IOFFICIAL DOCUMENTS 1818 H Street N.W. (202) 473-1000 The World Bank C p433 Cable Address: INTBAFRAD INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMEN Cable Address: INDEVAS U.S.A. INTERNATIONAL DEVELOPMENT ASSOCIATION August 20, 2014 Honorable Saada Mkuya Salum Minister of Finance Ministry of Finance P.O. Box 9111 Dar es Salaam Tanzania Tanzania: Advance Agreement for Preparation of Proposed Investment Project Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Supplemental Project Preparation Advance No. Q9280 -TZ Honorable Minister Salum: on behalf of the United In response to the request for financial assistance made you that the International Republic of Tanzania ("Recipient"), I am pleased to inform extend to the Recipient a Development Association ("World Bank") proposes to Preparation Facility in an supplemental advance out of the World Bank's Project States Dollars ($800,000) amount not to exceed eight hundred thousand United set forth or referred to in this ("Supplemental Advance") on the terms and conditions Annex, to assist in financing letter agreement ("Agreement"), which includes the attached advance of three million the activities described in the Annex ("Activities"). An initial 78 ) was granted United Sates Dollars (US$3,000,000) ("Initial Advance") (Pf total amount of the Initial to the Recipient on September 23, 2011, bringing the hundred thousand United Advance and Supplemental Advance to three million eight is to facilitate the preparation Sates Dollars ($3,800,000). The objective of the Activities of Tanzania (SAGCOT) of the proposed Southern Agricultural Growth Corridor the Recipient has requested Investment Project ("Project"), for the carrying out of which the World Bank's financial assistance. that: (a) it understands The Recipient represents, by confirming its agreement below, not constitute or imply any that the provision of the Supplemental Advance does the Project; and (b) it is commitment on the part of the World Bank to assist in financing out the Activities, repay the authorized to enter into this Agreement and to carry under this Agreement, all in Supplemental Advance and perform its other obligations accordance with the provisions of this Agreement. foregoing by having an Please confirm the Recipient's agreement to the of this Agreement, authorized official of the Recipient sign and date the enclosed copy and return it to the World Bank. Upon receipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date of the countersignature. Very truly yours, INTERNATIONAL DEVELOPMENT ASSOCIATION By Sajjad Ali Shah Acting Country Director for Tanzania, Uganda and Burundi Africa Region AGREED AND CONFIRMED: UNITED REPUBLIC OF TANZANIA B Authorized Representative Name: Y U W Title: A Ct 9 Date: 0 Enclosures: (1) "Standard Conditions for Advances Made by the World Bank under its Project Preparation Facility", dated July 31, 2010. (2) Disbursement Letter for the Advance of the same date as this Agreement, together with "World Bank Disbursement Guidelines for Projects", dated May 1, 2006. (3) Guidelines for "Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers", dated January 2011. (4) Guidelines: "Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers", dated January 2011. 1 (5) 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. 2 PPA No. Q9280-TZ ANNEX Article I Standard Conditions; Definitions 1.01. Standard Conditions. The Standard Conditions (as defined in the following Section 1.02 of this Annex) constitute an integral part of this Agreement. 1.02. Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Standard Conditions or in this Agreement, and the following additional terms shall have the following meanings: (a) "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 and revised in January 2011. (b) "Consultants' Guidelines" means the "Guidelines: Selection and Employment of dated Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" January 2011. of Goods, Works (c) "Procurement Guidelines" means the "Guidelines: Procurement Bank and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Borrowers" dated January 2011. (d) "Standard Conditions" means the "Standard Conditions for Advances Made by the World Bank under its Project Preparation Facility" dated July 31, 2010. Article II Execution of the Activities Advance is 2.01. Description of the Activities. The Activities for which the Supplemental provided consist of the following: of the (a) Provision of support for the Project coordination unit established within the Office Prime Minister for preparing the Project through the provision of consultant services, Goods and Equipment and Operating Costs. planning (b) Provision of support for the finalization of the operational manuals and strategic through the provision of for the Project's implementation and operationalization consultant services, goods and equipment, Workshops and Operating Costs. (c) Provision of support for the SAGCOT Catalytic Trust Fund for preparing the Project through the provision of consultant services and Operating Costs. the (d) Provision of support for the SAGCOT Center for preparing the Project through provision of consultant services and Operating Costs. (e) Provision of support for the finalization of the social assessment for the Project. 3 to the 2.02. Execution of the Activities Generally. The Recipient declares its commitment objectives of the Activities. To this end, the Recipient shall carry out the Activities in accordance the with the provisions of: (a) Article II of the Standard Conditions; (b) this Article II; and (c) Anti-Corruption Guidelines. 2.03. Monitoring, Reporting and Evaluation of the Activities. The Recipient shall monitor and evaluate the progress of the Activities in accordance with the provisions of Section 2.08 of the Standard Conditions. Without the limitation of the forgoing, the Recipient shall ensure that progress reports for the Activities are prepared and furnished to the World Bank not later than forty-five (45) days after the end of each calendar quarter, covering the quarter, in form and substance satisfactory to the World Bank. 2.04. FinancialManagement. (a) The Recipient shall ensure that a financial management system is maintained in accordance with the provisions of Section 2.09 of the Standard Conditions. (b) The Recipient shall ensure that interim un-audited financial reports for the days after Activities are prepared and furnished to the World Bank not later than forty-five (45) and substance satisfactory to the the end of each calendar quarter, covering the quarter, in form World Bank. with the (c) The Recipient shall have its Financial Statements audited in accordance provisions of Section 2.09 (b) of the Standard Conditions. has been (i) If, on or before the Refinancing Date, a Refinancing Agreement executed by all of its parties, the Recipient shall have the Financial Statements included in the first audit of financial statements required under the Refinancing Agreement. (ii) If, by the Refinancing Date, no Refinancing Agreement has been executed by all of its parties, such audit of the Financial Statements shall cover the period of the Supplemental Advance, commencing with the fiscal year in which the first withdrawal under the Supplemental Advance was made. The audited Financial Statements for such period shall be furnished to the World Bank not later than six (6) months after the end of the Recipient's fiscAl year in which the Refinancing Date occurs. (iii) Notwithstanding the provisions of paragraphs (i) and (ii) of this Section, the World Bank may request an audit of the Financial Statements prior to the Refinancing Date, covering such period as is indicated in its request. The audited Financial Statements for such period shall be furnished to the World Bank not later than six (6) months after the end of such period. 2.05. Procurement (a) General. All goods, non-consulting services and consultants' services required shall be for the Activities and to be financed out of the proceeds of the Supplemental Advance procured in accordance with the requirements set forth or referred to in: 4 and Non- (i) Section I of the "Guidelines: Procurement of Goods, Works consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Procurement Guidelines"), in the case of goods and non-consulting services; (ii) Sections I and IV of the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Consultant Guidelines") in the case of consultants' services; and (iii) the provisions of this Section, as the same shall be elaborated in the procurement plan prepared and updated from time to time by the Recipient for the Activities in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines ("Procurement Plan"). (b) Definitions. The capitalized terms used in the following paragraphs of this Bank of Section to describe particular procurement methods or methods of review by the World and III of the particular contracts, refer to the corresponding method described in Sections II and V of the Consultant Guidelines, as the case Procurement Guidelines, or Sections II, III, IV may be. Services (c) Particular Methods of Procurement of Goods and Non-consulting Goods and non-consulting services shall be procured under contracts awarded on the basis of Shopping. (d) Particular Methods of Procurement of Consultants' Services services (i) Except as otherwise provided in item (ii) below, consultants' shall be procured under contracts awarded on the basis of Quality- and Cost- based Selection. (ii) The following methods may be used for the procurement of consultants' services for those assignments which are specified in the Procurement Plan: (A) Least Cost Selection; (B) Selection based on Consultants' Qualifications; (C) Single-source Selection of consulting firms; (D) Selection of Individual Consultants; and (E) Single-source procedures for the Selection of Individual Consultants. Plan (e) Review by the World Bank of Procurement Decisions. The Procurement to the World Bank's Prior Review. All other shall set forth those contracts which shall be subject contracts shall be subject to Post Review by the World Bank. 5 Article III Withdrawal of the Supplemental Advance 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Supplemental (ii) this Advance in accordance with the provisions of: (i) Article III of the Standard Conditions; by notice to the Section; and (iii) such additional instructions as the World Bank may specify 2006, as Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May pursuant revised from time to time by the World Bank and as made applicable to this Agreement as set forth in the following table. The table to such instructions), to finance Eligible Expenditures financed out of the proceeds of the specifies each category of Eligible Expenditures that may be Advance allocated to each Supplemental Advance ("Category"), the amount of the Supplemental in each Category, and the percentage of expenditures to be financed for Eligible Expenditures Category: Amount of the Percentage of Supplemental Advance Expenditures to the Category Allocated Financed (expressed in Dollars) (inclusive of Taxes) (1) Goods, consultants' Services, 800,000 100% Workshops, and Operating Costs TOTAL AMOUNT 800,000 For the purpose of this paragraph, the term: (a) "Operating Costs" means incremental expenditures incurred for the preparation accommodation of the Project including maintenance and operation of vehicles, transport costs, for telephones, and per diem costs while travelling, office supplies, utilities, and expenditures and facsimiles, communication and advertising, but excluding salaries of civil servants; (b) "Workshops" includes services for the organization of the workshops and and per diem for conferences, materials and rental of facilities and equipment, local travel printing of documents, participants, travel, accommodation and per diem of participants, I communications, and various supplies needed for the workshops and conferences. of this 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 made prior to the date of countersignature Agreement, no withdrawal shall be made for payments of this Agreement by the Recipient. 3.03. Refinancing Date. The Refinancing Date is December 31, 2014. Article IV Terms of the Supplemental Advance on the Withdrawn 4.01. Service Charge. The Recipient shall pay a service charge of 1%) per annum. Supplemental Advance Balance at the rate of three-fourths of one percent (3/4 of the Supplemental The service charge shall accrue from the respective dates on which amounts in arrears in accordance with the provisions of Section Advance are withdrawn and shall be paid computed on the basis of a 360-day year of 4.02 of this Agreement. Service charges shall be twelve 30-day months. 6 shall be repaid by the 4.02. Repayment. The Withdrawn Supplemental Advance Balance thereon) in accordance Recipient to the World Bank (together with any service charges accrued and the following provisions: with the provisions of Article I of the Standard Conditions the Refinancing (a) Refinancing under the Refinancing Agreement: If, on or before then the full amount of the Date, a Refinancing Agreement has been executed by all of its parties, World Bank (together with any Withdrawn Supplemental Advance Balance shall be repaid to the date of repayment) as sobn as the service charges accrued on the Supplemental Advance to the by the World Bank of an Refinancing Agreement becomes effective, by means of a withdrawal Supplemental Advance Balance amount of the Refinancing Proceeds equivalent to the Withdrawn Refinancing Agreement. plus such service charges, in accordance with the provisions of the or before the (b) Repayment in the absence of a Refinancing Agreement: If, on by all of its parties, or if, by Refinancing Date, no Refinancing Agreement has been executed but terminates without becoming such date or at any time thereafter, it has been so executed , effective, then: Balance does not exceed (i) if the amount of the Withdrawn Supplemental Advance (together with $50,000, it shall be repaid by the Recipient to the World Bank Supplemental Advance Balance to the service charges accrued on the Withdrawn shall specify in a notice to the date of repayment) on such date as the World Bank following the date of Recipient, which shall in no event be earlier than 60 days dispatch of such notice; and exceeds (ii) if the amount of the Withdrawn Supplemental Advance Balance' accrued on the Withdrawn $50,000, it (together with service charges Balance") Supplemental Advance Balance to the Notice Date) (the "Aggregate equal shall be paid by the Recipient to the World Bank in ten approximately Dates") semiannual installments, in the amounts and on the dates ("Payment In no event which the World Bank shall specify in a notice to the Recipient. than 60 days following the date shall the first Payment Date be set earlier Recipient shall pay a service ("Notice Date") of dispatch of such notice. The of one percent charge on the Aggregate Balance at the rate of three-fourths The service (3/4 of 1%) per annum, payable in arrears on each Payment Date. of twelve 30-day charge shall be computed on the basis of a 360-day year months. Article V Recipient's Representative; Addresses referred to in Section 9.02 5.01. Recipient's Representative. The Recipient's Representative for finance. of the Standard Conditions is the Recipient's minister responsible 7 Section 9.01 of the Standard 5.02. Recipient's Address. The Recipient's Address referred to in Conditions is: Ministry of Finance P.O. Box 9111 Dar es Salaam Tanzania Cable Address: Facsimile: TREASURY (255) 222 11 77 90 Dar es Salaam to in Section 9.01 of the 5.03. World Bank's Address. The World Bank's Address referred Standard Conditions is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable: Telex: Facsimile: INDEVAS 248423 (MCI) or 1-202-477-6391 Washington, D.C. 64145 (MCI) 8