DLI 2: ILA 2.1: MWCD has 2.2: At least 50% of 2.3: At least 50% of 2.4: At least 60% of 2.5: At least 60% 2.6: At least 60% No DLI Target presented in this Schedule is time-bound. These DLI Targets can be met up till the Closing Date. - 13 - strengthened, developed and AWWs and at least Block Resource AWWs and at least of Block Resource of AWWs and at Improving deployed all 50%/c of ICDS Groups and at least 60%/9 of ICDS Program Groups and at least least 60% of knowledge of planned online ILA Program supervisors 50% of Sectors in supervisors in the 60% of Sectors in ICDS Program ICDS Program modules on the in the Participating the Participating Participating Districts the Participating supervisors in the field ILA e-learning Districts in each Districts in each in each respective Districts in each Participating functionaries platform respective Priority respective Priority Priority State have respective Priority Districts in each State have completed State conducted at completed all online State conducted at respective all online ILA least 4 monthly ILA modules in least 8 monthly Priority State modules in themes I learning and review themes 3, 4 and 5. learning and passed the and 2. meetings on ILA review meetings on knowledge test themes in any ILA themes in any for each of the consecutive period consecutive period online ILA of six months. of twelve months module themes. after the period of achievement of DLI Target 2.3. DLI Value USD 4,715,000 USD 562,000 for USD421,000 for USD 562,000 for each USD 421,000 for USD 421,000 for each Priority State each Priority State Priority State that each Priority State each Priority that achieves the DLI that achieves the achieves the DLI that achieves the State that Target DLI Target Target DLI Target achieves the DLI DLI 3: 3.1: MWCD has 3.2: National level 3.3: Each Priority 3.4: Each Priority 3.5: Each Priority Grievance developed standard grievance redress State has put in State has responded to State has redress operating system is operational place a functional at least 40% of its responded to at mechanism for procedures for and is linked with all grievance redress grievances registered least 50% of its improved citizen grievance redress States. system as per the in its grievance redress grievances engagement mechanism and standard operating system within business registered in its strengthened transmitted them to procedures. standards as defined in grievance redress all States. the standard operating system within procedures over a business standards consecutive period of as defined in the six months. standard operating procedures over any consecutive period of six I months after the - 14 - period of achievement of DLI Tarstet 3.4. DLI Value USD 4,200,000 USD 4,200,000 UD 375,000 for USD 375,000 for each USD 375,000 for each Priority State Priority State that each Priority State that achieves the achieves thle DLI that achieves the DLI TarRet Targe DUI Target DLI 4: 4. 1: M WCD has 4.2: MWCD has 4.3: At least 50% of 4.4: At least 60% of 4.5: At least 50% Community revised guidelines oriented all States on AWCs in the AWCs in the of AWWs from the mobilization for for community- the revised Participating Participating Districts Participating nutrition based events based community-based Districts in each in each respective Districts in each behavior change on lessons learnt events guidelines and respective Priority Priority State have Priority State meet strengthened during the Original tools. State have conducted at least 10 at least 60% of Project phase and conducted at least 4 community events in their targeted issued them to all community events any consecutive period number of home States, in a consecutive of twelve months after visits to pregnant, period of six the period of lactating women months. achievement of DLI and children under. Target 4.3. 3 years every month for a consecutive period of twelve months. DLI Value USD 3,680,000 USD 2,480,000 USD 546,000 for USD 546,000 for each USD 546,000 for each Priority State Priority State that each Priority State that meets the DLI meets thle DUI Target that meets the DLI Target IT31 ,et DLI 5: Mass and 5.1: MWCD has 5.2: MWCD has 53: MWCD has 5.4: Each Priority 1fId-11rdia completed an developed content deployed second State has deployed a - campaigns assessment of for mass media (TV round of mass Mid-Media campaign reinforcing prevalent nutrition and radio campaigns) media (TV and as per media plan. m nutrition customs and and Mid-Media as radio campaigns) as behavior change practices among per communication per media plan. Implemented vulnerable groups plan. in States as per approved mnethodologto support development of communication content- OLI Value LISD 1,290,000 USD 3.240,0M0 I'SD 3,2ROl.SH(I USD4170fY) fur each Porinty State that meets the DLI 'rarget OLI 6. ICDS 6.1: iWCD has 6.2. MWCD has 6.3: At ledst 20'. 6.4: MWCD has 0.5: Al least 4tr*' functionaries developed developed guidelines AWWs in each provided performance- AWWs in each achieve guidelines for and mechanisms for Priority State based incentives to Priority State milestones for perfonnance-based group and State received their States in accordance received their receiving AWW incentives. performance-based monthly with the State monthly performance- incentives. performance-based incentive guidelines performance-based based incentives incentives at least and to groups in incentive at least four times in a accordance with the four times in any . consecutive period group incentive consecutive period of six months. guidelines. of six months after the period of achievement of DLI Target 6.3. DLI Value USD 4,180,000 USD 4,180,000 USD I,l19,000 for USD 8.280,000 USD 1,119,000 for gg each Priority State each Priority State - that achieves the that achieves the 7 DLI Target DL1Target fLI 7: 7.1: MWCD has 7.2: Convergent 7.3: MWCD has 7.4: MWCD has Convergent developed nutrition action plans reviewed assessed, documented a nutrition action guidelines for at the state and implementation and disseminated best plans de%elopcd convergent district levels have progress of practices from and nutrition actions been developed in convergent nutrition implementation of the operationalized and issued them to each Priority State. action plans and convergent nutrition all States. innovations therein action plans and at the national level innovations therein for di the end of the learning . first year of implementalin of .theplan -16- DLI Value USD 1,480,000 USD 191,000 for USD 1,830,000 USD 1.830,000 each Priority State that achieves the DLI Target __ DLI 8: Program 8.1: MWCD has 8.2: At least 20% of 8.3: MWCD has 5.4: At least 40% of 8.5: MWCD has management, developed and ICDS Program completed first ICDS Program completed second monitoring and issued to all States supervisors, child round of survey. supervisors, child round of survey eialuatlon upddled development project developlCnt projet systems Supervision olficers and di%trici officers and ditrict strengthened guidelines for program olicers program ofTicer% fr0m improved from Participating Participating Di.iricvs monionng by Districts in cach in raL h respecti%c ICDS Prrgiamin reqpective Prioriv, Priority State have offliciak State have completed completed at least at least 60"6 of 601 (if mandated mandated super% inn %isits to -uperviRion viw; III AWCs ds per A W Cs as per guidelines for any guidelines for a consecltmve period oIf cOnsecutiVe period 01 twelve months afte. sir months ihe period of dachievementi of DL I Targe 8 2__ DLI I waie USD 1,890,000 USD 184,5I or (TS I 66.S-00 USD 184.500 for cach USD L61t Stil each Priority State Priority State that that achieves the DLI achieves the DLI Target I Target APPFNDIX Definitions 1. "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. 2. "Category" means a category set forth in the table in Section M.A of Schedule 2 to this Agreement. 3. "CPMU" means the central project management unit, referred to in Section I.A.3 of Schedule 2 to this Agreement, to be maintained by MWCD for the purpose of providing Project management support throughout Project implementation. 4. "DLI" means any of the disbursement-linked indicators set out in Schedule 4 to this Agreement. 5. "DLI Target" means each of the disbursement-linked targets/results specified in the table in Schedule 4 to this Agreement in the columns titled "DLI Targets". 6. "DLI Value" means the amount allocated to each individual DLI Target as set forth in Schedule 4 to this Agreement, as such amount might be modified by the Bank, from time to time, as the case may be, in accordance with the provisions of Section M.B.3 of Schedule 2 to this Agreement. 7. "Eligible Expenditure Program" and the acronym "EEP" means the reasonable costs required for the implementation of the Project, comprising salaries and allowances of staff of the State Directorates of Integrated Child Development Services, as further detailed in the Operations Manual. 8. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for IBRD Financing, Investment Project Financing", dated July 14, 2017. 9. "ICDS" and "ICDS Program" means the Borrower's Integrated Child Development Scheme, officially launched on October 2, 1975, with the objective to, inter alia, improve nutritional outcomes of children in India. 10. "ICDS-Common Application Software" and the acronym "ICDS-CAS" means the mobile and tablet based software application for monitoring ICDS Program services being rolled out under the Project. - 18 - 11. "Incremental Learning-by-Doing Approach" and the acronym "ILA" means a methodological, ongoing capacity building approach for building knowledge and skills of ICDS Program staff and functionaries, using supervisory interactions at different levels for providing practical and guided learning, being rolled out under the Project. 12. "Mid-Media" means the means of communication used to communicate at the household and community levels, through the use of locally conducted media formats as laid down in the Operations Manual. 13. "MoU" means a memorandum of understanding entered into, or to be entered into, between the Borrower, through MWCD, and a Priority State, and referred to in Section I.B of Schedule 2 to this Agreement, for the purpose of carrying out Project activities in the respective State, as such MoU may be revised from time to time with the prior agreement of the Bank. 14. "Original Financing Agreement" means the financing agreement for the ICDS Systems Strengthening and Nutrition Improvement Project between the Borrower and the Association, dated September 29. 2015, as amended from time to time (Credit No. 5150-IN). 15. "Original Project" means the Project described in Schedule I to the Original Financing Agreement. 16. "Participating District" means a district of a State in which the Project activities will be implemented, as specified in the Operations Manual. 17. "Priority State" means any of the Borrower's states of Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra. Odisha, Rajasthan and Uttar Pradesh. 18. "Procurement Regulations" means. for purposes of paragraph 85 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated July 2016, revised November 2017. 19. "Sector" means a sub-block unit under the ICDS Program supervised by, or under the responsibility of, an ICDS Program supervisor. 20. "Signature Date" means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to "the date of the Loan Agreement" in the General Conditions. 21. "State" means any of the states or union territories of the Borrower. - 19 - 22. "State Directorate of Integrated Child Development Services" means, in respect of each State, its directorate of ICDS, which is responsible for implementation of the ICDS Program in the respective State, or any successor thereto.