THE WORLD BANK BANKGROUP. DOCUMENTS 15 ap

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1 Public Disclosure Authorized THE WORLD BANK BANKGROUP DOCUMENTS 15 ap Public Disclosure Authorized Hon. Patrick Anthony Chinamasa Minister of Finance and Economic Development Ministry of Finance and Economic Development Harare Republic of Zimbabwe Hon. Minister: Re: ZIMREF Grant No. TF0A4121 Republic of Zimbabwe: Implementation Support to the PICES Survey in Zimbabwe Letter Agreement Public Disclosure Authorized Public Disclosure Authorized In response to the request for financial assistance made on behalf of the Republic of Zimbabwe ("Recipient"), I am pleased to inform you that the Intemational Development Association ("World Bank"), acting as administrator of grant funds provided by various donors ("Donors") under the Multi-Donor Trust Fund for the Zimbabwe Reconstruction Fund, proposes to extend to the Recipient a grant in an amount not to exceed one million nine hundred thousand United States Dollars (USD 1,900,000) ("Grant") on the terms and conditions set forth or referred to in this letter agreement ("Agreement"), which includes the attached Annex, to assist in the financing of the project described in the Annex ("Project"). This Grant is funded out of the abovementioned trust fund for which the receives World Bank periodic contributions from the Donors. In accordance with Section Standard 3.02 of Conditions the (as defined in the Annex to this Agreement), the World Bank's obligations payment in connection with this Agreement are limited to the amount of funds made available by the Donors to it under the abovementioned trust fund, and the Recipient's right to withdraw proceeds the Grant is subject to the availability of such funds. The Recipient represents, by confirming its agreement below, that it is authorized to enter into this Agreement and to carry out the Project in accordance with the terms and conditions set forth or referred to in this Agreement. Please confirm the Recipient's agreement to the foregoing by having an authorized official of the Recipient sign and date the enclosed copy of this Agreeme333nt, and retuming it to the World Bank. Upon receipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date of the notice of effectiveness from the World Bank to the Recipient, confirming in accordance with the provisions of Section 5.02 of the Annex to this Agreement that the World Bank has accepted the supporting document provided by the Recipient 1818 H Street NW * Washington, DC USA Ck

2 to the World Bank to establish that the condition of effectiveness listed in Section 5.01 of the Agreement has been satisfied. Very truly yours, INTERNATIONAL DEVELOPMENT ASSOCIATION Acting as administrator of grant funds provided by various donors under the Multi-Donor Trust Fund for the Zimbabwe Reconstruction Fund By Carni e Lampff Nuamah Country anager for Zimbabwe Africa Region AGREED: REPUBLIC OF ZIMBABWE By: / Authorized Representative OFFICE OTLF I INISTER OF FINANCE A'qD ECONOMIC FEN 0 3 FE 20)1 Name: AAOI) PhTCV- -ftnlta--1 C4 F ' A P SAG CY 7705, CAUSEWAY DM -2 E Date: R - ua -\4 2o 1 Enclosures: (1) Standard Conditions for Grants Made by the World Bank Out of Various Funds, dated February 15, 2012 (2) Disbursement Letter of the same date as this Agreement, together with World Bank Disbursement Guidelines for Projects, dated May 1, 2006 (3) 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, 2016

3 Article I Standard Conditions; Definitions ZIMREF Grant No. TFOA4121 ANNEX Standard Conditions. The Standard Conditions for Grants Made by the World Bank out of Various Funds, dated February 15, 2012 ("Standard Conditions"), constitute an integral part of this Agreement Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Standard Conditions or in this Agreement and the following additional terms shall have the following meanings: (a) "Census and Statistics Act [Chapter 10:29]" means the act providing for the establishment of the Recipient's National Statistics Agency and the collection, processing and dissemination of statistics. (b) "Operating Costs" means the incremental operating costs under the Project incurred on account of utilities and supplies, bank charges, communications, vehicle operation, maintenance and insurance, office space rental, building and equipment maintenance, public awareness-related media expenses, travel and supervision, and salaries of contractual and temporary staff, but excluding salaries, fees, honoraria, and bonuses of members of the Recipient's civil service. (c) "Project Implementing Entity" and "PIE", each means the Recipient's Statistics Agency National or ZIMSTAT. (d) "Project Implementing Entity's Legislation" means the Census and Statistics Act [Chapter 10:29], pursuant to which the Project Implementing Entity has been established and operating. (e) "Project Implementation Manual" means the manual referred to in Section 2.03(e) of this Annex, as the same may be revised from time to time with the prior consent of the World Bank. (f) "Subsidiary Agreement" means the agreement referred to in Section 2.03(c) of this Annex pursuant to which the Recipient shall make the proceeds of the Grant available to the Project Implementing Entity. (g) "Training" means the costs of training under the Project, including workshops seminars, and study tours, along with travel and subsistence allowances for training services participants, of trainers, rental of training facilities, preparation and reproduction and other of activities training directly materials, related to course preparation and implementation. Article II Project Execution Project Objectives and Description. The objective of the Project is to support the Recipient's national statistics agency to collect high quality welfare data through the preparation and implementation of a household survey. The Project consists of the following parts:

4 Part A. Survey Design and Preparation Carrying out the design and preparation of the survey, including: (a) finalizing the survey's questionnaire through: (i) technical review; (ii) field testing; and (iii) validation with stakeholders; (b) developing the survey manual; (c) conducting a trainers' as well as an enumerator's training; (d) printing the questionnaire; and (e) designing the data entry systems. Part B. Data Collection and Entry Collection of actual data, including: (a) a paper questionnaire; (b) quality control during field work; (c) processing of all data collected through the questionnaire and the household consumption diary in the computer; and (d) data error detection and cleaning. Part C. Project Management Provision of support to ZIMSTAT on the fiduciary aspects of Project implementation, including: (a) financial management; (b) procurement; and (c) audit activities Project Execution Generally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall cause the Project to be carried out by the Project Implementing Entity in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) 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, 2016 ("Anti-Corruption Guidelines"); and (c) this Article II Institutional and Other Arrangements. Without limitation upon the provisions of Section 2.02 above: (a) The Recipient shall, throughout Project implementation, cause the Project Implementing Entity to be responsible for the management of the overall implementation of the Project, including financial management, procurement and monitoring and evaluation. (b) The Recipient shall take all actions necessary on its part to ensure that the Project Implementing Entity is maintained, throughout Project implementation, with: (i) mandate, functions and resources satisfactory to the World Bank; and (ii) adequate staff with qualifications and experience satisfactory to the World Bank, all for the purpose of ensuring a prompt and efficient implementation of the Project. (c) The Recipient, to facilitate the carrying out of the Project, shall make the proceeds of the Grant available to the Project Implementing Entity on a non-reimbursable grant basis under a subsidiary agreement ("Subsidiary Agreement") between the Recipient and the Project Implementing Entity, under terms and conditions approved by the World Bank, which shall include the obligations of the Project Implementing Entity to: (i) implement the Project with due diligence and efficiency and in conformity with appropriate administrative, technical, financial, economic, environmental and social standards and practices, including the provisions of the Anti-Corruption Guidelines and in accordance with the provisions of this Agreement; 014

5 (ii) (A) procure all goods and services required under the Project and to financed be out of the proceeds of the Grant in accordance with the provisions of Section 2.08 of this Annex; and (B) ensure that all such goods and services are used exclusively for the purposes of the Project; (iii) ensure that all facilities relevant to the Project shall at all times properly be operated and maintained and that all necessary repairs and renewals of such facilities shall be made promptly as needed; (iv) with respect to records management: (A) maintain records adequate to record the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Grant and disclose their use in the Project; (B) furnish such records and information as may be requested by the Recipient or the World Bank; and (C) retain all records evidencing expenditures under the Project for the period of time specified in the Standard Conditions; (v) with respect to monitoring and evaluation: (A) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators acceptable to the Recipient and the World Bank, the progress of the Project and the achievement of its objective; (B) prepare periodic reports, in form and substance satisfactory to the Recipient and the World Bank, integrating the results of such monitoring and evaluation activities and setting out measures recommended to ensure the continued efficient and effective execution of the Project, and to achieve its objective, each such report to cover a calendar quarter; (C) furnish each such report to the Recipient and the World Bank within forty-five (45) days after the end of such period; and (D) prepare, and furnish to the Recipient a final report, of such scope and in such detail as the Recipient and the World Bank shall reasonably request, on the execution of the Project, and furnish the same to the Recipient and the World Bank within not later than six (6) months after the end of the Project; (vi) with respect to financial management: (A) maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Recipient and the World Bank, both in a manner adequate to reflect its operations and financial condition, including the operations, resources and expenditures related to the Project; (B) avail the records pertaining to the Project to external and internal auditors; (C) prepare as part of the Project Report, interim unaudited financial reports covering each quarter, and furnish them to the Recipient and the World Bank not later than fortyfive (45) days after the end of the period covered by such reports, and provide such other information concerning such unaudited financial statements as the Recipient or the World Bank may from time to time reasonably request; and (D) have its financial statements audited by independent auditors and applying standards both acceptable to the World Bank at least once in each fiscal year; (vii) open and maintain a dedicated Project Account, until the completion of the Project, in a commercial bank on terms and conditions acceptable to the World Bank; and ensure that the funds deposited into the Project Account shall be used exclusively to finance the cost of expenditures related to the Project; and (viii) share with the Recipient and the World Bank the anonymized micro-data collected for the 2016/17 household survey.

6 (d) The Recipient shall exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the World Bank and to accomplish the purposes of the Grant. Except as the World Bank shall otherwise agree, the Recipient shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. (e) The Recipient shall: (i) cause the Project Implementing Entity to prepare, under terms of reference satisfactory to the World Bank, and furnish to the World Bank, not later than three (3) months after the Effective Date, for its review and approval, a Project implementation manual containing detailed guidelines and procedures for the implementation of the Project, including in the areas of monitoring and evaluation, procurement, coordination, social and environmental safeguards, financial, administrative and accounting procedures, corruption and fraud mitigation measures and such other arrangements and procedures as shall be required for the Project; and (ii) cause the Project Implementing Entity to thereafter adopt, and carry out the Project in accordance with such Project implementation manual as shall have been approved by the World Bank ("Project Implementation Manual"). (f) Except as the World Bank shall otherwise agree in writing, the Recipient shall not amend or waive, or permit to be amended of waived, any provision of the Project Implementation Manual. (g) In case of a conflict between the provisions of the Project Implementation Manual and this Agreement, those of this Agreement shall prevail. (h) The Recipient shall ensure that the PIE shall, not later than six (6) months after the collection of the anonymized micro-data for the 2016/17 household survey, share said data with the Recipient and the World Bank Donor Visibility and Visit. (a) The Recipient shall take or cause to be taken all such measures as the World Bank may reasonably request to identify publicly the Donors' support for the Project. (b) For the purposes of Section 2.09 of the Standard Conditions, the Recipient upon shall, the World Bank's request, enable the representatives of the Donors to visit any part of the Recipient's territory for purposes related to the Project Documents; Records In addition and without limitation to the obligations set forth in Section 2.05 of the Standard Conditions, the Recipient shall ensure that: (a) all records evidencing expenditures under the Project are retained for seven (7) years and six (6) months after the Closing Date, such records to include: (i) this Agreement, all addenda thereof, and any amendments thereto; (ii) the Recipient's financial and narrative progress reports submitted to the World Bank; (iii) the Recipient's financial information related to the Grant, including audit reports, invoices and payroll records; (iv) the Recipient's implementation documentation (including sub-agreements, procurement files, contracts, purchase orders); and (v) the corresponding supporting evidence referred to in Section 3.04 of the Standard Conditions; and (b) the representatives of the World Bank are: (i) able to examine all records referred to above in paragraph (a); (ii) provided all such information concerning such records as they may 0Qi

7 from time to time reasonably request; and (iii) able to disclose such records and information to the Donor Project Monitoring, Reporting and Evaluation. (a) The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Conditions and on the basis of indicators acceptable to the World Bank. Each Project Report shall cover the period of one calendar quarter, and shall be furnished to the World Bank not later than forty-five (45) days after the end of the period covered by such report. (b) The Recipient shall prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than six (6) months after the Closing Date Financial Management. (a) The Recipient shall ensure that a financial management system is maintained in accordance with the provisions of Section 2.07 of the Standard Conditions. (b) The Recipient shall ensure that interim unaudited financial reports for the Project are prepared and furnished to the World Bank not later than forty-five (45) days after the end of each calendar quarter, covering the quarter, in form and substance satisfactory to the World Bank. (c) The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the World Bank not later than six (6) months after the end of such period Procurement All goods, non-consulting services and consulting services required for the Project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in the "World Bank Procurement Regulations for Borrowers under Investment Project Financing" dated July 1, 2016 ("Procurement Regulations"), and the provisions of the Recipient's procurement plan for the Project ("Procurement Plan") dated November 22, 2016 provided for under Section IV of the Procurement Regulations, as the same may be updated from time to time in agreement with the World Bank. Article III Withdrawal of Grant Proceeds Eligible Expenditures. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) the Standard Conditions; (b) this Section; and (c) such additional instructions as the World Bank may specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the World Bank and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the following table. The table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant ("Category"), the allocations of the amounts of the Grant to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category:

8 Category Amount of the Grant Percentage of Allocated Expenditures to be (expressed in USD) Financed (inclusive of Taxes) (1) Goods, non-consulting 1,900, % services, consultants' services, Operating Costs and Training under the Project TOTAL AMOUNT 1,900, Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawal shall be made for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed three hundred fifty thousand United States Dollars (USD 350,000) equivalent may be made for payments made prior to this date but on or after November 1, 2016 for Eligible Expenditures under Category (1) Withdrawal Period. The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is June 15, Article IV Additional Remedies Additional Events of Suspension. The Additional Events of Suspension referred to in Section 4.02 (k) of the Standard Conditions consist of the following: (a) the Recipient has taken or permitted to be taken any action which would prevent or interfere with the performance by the Project Implementing Entity of its obligations under Project; the (b) the Project Implementing Entity's Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Project Implementing Entity to perform any of its obligations under the Project; (c) IBRD or IDA has declared the Project Implementing Entity ineligible to receive proceeds of any financing made by IBRD or IDA, or otherwise to participate in the preparation or implementation of any project financed in whole or in part by IBRD or IDA (including as administrator of funds provided by another financier), as a result of: (i) a determination by IBRD or IDA that the Project Implementing Entity has engaged in fraudulent, corrupt, coercive or collusive practices in connection with the use of the proceeds of any financing made by IBRD or IDA; and/or (ii) a declaration by another financier that the Project Implementing Entity is ineligible to receive proceeds of financings made by such financier or otherwise to participate in the preparation or implementation of any project financed in whole or in part by such financier as a result of a determination by such financier that the Project Implementing Entity has engaged in fraudulent, corrupt, coercive or collusive practices in connection with the use of the proceeds of a financing made by such financier;

9 (d) IBRD or IDA has suspended in whole or in part the right Implementing of the Project Entity to make withdrawals under any agreement with IBRD of or a failure with IDA by because the Project Implementing Entity to perform any of its obligations agreement under or such any other agreement with IBRD or IDA; (e) as a result of events which have occurred after the date extraordinary of this Agreement, situation an has arisen which makes it improbable that the Project will Implementing be able to Entity perform its obligations under the Project; and (f) the World Bank has determined after the Effective Date Section referred 5.02 of to this in Annex that prior to such date but after the date of this Agreement, has occurred an event which would have entitled the World Bank to suspend the Recipient's withdrawals right to from make the Grant Account if this Agreement had been effective on the occurred. date such event Article V Effectiveness; Termination This Agreement shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that the following condition, namely, the Subsidiary Agreement has been executed on behalf of the Recipient and the Project Implementing Entity Except as the Recipient and the World Bank shall otherwise agree, the date on Agreement which this shall enter into effect shall be the date upon which the World Bank dispatches Recipient to notice the of its acceptance of the evidence required pursuant to Section 5.01 of this ("Effective Annex Date"). If, before the Effective Date, any event has occurred which would entitled have the World Bank to suspend the right of the Recipient to make withdrawals from Account the Grant if this Agreement had been effective, the World Bank may postpone the dispatch notice of the referred to in this Section until such event (or events) has (or have) ceased to exist 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. Article VI Recipient's Representative; Addresses Recipient's Representative. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is its Minister responsible for finance Recipient's Address. The Recipient's Address referred to in Section 7.01 of the Standard Conditions is: C-N

10 Ministry of Finance and Economic Development 6'h Floor, Block B, Composite Office Building Cnr. Samora Machel Avenue/4th Street Private Bag 7705 Causeway Harare Republic of Zimbabwe Facsimile: / World Bank's Address. 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 United States of America Telex: Facsimile: (MCI) or (MCI)