OFFICIAL DOCUMENTS. Financing Agreement. Public Disclosure Authorized. CREDIT NUMBER BD Public Disclosure Authorized

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1 Public Disclosure Authorized OFFICIAL DOCUMENTS CREDIT NUMBER BD Public Disclosure Authorized Financing Agreement (Sustainable Coastal and Marine Fisheries Project) Public Disclosure Authorized between PEOPLE'S REPUBLIC OF BANGLADESH and Public Disclosure Authorized INTERNATIONAL DEVELOPMENT ASSOCIATION Date October 25, 2018

2 CREDIT NUMBER 6326-BD FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between PEOPLE'S REPUBLIC OF BANGLADESH ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association 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 - FINANCING 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 equivalent to one hundred and seventy one million and three hundred thousand Special Drawing Rights (SDR 171,300,000) (variously, "Credit" and "Financing"), to assist in financing the project described in Schedule 1 to this Agreement ("Project") The Recipient may withdraw the proceeds of the Financing in accordance with Section III of Schedule 2 to this Agreement The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance The Service Charge is three-fourths of one percent (3/4 of 1%) per annum on the Withdrawn Credit Balance The Interest Charge is one and a quarter percent (1.25%) per annum on the Withdrawn Credit Balance The Payment Dates are February 1 and August 1 in each year.

3 The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement The Payment Currency is Dollar. ARTICLE III - PROJECT The Recipient declares its commitment to the objective of the Project. To this end, the Recipient through its DOF shall carry out Parts 1, 2 and 4 of the Project and cause Part 3 of the Project to be carried out by SDF, in accordance with the provisions of Article V of the General Conditions, Schedule 2 to this Agreement and the Project Agreement. ARTICLE IV- REMEDIES OF THE ASSOCIATION The Additional Event of Suspension consist of the following: (a) SDF has amended, suspended, abrogated, repealed or waived its Articles of Association so as to materially and adversely affect its ability to perform any of its obligations under the Project Agreement; and (b) provision(s) of the Marine Fisheries Act contravene(s) provision(s) of UNCLOS The Additional Event of Acceleration consists of the following: any of the events specified in paragraphs (a) and (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. ARTICLE V - EFFECTIVENESS The Additional Condition of Effectiveness consist of the following: (a) the Project Operations Manual has been issued and put into effect in a manner satisfactory to the Association; and (b) the Subsidiary Grant Agreement has been executed in a manner satisfactory to the Association The Effectiveness Deadline is the date ninety (90) days after the Signature Date.

4 -3- ARTICLE VI- REPRESENTATIVE; ADDRESSES The Recipient's Representative is the Senior Secretary/Secretary or the Additional Secretary, or any Joint Secretary, Joint Chief, Deputy Secretary, Deputy Chief, Senior Assistant Secretary, Senior Assistant Chief, Assistant Secretary or Assistant Chief of the Economic Relations Division of the Ministry of Finance For purposes of Section of the General Conditions: (a) the Recipient's address is: Economic Relations Division Ministry of Finance Government of the People's Republic of Bangladesh Sher-E-Bangla Nagar 1207 Dhaka, Bangladesh; and (b) the Recipient's Electronic Address is: Facsimile: For purposes of Section of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: (MCI) qfan@worldbank.org

5 -4- AGREED as of the Signature Date. PEOPLE'S REPUBLIC OF BANGLADESH By Authorized Representative Name: KAZI SHOFIQUL AZAM Title: SENIOR SECRETARY Date: OCTOBER 25, 2018 INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: ZAHID HUSSAIN Title: ACTING COUNTRY DIRECTOR Date: OCTOBER 25, 2018

6 -5- SCHEDULE 1 Project Description The objective of the Project is to improve management coastal and marine fisheries and aquaculture. The Project consists of the following parts: Part 1: Enabling activities for sustainable fisheries sector investments and growth 1. Stock assessment and development of national fishery management plans: (a) carrying out stock surveys and assessments for shrimp, demersal and pelagic stocks; (b) strengthening catch monitoring systems of industrial and artisanal fisheries for verifying, tracking and updating stock data; and (c) preparing, updating and implementing national fisheries management plans on a participatory manner and following international principles and standards, including the "precautionary principle". 2. Enabling investments in sustainable fisheries: (a) strengthening the Recipient's existing fisheries policies and regulatory framework following international principles and standards, including providing technical assistance to: (i) review the draft Marine Fisheries Act to align it with the provisions of UNCLOS; (ii) identify and reduce investment risks due to gaps concerning vessel registration and fleet capacity management, licensing management system, stock monitoring, MCS (including joint coordination approaches), co-management, administrative fine enforcement and conflict resolution issues among fishers; and (iii) provide training on marine fisheries management and mariculture, co-management, licensing and administrative fine enforcement; and (b) carry out awareness-raising programs on fisheries monitoring and control. 3. MCS development and illegal, unregulated and unreported (IUU) fishing reduction: (a) expanding and strengthening the Recipient's existing fishermen identification card system and vessel registration and licensing; and (b) setting up a joint MCS center, including designing, equipping and installing an integrated MCS information system, providing training for operating said MCS information system and developing MCS protocols and manuals.

7 -6- Part 2: Improving infrastructure and production practices 1. Infrastructure improvements for capture and culture fisheries: (a) prioritizing productive infrastructure improvements, including identifying options for improving existing harvest-to-retailer chains in capture and culture fisheries and designing and testing access-to-finance facility and capitalization schemes for fisheries and aquaculture smallholders; (b) supporting investments aimed at designing, building and supervising industrial and small-scale artisanal fisheries landing clusters with post-harvest facilities; (c) providing Sub-grants to carry out Cluster Support Sub-projects aimed at deploying extension agencies for mobilizing cluster producers, developing their business/infrastructure plans and improving access to basic utilities; (d) desilting and rehabilitating selected channels supporting shrimp aquaculture; and (e) carrying out salinization mapping, hydrological surveys, and canal rehabilitation designs. 2. Value chain and food safety development: (a) providing technical assistance to address Recipient's regulatory capacity and skills gaps concerning seafood safety and competitiveness, including (i) carrying out a seafood safety needs assessment, a training in food safety, a seafood safety consumer awareness campaign, international and domestic food safety inspection training; (ii) supporting the implementation of the Recipient's existing sea food safety policy; and (iii) developing and implementing an e-traceability food safety system; (b) carrying out a 'training of trainers' model on best practices for enforcing and handling food safety regulations, including developing long-term building capacity approaches to maintain quality and ensure food safety and providing training on post-harvest quality and food safety; and (c) providing technical assistance to expand the Recipient's marine science and technology capacity, including: (i) preparing a marine spatial plan for scaling mariculture interventions and carrying out mariculture research; and (ii) carrying out research & development partnerships for delivering vocational training programs on, inter alia, aquaculture, fishing and post-harvest practices. 3. Boosting coastal aquaculture productivity: (a) establishing a grant facility for providing Sub-grants to carry out: (i) Mariculture Sub-projects aimed at supporting mariculture research, technology innovation, market studies and commercialization; and (ii) Aquaculture Sub-projects aimed at addressing poor growth performance and disease burden attributable to wild brood stock; and (b) building and equipping a dedicated brood stock facility and quarantine and food security laboratories for shrimp, fish and fish products; and (c) strengthening Recipient's existing regulatory and oversight capacity in monitoring and controlling infectious crustacean diseases.

8 -7- Part 3: Community empowerment and livelihoods 1. Fishing community institutions and alternative livelihood development: (a) providing Sub-grants to carry out Community Institutions Sub-projects aimed at establishing fishing community institutions, strengthening their fishing management capacities and promoting alternative livelihood activities; (b) providing technical assistance to build capacities of fishing communities on fisheries management, nutrition, climate and disaster risk reduction and livelihood diversification; (c) providing Sub-grants aimed at acquiring key household livelihood assets; and (d) providing Sub-grants to carry out Co-management Sub-projects aimed at piloting participatory community-led fisheries co-management infrastructure and productive activities for transforming livelihoods. 2. Business development and market linkages for alternative livelihoods: (a) providing Sub-grants to carry out Business Development Sub-projects aimed at developing livelihood diversification business; (b) building and strengthening producer organizations and fishers federations in fishing communities; (c) facilitating market linkages with producers in fishing communities; (d) providing vocational training aimed at also reaching fishers who work in the semi-industrial fleet; and (e) providing employment opportunities to youth fishers to access wage and self-employment other than capture fishing. Part 4: Project Management and Monitoring Carrying out Project management, monitoring and evaluation activities, including: (a) establishing financial management and procurement management systems; (b) developing and implementing a communications plan, and governance and accountability plan; (c) carrying out monitoring and evaluation and third-party audits; and (d) carrying out evaluation studies and stakeholder coordination activities.

9 -8- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. Project Steering Committee. By no later than one (1) month after the Effective Date, the Recipient shall establish and thereafter maintain, throughout the period of implementation of the Project, a Project steering committee with a mandate, composition and resources satisfactory to the Association. Without limitation on the foregoing, said committee shall be chaired by the Secretary of Recipient's Ministry of Fisheries and Livestock and comprise relevant ministries and agencies, and shall meet at least twice every year or more often if required for the purposes of, inter alia: (a) reviewing the overall progress of the Project; (b) providing strategic and policy direction on all Project activities; (c) facilitating the coordination of Project activities; and (d) approving Project annual plans and budgets. 2. Project Management Unit. By no later than one (1) month after the Effective Date, the Recipient shall establish and thereafter maintain, throughout the period of implementation of the Project, a Project management unit within DOF, with functions and resources satisfactory to the Association, and with staff in adequate numbers and with qualifications, experience and terms of reference satisfactory to the Association. Without limitation on the foregoing, said unit shall be: (a) headed by one (1) full-time Project director and comprising three (3) full-time deputy project directors and having adequate numbers of financial management and procurement specialists; (b) supported by three (3) satellite offices in Chittagong, Khulna and Barisal each headed at the deputy project director level with staff in adequate numbers and with qualifications, experience and terms of reference satisfactory to the Association; and (c) responsible for, inter alia: implementing Project activities in accordance with the provisions of this Agreement and the Project Operations Manual. 3. Project Management Consultant. By no later than three (3) months after the Effective Date, the Recipient shall hire a project management consultant for a 3-year period, with qualifications, experience and terms of reference satisfactory to the Association, to support DOF with Project implementation and provide on-the-job training to DOF's staff on Project management.

10 -9-4. Project Technical Implementation Group. By no later than three (3) months after the Effective Date, the Recipient shall establish and thereafter maintain, throughout the period of implementation of the Project, a technical implementation group with a mandate, composition and resources satisfactory to the Association. Without limitation on the foregoing, said group shall comprise DOF staff in an adequate number and technical capabilities; which shall be responsible for: (a) providing technical advice on all Project activities; and (b) overseeing Project implementation quality. 5. Citizen Engagement Forum. By no later than three (3) months after the Effective Date, the Recipient shall establish and thereafter maintain, throughout the period of implementation of the Project, a citizen engagement forum with a mandate, composition and resources satisfactory to the Association. Without limitation on the foregoing, said committee shall meet at least once every six (6) months for the purposes of, shall be responsible for: (a) providing a formal process for carrying out consultations among representatives from government, private sector and civil society, (b) facilitating Project citizen engagements and informing on fisheries trends, governance and technical issues to DOF staff, (c) facilitating conflict resolution and (d) providing suggestions towards Project implementation. B. Project Operations Manual and Grant Manual The Recipient shall carry out the Project in accordance with the Project Operations Manual and the Grant Manual in a manner satisfactory to the Association. Except as the Association shall otherwise agree in writing, the Recipient shall not assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, any provisions of the Project Operations Manual and/or the Grant Manual. In the event of a conflict between the provisions of those manuals and those of this Agreement, the latter shall govern. C. Monitoring, Control and Surveillance 1. By no later than eighteen (18) months after the Effective Date, the Recipient through DOF shall enter into a memorandum of understanding with the relevant agencies/entities related to the Recipient's maritime domain, under terms and conditions satisfactory to the Association, which shall include, inter alia: (a) the terms and conditions for establishing a joint MCS center; and (b) the roles and responsibilities of the aforementioned agencies/entities for jointly carrying out MCS activities under said center. The Recipient shall exercise its rights under the memorandum of understanding in such manner as to protect the interests of the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree in writing, the Recipient shall not to, assign,

11 -10- amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the memorandum of understanding or any of its provisions. In the event of any conflict between the provisions of the memorandum of understanding and the provisions of this Agreement, the provisions of this Agreement shall prevail. 2. Without limitation upon the provisions of Section C.1 above and to ensure the proper implementation of Part I of the Project and more generally the MCS of its coastal fisheries in a manner designed to achieve the objectives of the Project, the Recipient shall ensure that at all times: (a) all MCS activities carried out under the Project shall be under the control of DOF and shall be carried out by civilian authorities under terms of reference limited to fisheries surveillance; (b) all goods, works, services, Incremental Operating Costs and Training financed out of the proceeds of the Financing are used exclusively by civilian authorities for the purposes of the Project; and (c) all MCS activities carried out under the Project are evaluated periodically by an independent group of experts, whose qualifications, experience and terms of reference are satisfactory to the Association. To this end, the Recipient shall take all measures required on its part, including provision of all information required and access to all relevant sites, to enable said group of experts to conduct the required audits. D. Sub-projects under Part 2 of the Project For purposes of carrying out the Cluster Support Sub-projects, Mariculture Sub-projects and Aquaculture Sub-projects under Parts 2.1(c), 2.3(a)(i) and 2.3(a)(ii) of the Project respectively (hereinafter referred to "Sub-projects), the Recipient shall: (a) review and appraise all the Sub-projects' proposals in accordance with the terms and conditions of the Grant Manual; and (b) make a Sub-grant under a Sub-Project Agreement with the respective selected Beneficiary under terms and conditions acceptable to the Association, which shall include, inter alia:

12 -11- (i) the Beneficiary's obligations to: (i) carry out the Sub-project with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social standards and practices satisfactory to the Association; (ii) to maintain policies and procedures to enable it to monitor and evaluate the progress of the Sub-grant in accordance with indicators acceptable to the Association; (iii) prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association; (iv) provide contributions towards the cost as per the Grant Manual and in a timely manner to cover the cost of the Sub-project; (v) procure the goods, works and services to be financed out of the Sub-grant in accordance with the provisions of this Agreement; (vi) complete the carrying out of the Sub-project before the Closing Date; (vii) maintain policies and procedures to enable to monitor the progress of the Sub-project and the achievement of its objectives; (viii) abide by, and comply with, the terms and conditions of the ESMF and RPF, as applicable; and (ix) accept physical or documentary inspection by the Association, in relation to the carrying out of the Sub-project; and (ii) the Recipient's right to suspend or terminate the right of the Beneficiary to use the proceeds of the Sub-grant or obtain a refund of all or any part of the amount of the Sub-grant then withdraw, upon the Beneficiary's failure to perform its obligations under the Sub-Project Agreement. E. Subsidiary Grant Agreement and Memorandum of Understanding under Part 3 of the Project 1. For purposes of carrying out Part 3 of the Project, the Recipient shall make part of the proceeds of the Financing available to SDF under a subsidiary grant agreement between the Recipient and SDF, under terms and conditions acceptable to the Association, by which the Recipient agreed to extend to SDF a grant in the amount equivalent to thirty five million six hundred and eighty thousand Special Drawing Rights (SDR 35,680,000). The Recipient shall exercise its rights under the subsidiary grant agreement in such manner as to protect the interests of the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree in writing, the Recipient shall not assign, amend, abrogate or waive the Subsidiary Grant Agreement or any of its provisions. In the event of any conflict between the provisions of the Subsidiary Grant Agreement and the provisions of this Agreement, the provisions of this Agreement shall prevail.

13 Without limitation upon the provisions of Section E.1 above, the Recipient through DOF shall enter into a memorandum of understanding with SDF, under terms and conditions acceptable to the Association, which shall include, inter alia, the roles and responsibilities of DOF and SDF regarding the implementation of Part 3 of the Project. The Recipient shall exercise its rights under the memorandum of understanding in such manner as to protect the interests of the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree in writing, the Recipient shall not to, assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the memorandum of understanding or any of its provisions. In the event of any conflict between the provisions of the memorandum of understanding and the provisions of this Agreement, the provisions of this Agreement shall prevail. F. Safeguards 1. The Recipient shall ensure and cause to ensure that Part 1, 2 and 4 of the Project is carried out in accordance with the provisions of the ESMF, the RPF, the SECDF and all Safeguard Assessments and Plans and the requirements of the Grievance Redress Mechanism. To this end, the Recipient shall ensure, and cause SDF to ensure, that the appropriate review, clearance and public disclosure of all Safeguard Assessments and Plans as required by the ESMF, the RPF and the SECDF. 2. Whenever an additional or revised Safeguard Assessment and Plan shall be required for any proposed Project activity under Parts 1, 2 and 4 of the Project, in accordance with the provisions of the ESMF, the RPF and/or the SECDF, the Recipient shall: (a) (b) (c) prior to the commencement of such activity, proceed to have such Safeguard Assessment and Plan: (i) prepared and publicly consulted on in accordance with the provisions of the ESMF, the RPF and the SECDF, as the case may be; (ii) furnished to the Association for review and approval; and (iii) thereafter adopted and disclosed as approved by the Association, in a manner acceptable to the Association; thereafter take such measures as shall be necessary or appropriate to ensure compliance with the requirements of such Safeguard Assessment and Plan; and in the case of any resettlement activity under Parts 1, 2, and 4 of the Project involving Affected Persons, ensure that no displacement shall occur before necessary resettlement measures consistent with the RAP applicable to such activity have been executed, including, in the case of displacement, full payment to Affected Persons of compensation and of other assistance required for relocation, prior to displacement.

14 Without limitation on its other reporting obligations under this Agreement, the Recipient shall collect, compile and submit to the Association on a bi-annual basis (or such other frequency as may be agreed with the Association) consolidated reports on the status of compliance with the ESMF, the RPF, the SECDF and the Safeguard Assessments and Plans, giving details of: (a) measures taken in furtherance of the said instruments; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the said measures; and (c) remedial measures taken or required to be taken to address such conditions. 4. The Recipient shall not amend, abrogate or waive, or permit to be amended, abrogated or waived, the ESMF, the RPF, the SECDF or any Safeguard Assessments and Plans, unless the Association has provided its prior approval thereof in writing, and the Recipient has complied with the same consultation and disclosure requirements as applicable to the original adoption of the said instruments. 5. In the event of any conflict between the provisions the ESMF, the RPF, the SECDF or any Safeguard Assessments and Plans, and the provisions of this Agreement, the provisions of this Agreement shall prevail. G. Other Covenants 1. The Recipient shall, throughout the period of implementation of the Project: (a) until the publication of the national marine fisheries management plan, abstain from the issuance of new vessel or vessel replacement licenses in the trawl (excluding purse seiners and long liners) fisheries industrial sub-sector; and (b) ensure that the fishing capacity for industrial vessels does not exceed the limits set out in the national marine fisheries management plan on a yearly basis, starting from the publication of the first national fisheries management plan under the Project, all in a manner satisfactory to the Association. 2. By no later than forty eight (48) months after the Effective Date, the Recipient shall establish a fisheries enforcement unit on the basis of the recommendations of a Project steering committee to be established under terms of reference satisfactory to the Association and within the framework of a memorandum of understanding to be concluded among the Recipient's agencies that shall contribute to the establishment of said unit and which shall set out the roles and responsibilities of each of the parties to the memorandum of understanding aimed at achieving the stated objectives of the fisheries enforcement unit. 3. The Recipient shall, throughout the period of implementation of the Project, complete the registration, as per mercantile marine specifications, and licensing,

15 -14- as per DOF regulations, of the entire existing industrial, artisanal mechanized, and artisanal motorized fishing vessel fleets, all in a manner satisfactory to the Association and in accordance with the following milestones: (a) (b) (c) by no later than twenty-four (24) months after the Effective Date, bring the industrial fleet licensing in compliance with the annual fishing effort as defined in the first annual fisheries management plan; by no later than forty-two (42) months after the Effective Date, complete the registration and licensing of the entire existing mechanized fishing vessels of over 28 horsepower; and by no later than fifty-four (54) months after the Effective Date, complete the registration and licensing of fifty percent (50%) of the entire existing motorized artisanal vessels between horsepower. Section II. Project Monitoring, Reporting and Evaluation The Recipient shall furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar quarter, covering the calendar quarter. Section III. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to finance Eligible Expenditures; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table:

16 -15- Amount of the Percentage of Financing Expenditures to be Category Allocated Financed (expressed in SDR) (inclusive of Taxes) (1) Goods, works, non-consulting 100% services, consulting services, Training and Incremental 99,050,000 Operating Costs under Parts 1, 2 and 4 of the Project (except for Parts 2.1 (c) and 2.3(a)(i) and (ii) of the Project) (2) Sub-grants for: 100% of disbursed amount (a) Cluster Support Sub-projects 21,400,000 under Part 2.1(c) of the Project (b) Mariculture Sub-projects under Part 2.3(a)(i) of the Project (c) Aquaculture Sub-projects under 7,150,000 Part 2.3(a)(ii) of the Project 7,150,000 (3) Goods, works, non-consulting 11,350, % services, consulting services, Training and Incremental Operating Cost under Part 3 (except for Parts 3.1(a), (c) and (d) and 3.2(a) of the Project) and Part 4 of the Project (4) Sub-grants for: 100% (a) Community Institutions Sub- 4,700,000 projects under Part 3.1(a) of the Project (b) Sub-grants under Part 3.1(c) of 9,450,000 the Project

17 -16- (c) Co-management Sub-projects 500,000 under Parts 3.1(d) of the Project (d) Business Development Subprojects under Part 3.2(a) of the 9,680,000 Project (5) Refund of Project Preparation 870,000 Amount payable pursuant Advance to section 2.07 of the General Conditions TOTAL AMOUNT 171,300,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made: (a) for payments made prior to the Signature Date; (b) under Category (2) until the Recipient submits evidence satisfactory to the Association showing that the Grant Manual has been issued by DOF in a manner satisfactory to the Association; and (c) under Category (3) until SDF submits evidence satisfactory to the Association showing that: (i) the Community Operations Manual has been issued by SDF in a manner satisfactory to the Association; and (ii) the memorandum of understanding referred to in Section I.E.2 of this Schedule has been executed under terms and conditions satisfactory to the Association. 2. The Closing Date is December 31, C. Other Undertakings The Recipient shall ensure that proceeds out of the Financing are not used for any expenditure for goods, works, services, Incremental Operating Costs and Training intended for: (a) any military purpose; (b) any criminal investigation, prosecution or proceeding related to fishing violations; (c) any detention and imprisonment proceeding; (d) any domestic procedure or proceeding incompatible with Article 73 of UNCLOS; (e) other purposes unrelated to the objectives of the Project; and/or (f) acquiring vehicles other than eight (8) vessels approved by the Association.

18 -17- SCHEDULE 3 Repayment Schedule Date Payment Due Principal Amount of the Credit repayable (expressed as a percentage) * On each Feb I and Aug 1: commencing February 1, 2024 to and including 1.65% August 1, 2043 commencing Feb 1, 2044 to and including 3.40% August 1, 2048 * 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.

19 -18- APPENDIX Section I. Definitions 1. "Affected Person" means a person who, on account of the execution of the Project, has experienced or would experience direct economic and social impacts caused by: (a) the involuntary taking of land, resulting in: (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 such person must move to another location; or (b) the involuntary restriction or access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such person. 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, "Aquaculture Sub-project" means a set of goods, works and services, which have met the criteria set out in the Grant Manual, and to be financed under Part 2.3(a)(iii) of the Project. 4. "Articles of Association" means the Memorandum and Articles of Association of SDF, dated June 28, "Beneficiary" means a fisherman, a fishing community or an aquiculture farmer living in the Recipient's coast districts, who is proposed to receive a Sub-grant after meeting the selection criteria set forth in the Grant Manual or the Community Operations Manual, as the case may be. 6. "Business Development Sub-project" means a set of goods, works and services, which have met the criteria set out in the Community Operations Manual, and to be financed under Part 3.2(a) of the Project. 7. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 8. "Cluster Support Sub-project" means a set of goods, works and services, which have met the criteria set out in the Grant Manual, and to be financed under Part 2.1(c) of the Project.

20 "Co-management Sub-project" means a set of goods, works and services, which have met the criteria set out in the Community Operations Manual, and to be financed under Part 3.1(d) of the Project. 10. "Community Institutions Sub-project" means a set of goods, works and services, which have met the criteria set out in the Community Operations Manual, and to be financed under Part 3.1(a) of the Project. 11. "Community Operations Manual" means the manual referred to in Section I.B of the Schedule to the Project Agreement, containing detailed criteria, arrangements and procedures for financing Community Institutions Sub-projects, Co-management Sub-projects and Business Development Sub-projects. 12. "DOF" means the Department of Fisheries of the Recipient's Ministry of Fisheries and Livestock, or its successor thereto. 13. "Environmental Impact Assessment" or "EIA" means each of the environmental impact assessments to be prepared under the Project in accordance with the ESMF, each such assessment in form and substance satisfactory to the Association, and defining details of potential environmental risks and adverse impacts associated with the implementation of Project activities, together with an environmental management plan defining measures to manage such risks and impacts; as each assessment may be amended from time to time with prior written consent of the Association. 14. "Environmental and Social Management Framework" or "ESMF" means the Project environmental management and social framework duly disclosed on January 1, 2018, acceptable to the Association, setting forth the policy framework, principles, standards, processes and institutional arrangements to be applied the Project to assess potential adverse environmental and social impacts associated with Project activities and the ways to avoid, minimize, mitigate or offset them, including public consultation, disclosure and reporting as well as a description of the process for preparing and approving EMPs during the implementation of the Project; as such framework may be amended from time to time with the prior written consent of the Association. 15. "Environmental Management Plan" or "EMP" means each of the environmental management plans to be prepared under the Project in accordance with the ESMF, each such plan in form and substance satisfactory to the Association, and defining details of measures to manage potential environmental risks and mitigate, reduce and/or offset adverse environmental impacts associated with the implementation of Project activities, together with adequate budget, institutional, monitoring and

21 -20- reporting arrangements capable of ensuring proper implementation of, and regular feedback on compliance with, its terms; as each plan may be amended from time to time with prior written consent of the Association. 16. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated July 14, "Grant Manual" means the manual referred to in Section I.B of Schedule 2 to this Agreement, containing detailed criteria, arrangements and procedures for financing Cluster Support Sub-projects, Mariculture Sub-projects and/or Aquaculture Sub-projects. 18. "Grievance Redress Mechanism" means the system to be established and implemented by the Project Implementing Entity under the Project, which shall meet the requirements set forth in the ESMF and be acceptable to the Association, be designed to track complaints regarding the Project, guide resolution of such complaints, and track and publicize resolution of such complaints, as such system may be updated from time to time by prior written agreement between the Recipient and the Association. 19. "Incremental Operating Costs" means the reasonable costs required for the day-to-day coordination, administration and supervision of Project activities, including leasing and/or routine repair and maintenance of vehicles, equipment, facilities and office premises, office supplies, utilities, consumables, communication expenses, translation, printing, photocopying and postal expenses, bank charges, advertising expenses, insurance, Project-related meeting expenses and Project-related travel provided that such allowances are paid directly to the eligible recipient using the banking system; excluding salaries, fuel, per diem, allowances and honorarium of officials of the Recipient's civil service and/or other sitting allowances and honorarium of any other nature. 20. "Mariculture Sub-project" means a set of goods, works and services, which have met the criteria set out in the Grant Manual, and to be financed under Part 2.3(a)(i) of the Project. 21. "Marine Fisheries Act" means the Marine Fisheries Act to be enacted by the Recipient, draft for which has been prepared in 2016, or any other fishery-related draft act to repeal the Recipient's Marine Fisheries Ordinance 1983 (Ordinance No. XXXV of 1983).

22 "MCS" means monitoring, control and surveillance of the Recipient's coastal fisheries. 23. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated July 2016, revised November "Project Operations Manual" means the operational manual referred to in Section I.B of Schedule 2 to this Agreement, containing detailed arrangements and procedures for the carrying out the Project. 25. "Project Preparation Advance" means the agreement entered into between the Recipient and the Association, signed on behalf of the Bank on May 18, 2017, and on behalf of the Recipient on June 22, 2017, for supporting the financing of Project preparation activities. 26. "Resettlement Action Plan" or "RAP" means each plan to be prepared under the Project in accordance with the RPF, each such plan in form and substance satisfactory to the Association, and containing, a program of actions, measures and policies for compensation and resettlement of Affected Persons, including the magnitude of displacement, compensation and resettlement arrangements, budget and cost estimates, and sources of funding, together with adequate institutional, monitoring and reporting arrangements capable of ensuring proper implementation of, and regular feedback on compliance with its terms; as each resettlement action plan may be amended from time to time with the prior consent of the Association. 27. "Resettlement Policy Framework" or "RPF" means the Project resettlement framework duly disclosed on February 1, 2018, acceptable to the Association, setting forth the principles and objectives governing resettlement preparation and implementation, as well as a description of the process for preparing and approving RAPs during the implementation of the Project; as such framework may be amended from time to time with the prior consent of the Association. 28. "Safeguard Assessment and Plan" means each EIA, SIA, EMP, SMP and/or RAP prepared or to be prepared during the implementation of the Project, as the case may be, in accordance with the ESMF, the RPF and the SECDF, as the case may be; and "Safeguard Assessments and Plans" means, collectively, all such assessments and plans. 29. "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.

23 "Small Ethnic Communities Development Plan" or "SECDP" mean each plan to be prepared in accordance with the SECDF, each such plan in form and substance satisfactory to the Association, defining the specific actions, measures and policies designed to address any impact on Small Ethnic Communities; as said plan may be amended from time to time with the prior written consent of the Association. 31. "Small Ethnic Communities" means, for purposes of the Project and in a generic sense, distinct, disadvantaged, social and cultural groups (including tribes, minor races, ethnic sects and communities) possessing the following characteristics in varying degrees: (a) self-identification as members of a distinct indigenous cultural group and recognition of this identity by others; (b) collective attachment to geographically distinct habitats or ancestral territories in the project area and to the natural resources in these habitats and territories; (c) customary cultural, economic, social, or political institutions that are separate from those of the dominant society; and (d) an indigenous language, often different from the official language of the country or region. 32. "Small Ethnic Communities Development Framework" "SECDF" means the Project framework disclosed on February 1, 2018, acceptable to the Association, setting forth the policies and procedures to ensure that ethnic and disadvantaged communities affected by the Project receive culturally appropriate social and economic benefits, and if any potential adverse effects on such communities are identified, measures to ensure their effects are avoided, minimized, mitigated, or compensated, as well as a description of the process for preparing and approving SECDPs during the implementation of the Project, as said framework may be amended from time to time with the prior written consent of the Association. 33. "Social Development Foundation" or "SDF" means the Project Implementing Entity, an institution registered as a non-profit organization under the Recipient's Companies Act, 1994, as amended. 34. "Social Impact Assessment" and "SIA" means each social impact assessment to be prepared under the Project in accordance with the ESMF, each such assessment in form and substance satisfactory to the Association, and defining details of potential social risks and adverse impacts associated with the implementation of Project activities, together with measures to manage such risks and impacts; as each assessment may be amended from time to time with prior written consent of the Association. 35. "Social Management Plan" or "SMP" means each of the social management plans to be prepared under the Project in accordance with the ESMF, each such plan in form and substance satisfactory to the Association, and defining details of

24 -23- measures to manage potential social risks and mitigate, reduce and/or offset adverse social impacts associated with the implementation of the Project, together with adequate budget, institutional, monitoring and reporting arrangements capable of ensuring proper implementation of, and regular feedback on compliance with, its terms; as each plan may be amended from time to time with prior written consent of the Association. 36. "Sub-grant" means any grant provided by DOF to a Beneficiary aimed at financing a Cluster Support Sub-project, a Mariculture Sub-project or an Aquaculture Sub-project; or any grant provided by SDF to a Beneficiary aimed at financing a Community Institutions Sub-project, a Co-management Sub-project, a Business Development Sub-project or at financing the assets referred to in Part 3.1(c) of the Project. 37. "Sub-project Agreement" means: (a) an agreement to be entered between DOF and a Beneficiary for purposes of providing a Sub-grant; or (b) an agreement to be entered between SDF and a Beneficiary for purposes of providing a Sub-grant. 38. "Subsidiary Grant Agreement" means the agreement referred to in Section I.E. 1 of Schedule 2 to this Agreement. 39. "Training" means the reasonable costs required for the participation of personnel involved in training activities, workshops and study tours under the Project which have been approved by the Association in writing on annual basis, including: (a) travel, hotel, and subsistence costs for training, workshop and study tour participants provided that such allowances are paid directly to the eligible recipient using the banking system; and (b) costs associated with rental of training and workshop facilities, preparation and reproduction of training and workshop materials, costs of academic degree studies, and other costs directly related to training course, workshop or study tour preparation and implementation, but excluding salaries of consultants and sitting allowances and honorarium of any other nature. 40. "UNCLOS" means the United Nations Convention of the Law of Sea, an international treaty adopted in 1942 and entered into force in 1994, which provides a regulatory framework for the use of the world's seas and oceans, inter alia, to ensure the conservation and equitable usage of resources and the marine environment and to ensure the protection and preservation of the living resources of the sea.