OFFICIAL oocuMENTS ニニ二二二ニニニニニニニニニニニ GRANTNUM[BERD43SO-SL Financin:9 Agreement Second Productivity and TransParency SupPort Grant DeveloPment PohCy Financing between THE R玉PUBLIC OF SIERRA LEONE and INTERNATIONALDEVELOPMENTASSOCいT10N 日―■■国ー国―園ー■――国園馴■■■■ー国園■■■■■国■曲国― 国国国―幽■国■ー園■■■■■■■■■■■■■■■■■■■■■国■―目園■■■国国園国日国日国国国国国■―馴目―■園国園国国国園日■■■■■ GRANT NUMBER D4350-SL FINANCING AGREEMENT AGREEmENT dated as, of the Signature Date between THE REPUBLrC OF SIERRA LEONE ("Recipient 4) and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for providing financing in support of the Program (as defined in the Appendix to this Agreement). The Association has decided to provide this financing- on the basis, inter.alia, of, (i) theActi ons which the Recipient has already taken under the Program andwhich are described in Section I of Schedule I to this Agreement; and (ii) the Recipient's maintenance of an- adequate macroeconomic policy framework. The Recipient, and the Association therefore hereby agree as follows: ARTICLE I - GENERAL CONDITIONS;.DE, FINITIONS 1.01. The General Conditions (as defined in -the Appendix to this.Agreement) apply to and form part of ibis Agreement. 1.02, Unlessthe contextrequires otherwise, the capitidizedterms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE 11 - FINANCING 2,01. The Association agrees to extend to the Recipient a grant, which is deemed as Concessional Financing for purposes of the General *Conditions, in an amount equivalent to twenty-eight million six hundred thousand Special Drawing Righm- (SDR 28,600,000) ("Financing7), 2,02i The.Maximurn Cornmitment Charge Rate is one-half of one. percent (1 /2: of No) per annum on the Unwithdrawn Financing Balance. 2.03. The Payment - bates.are February 15 and August 15 in eajch year. 2.04. The Payment Currency is. Dollar. 2.05. Without. limitation upon the provisions of Section 5.05*of the General Conditions. the. Recipient shall promptly furnish to the Association such information relating to the provisions. of this Article 11 as the Association may, from time. to time, reasonably request. -2- ARTICLE III - PROGRAM 3.01. The Recipient declares its commitment to the Program and its implementation. To this end, and further to Section 5.05 of the General Conditions: (a) the Recipient and the Association shall from time to time, at the request of either party, exchange views on the Recipient's macroeconomic policy framework and the progress achieved in carrying out the Program; (b) prior to each such exchange of views, the Recipient shall furnish to the Association for its review and comment a report on the progress achieved in carrying out the Program,. in such detail as the Association shall reasonably request; and (c) without limitation upon the provisions of paragraphs (a) and (b) of this Section, the Recipient shall promptly inform the Association of any situation that would have the effect of materially reversing the objectives of the Program or any action taken under the Program including any action specified in Section I of Schedule I to this Agreement. ARTICLE IV - REMEDIES OF THE ASSOCIATION 4.01. The Additional Events of Suspension consist of the following: (a) A situation has arisen which shall make it improbable that the Program, or a significant part of it, will be carried out. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01 The Additional Conditions of Effectiveness consist of the following; namely the Association is satisfied with the progress achieved by the Recipient in carrying out the Program and with the adequacy of the Recipient's macroeconomic policy framework. 5.02 The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 5.03 For purposes of Section 10.05 (b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty years (20) after the Signature Date. -3- ARTICLE VI -REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its minister responsible for finance. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance Treasury Building George Street Freetown, Sierra Leone (b) the Recipient's Electronic Address is Facsimile: + 232 22 228 472 6.03. For purposes of Section 11.01 of the General Conditions: (a) the Association's address is: International Development Association I818 -H Street, NW. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 -4- AGREED as of the Signature Date. REPUBLIC OF SIERRA LEONE By Authonzed kepresentative Name: Title: \ AA€ Date: INTERNATIONAL DEVELOPMENT ASSOCIATION By Auth ' epresentative Name: Titie: Date: 20 -5- SCHEDULE I Program Actions; Availability of Financing Proceeds Section I. Actions under the Program. The actions taken by the Recipient under the Program include the following: A. Increasing Productivity in Selected Economic Sectors I. The Recipient's Parliament has passed the Seed Certification Agency Act, 2017 which inter alia provides for a sustainable seed delivery system and private sector participation in seeds production and marketing. 2. The Recipient's Parliament has passed the National Fertilizer Regulatory Agency Act, 2017 which inter alia provides for private sector participation in fertilizer supply. 3. The Recipient's Parliament has passed the Fisheries and Aquaculture Act, 2017 which inter alia provides for long-term conservation and sustainable management of fisheries resources. 4. The Recipient's Board of Electricity Distribution and Supply Authority (EDSA) has issued the Resolution dated August 30, 2018, to adopt the Network Configuration Optimization Plan (NCOP) to reduce Technical Losses on the transmission and distribution network and implementation of the NCOP has commenced as evidenced by the signed contract dated October 29,. 2018 between EDSA and Network Energy Services Corporation. 5. The Recipient has pursuant to the Public Financial Management Act, 2016, (a) eliminated the subsidies on petroleum products; and (b) adopted the automatic fuel price indexation formula to determine fuel prices based on international prices and the prevailing exchange rate in the Recipient's territory as evidenced by the Supplementary Budget. 6. The Recipient's Ministry of Basic and Secondary Education (MoBSE) has transferred all the responsibilities and records linked to teacher management to the Teaching Service Commission in accordance with the Transition Plan as evidenced by the letter from the Ministry of Finance dated January 31, 2019. B. Improving Transparency and Accountability in Selected Government Decision Making Processes I. The Recipient's Ministry of Finance has pursuant to Executive Order No. 1, dated April 9, 2018 on Revenue Mobilization directed all Ministries, Departments and Agencies to transfer all revenues collected on behalf of the Recipient into the -6- Treasury Single Account (TSA); and the transfer of the revenues into the TSA has commenced as evidenced by the Daily Summary Report dated January 31, 2019. 2. The Recipient's Parliament has passed the Extractive Industry Revenue Act, 2018 which inter alia promotes a transparent, stable, predictable and robust fiscal regime for all future mining contracts. 3. The Recipient's Anti-Corruption Commission has submitted to Parliament for approval an Asset Disclosure Regulation which inter alia defines the scope of aLl government officials covered by said regulation and includes an effective, non- discretionary administrative sanction for non-compliance with asset disclosure filing obligations as evidenced by the letter dated January 25, 2019 from the Clerk of Parliament. Section H1. Availability of Financine Proceeds A. General. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of this Section and such additional instructions as the Association may spciIfy by notice to the Recipient. B. Allocation of Financing Amounts. The Financing is allocated in a single withdrawal tranche, from which the. Recipient may make withdrawals of the Financing proceeds. The allocation of the amounts of the Financing to this end is set out in the table below: Amount of the Financing Allocated Allocations (expressed in SDR) (1) Single Withdrawal Tranche 28,600,000 TOTAL AMOUNT 2&,600,000 C. Withdrawal Tranche Release Conditions No withdrawal shall be made of the Single Withdrawal Tranche unless the Association is satisfied: (a) with the Program being carried out by the Recipient; and (b) with the adequacy ofthe Recipient's macroeconomic policy framework. D. Deposit of Financing Amounts 1 . The Recipient shall open, prior to furnishing to the Association the request for withdrawal from the Financing Account, a dedicated foreign exchange account in the Bank of Sierra Leone (the "Dedicated Account"). All withdrawals from the -7- Financing Account shall be deposited by the Association into the Dedicated Account. 2. The Recipient shall ensure that within two (2) days after the deposit of the amount of the Financing into the Dedicated Account, an equivalent amount in Leones is. transferred into the Consolidated Fund, and such amount is. accounted for in the Recipient's budget management system, in a manner acceptable to the Association. 3. Within thirty (30) days after deposit of the amount of the Financing into the Dedicated Account, provide to the Association written certification by the Financial Secretary of the Recipient's Ministry of Finance: (a) the receipt of such amount from the Financing Account into the. Dedicated Account, and (b) receipt of an equivalent amount in Leones from the Dedicated Account into the Consolidated Fund, including the number of said accounts, the dates of receipt and the exchange rate applied to translate the currency of the deposit into Leones. F. Audit. The Recipient shall: 1. Provide to the Association, within one (1) month after submission to Parliament as required by the Public Financial Management Act 2016, the Auditor-General's annual report and audited accounts of the Consolidated Fund for Fiscal Year 2019. 2. Ensure that the annual financial statements of the Bank of Sierra Leone, as audited in accordance with international standards on audits promulgated by the International Federation of Accountants, are made publicly available through posting on the public website of the Bank of Sierra Leone. 3. Have the Dedicated Account audited at the request of the Association by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards and with terms of reference acceptable to the Association; and furnish to the Association as soon as available, but in any case not later than six (6) months after the Financing is deposited into the Dedicated Account pursuant to paragraph D. 1 above, a certified copy of the report of such audit, of such scope and in such detail as the Association shall reasonably request. 4. Furnish to the Association such other information concerning the said accounts and their audit as the Association shall reasonably request. F. Closing Date. The Closing Date is October31, 2019. APPENDIX Section . Definitions 1. "Basis Adjustment to the Service Charge" means the Association's standard basis adjustment to the Service Charge for credits in the currency of denomination of the Credit, in effect at 12:01 a.m. Washington, D.C. time, on the date on which the Credit is approved by the Executive Directors of the Association and expressed either as a positive or negative percentage per annum. 2. "Clerk of Parliament" means the official who is the administrative head of the Recipient's parliament. 3. "Consolidated Fund" means the account for the Consolidated Fund as defined in the Recipient's Public Financial Management Act, 2016, and described in Article 46 thereof and Section 11I of the Recipient's Constitution (Act No.6 of 1991). 4. "Daily Summary Report" means the statement of daily transfers made by the Ministries, Departments and Agencies into the Treasury Single Account 5. "Dedicated Account" means the account referred to in Part D (1) of Section II of Schedule 1 of this Agreement. 6. "Electricity Distribution and Supply Authority" means an agency responsible for distribution, supply and retail sale of electricity in the Recipient's territory established and operating pursuant to the National Electricity Act, 2011 or its successor. 7. "Fiscal Year" means the Recipient's calendar year from January I to December 31. 8. "Leones" means the Recipient's local currency. 9. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Development Policy Financing", dated December 14, 2018. 10. "Ministries Departments and Agencies" or "MDAs" means the Recipient's government institutions responsible for carrying out various functions in the various sectors. 11. "MoBSSE" means the Recipient's Ministry of Basic and Senior Secondary Education or its successor. -9- 12. "Network Configuration Optimization Plan" means a plan adopted by the Recipient Board of EDSA to reduce power losses on the transmission and distribution network, as said plan may be amended from time to time. 13. "Network Energy Services Corporation" of NES" means a private US company responsible for smart grid infrastructure solutions incorporated under the General Corporation Law of Delaware on September 16,:2014, or its successor. 14. "Program" means: the program of objectives, policies, and actions set forth or referred, to in the letter dated January 30, 2019, from the Recipient to the Association declaring the Recipient's commitment to the execution of the Program, and requesting assistance from the Association in support of the Program during its execution and comprising actions taken, including those set.forth in Section I of Schedule 1 to this Agreement, and actions to be taker consistent with the program's objectives. 15. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to "the date of the Financing Agreement" in the General Conditions. 16. "Single Withdrawal Tranche" tmeans the amount of the Financing allocated to the category entitled "Single Withdrawal Tranche" in. the table set forth in Part B of Section II of Schedule I to this Agreement. 17. "Supplementary Budget"means the.Recipient's Supplementary Budget dated July 13, 2018, as provided fbr in the Recipient's Public Financial Management Act, 2016. 18. "Teaching Service Commission" means the Recipient Teaching Service Commission established and operating pursuant to the Teaching Service Commission Act of 2011 or its successor. 19. "Technical Losses" means loss of power during its transmission and distribution in the network system. 20, "Transition Plan" means a plan dated May 22, 2017, defining the timeline and milestones for the transfer of flles, records and functionaries from Ministry of Basic and Senior Secondary Education to the Teaching Service Commission in accordance with the Teaching Service Commission Act of 2011. 21. "Treasury Single Account" or "TSA" means the account established by the Recipient in the BSL to manage the Recipient's cash balances.in a consolidated manner and as defined in the Recipient's Public Financial Management-Act, 2016.