OFFICIAL DOCUMENTS GPE GRANT NUMBER TFOBOO95-NP Global Partnership for Education Grant Agreement (Additional Financing for the School Sector Development Program) between Nepal and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Grant Agent of the Global Partnership for Education Trust Fund Dated O7 ,2019 GPE GRANT NUMBER TFOBOO95-NP GLOBAL PARTNERSHIP FOR EDUCATION TRUST FUND GRANT AGREEMENT AGREEMENT dated NoAnew 21, 2019, entered into between: NEPAL ("Recipient") and the INTERNATIONAL DEVELOPMENT ASSOCIATION ("World Bank"), acting as a Grant Agent of the Global Partnership for Education Trust Fund ("GPE"), for the purpose of providing additional financing for activities related to the Program ("Agreement"). WHEREAS (A) The Recipient has adopted and is implementing the School Sector Development Program ("SSDP"); (B) Under the Original Financing Agreement (as such term is defined in the Appendix to this Agreement), the International Development Association agreed to provide to the Recipient a credit in an amount equivalent to one hundred thirty-six million two hundred thousand Special Drawing Rights (SDR 136,200,000) to assist in financing the Program; (C) The Recipient has requested the World Bank to provide additional financial assistance to the Program by making available to the Recipient a grant in an amount not to exceed twenty-three million nine hundred fifty-eight thousand United States Dollars (USD23,958,000); (D) The World Bank has agreed, on the basis, inter alia, of the foregoing, to extend a grant from the GPE to the Recipient on the terms and conditions set forth in this Agreement; and NOW THEREFORE, the Recipient and the World Bank hereby agree as follows: Article I Standard Conditions; Definitions 1.01. The Standard Conditions (as defined in the Appendix to this 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 Standard Conditions or in the Appendix to this Agreement. -2- Article II The Program 2.01. The Recipient declares its commitment to the objectives of the program described in Schedule 1 to this Agreement ("Program"). To this end, the Recipient shall carry out the Program through MOEST in accordance with the provisions of Article II of the Standard Conditions. 2.02. Without limitation upon the provisions of Section 2.01 of this Agreement, and except as the Recipient and the World Bank shall otherwise agree, the Recipient shall ensure that the Program is carried out in accordance with the provisions of Schedule 2 to this Agreement. Article III The Grant 3.01. The World Bank agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a grant in an amount not to exceed twenty-three million nine hundred fifty-eight thousand United States Dollars (USD23,958,000) ("Grant") to assist in financing the Program. 3.02. The Recipient may withdraw the proceeds of the Grant in accordance with Section IV of Schedule 2 to this Agreement. 3.03. The Grant is funded out of the abovementioned trust fund for which the World Bank receives periodic contributions from the donors to the trust fund. In accordance with Section 3.02 of the Standard Conditions, the World Bank's payment obligations in connection with this Agreement are limited to the amount of funds made available to it by the donors under the abovementioned trust fund, and the Recipient's right to withdraw the Grant proceeds is subject to the availability of such funds. Article IV Effectiveness 4.01. This Agreement shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that the Federal Government has developed and implemented reporting procedures satisfactory to the World Bank to ensure appropriate reporting by LGs to the Federal Government on the use of the Grant proceeds for their intended purposes. 4.02 This Agreement and all obligations of the parties under it shall terminate if it has not entered into effect by the date ninety (90) days after the date of this Agreement, unless the World Bank, after consideration of the reasons for the delay, establishes a later date for the purpose of this Section. The World Bank shall promptly notify the Recipient of such later date. -3- Article V Recipient's Representative; Addresses 5.01. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is the Secretary, Ministry of Finance of the Recipient. 5.02. The Recipient's address referred to in Section 7.01 of the Standard Conditions is: Ministry of Finance Government of Nepal Singha Durbar Kathmandu Nepal; and Facsimile: (977-1) 4211-164 5.03. The World Bank's address referred to in Section 7.01 of the Standard Conditions is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and Telex: Facsimile: 248423 (MCI) orl-202-477-6391 64145 (MCI) -4- AGREED at , , as of the day and year first above written. NEPAL By Auth rized Representative Name: C4L- h)L Title: R cy)c . C-q z' INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Grant Agent of the Global Partnership for Education Trust Fund By Aut4oriz&Ltre,inaive Name: "ce wYY' Title: VA )V (A\6 -5- SCHEDULE 1 Program Description The objective of the Program is to improve the quality, equitable access and efficiency of basic and secondary education in Nepal by supporting the Recipient's School Sector Development Program ("SSDP"). The Program is a subset of the SSDP and focuses on specific SSDP outcomes during FY2018/19-FY2020/21 in the following critical areas. Results Area 1: Improved Teaching-Learning and Student Learning Outcomes Supporting the Recipient's capacity to: (a) enhance learning opportunities for children in early years through improved early childhood education and development services and national early grade reading program; (b) improve curriculum through systematic revision of the NCF and phased implementation of reforms; (c) improve student assessment and examination system through implementation of NASA and standardized board examinations; (d) to improve school management and accountability through piloting of block grants scheme and performance-based grants scheme; and (e) improve teacher management, accountability and development through incentives to increase teacher time spent on teaching and improve availability of qualified teachers. Results Area 2: Improved Equitable Access to Basic and Secondary Education Supporting the Recipient's plan to reduce out of school children in basic education through school-based and Learning-Center based approaches and to increase retention in secondary education through implementation of pro-poor scholarship and pro-science scholarship scheme. Results Area 3: Strengthened Education System, Sector Planning, Management, and Governance Strengthening the Recipient's education system by improving the institutional capacity: (a) to implement enhanced fiduciary management system, education management information system, the Grants Management System; and (b) to achieve the goals under the SSDP. -6- SCHEDULE 2 Program Execution Section I. Implementation Arrangements A. Program Fiduciary, Environmental and Social Systems Without limitation upon the provisions of Article II of the Standard Conditions, the Recipient shall carry out the Program, or cause the Program to be carried out, in accordance with financial management, procurement and environmental and social management systems acceptable to the World Bank, including those set out in the Program Implementation Manual, and the Program Action Plan ("Program Fiduciary, Environmental and Social Systems") which are designed to ensure that: 1. the Grant proceeds are used for their intended purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and accountability; and 2. the actual and potential adverse environmental and social impacts of the Program are identified, avoided, minimized, or mitigated, as the case may be, all through an informed decision-making process. B. Anti-Corruption Without limitation upon the provisions of Part A of this Section, the Recipient shall carry out the Program, or cause the Program to be carried out, in accordance with the provisions of the Anti-Corruption Guidelines. C. Other Program Institutional and Implementation Arrangements 1 . Program Institutions (a) Without limitation upon the generality of Part A of this Section I, the Recipient shall maintain, throughout the period of implementation of the Program, the Steering Committee chaired by the MOEST Secretary with membership, powers, functions and competencies acceptable to the World Bank. (b) Without limitation upon the generality of Part A of this Section 1, the Recipient shall maintain, throughout the period of implementation of the Program, the SSDP Implementing Committee, headed by the Director General of the CEHRD, assisted by competent staff, all with -7- experience, qualification and terms of reference satisfactory to the World Bank, provided with such powers, financial resources, functions and competencies appropriate to fulfill their respective functions under the Program. (c) Without limitation upon the generality of Part A of this Section I, the Recipient shall maintain, throughout the period of implementation of the Program, the Financial and Budget Management Support Committee, housed within MOF: (i) headed by its Joint Secretary of International Economic Cooperation Coordination Division; (ii) assisted by competent staff, all with experience and qualification; and (iii) provided with such powers, financial resources, functions and competencies appropriate to fulfill their respective functions under the Program. 2. Additional Program Implementation Arrangements (a) Without limitation upon the generality of Part A of this Section I, the Recipient shall carry out the Program Action Plan in accordance with the schedule set out in the said Program Action Plan in a manner satisfactory to the World Bank. (b) In the event of any inconsistency between the provision of the Program Action Plan and those of this Agreement, the provisions of this Agreement shall prevail. 3. Annual Work Plan and Budget Without limitation upon the generality of Part A of this Section 1, the Recipient shall, throughout the Program implementation, prepare and share with the World Bank the draft AWPB for the subsequent FY, which includes activities under the Program Action Plan and the Program Support Facility. Section II. Excluded Activities The Recipient shall ensure that the Program excludes any activities which: A. in the opinion of the World Bank, are likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people; or -8- B. involve the procurement of: (i) works, estimated to cost $10,000,000 equivalent or more per contract; (ii) goods, estimated to cost $5,000,000 equivalent or more per contract; (iii) non-consulting services, estimated to cost $5,000,000 equivalent or more per contract; or (iv) consulting services, estimated to cost $3,000,000 equivalent or more per contract. Section III. Program Monitoring, Reporting and Evaluation; Audits A. Program Reports The Recipient shall monitor and evaluate the progress of the Program and prepare Program Reports in accordance with the provisions of Section 2.06 of the Standard Conditions. Each Program Report shall cover the period of one (1) Fiscal Year and shall be furnished to the World Bank not later than sixty (60) days after the end of each Fiscal Year. B. Program Financial Audits Without limitation upon the generality of Section L.A of this Schedule 2 and Section 2.07 of the General Conditions, the Recipient shall have the Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Unless otherwise agreed by the World Bank, 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 to the World Bank not later than nine (9) months after the end of such period. C. Independent Verification Agency 1 . Without limitation upon the generality of Section L.A of this Schedule 2, the Recipient shall maintain, throughout the period of implementation of the Program, the Independent Verification Agency in accordance with the terms of the MoU between the MOEST and the Independent Verification Agency. 2. The Recipient shall furnish to the Independent Verification Agency and the World Bank any information and/or documentation that the Independent Verification Agency and/or the World Bank shall reasonably require for the monitoring, audit, analysis and/or verification of the achievement/fulfillment of the DLRs set out in Schedule 3 to this Agreement. -9- Section IV. Withdrawal of Grant Proceeds A. General 1. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of Article III of the Standard Conditions, this Section, and such additional instructions as the World Bank may specify from time to time by notice to the Recipient to finance the results ("Disbursement Linked Results" or "DLRs") achieved by the Recipient, as measured against specific indicators ("Disbursement Linked Indicators" or "DLIs"); all as set forth in the table in paragraph 2 of this Part A and Schedule 3 to this Agreement. 2. The following table specifies each category of withdrawal of the proceeds of the Grant (including the Disbursement Linked Indicators as applicable) ("Category"), the Disbursement Linked Results for each Category (as applicable), and the allocation of the amounts of the Grant to each Category. Notwithstanding the foregoing, the actual amount authorized for disbursement against each Disbursement Linked Results for each Category corresponding to a Disbursement Linked Indicator ("Allocated Amount") and/or the formula for its determination are set forth in Schedule 3 to this Agreement. Category Amount of the Grant (including Disbursement Linked Allocated Indicator as applicable) (expressed in USD) (1) DLI #1: Strengthened governance, 16,600,000 fiduciary management, data systems and institutional capacity for results-based program implementation. (2) DLI #2: Improved access to basic 2,400,000 schools and retention in secondary schools. (3) DLI #7 1 Strengthening reading 4,958,000 proficiencies and habits in early grades TOTAL AMOUNT 23,958,000 B. Withdrawal Conditions; Withdrawal Period 1 . Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) for purposes of Section 3.04 of the Standard Conditions (renumbered as such pursuant to paragraph 5 of Section II of the Appendix to this The numbering of DLs is aligned with the DLIs under the Original Financing Agreement. - 10 - Agreement and relating to Program Expenditures), for DLRs achieved prior to the date of this Agreement; or/and (b) for any DLR under Category (1), (2), or (3), until and unless the Recipient has furnished evidence satisfactory to the World Bank that said DLR has been achieved. 2. Notwithstanding the provisions of Part B.1(b) of this Section, if any of the DLRs under Category (1), (2) or (3) has not been achieved by the end of the Fiscal Year in which the said DLR is set to be achieved, the World Bank may, by notice to the Recipient: (a) authorize the withdrawal of such lesser amount of the unwithdrawn proceeds of the Grant then allocated to said Category which, in the opinion of the World Bank, corresponds to the extent of achievement of said DLR, said lesser amount to be calculated in accordance with the formula set out in Schedule 3 to this Agreement; (b) withhold all or portion of the proceeds of the Grant then allocated to said DLR(s) until said DLR(s) is/are satisfactorily met; (c) reallocate all or a portion of the proceeds of the Grant then allocated to said DLR to any other DLR; and/or (d) cancel all or a portion of the proceeds of the Grant then allocated to said DLR. 3. The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is July 15, 2021. 4. Notwithstanding the foregoing provisions of this Section IV, if at any time after the Closing Date the Recipient has failed to provide evidence satisfactory to the World Bank that the amount of the Grant withdrawn from the Grant Account does not exceed the total amount of Program Expenditures (exclusive of any such expenditures financed by any other financer or by the World Bank under any other loan, credit or grant), the Recipient shall, promptly upon notice from the World Bank, refund to the World Bank such excess amount of the Grant withdrawn from the Grant Account. The World Bank shall cancel the refunded amount of the Grant withdrawn from the Grant Account. - 11 - SCHEDULE 32 DISBURSEMENT-LINKED RESULTS (DLRs) TOTAL DLI RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED DISBURSEMENT-LINKED ALLOCATION IN YEAR 1 IN YEAR 2 IN YEAR3 INDICATOR (DLls) BASELINE (BY JULY 15, 2019) (JULY 16, 2019 -JULY 15, (JULY 16, 2020 -CLOSING 2020) DATE) DLR 1.7, 1.9: DLR 1.7: DLR 1.9: LG AWPB do 75 LGs have integrated 65 additional LGs have not include SSDP activities in their integrated SSDP activities SSDP AWPB in their AWPB activities (provided that the LGs under DLR 1.7 have 1. Strengthened continued to integrate governance, SSDP activities in their fiduciary AWPB) management, data systems and institutional capacity DLR 1.8, DLR 1.8: DLR 1.10: DLR 1.11: for results-based 1.10, 1.11: 200 LGs have made data on 100 additional LGs have program conditdiionionalav plegramn o L t conditional grants released made data on conditional madidatnon ondiiona implementation LGs do not to individual schools, grants released to made data on conditional report data on consistent with the Grant individual schools, grants released to conditional Management Guideline, consistent with the Grant . ' grants released . . consistent with the Grant to schools public on user-friendly Management Guidelme, Management Guideline, websites (or accessible public on user-friendly spaces) websites (or accessible spaces)spaces) 2 The numbering of DLIs/DLRs is aligned with the DLls/DLRs under the Original Financing Agreement. - 12 - DISBURSEMENT-LINKED RESULTS (DLRs) TOTAL DLI RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED DISBURSEMENT-LINKED ALLOCATION IN YEAR I IN YEAR 2 IN YEAR 3 INDICATOR (DLIs) BASELINE (BY JULY 15,2019) (JULY 16,2019-JULY 15, (JULY 16,2020-CLOSING 2020) DATE) (provided that the LGs (provided that the LGs under DLR 1.8 have (rvddta h G under DLR 1.8 and DLR continued to make such 1.10 have continued to data public on user-friendly make such data public on websites (or accessible user-friendly websites (or spaces)) accessible spaces)) $16,600,000 $8,300,000 $7,700,000 $600,000 DLR 1.7 DLR 1.9 Roll over: Yes Roll over: Yes Deadline for achievement: Deadline for achievement: July 15, 2021 July 15, 2021 Financine Formula: Financini Formula: AllocatedAmounts US$3,300,000 if 37 LGs US$3,900,000 if 33 LGs (USD) have integrated SSDP have integrated SSDP activities in their AWPB activities in their AWPB and thereafter US$100,000 and thereafter for each additional LGs US$100,000 for additional that has integrated the LGs that has integrated SSDP in their AWPB, with the SSDP in their AWPB, a maximum of with a maximum of US$7,100,000 (= total of US$7,100,000 (= total of 75 LGs) 65 LGs) DLR 1.8 DLR 1.10 DLR 1.11 - 13 - DISBURSEMENT-LINKED RESULTS (DLRs) TOTAL DLI RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED DISBURSEMENT-LINKED ALLOCATION IN YEAR I IN YEAR 2 IN YEAR 3 INDICATOR (DLIs) BASELINE (BY JULY 15,2019) (JULY 16,2019-JULY 15, (JULY 16,2020-CLOSING 2020) DATE) Roll over: Yes Roll over: Yes Roll over: No Deadline for achievement: Deadline for achievement: Deadline for achievement: July 15, 2021 July 15, 2021 July 15, 2021 Financing Formula: Financing Formula: Financing Formula: US$600,000 if 100 LGs US$300,000 if 50 LGs US$300.000 if 50 LGs have made data on have made data on have made data on conditional grants released conditional grants released conditional grants released to schools, consistent with to schools, consistent with to schools, consistent with the Grant Management the Grant Management the Grant Management Guideline, public on user- Guideline, public on user- Guideline, public on user- friendly websites (or friendly websites (or friendly websites (or accessible space) and accessible space) and accessible space) and thereafter US$6,000 for thereafter US$6,000 for thereafter US$6,000 for each additional LG, with a each additional LG, with a each additional LG, with a maximum of maximum of US$600,000 maximum of US$600,000 US$1,200,000 (= total of (= total of 100 LGs) (= total of 100 LGs) 200 LGs) 2. Improved access DLR 2.6: DLR 2.6: DLR 2.7: to basic schools and Household OOSC have been reduced OOSC have been reduced retention in secon schools surveys on by 30% in 15 Targeted by 5_6% nationwide secondary sOOSC Districts conducted in Fiscal Year 2017/18 in - 14 - DISBURSEMENT-LINKED RESULTS (DLRs) TOTAL DLI RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED DISBURSEMENT-LINKED ALLOCATION IN YEAR I IN YEAR 2 IN YEAR 3 INDICATOR (DLs) BASELINE (By JULY 15, 2019) (JULY 16,2019- JULY 15, (JULY 16, 2020- CLOSING 2020) DATE) each Targeted District DLR 2.7: 10.6% of school children in the age group from 7-12 are OOCS nationwide Allocated Amounts $2,400,000 $1,200,000 $1,200,000 Roll over: No Roll over: No Deadline for achievement: Deadline for achievement: July 15, 2019 July 15, 2021 Financing Formula: Financing Formula: US$600,000 if OOSC US$600,000 if OOSC have have been reduced by been reduced by 15%, and 2.6%, and thereafter thereafter US$40,000 for US$200,000 for each each additional percent of additional percent of reduction, with a reduction with a maximum of maximum of US$1,200,000 (= total of US$1,200,000 (= total of 30% reduction) 5.6% reduction) - 15- DISBURSEMENT-LINKED RESULTS (DLRs) TOTAL DLI RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED DISBURSEMENT-LINKED ALLOCATION IN YEAR I IN YEAR 2 IN YEAR 3 INDICATOR (DLIs) BASELINE (BY JULY 15,2019) (JULY 16,2019-JULY 15, (JULY 16,2020-CLOSING 2020) DATE) DLR 7.1: DLR 7.2: DLR 7.3: All LGs in 20 Districts All LGs in 9 additional All LGs in 9 additional have implemented the Districts have Districts have NEGRP minimum package implemented the NEGRP implemented the NEGRP in at least 80% of minimum package in at minimum package in at 7. Proficiencies and community schools least 80% of community least 80% of community habits strengthened schools schools in early grades (provided that all LGs (provided that all LGs under DLR 7.1 have under DLR 7.1 and DLR continued to implement the 7.2 have continued to NEGRP minimum package implement the NEGRP in at least 80% of minimum package in at community schools) least 80% of community schools) $4,958,000 $1,000,000 $1,979,000 $1,979,000 Roll over: Yes Roll over: Yes Roll over: No Allocated Amounts Deadline for achievement: Deadline for achievement: Deadline for achievement: July 15, 2021 July 15, 2021 July 15, 2021 Financing Formula: Financing Formlac: Financing Formula: - 16 - DISBURSEMENT-LINKED RESULTS (DLRs) TOTAL DLI RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED RESULTS TO BE ACHIEVED DISBURSEMENT-LINKED ALLOCATION IN YEAR I IN YEAR 2 IN YEAR 3 INDICATOR (DLIs) BASELINE (By JULY 15, 2019) (JULY 16, 2019-JULY 15, (JULY 16, 2020 -CLOSING 2020) DATE) US$500,000 if NEGRP US$1,099,000 if 5 US$1,099,000 if LGs in 5 minimum package is additional Districts have additional Districts have implemented in 18 implemented the NEGRP implemented the NEGRP districts and thereafter minimum package, and minimum package, and US$250,000 per additional thereafter, US$220,000 thereafter, US$220,000 District, with a maximum for each additional for each additional of US$1,000,000 District, with a maximum District, with a maximum of US$1,979,000 (= total of US$1,979,000 (= total of 9 additional Districts) of 9 additional Districts) - 17- APPENDIX Section I. Definitions 1. "Allocated Amount(s)" means the amount allocated to each individual DLR, or determined for each DLR pursuant to the formula detailed in Schedule 3 to this Agreement, as such amount might be increased, reallocated and/or cancelled (whether partially or in its entirety) by the World Bank, from time to time as the case may be, in accordance with the provisions of Section IV.B.2 of Schedule 2 to this Agreement. 2. "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing", dated February 1, 2012, and revised July 10, 2015. 3. "AWPB" means the Annual Work Plan and Budget, a plan and budget of the SSDP to be approved by the Recipient for each FY and uploaded electronically to the website of CEHRD and MOEST. 4. "Category" means a category set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 5. "CEHRD" means the Recipient's Centre for Education and Human Resources Development, or any successor thereto. 6. "CLA" means the central-level agencies under the MOEST, supporting the SSDP implementation. 7. "Disbursement Linked Indicator" or "DLI" means in respect of a given Category, the indicator related to said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 8. "Disbursement Linked Result" or "DLR" means in respect of a given Category, the result under said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement, on the basis of the achievement of which, the amount of the Grant allocated to said result may be withdrawn in accordance with the provisions of said Section IV. 9. "District" means the subdivision of an administrative unit of the Recipient, or any successor thereto. - 18- 10. "Federal Government" means the Government of Nepal, pursuant to Section 75(3) of the Recipient's Constitution, as one of the three levels of government, as described under Article 56 of the Recipient's Constitution. 11. "Financial and Budget Management Support Committee" means a committee housed within MOF headed by its Joint Secretary of International Economic Cooperation Coordination Division and responsible for the monitoring of Program results, including the DLRs, and ensuring that adequate resources are made available to achieve those results. 12. "Fiscal Year" or "FY" means the Recipient's fiscal year, which begins on July 16 of each calendar year and ends on July 15 of the following calendar year. 13. "Grant Management Guidelines" means the guidelines adopted by MOEST/ CEHRD on April 30, 2017, as may be amended from time to time. 14. "Independent Verification Agency" means an independent institution which has been selected based on established criteria set out in the terms of reference acceptable to the World Bank to verify the achievement of the DLI based on a detailed DLI verification protocol jointly endorsed by the MOEST and the World Bank. 15. "Local Governments" or the acronym "LGs" means the Recipient's local governments as set out in the Recipient's Constitution. 16. "MOE" means the Recipient's Ministry of Education, which has been succeeded by MOEST. 17. "MOEST" means the Recipient's Ministry of Education, Science and Technology, or any successor thereto. 18. "MOF" means the Recipient's Ministry of Finance, or any successor thereto. 19. "MOFAGA" means the Recipient's Ministry of Federal Affairs and General Administration, or any successor thereto. 20. "MoU" means the memorandum of understanding between the MOEST and the Independent Verification Agency, setting out the terms of reference and operational modality of DLI verification under the Program. -19- 21. "NASA" means the National Assessment of Student Achievement system for school education, initiated by the MOE through its ERO Guidelines 2011. 22. "NCF" means the National Curriculum Framework for school education initially adopted by the Recipient's National Curriculum Development and Evaluation Council in 2007, setting forth grade-specific competencies. 23. "NEGRP" means the Recipient's national early grade reading program. 24. "OOSC" means out of school children who are 7-12 years old who have not been to school at least for 6 months. 25. "Original Financing Agreement" means the financing agreement for the School Sector Development Program between the Recipient and the World Bank, dated June 22, 2017, as such agreement may be amended from time to time. 26. "Program Action Plan" means the Recipient's plan dated April 22, 2019 and referred to in Section 1.C.2. of Schedule 2 to this Agreement, as may be amended from time to time with the prior agreement of the World Bank. 27. "Program Fiduciary and Environmental and Social Systems" means the Recipient's systems for the Program referred to in Section L.A of Schedule 2 to this Agreement. 28. "Program Implementation Plan" means the implementation plan for the Program referred to in Section I.A. of Schedule 2 to this Agreement, as may be amended from time to time with the prior agreement of the World Bank. 29. "Program Support Facility" and the acronym "PSF" mean a sub-results area of the Program with supporting activities which provide technical assistance and operational support to program management, monitoring and evaluation. 30. "SSDP Implementing Committee" means the implementing committee under the CEHRD, or its successor thereto, responsible for overall implementation and coordination of the SSDP activities across MOEST, CEHRD, and CLAs of MOEST. 31. "Standard Conditions" means the "S?andard Conditions for Grants Made by the World Bank Out of Various Funds ", dated February 15, 2012, with the modifications set forth in Section II of this Appendix. - 20 - 32. "Steering Committee" means the SSDP steering committee, or its successor thereto, established on October 23, 2016, through the Decision of the Recipient's Minister of Education, overseeing the coordination, monitoring, verification of implementation progress and implementation of the SSDP. 33. "Targeted Districts" means the districts targeted for interventions under the Program based on equity index. Section II. Modifications to the Standard Conditions The Standard Conditions are modified as follows: 1. Wherever used throughout the Standard Conditions, the term "the Project" is modified to read "the Program", the term "Project Report" is modified to read "Program Report", and the term "Eligible Expenditure" is modified to read "Program Expenditure". 2. Section 3.03, Special Commitment by the World Bank, is deleted in its entirety, and the subsequent Sections in Article III are renumbered accordingly. 3. In Section 3.03 (originally numbered as Section 3.04), the phrase "or to request the World Bank to enter into a Special Commitment" is deleted. 4. The section originally numbered as Section 3.05, Designated Accounts, is deleted in its entirety, and the subsequent Sections in Article III are renumbered accordingly. 5. Paragraph (a) of Section 3.04 (originally numbered as Section 3.06), Eligible Expenditures (renamed "Program Expenditures" in accordance with paragraph I of this Section II), is modified to read: "(a) the payment is for the reasonable cost of expenditures required for the Program and to be financed out of the proceeds of the Grant in accordance with the provisions of the Grant Agreement;". 6. Paragraph (a) of Section 3.05 (originally numbered as Section 3.07), Financing Taxes, is modified to read: "(a) The Grant Agreement may specify that the proceeds of the Grant may not be withdrawn to pay for Taxes levied by, or in the territory of, the Member Country on or in respect of Program Expenditures, or on their importation, manufacture, procurement or supply. In such case, if the amount of any such Taxes decreases or increases, the World Bank may, by notice to the Recipient, exclude such amount or such Tax from the Program Expenditures to be financed out of the proceeds of the Grant specified in the Grant Agreement, as required to ensure consistency with such limitation on withdrawals." -21 - 7. The last sentence of Section 3.05 (originally numbered as Section 3.07), Financing Taxes, is modified to read: "To that end, if the World Bank at any time determines that the amount of any such Tax is excessive, or that such Tax is discriminatory or otherwise unreasonable, the World Bank may, by notice to the Recipient, exclude such amount or such Tax from the Program Expenditures to be financed out of the proceeds of the Grant specified in the Grant Agreement, as required to ensure consistency with such policy of the World Bank.". 8. Section 3.06 (originally numbered as Section 3.08), Reallocation, is modified to read: "Notwithstanding any allocation of an amount of the Grant to a withdrawal category under the Grant Agreement, the World Bank may, by notice to the Recipient, reallocate any other amount of the Grant to such category if the World Bank reasonably determines at any time that such reallocation is appropriate for the purposes of the Program." 9. Section 4.01, Cancellation by the Recipient, is modified to read: "The Recipient may, by notice to the World Bank, cancel any unwithdrawn amount of the Grant." 10. Paragraph (d) of Section 4.03, Cancellation by the World Bank, entitled "Misprocurement", is deleted, and subsequent paragraph (e) is re-lettered accordingly. 11. Section 4.04, Amounts Subject to Special Commitment Unaffected, is deleted in its entirety, and subsequent Sections in Article IV and references to such Sections are renumbered accordingly. 12. In the Appendix, Definitions, all references to Section numbers are modified, as necessary, to reflect the modifications set forth above. In addition, the definition of the term "Special Commitment" set forth in paragraph 22 is deleted in its entirety, and all subsequent paragraphs are renumbered accordingly. 13. In the Appendix, Definitions, the definition number 10 is modified to read: "Program Expenditure" means an expenditure that meets the requirements of Section 3.06, incurred under the following budget headings of the MOEST: 350016-3, 350017-3, 350023-4, 350140-3, 350140-4, 350023-3, 350806-3, 350806-4; budget headings 701-707 of the provincial governments for SSDP and budget heading 801 of the LGs for SSDP; as the numbering of such corresponding budget lines may be revised from time to time with the agreement of the World Bank but without affecting the description of the Program.