OFFICIAL DOCUMENTS. Loan Agreement

Transcription

1 Public Disclosure Authorized OFFICIAL DOCUMENTS LOAN NUMBER 8796-IQ Public Disclosure Authorized Loan Agreement (Baghdad Water Supply and Sewerage Improvement Project) between REPUBLIC OF IRAQ Public Disclosure Authorized and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized

2 LOAN NUMBER 8796-IQ LOAN AGREEMENT AGREEMENT dated as of the Signature Date between the REPUBLIC OF IRAQ ("Borrower") and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement 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 - LOAN The Bank agrees to lend to the Borrower the amount of two hundred ten million Dollars ($210,000,000), as such amount may be converted from time to time through a Currency Conversion ("Loan"), to assist in financing the project described in Schedule 1 to this Agreement ("Project") The Borrower may withdraw the proceeds of the Loan in accordance with Section III of Schedule 2 to this Agreement The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount The Commitment Charge is one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance The interest rate is the Reference Rate plus the Variable Spread or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions The Payment Dates are February 15 and August 15 in each year The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement. ARTICLE III - PROJECT The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall carry out the Project through the Mayoralty of Baghdad

3 -2- ("MoB") in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV - EFFECTIVENESS The Effectiveness Deadline is the date ninety (90) days after the Signature Date. ARTICLE V - REPRESENTATIVE; ADDRESSES The Borrower's Representative is its minister responsible for finance For purposes of Section of the General Conditions: (a) the Borrower's address is: Ministry of Finance Hay Alaloom Bab Al Mu'dham Baghdad, Iraq; and (b) the Borrower's Electronic Address is: s.hadeethi@mof.gov.iq For purposes of Section of the General Conditions: (a) the Bank's address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America; and (b) the Bank's Electronic Address is: Telex: Facsimile: (MCI) or (MCI)

4 -3- AGREED as of the Signature Date. REPUBLIC OF IRAQ By Authorized Representative Name: f4 kl cl Title: TVk Aj~VV 4 "'- Date: , INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: : Title: Date: y)

5 -4- SCHEDULE 1 Project Description The objective of the Project is to improve the quality of drinking water supply and wastewater services in Baghdad. The Project consists of the following parts: Part 1: Institutional Strengthening for Integrated Urban Water Management and Utility Management, and Creating an Enabling Environment for Private Sector Management (a) (b) (c) (d) Assessing the MoB's institutional knowledge and preparedness for integrated urban water management and water security management, including, climate change adaptation measures, sustainability of water use, potential use of groundwater and non-conventional water sources, undertaking associated studies and preparing appropriate master plans for the purpose. Undertaking a comprehensive assessment of Baghdad Water Authority ("BWA") and Baghdad Sewerage Authority ("BSA") revenue administration systems as well as business processes and implementing key recommendations (including, preparation of a revenue administration manual, business process re-engineering and Training of staff), all with a view to improve water billing and collection processes. Acquisition, installation and operationalization of: (i) commercial management systems incorporating modem billing, account collection and customer information systems for BWA and BSA; (ii) modem financial and accounting management systems for BWA and BSA, including, disbursement, auditing and monitoring arrangements; and (iii) modem infrastructure/asset management databases for BWA and BSA. Strengthening the capacity of the Project Management Unit ("PMU") for designing, preparing and structuring long-term bankable investment projects in the sector (including, innovating financing aspects, public-private partnerships, procurement and contract management aspects), through participation in study tours, provision of Training and carrying out of associated studies. Part 2: Investment in Drinking Water Supply and Wastewater Infrastructure (a) Construction of an R2 reservoir on the east side of Baghdad, comprising of a twin compartment concrete ground level reservoir, inlet and outlet works, reservoir overflow systems, pumping stations including pumps, piping system, standby

6 -5- generator station, chlorination station, guard house, fuel tank, store warehouse, access road and landscaping, and security towers. (b) (c) (d) (e) (f) Rehabilitation of approximately 29 sewerage pumping stations including the main network, namely, Dora main sewerage pumping station; Habibiya main sewerage pumping station; 22 sewerage and storm water pumping stations in Rasafa; and Ghazalya main sewerage system including the main trunk and five pumping stations. Piloting water loss reduction activities in Shaab and Rasheed municipalities of Baghdad, through establishment and operationalization of district metered areas, preparation of a customer database, installation or replacement of customer meters, establishment of an active non-revenue water management system and acquisition and installation of a SCADA system. Establishment and operationalization of a non-revenue water unit in BWA. Undertaking a comprehensive assessment of the shared roles and responsibilities of BWA and the municipalities for management of the integrated water network (such as non-revenue water management and reduction, establishment of district metered areas, installation of customer meters, repair of leaks, service connection replacement, distribution network replacement, among others) to identify gaps and make recommendations for improvement. Provision of engineering and other consulting services for, inter alia, reviewing detailed designs, preparation of bidding documents, preparation of bid evaluation reports, supervision and management of construction and other works (including, environmental and social impacts due diligence), under the Project, all with a view to strengthening the capacity of the BWA and BSA for supervision and management of Project. Part 3: Project Management, Studies and Monitoring and Evaluation (a) (b) Strengthening the capacities of the MoB, BWA, BSA and the PMU for implementation, coordination and management of activities under the Project (including, inter alia, procurement, financial management, technical and financial audits, environmental and social safeguards, grievance redress mechanisms, monitoring and evaluation, health information management, supervision and reporting aspects), all through the provision of consulting services, non-consulting services, Training, Operating Costs, and acquisition of goods for the purpose. Carrying out of an IBNET performance assessment and preparation of an appropriate report.

7 -6- (c) (d) Provision of Training for BWA, BSA and municipalities in Baghdad on environmental and social safeguards issues under the Project. Undertaking select studies on water and wastewater services as well as preparation of feasibility studies on future water supply and sewerage improvement projects. (e) Supporting citizens' engagement, communication and water conservation awareness activities.

8 -7- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. Mayoralty of Baghdad (a) (b) The Borrower shall designate, at all times during the implementation of the Project, the Mayoralty of Baghdad (in particular, the BWA and the BSA) to be responsible for providing overall strategy and guidance and to be responsible for the implementation, supervision, monitoring and evaluation of Project activities, and shall take all actions including the provision of funding, personnel and other resources necessary to enable said Mayoralty of Baghdad to perform said functions. Project Management Unit. To this end, the Borrower shall ensure that the Mayoralty of Baghdad establishes and thereafter maintains throughout the period of implementation of the Project, a Project Management Unit ("PMU"), with composition, terms of reference and resources satisfactory to the Bank. The PMU shall be responsible for, inter alia: day to day preparation, implementation, supervision, coordination, management, monitoring and evaluation of Project activities and results. B. Safeguards 1. The Borrower shall implement the Project in accordance with the Safeguard Instruments and shall not amend, suspend, abrogate, repeal or waive any provision of any of the Safeguard Instruments without the prior written approval of the Bank and subject to compliance with applicable consultation and public disclosure requirements of the Bank. 2. The Borrower shall ensure that adequate information on the implementation of the Safeguards Instruments is suitably included in the Project Reports referred to in Section II of this Schedule, including details of: (a) measures taken in furtherance of the Safeguards Instruments; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguards Instruments; and (c) remedial measures taken or required to be taken to address such conditions. 3. The Borrower shall ensure that: (a) all measures identified and described in the Safeguards Instruments are taken in a timely manner, and (b) that the tender documents and each contract for civil works to be carried out under the Project includes the obligation of the relevant contractor to comply with the relevant

9 -8- Safeguards Instruments applicable to such civil works commissioned or awarded pursuant to said contract. 4. Without limitation upon the foregoing, the Borrower shall: (a) (b) (c) prior to commencing civil works for any activity under the Project and when required under the ESMF, prepare, adopt and disclose appropriate ESIA(s) and/or ESMP(s), as applicable, in accordance with the ESMF, such ESIA(s) and/or ESMP(s) to be in form and substance satisfactory to the Bank; prior to commencement of civil works for any activity of the Project involving involuntary resettlement or involuntary acquisition of land, prepare, adopt, disclose and implement appropriate RAP or RAPs, as the case may be, for compensation or resettlement, in accordance with the RPF, such RAP or RAPs to be in form and substance satisfactory to the Bank; and prior to commencing civil works for any activity under the Project and when required under the ESIAs, ESMPs and the RAPs, carry out specific public consultation in form and in substance satisfactory to the Bank. 5. In the event that any provision of the Safeguards Instruments shall conflict with any provision under this Agreement, the terms of this Agreement shall prevail. 6. The Borrower shall: (a) by no later than ninety (90) days after the Effective Date, establish and thereafter maintain throughout the period of implementation of the Project, a grievance redress mechanism, satisfactory to the Bank, for the management of complaints related to the Project; and (b) ensure that adequate measures, satisfactory to the Bank, are put in place to ensure that all aspects of Project implementation are carried out in an inclusive, non-discriminatory and participatory manner. 7. The Borrower shall ensure that all terms of reference for any technical assistance and studies to be carried out under the Project are prepared in form and substance satisfactory to the Bank and taking into account appropriate environmental and social safeguards measures. 8. The Borrower shall ensure that any area in which civil works under the Project will be implemented has been cleared of Explosive Remnants of War and/or Unexploded Ordinance (s), and to that end, prior to commencing civil works for any activity under the Project, the Borrower shall provide a confirmation, in form and substance satisfactory to the Bank, that the area in which such civil works will be implemented has been declared safe and clear of Explosive Remnants of War and/or Unexploded Ordinance(s).

10 -9- Section II. Project Monitoring Reporting and Evaluation The Borrower shall furnish to the Bank each Project Report not later than fortyfive (45) days after the end of each calendar semester, covering the calendar semester. Section III. Withdrawal of Loan Proceeds 1. Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Borrower may withdraw the proceeds of the Loan to: (a) finance Eligible Expenditures; and (b) pay: (i) the Front-end Fee; and (ii) each Interest Rate Cap or Interest Rate Collar premium; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Percentage of Amount of the Loan Expenditures to be Allocated financed Category (expressed in USD) (inclusive of Taxes) (1) Goods, works, non- 209,475, % consulting services, consulting services, Training and Operating Costs for the Project (2) Front-end Fee 525,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions (3) Interest Rate Cap or 0 Amount due pursuant to Interest Rate Collar Section 4.05 (c) of the premium General Conditions TOTAL AMOUNT 210,000, Notwithstanding the provisions of paragraph I above, no withdrawal shall be made for payments made prior to the Signature Date. 3. The Closing Date is May 30, 2023.

11 -10- SCHEDULE 3 The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). Principal Payment Date Installment Share On each February 15 and August 15, beginning 5% February 15, 2023, through August 15, 2032.

12 -11- APPENDIX Definitions 1. "Affected Person" means a person who as a result of: (a) the involuntary taking of land under the Project is affected in any of the following ways: (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not the affected person must move to another location; or (b) the involuntary restriction of access to legally designated parks and protected areas, suffers adverse impacts on his or her livelihood. 2. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, 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 and as of July 1, "Baghdad Sewerage Authority" or "BSA" means the Borrower's sewerage utility established and operating pursuant to Law No. 16 of 1995 (Law of Baghdad Municipality). 4. "Baghdad Water Authority" or "BWA" means the Borrower's water utility established and operating pursuant to Law No. 16 of 1995 (Law of Baghdad Municipality). 5. "Category" means a category set forth in the table in Section III.1 of Schedule 2 to this Agreement. 6. "ESIA" means an environmental and social impact assessment to be prepared by the Borrower pursuant to the ESMF, in each case identifying and assessing the potential environmental and social impacts of a proposed Project activity; and "ESIAs" means two or more such ESIA, as such ESIAs may be amended from time to time with the prior written agreement of the Bank. 7. "ESIA/ESMP" each means the document of the Borrower entitled: (a) "Environmental and Social Impact Assessment (ESIA)/Environmental and Social Management Plan (ESMP) for Rehabilitation of Al-Habibiya, Al-Doura, and Al-Ghazaliya Sewerage Subprojects" ESIA and ESMP Report dated and disclosed August 2017; and (b) "Environmental and Social Impact Assessment (ESIA)/Environmental and Social Management Plan (ESMP) for Constructing R2 Water Reservoir Complex" ESIA and ESMP Report dated and disclosed August "ESMP" means: (a) an environmental and social management plan to be prepared by the Borrower pursuant to the ESMF, in each case setting forth appropriate mitigation, monitoring and institutional measures designed to mitigate the

13 -12- potential adverse environmental and social impacts of a proposed Project activity; or (b) the document of the Borrower entitled "Environmental and Social Management Plan (ESMP) for Rehabilitation of twenty-two Sewerage Pumping Stations in Rusafa", Generic ESMP Report dated and disclosed in August 2017; and "ESMPs" means two or more such ESMP, as such ESMPs may be amended from time to time with the prior written agreement of the Bank. 9. "Explosive Remnants of War" means explosive remnants of war, including but not limited to, unexploded ordnance, improvised explosive devices and landmines. 10. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for IBRD Financing, Investment Project Financing", dated July 14, "IBNET" means International Benchmarking Network of Water and Sanitation Utilities. 12. "Mayoralty of Baghdad" or "MoB" means the Borrower's entity established and operating pursuant to Article 2 of Law No. 16 of 1995 (Law of Baghdad Municipality). 13. "Operating Costs" means the reasonable costs incurred by the PMU on account of Project implementation including costs for communication; translation and interpretation; printing; advertising; office supplies; banking charges; Project related travel (including per diems, accommodation and transportation); vehicle rental and fuel; postal fees; and other miscellaneous costs directly associated with Project implementation subject to approval by the Bank, but excluding salaries and allowances of the Borrower's civil servants or other regular government staff. 14. "Procurement Regulations" means, for purposes of paragraph 85 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for Borrowers under Investment Project Financing", dated July 1, "Project Management Unit" or "PMU" mean a Project management team to be established by the Borrower pursuant to the provisions of Section I.A.1.(b) of Schedule 2 to this Agreement. 16. "RAP" means a resettlement action plan to be prepared by the Borrower pursuant to the RPF, describing, for a proposed Project activity, the compensation and other resettlement assistance to be provided, consultation to be conducted with Affected Persons about acceptable alternatives, institutional responsibilities for the implementation, procedures for grievance redress, and arrangements for monitoring and evaluation; and "RAPs" means more than one such RAP, as such RAPs may be amended from time to time with the prior written agreement of the Bank.

14 "RPF" means the Resettlement Policy Framework for Baghdad Water Supply and Sewerage Improvement Project, RPF Report, prepared and disclosed by the Borrower on August 20, 2017, setting forth the guidelines, procedures, timetables and other specifications for the provision of compensation, rehabilitation and resettlement assistance to Affected Persons, and for the preparation and implementation of RAPs; as such RPF may be amended from time to time with the prior written agreement of the Bank. 18. "Safeguard Instrument" means one of the following: ESIA, ESIA/ESMP, ESMP, RAP and RPF as the context may require, and "Safeguard Instruments" means, collectively, two or more of the listed instruments. 19. "SCADA" means Supervisory Control and Data Acquisition. 20. "Signature Date" means the latest of the two dates on which the Borrower and the Bank signed this Agreement and such definition applied to all references to "the date of the Loan Agreement" in the General Conditions. 21. "Training" means the reasonable costs of training, seminars, workshops, conferences and study tours, including: (a) the fees of training institutions and courses; (b) domestic and international travel costs, lodging costs, and subsistence/per diem allowances for both trainers and trainees; (c) the rental of training facilities; and (d) preparation, purchase or reproduction of training materials.