OFFICIAL DOCUMENTS CREDIT NUMBER 6275-GD Financing Agreement (First Fiscal Resilience and Blue Growth Development Policy Financing) between GRENADA And INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 6275-GD FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between GRENADA ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") for the purpose of 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) the actions which the Recipient has already taken under the Program and which are described in Section I of Schedule 1 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; 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 or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01 The Association agrees to extend to the Recipient a credit, deemed by the Association to be on concessional terms, as set forth or referred to in this Agreement, in the amount of thirty million Dollars (USD30,000,000) (variously, "Credit" and "Financing"). 2.02. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.03. The Service Charge is the greater of: (a) the sum of three-fourths of one percent (3/4 of 1%) per annum plus the Basis Adjustment to the Service Charge; and (b) three-fourths of one percent (3/4 of 1%) per annum; on the Withdrawn Credit Balance. 2.04. The Payment Dates are March 15 and September 15 in each year. 2.05. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 2 to this Agreement. -2- 2.06. The Payment Currency is Dollar. 2.07. 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 II as the Association may, from time to time, reasonably request. 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 materially reversing any action taken under the Program including any action specified in Section I of Schedule 1 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. (b) An action has been taken or a policy has been adopted by the Recipient to reverse any action or policy under the Program including any action listed in Section I of Schedule 1 to this Agreement. 4.02. The Additional Event of Acceleration consists of the following, namely that any event specified in paragraphs (a) or (b) of Section 4.01 of this Agreement occurs and is continuing for a period of sixty (60) days after notice of the event has been given by the Association to the Recipient. -3- ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following, namely that 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 (20) years after the Signature Date. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its Minister of Finance, Planning, Economic and Physical Development. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance, Planning, Economic and Physical Development Financial Complex The Carenage St. George's Grenada; and (b) the Recipient's Electronic Address is: Facsimile: E-mail: 1-473-440-4115 psfinancegrenada@gmail.com 6.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: -4- Telex: Facsimile: E-mail: 248423 (MCI) 1-202-477-6391 tsayed@worldbank.org AGREED as of the Signature Date. GRENADA By: B: uth rizedtepresent rve Name: Dr. E. Angus Friday Title: Ambassador of Granada Date: June 27, 2018 INTERNATIONAL DEVELOPMENT ASSOCIATION By: Authorized Representative Name: Tahseen Saved Title: Country Director, Latin America and Caribbean Region Date: June 27, 2018 -5- SCHEDULE 1 Program Actions; Availability of Financing Proceeds Section I. Actions under the Pro2ram A. Actions Taken Under the Program. The actions taken by the Recipient under the Program include the following: 1 . The Recipient has (a) operationalized FROC as evidenced by the adoption and publication of the Notice of Appointment for said FROC on the Recipient's Government Gazette dated August 18, 2017 and the release of the FROC 2016 Annual Report dated November 10, 2017 as published on the following website: http://www.gov.gd/egov/docs/reports/froc-report.pdf ; and (b) caused FROC to present said report to Parliament, as evidenced by the letter dated November 21, 2017 sent by FROC Chairman to the Clerk of Parliament to submit the FROC 2016 report, published on page 3 of said report. 2. The Recipient's Cabinet of Ministers has approved the Compensation Management Policy Framework for the public sector in line with the parameters of the Fiscal Responsibility Act, as evidenced by the Advance Cabinet Conclusion dated April 3, 2018. 3. The Recipient has established an Appeals Commission for the Customs and Excise Division with a view to improving trader services and enhancing compliance, as evidenced by the Cabinet Conclusion No. 273 dated February 27, 2017. 4. The Recipient has amended the Customs Act No. 9 of 2015 with a view to strengthen customs administration and improve the adoption of electronic declarations and other automatic processes, as evidenced by the enactment of Act No. 32 of 2017 dated December 22, 2017 and Act No. 35 of 2017 dated December 28, 2017, both published in the Recipient's Government Gazette on December 29, 2017 ; as well as the enactment of Act No. 6 of May 8, 2017, as published in the Recipient's Government Gazette on May 19, 2017. 5. The Recipient, through its Ministry of Finance, has established a report card system to track key performance indicators of the commercial state-owned enterprises, as evidenced by the Cabinet Conclusion No. 297 dated March 5, 2018. 6. The Recipient has: (a) established the Grand Anse Marine Protected Area as evidenced by the Advance Cabinet Conclusion dated March 5, 2018; and (b) established the Blue Innovation Institute, as evidenced by the Cabinet Conclusion No. 1245 dated August 28, 2017. -6- 7. The Recipient's Cabinet of Ministers has approved: (a) a total ban on styrofoam food containers; and (b) a total ban on plastic shopping bags (single use bags), disposable plastic plates, spoons and forks, with a view to facilitating optimal conditions for ecosystem restoration, rehabilitation and recovery and improving the quality of the marine environment, both as evidenced by the Advance Cabinet Conclusion dated March 5, 2018. 8. The Recipient has updated its National Climate Change Policy and National Adaptation Plan, with a view to reiterating its commitment to the NDCs, as evidenced by the Cabinet Conclusion No. 1568 dated October 30, 2017. 9. The Recipient has modified its building codes with a view to improve resilience of housing infrastructure, as evidenced by the enactment of Act No. 23 of 2017 dated September 29, 2017 amending the Physical Planning and Development Control Act No. 23 of 2016, published in the Recipient's Government Gazette on October 6, 2017. Section II. Availability of Financinig 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 specify 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: Allocations Amount of the Financing Allocated (expressed in USD) (1) Single Withdrawal 30,000,000 Tranche TOTAL AMOUNT 30,000,000 C. Withdrawal Tranche Release Conditions. 1. 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 of the Recipient's macroeconomic policy framework. -7- D. Deposit of Financing Amounts. 2. The Recipient, within thirty (30) days after the withdrawal of the Financing from the Financing Account, shall report to the Association: (a) the exact sum received into the account referred to in Section 2.03 (a) of the General Conditions; and (b) the record that an equivalent amount has been accounted for in the Recipient's budget management systems. F. Closing Date. The Closing Date is December 31, 2019. -8- SCHEDULE 2 Repayment Schedule Date Payment Due Principal Amount of the Credit repayable (expressed as a percentage)* On each March 15 and September 15: commencing September 15, 2028 to and 1% including March 15, 2038 commencing September 15, 2038 to and 2% including March 15, 2058 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.05 (b) of the General Conditions. -9- APPENDIX Definitions 1. "Appeals Commission for the Customs and Excise Division" means the Recipient's commission established to improve trader services and enhancing compliance, as operating in accordance with the Recipient's Cabinet Conclusion No. 273 dated February 27, 2017. 2. "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. 3. "Blue Innovation Institute" means the Recipient's institute established and operating under the Recipient's Cabinet Conclusion No. 1245 dated August 28, 2017. 4. "Compensation Management Policy Framework" means the Recipient's management policy framework as established and operating under the Recipient's Cabinet Conclusion dated April 3, 2018. 5. "Fiscal Responsibility Act 2015" means the Recipient's Act No. 29 of 2015 dated August 25, 2015, as published on the Recipient's Government Gazette on September 4, 2015 (No 39). 6. "FROC" means the Recipient's Fiscal Responsibility Oversight Committee in charge of undertaking monitoring of the fiscal rules and key parameters of the Fiscal Responsibility Act 2015 established and operating under said Fiscal Responsibility Act (section 14), as amended. 7. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Development Policy Financing", dated July 14, 2017. 8. "National Adaptation Plan" means the Recipient's national adaptation plan, established and operating under the Recipient's Cabinet Conclusion No. 1568 dated October 30, 2017. 9. "National Climate Change Policy" means the Recipient's national climate change policy, established and operating under the Recipient's Cabinet Conclusion No. 1568 dated October 30, 2017. -10- 10. "NDCs" means "Nationally Determined Contributions", the long-term goals established under the Paris Agreement ("COP-21") dated December 12, 2015 (enhancing the implementation of the United Nations Framework Convention on Climate Change, adopted in New York on May 9, 1992), requiring each country to reduce national emissions, adapt to the impacts of climate change and prepare, communicate and maintain successive nationally determined contributions. 11. "Program" means: the program of objectives, policies, and actions set forth or referred to in the letter dated March 8, 2018 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 taken consistent with the program's objectives. 12. "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. 13. "Single Withdrawal Tranche" means 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 1 to this Agreement.