OFFICIAL DOCUMENTS LOAN NUMBER 8724-MA Project Agreement (Financing Innovative Startups and Small and Medium Enterprises Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and CAISSE CENTRALE DE GARANTIE Dated June 16, 2017 LOAN NUMBER 8724-MA PROJECT AGREEMENT AGREEMENT dated June 16, 2017, entered into between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank") and CAISSE CENTRALE DE GARANTIE ("Project Implementing Entity") ("Project Agreement") in connection with the Loan Agreement ("Loan Agreement") of same date between the Kingdom of Morocco ("Borrower") and the Bank. The Bank and the Project Implementing Entity hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defincd in the Appendix to the Loan Agreement) constitute an integral part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Loan Agreement or the General Conditions. ARTICLE II - PROJECT 2.01. The Project Implementing Entity declares its commitment to the objective of the Project. To this end, the Project Implementing Entity shall carry out the Project in accordance with the provisions of Article V of the General Conditions, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. 2.02. Without limitation upon the provisions of Section 2.01 of this Agreement, and except as the Bank and the Project Implementing Entity shall otherwise agree, the Project Implementing Entity shall carry out the Project in accordance with the provisions of the Schedule to this Agreement. -2- ARTICLE III - REPRESENTATIVE; ADDRESSES 3.01. The Project Implementing Entity's Representative is its Director General. 3.02. The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, NW Washington, DC 20433 United States of America Telex: Facsimile: 248423(MCI) or 1-202-477-6391 64145(MCI) 3.03. The Project Implementing Entity's Address is: Caisse Centrale de Garantie Centre d'Affaires, Boulevard Ar Ryad Hay Ryad, Rabat B.P. 2031 Kingdom of Morocco Facsimile: 212 537 715 715 -3- AGREED at Rabat, Kingdom of Morocco, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By thorizedR esentative Name: el Hamaide tic: Senior Country Officer CAISSE CENTRALE DE GARANTIE By A orized Representative Name: Zanati Srghini Title: General Director -4- SCHEDULE Execution of the Project Section 1. Implementation Arraneements A. Institutional Arrangements The Project Implementing Entity shall take steps to ensure that: (a) the Project Management Unit shall be headed by a Project Manager, having the requisite qualifications and experience in equity investments and development of new and innovative businesses, who shall be assisted by a team of key personnel consisting of an ecosystem project officer, a financial management specialist, a procurement specialist and a team of external consultants, including a safeguards specialist, a monitoring and evaluation expert, a communication specialist, and legal and accounting experts, along with other technical and support staff as needed and in adequate numbers, all of whom shall be suitably qualified and experienced; and (b) the positions of Project Manager and other key personnel referred to in paragraph (a) above shall be kept filled at all times by persons having qualifications and experience acceptable to the Bank. B. Project Operations Manual; Midterm Review 1. The Project implementing Entity shall: (a) prepare and adopt a Project Operations Manual, in form and substance acceptable to the Bank, giving details of all operational guidelines and procedures as shall have been agreed with the Bank for the implementation, monitoring and supervision of the Project, including: (i) performance indicators, monitoring and evaluation guidelines, and environmental assessment methodology; (ii) administrative, accounting and financial procedures; (iii) procurement and disbursement guidelines; (iv) procedures and eligibility criteria governing selection of Participating Intermediaries, review and approval of Sub-project proposals and grant of Sub-financings, and model forms of Administration Agreements and Sub-financing Agreements; and -5- (v) details of the Safeguard Instruments, as and when they become available; (b) carry out the Project in accordance with procedures set forth in the Project Operations Manual, and except as the Borrower and the Bank shall otherwise agree, shall not amend or waive any provision thereof, if such amendment or waiver may materially or adversely affect the implementation of the Project. 2. The Project Implementing Entity shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the Project and the achievement of the objective thereof, (b) prepare, under terms of reference satisfactory to the Borrower and the Bank, and furnish to the Bank, not later than June 30, 2020, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report, and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objective thereof during the period following such date; and (c) review with the Borrower and the Bank, not later than September 30, 2020, or such later date as the Borrower or the Bank shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objective thereof, based on the conclusions and recommendations of the said report, and the Borrower's and the Bank's views on the matter. C. Anti-Corruption The Project Implementing Entity shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. D. Sub-projects under Part A 1 . The Project Implementing Entity shall make the proceeds of the Subsidiary Financing Part A available to one or more Participating Financial Intermediaries under Administration Agreements between the Project Implementing Entity and each of the Participating Financial Intermediaries ("Administration Agreements"), to be held in investment funds managed by the respective Participating Financial -6- Intermediaries for onward transfer in favor of one or more Beneficiaries to finance equity and quasi-equity investments ("Equity Investments") under investment agreements ("Investment Agreements") between the respective Participating Financial Intermediaries and the respective Beneficiaries. 2. The Project Implementing Entity shall also make proceeds of the Subsidiary Financing Part A available to Participating Financial Intermediaries to finance sub- loans ("Sub-loans") for the benefit of Beneficiaries under sub-loan agreements ("Sub-loan Agreements"), among the Project Implementing Entity, Beneficiaries and the respective Participating Financial Intermediaries. 3. Investment Agreements and Sub-loan Agreements shall be subject to terms and conditions specified in the Project Operations Manual, which shall include the following: (a) participating Financial Intermediaries shall be selected on a competitive basis, and in accordance with procedures and eligibility criteria set forth in the Project Operations Manual; (b) each Participating Financial Intermediary shall be required to open and maintain a project account, on terms and conditions acceptable to the Bank, in order to track the source and application of funds allocated to the Participating Financial Intermediary under the Administration Agreement; (c) the Project Implementing Entity's transfers in favor of the Participating Financial Intermediaries shall be in the form of equity contributions to the capital of investment funds managed by the respective Participating Financial Intermediaries, with the Project Implementing Entity listed in each case as equity shareholder on behalf of the Borrower; (d) the mutual rights and obligations of the Project Implementing Entity and other shareholders of an investment fund managed by a Participating Financial Intermediary shall be subject to terms and conditions acceptable to the Bank, and specified in the Project Operations Manual; and (e) equity Investments and Sub-loans in favor of Beneficiaries shall be made exclusively to finance Eligible Expenditures in accordance with this Agreement, the Loan Agreement, the Project Operations Manual, and the additional terms and conditions set forth in Part F of this Schedule. 4. The Project Implementing Entity shall exercise its rights under each Administration Agreement in such manner as to protect the interests of the Borrower and the Bank, and to accomplish the purposes of the Project. Except as the Borrower and the Bank shall otherwise agree, the Project Implementing Entity shall not assign, amend, abrogate or waive the general framework of the Administration Agreement, or any provisions thereof. E. Sub-projects under Part B The Project Implementing Entity shall make the proceeds of the Subsidiary Financing Part B available to one or more Participating Non-Financial Intermediaries under Participation Agreements between the Project Implementing Entity and each of the Participating Non-Financial Intermediaries ("Participation Agreements"), to be applied for the benefit of one or more Beneficiaries, whether to provide non-cash support to the Beneficiaries, or to make grants ("Sub-grants") and sub-loans ("Sub-loans"), under sub-grant agreements ("Sub-grant Agreements") and sub-loan agreements ("Sub-loan Agreements"), respectively, between the respective Participating Non-Financial Intermediaries and the respective Beneficiaries, under terms and conditions approved by the Bank, which shall include the following: (a) Participating Non-Financial Intermediaries shall be selected on a competitive basis, and in accordance with procedures and eligibility criteria set forth in the Project Operations Manual; (b) Each Participating Non-Financial Intermediary shall be required to open and maintain a project account, on terms and conditions acceptable to the Bank, in order to track the source and application of funds allocated to the Participating Non-Financial Intermediary under the Participation Agreement; and (c) Participating Non-Financial Intermediaries shall make Sub-grants and Sub-loans in favor of Beneficiaries exclusively to finance Eligible Expenditures in accordance with this Agreement, the Loan Agreement, the Project Operations Manual, and the additional terms and conditions set forth in Part F of this Schedule. 2. The Project Implementing Entity shall exercise its rights under each Participation Agreement in such manner as to protect the interests of the Borrower and the Bank, and to accomplish the purposes of the Project Except as the Borrower and the Bank shall otherwise agree, the Project Implementing Entity shall not assign, amend, abrogate or waive the Participation Agreement, or any provisions thereof, if such assignment, amendment, abrogation or waiver may materially or adversely affect the implementation of the Project. F. Additional Terms and Conditions Governing Sub-financings. I. Sub-financings to Beneficiaries shall be subject to the following additional terms and conditions: -8- (a) the choice of Beneficiaries, and selection of activities, investment activities and sectors of activity, shall be undertaken according to industry best practices, and on the basis of principles of good governance, equity and transparency; and (b) no activity or sector of activity shall benefit from funding under the Project if it belongs to the negative list of activities or sectors of activity deemed ineligible for support under the Project, and specified in the Project Operations Manual. 2. Participating Intermediaries shall make each Sub-financing under a Sub-financing Agreement with the respective Beneficiary on terms and conditions specified in the Project Operations Manual, which shall include the following: (a) in the case of Equity Investments, the investment fund managed by the Participating Financial Intermediary shall in each case be the equity shareholder; (b) Sub-loans shall be on concessional terms specified in the Project Operations Manual and, except as otherwise provided in the Project Operations Manual, shall be repayable in full; and (c) the Participating Intermediary shall obtain rights adequate to protect its interests and those of the Borrower and the Bank, including the right to: (i) suspend or terminate the right of the Beneficiary to use the proceeds of the Sub-financing, or obtain a refund of all or any part of the amount of the Sub-financing then withdrawn, upon the Beneficiary's failure to perform any of its obligations under the Sub-financing Agreement; and (ii) require each Beneficiary to: (A) carry out its Sub-project with due diligence and efficiency and in accordance with relevant technical, economic, financial, managerial, environmental and social standards and practices, including in accordance with the provisions of the Anti-Corruption Guidelines applicable to recipients of loan proceeds other than the Borrower; (B) provide, promptly as needed, the resources required for the purpose; -9- (C) procure the goods, works and services to be financed out of the Sub-financing in accordance with the provisions of this Agreement; (D) maintain policies and procedures adequate to enable it to monitor and evaluate in accordance with indicators acceptable to the Bank, the progress of the Sub-project and the achievement of its objectives; (E) (1) maintain a financial management system and prepare financial statements in accordance with relevant accounting standards adequate to reflect the operations, resources and expenditures related to the Sub-project; and (2) at the Bank's or the Project Implementing Entity's request, have such financial statements pertaining to Eligible Expenditures audited by independent auditors acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank, and promptly furnish the statements as so audited to the Bank and the Project Implementing Entity; (F) enable the Bank and the Project Implementing Entity to inspect the Sub-project, its operation and any relevant records and documents; and (G) prepare and furnish to the Bank and the Project Implementing Entity all such information as the Bank or the Project Implementing Entity shall reasonably request relating to the foregoing. 3. Each Participating Intermediary shall exercise its rights under each Sub-financing Agreement in such manner as to protect the interests of the Borrower, the Bank and the Project Implementing Entity, and to accomplish the purposes of the Loan. Except as the Bank and Project Implementing Entity shall otherwise agree, the Participating Intermediary shall not assign, amend, abrogate or waive any Sub- financing Agreement or any of its provisions, if such assignment, amendment, abrogation or waiver may materially or adversely affect the implementation of the Project. G. Safeguards 1 . The Project Implementing Entity shall take steps to monitor on a continuing basis the implementation of the Safeguard Instruments and ensure that the Project is executed in strict accordance with such Safeguard Instruments, and, upon the occurrence of any event or condition likely to interrupt or interfere with the smooth -10- implementation of the Safeguard Instruments, the Project Implementing Entity shall act promptly to deal with or address such event or condition, and inform Borrower and the Bank accordingly. 2. For the purposes of any Sub-project or other activity under the Project, and prior to implementation thereof, the Project Implementing Entity shall ensure that any plan, action plan, fact sheet or other instrument required in terms of any one or more of the Safeguard Instruments, shall have been duly: (a) prepared in form and substance satisfactory to the Bank, and, except as otherwise agreed with the Bank, submitted to the Bank for review and approval, and (b) thereafter adopted and publicly disclosed. 3. The Project Implementing Entity shall take all measures necessary on its part to regularly collect, compile, and submit to the Bank, as part of the six-monthly reports referred to in Section II.A below, reports on the status of compliance with the Safeguard Instruments, giving details of: (a) measures taken in frtherance of such Safeguard Instruments; (b) any event or condition which interferes or threatens to interfere with the smooth implementation of such Safeguard Instruments; and (c) remedial measures taken or required to be taken to address such event or condition. 4. Except as the Borrower and the Bank shall otherwise agree in writing, the Project Implementing Entity shall not amend, waive or abrogate, or cause to be amended, waived or abrogated, any provision of the Safeguard Instruments. Section II. Project Monitorine. Reporting and Evaluation. A. Project Reports 1. The Project Implementing Entity shall monitor and evaluate the progress of the Project and prepare Project Reports for the Project in accordance with the provisions of Section 5.08 (b) of the General Conditions, and on the basis of indicators acceptable to the Bank and set forth in the Project Operations Manual. Each such Project Report shall cover the period of one calendar semester, and shall be furnished to the Borrower not later than forty-five (45) days after the end of the period covered by such report for incorporation and forwarding by the Borrower to the Bank of the overall Project Report. -ll- B. Financial Management, Financial Reports and Audits 1. The Project Implementing Entity shall maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Bank, both in a manner adequate to reflect the operations and financial condition of the Project Implementing Entity, including the operations, resources and expenditures related to the Project. 2. The Project Implementing Entity shall have its financial statements referred to above audited by independent auditors acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank. Each audit of these financial statements shall cover the period of one fiscal year of the Project Implementing Entity. The Project Implementing Entity shall ensure that the audited financial statements for each period shall be: (a) furnished to the Borrower and the Bank not later than six months after the end of the period; and (b) made publicly available in a timely fashion and in a manner acceptable to the Bank. Section Ill. Procurement All goods and services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Section III of Schedule 2 to the Loan Agreement.