Official Documents- Loan Agreement for Loan 8779-SC (Closing Package)

OFFICIAL DOCUMENTS LOAN NUMBER 8779-SC Loan Agreement (Third South West Indian Ocean Fisheries Governance and Shared Growth Project) between REPUBLIC OF SEYCHELLES and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated cO a 16 ,2017 LOAN NUMBER 8779-SC LOAN AGREEMENT AGREEMENT dated (XlbrW 15 2017, between REPUBLIC OF SEYCHELLES ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: WHEREAS: (A) the International Development Association ("Association"), by extending financial assistance (1) in 2015 to the Republic of Mozambique, the Union of Comoros, the United Republic of Tanzania and the Indian Ocean Commission ("IOC") and (2) in 2017 to the Republic of. Madagascar and the IOC, has provided support to activities of the preceding projects under the first and second phases, respectively of the South West Indian Ocean Fisheries Governance and Shared Growth Program ("Program") which aims to increase the economic, social, and environmental benefits to South West Indian Ocean ("SWIO") countries from sustainable marine fisheries; (B) the Borrower, having satisfied itself as to the feasibility and priority of the project ("Project", as described in Schedule 1 hereto) under the third phase of the Program, has requested the Bank to assist in the financing of the Project; (C) the Bank, acting as an Implementing Agency of the Global Environment Facility ("GEF"), intends to make available financial assistance to the Borrower under the GEF grant in an amount not exceeding five million two hundred -ninety-two thousand one hundred ten Dollars ($5,292,110) ("GEF Grant"), to assist the Borrower in financing Parts A.1, A.2, B.1, B.2 and B.3 of the Project on the terms and conditions set forth in the GEF Grant agreement to be entered into between the Borrower and the Bank, acting as Implementing Agency of the GEF ("GEF Grant Agreement"), as further defined in the Appendix to this Agreement); (D) the Bank, acting as an Implementing Agency of the GEF, further intends to make available financial assistance to the Borrower under a GEF loan in an amount not exceeding five million Dollars ($5,000,000) ("GEF Loan"), to assist the Borrower in financing Part C.6 of the Project on the terms and conditions set forth in the GEF loan agreement to be entered into between the Borrower and the Bank, acting as Implementing Agency of the GEF ("GEF Loan Agreement", as further defined in the Appendix to this Agreement); and (E) the Borrower intends to issue a bond supported by the GEF Loan and a Bank Guarantee, in an amount of approximately fifteen million Dollars ($15,000,000) ("SWIOFish 3 Blue Bond"), as further defined in the Appendix to this Agreement, to assist the Borrower in financing part of the cost of Parts A.3, B.4 and C.5 of the Project; WHEREAS the Bank has also agreed, on the basis, inter alia, of the foregoing, to extend the loan provided for in Article II of this Agreement to the Borrower upon the terms and conditions set forth in this Agreement; -2- NOW THEREFORE the Borrower and the Bank hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - LOAN 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of five million Dollars ($5,000,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.08 of this Agreement ("Loan"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount. 2.04. The Commitment Charge payable by the Borrower shall be equal to one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2.05. The interest payable by the Borrower for each Interest Period shall be at a rate equal to the Reference Rate for the Loan Currency plus the Fixed Spread; provided, however, that the interest payable shall in no event be less than zero percent (0%) per annum; and provided furthermore that, upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02 (e) of the General Conditions. 2.06. The Payment Dates are February 15 and August 15 in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. 2.08. (a) The Borrower may at any time request any of the following Conversions of the terms of the Loan in order to facilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of the interest rate basis -3- applicable to: (A) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate to a Fixed Rate, or vice versa; or (B) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Reference Rate and the Variable Spread to a Variable Rate based on a Fixed Reference Rate and the Variable Spread, or vice versa; or (C) all of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Variable Spread to a Variable Rate based on a Fixed Spread ; and (iii) the setting of limits on the Variable Rate or the Reference Rate applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding by the establishment of an Interest Rate Cap or Interest Rate Collar on the Variable Rate or the Reference Rate. (b) Any conversion requested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a "Conversion", as defined in the General Conditions, and shall be effected in accordance with the provisions of Article IV of the General Conditions and of the Conversion Guidelines. ARTICLE III - PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project and the Program. To this end, the Borrower shall carry out the Project, except Parts A.3, B.4 and C.5, through MFTEP, shall cause SeyCCAT to carry out Parts A.3 and B.4, and shall cause DBS to carry out Part C.5, all in accordance with the provisions of Article V of the General Conditions. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - REMEDIES OF THE BANK 4.01. The Additional Events of Suspension consist of the following: (a) The SeyCCAT's Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of SeyCCAT to perform any of its obligations under the SeyCCAT Subsidiary Agreement. (b) The DBS's Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of DBS to perform any of its obligations under the DBS Subsidiary Agreement. (c) SeyCCAT or DBS shall have failed to comply with any of its obligations under its respective Subsidiary Agreement. (d) As a result of events which have occurred after the date of this Agreement, an extraordinary situation shall have arisen which shall make it improbable that -4- SeyCCAT or DBS will be able to perform any of its obligations under its respective Subsidiary Agreement. (e) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of SeyCCAT or DBS or for the suspension of SeyCCAT or DBS operations. 4.02. The Co-financing Deadline for the effectiveness of the GEF Loan Agreement and the SWIOFish 3 Blue Bond is June 30, 2018. 4.03. The Additional Event of Acceleration consists of the following, namely that, any event specified in 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 Bank to the Borrower. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) The GEF Grant Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Borrower to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. (b) The Borrower has adopted the Project Operations Manual in accordance with the provisions of Section I.E of Schedule 2 to this Agreement. 5.02. The Effectiveness Deadline is the date one hundred and twenty (120) days after the date of this Agreement. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Borrower's Representative is the Borrower's minister responsible for finance. 6.02. The Borrower's Address is: Ministry of Finance, Trade and Economic Planning P.O. Box 313 Liberty House Victoria Mah6 Republic of Seychelles Facsimile: Telephone: +248 432 5161 +248 438 3120 -5- 6.03. The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: Facsimile: INTBAFRAD 248423(MCI) or 1-202-477-6391 Washington, D.C. 64145(MCI) -6- AGREED at Washington DC, United States, as of the day and year first above written. REPUBLIC OF SEYCHEL S By Auth depresentative Name: Dr. ouise Rene Peter Larose Title: Minister of Finance, Trade and Economic Planning INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: Mark R. Lundell Title: Country Director -7- .SCHEDULE 1 Project Description The objective of the Project is to improve management of marine areas and fisheries in Targeted Zones and strengthen fisheries value chains in the Borrower's territory. The Project constitutes the third phase of the Program, and consists of the following parts: Part A. Expansion of the Borrower's Sustainable-use Marine Protected Areas 1 . (a) Carrying out of studies to determine the management measures for the Sustainable- use Marine Protected Areas; (b) preparation of management plans for Sustainable-use Marine Protected Areas, including outlining of detailed governance mechanisms for said Sustainable-use Marine Protected Areas; (c) preparation of regulations to enable the creation and operationalization of said Sustainable-use Marine Protected Areas; and (d) provision of technical assistance to implement the re-zoning of Sustainable- use Marine Protected Areas. 2. (a) Provision of equipment and training to strengthen relevant government institutions for enhanced and cost-effective management of the Sustainable-use Marine Protected Areas; (b) the monitoring, control, and surveillance of the natural resources and economic activities, including satellite-based imaging, patrols, operating costs, equipment, and infrastructure; (c) carrying out of awareness campaigns and capacity- building activities targeted at the main stakeholders, notably fishers, tourism operators, and training of relevant government institutions; (d) support towards the promotion of sustainable practices in the tourism and fisheries sectors; and (e) carrying out of METT-based third-party evaluation of management effectiveness for the Sustainable-use Marine Protected Areas. 3. Carrying out of a program of activities aimed at strengthening the Sustainable-use Marine Protected Areas Network, through the provision of Blue Grants to Protected Areas Network Beneficiaries to finance, inter alia, research activities on fisheries management, development and implementation of management plans, education and awareness programs, capacity building and training activities, monitoring, control and surveillance, and promotion of sustainable practices in marine tourism. -8- Part B. Improved governance of the Borrower's Priority Fisheries 1. Carrying out of (a) stock .assessments, socioeconomic impact assessments, preparation, and regular reviews of priority fisheries management plans; (b) capacity building activities for the steering committees of the fisheries management plans and the fishers associations; (c) support to the liaising function at the Seychelles Fishing Authority to serve artisanal fishers; (d) monitoring, control, and surveillance activities, including installation of vessel monitoring system equipment within the Fisheries Monitoring Center and on coastal patrol boats; (e) support to the certification of the semi-industrial longline fishery; and (f) preparation and implementation of a fleet capacity management and licensing framework. 2. Strengthening the provision of relevant and reliable information on the status of the marine environment and fisheries and their respective contribution to the Borrower's economy through, inter alia, (a) finalization of the fisheries information system, including fish size data capture; (b) provision of relevant training for government statisticians; (c) development of a new fisheries information management system; (d) provision of technical assistance and capacity building support to the Fisheries Economic Intelligence Unit; and (e) design and development of a satellite economic account for fisheries by the National Bureau of Statistics. 3. (a) Drafting of a fisheries sector policy note; (b) development of the fisheries sector policy and strategy and its midterm review; (c) carrying out of an assessment of the current government financial support to the fisheries sector, including sector subsidies; (d) support towards the updating of the sector legal framework, including laws, regulations and policies; and (e) provision of capacity building and ad hoc technical assistance to the relevant public entities, including MAF and the Seychelles Fishing Authority. 4. Carrying out of a program of activities aimed at improving governance of priority fisheries, through the provision of Blue Grants to Priority Fisheries Beneficiaries to finance, inter alia, research activities on fisheries management, development and implementation of management plans, education and awareness programs, capacity building and training activities, monitoring, control and surveillance, research and development for innovation in post-harvesting and marketing. Part C. Sustainable Development of the Borrower's Blue Economy 1 . Carrying out of a program of activities to expand the seafood value chains and promote other subsector synergies, notably, through, inter alia, (a) identification of value chain development opportunities and provision of targeted capacity building to fishers and operators; (b) support to the relevant government institutions and the Fishers and Boat Owners Association to design, develop and operationalize the Providence Fish Center; (c) installation of a small ice plant and bait storage on Praslin; (d) promotion of the nascent labelling scheme for sustainable artisanal fisheries, linking the fisheries and tourism value chains; and (e) enhanced inclusion of the sport and recreational fisheries in the fisheries management effort, through education and awareness programs and marketing to promote tagging and catch-and-release and the development of the related electronic logbook application. -9- 2. Creating of an enabling environment for sustainable, local, small-scale investments in the aquaculture sector through, inter alia, (a) carrying out of environmental and social impact assessments for local investments in inshore and land-based aquaculture, (b) capacity-building of select relevant investors and the Seychelles Fishing Authority, and (c) development of training courses and long-term human capital development plans. 3. (a) Carrying out of a program of activities to strengthen the performance of fisheries loan schemes and their alignment with the blue economy objectives; (b) elaboration of standardized proposal assessment methodologies and related training for the Blue Investment Fund; (c) carrying out of an assessment of the maximum carrying capacity for investments in the fishing post-harvesting and service sectors; (d) provision of technical assistance to facilitate a sustainable, economically sound port development process; (e) carrying out of studies necessary to the development of different areas of the blue economy, notably, feasibility of vessel refitting, decommissioning, and buyback, policy and management for new and emerging fisheries; and (f) support towards the development of policies and standards to improve recruitment and retention of local crew and skippers. 4. Strengthening of the sanitary and phytosanitary monitoring capacity in the Borrower's territory through the setting up of an enhanced monitoring program, and provision of related training, equipment and technical assistance. 5. Provision of Blue Loans to Blue Investment Fund Beneficiaries to finance private and public investments aimed at facilitating the implementation of the Mahd Plateau fisheries management plan and the transition from open-access to better controlled fisheries, including, inter alia, refitting of tourism vessels, refitting fishing vessels, land-based production of high value niche products, fish processing and value addition, sector services and logistics support. 6. Support to the Borrower's capacity to reduce the financing cost of the SWIOFish 3 Blue Bond issuance through, inter alia, (i) capitalization of the SWIOFish 3 Blue Bond Account to assist in the financing, directly or indirectly, of a percentage of the SWIOFish 3 Blue Bond-related coupons payments and/or purchase of a financial asset to securitize repayment of a percentage of the SWIOFish 3 Blue Bond principle; and (ii) technical assistance and Operating Costs associated with the SWIOFish 3 Blue Bond issuance. Part D. Project coordination, management and monitoring, preparation of financial audits, and periodic evaluations through, inter alia, advisory services, purchase of equipment, provision of Training, Operating Costs and monitoring and evaluation activities. -10- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. Project Steering Committee (a) The Borrower shall maintain, at all times during the implementation of the Project, a Project steering committee with a mandate, composition and resources satisfactory to the Bank ("Project Steering Committee"). (b) Without limitation upon the provisions of paragraph (a) of Section I.A.1 of this Schedule 2, the Project Steering Committee shall be chaired by a representative of MFTEP, the assistant to the Project shall serve as the secretary and it shall further be comprised of, inter alia, representatives of the Borrower's ministries responsible for agriculture and fisheries, environment, energy and climate change, and foreign affairs; the Seychelles Fishing Authority; the Seychelles National Parks Authority; and the Seychelles Port Authority. (c) The Project Steering Committee shall meet at least semi-annually and shall be responsible for Project oversight, including inter alia: (i) reviewing the proposed Annual Work Plans and Budgets for the Project, (ii) providing overall Project oversight and strategic guidance, (iii) facilitating adequate coordination with relevant stakeholders and alignment with sector strategies, and (iv) identifying necessary Project adjustments based on monitoring and evaluation reports. 2. Project Implementation Unit (a) For purposes of the Project, except Parts A.3, B.4, C.5 and C.6, the Borrower shall maintain at all times until the completion of the Project, the Project Implementation Unit within the MFTEP with terms of reference and resources satisfactory to the Bank ("Project Implementation Unit"). (b) Without limitation upon the provisions of paragraph (a) of Section I.A.2 of this Schedule 2, the Project Inplementation Unit shall at all times: (i) be comprised of qualified and experienced personnel in adequate numbers, and to this end, inter alia, no later than six (6) months after the Effective Date, recruit an environmental and social specialist and a monitoring and evaluations specialist, all with qualifications and terms of reference acceptable to the Bank; and (ii) be responsible for the day-to-day Project coordination and implementation, including: (A) preparing each proposed Annual Work Plan and Budget for the Project, updating the Procurement Plan and consolidating the Project reports for the Project Steering Committee; (B) carrying out all Project procurement -11- activities including developing and maintaining a comprehensive procurement filing system for the Project, except Parts A.3, B.4 and C.5 of the Project; and (C) monitoring and evaluating the Project. B. SeyCCAT Subsidiary Agreement In order to achieve the objectives of Parts A.3 and B.4 of the Project, no later than one (1) month after the conclusion of the Bank Guarantee, the Borrower shall make part of the proceeds of the SWIOFish 3 Blue Bond available to SeyCCAT under a subsidiary agreement between the Borrower and SeyCCAT, under terms and conditions acceptable to the Bank, as further detailed in the Bank Guarantee ("SeyCCAT Subsidiary Agreement"). C. DBS Subsidiary Agreement In order to achieve the objectives of Part C.5 of the Project, no later than one (1) month after the conclusion of the Bank Guarantee, the Borrower shall make part of the proceeds of the SWIOFish 3 Blue Bond available to DBS under a subsidiary agreement between the Borrower and DBS, under terms and conditions acceptable to the Bank, as further detailed in the Bank Guarantee ("DBS Subsidiary Agreement"). D. Anti-Corruption The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. E. Project Operations Manual 1. The Borrower shall prepare or cause to be prepared, in accordance with terms of reference acceptable to the Bank, a Project operations manual, containing (a) detailed arrangements and procedures for: (i) institutional coordination and day-to-day execution of the Project; (ii) Project budgeting, disbursement and financial management; (iii) procurement; (iv) monitoring, evaluation, reporting and communication; (v) environmental and safeguard management; (b) the SWIOFish 3 Blue Bond Account Manual and (c) such other administrative, financial, technical and organizational arrangements and procedures as shall be required for the Project. 2. The Borrower shall afford the Bank a reasonable opportunity to review and approve such manual, and shall thereafter adopt such manual as shall have been approved by the Bank ("Project Operations Manual"). 3. The Borrower shall carry out the Project in accordance with the Project Operations Manual and shall, not amend, abrogate, waive, or permit to be amended, abrogated, or waived, the aforementioned, or any provision thereof, without the prior written consent of the Bank. 4. In the event of any conflict between the provisions of the Project Operations Manual and those of this Agreement, the provisions of this Agreement shall prevail. -12- F. Annual Work Plans and Budgets 1. Not later than [December 31] in each calendar year (or one (1) month after the Effective Date for the first year of Project implementation), the Borrower shall prepare or cause to be prepared a draft annual work plan and budget for the Project (including Training and Operating Costs) for the subsequent calendar year of Project implementation, of such scope and detail as the Bank shall have reasonably requested. 2. The Borrower shall afford the Bank a reasonable opportunity to review such draft annual work plan and budget, and thereafter shall carry out (or cause to be carried out) such annual work plan and budget during such subsequent calendar year as shall have been approved by the Bank ("Annual Work Plan and Budget"). Only those activities that are included in an Annual Work Plan and Budget shall be eligible for financing out of the proceeds of the Loan. 3. Any Training proposed to be included in an Annual Work Plan and Budget, shall include, inter alia: (a) particulars of the Training envisaged; (b) the criteria for selection of the personnel to be trained, and such personnel if known; (c) the selection method of the institution or individuals conducting such Training; (d) the institution conducting such Training if identified; (e) the purpose and justification for such Training; (f) the location and duration of the proposed training; and (g) the estimate of the cost of such Training. 4. Annual Work Plans and Budgets may be revised as needed during Project implementation subject to the Bank's prior written approval. G. Safeguards 1 . The Borrower shall implement (or cause SeyCCAT and DBS to implement) the Project in accordance with the relevant Safeguards Instruments, and shall, to that end: (a) if any activity under the Project requires the adoption of a Supplemental Safeguard Instrument: (i) prepare or cause to be prepared: (A) such Supplemental Safeguard Instrument in accordance with the applicable ESMF or PF; (B) furnish such Supplemental Safeguard Instrument to the Bank for review and approval; and (C) thereafter adopt such Supplemental Safeguard Instrument prior to implementation of the activity; and (ii) thereafter take such measures as shall be necessary or appropriate to ensure full compliance with the requirements of such Supplemental Safeguard Instrument; and (b) if any activity under the Project would involve Affected Persons, ensure that no displacement (including restriction of access to legally designated parks and protected areas) shall occur before compensation measures under the applicable LRP, including, in the case of displacement, full payment to Affected Persons of compensation and of other assistance required for relocation, have been taken. 2. Without limitation upon its other reporting obligations under this Agreement, the Borrower shall, for each applicable Safeguard Instrument, regularly collect, compile and furnish, cause -13- to be regularly collected, compiled and furnished to the Bank reports in form and substance satisfactory to the Bank, on the status of compliance with each applicable Safeguard Instrument, as part of the Project Reports, giving details of: (a) measures taken in furtherance of such Safeguard Instrument; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of such Safeguard Instrument; and (c) remedial measures taken or required to be taken to address such conditions. 3. In the event that any provision of the Safeguards Instruments shall conflict with any provision under this Agreement, the provisions of this Agreement shall prevail. 4. The Borrower shall ensure that: (a) all terms of reference for any technical assistance and studies to be carried out under the Project are consistent with the Bank's environmental and social safeguard policies; and (b) in any Project activity that may support the drafting of regulatory instruments for the purpose of the Project, due attention will be given to said policies. Section II. Project Monitoring Reporting and Evaluation A. Project Reports The Borrower shall (and shall cause SeyCCAT or DBS, as the case may be, to) monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of indicators acceptable to the Bank. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the Bank not later than forty-five (45) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1 . The Borrower shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. 2. Without limitation on the provisions of Part A of this Section, the Borrower shall prepare and furnish to the Bank not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Bank. 3. The Borrower shall have its Financial Statements audited in accordance with the provisions of Section 5.09(b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period. -14- Section III. Procurement A. General 1. Goods, Works and Non-consulting Services. All goods, works and non-consulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in Sections II and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The following methods, other than International Competitive Bidding, may be used for procurement of goods, works and non-consulting services for those contracts specified in the Procurement Plan: Procurement Method (a) National Competitive Bidding (b) Shopping (c) Direct Contracting C. Particular Methods of Procurement of Consultants' Services 1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following methods, other than Quality- and Cost-based Selection, may be used for procurement of consultants' services for those contracts which are specified in the Procurement Plan: Procurement Method (a) Quality-based Selection (b) Selection under a Fixed Budget -15- Procurement Method (c) Least-Cost Selection (d) Selection Based on the Consultants' Qualifications (e) Selection of Individual Consultants (f Single-source Selection of consulting firms (g) Single-source procedures for the Selection of Individual Consultants D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank's Prior Review..All other contracts shall be subject to Post Review by the Bank. -16- Section IV. Withdrawal of Loan Proceeds A. General 1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Bank shall specify by notice to the Borrower (including the "World Bank Disbursement Guidelines for Projects" dated February 2017, as revised from time to time by the Bank and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan ("Category"), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Category Amount of the Loan Percentage of Expenditures to be Allocated financed (expressed in USD) (inclusive of Taxes) (1) Goods, works, non-consulting 3,776,500 100% services, consultants' services, Training and Operating Costs for Parts C.1, C.2, C.3, C.4 and D of the Project (2) Refund of the Preparation 1,211,000 Amount payable pursuant to Advance Section 2.07(a) of the General Conditions (3) Front-end Fee 12,500 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07(b) of the General Conditions TOTAL AMOUNT 5,000,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for payments made prior to the date of this Agreement. 2. The Closing Date is June 30, 2023. -17- SCHEDULE3 Amortization Schedule 1. 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"). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) On each February 15 and August 15, beginning February 15, 2028 through August 15, 2037. 5% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph I of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date ("Original Installment Share") and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. 3. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. -18- 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. -19- APPENDIX Section I. Definitions 1. "Affected Person" means a person who as a result of: (i) the involuntary taking of land under the Project is affected in any of the following ways: (A) relocation or loss of shelter; (B) loss of assets or access to assets; or (C) loss of income sources or means of livelihood, whether or not the affected person must move to another location; or (ii) the involuntary restriction of access to legally designated parks and protected areas suffers adverse impacts on his or her livelihood; and "Affected Person" means any of the Affected Persons. 2. "Annual Work Plan and Budget" means the annual work plan and budget as prepared by the PIU and approved by the Bank in accordance with the provisions of Section I.F of Schedule 2 to this Agreement. 3. "Anti-Corruption Guidelines" means 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. 4. "Bank Guarantee" means the International Bank for Reconstruction and Development guarantee backstopping a share of the repayment of the SWIOFish 3 Blue Bond. 5. "Blue Grants" means grants provided by SeyCCAT to Protected Areas Network Beneficiaries and Priority Fisheries Beneficiaries, under Parts A.3 and B.4 of the Project. 6. "Blue Loans" means loans provided by DBS to Blue Investment Fund Beneficiaries, under Part C.5 of the Project. 7. "Blue Investment Fund" means a fund to be established by DBS to operate the Blue Loans as further detailed in the DBS Subsidiary Agreement. 8. "Blue Investment Fund Beneficiaries" means individuals and/or firms to which a Blue Loan is made pursuant to Part C.5 of the Project. 9. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 10. "Co-financiers" means the International Bank for Reconstruction and Development, acting as an Implementing Agency of the Global Environment Facility (GEF) and the Borrower as the issuer of the SWIOFish 3 Blue Bond, and "Co-financier" means each and any of the Co- financiers. 11. "Co-financing" means, for purposes of paragraph 16 of the Appendix to the General Conditions, a GEF Grant in an amount of approximately US$5.92 110 million and GEF Loan in an amount of approximately US$5 million and the Borrower's SWIOFish 3 Blue Bond in an amount of approximately US$15 million to assist in financing the Project. 12. "Co-financing Agreement" means the GEF Grant Agreement or the GEF Loan Agreement, and "Co-financing Agreements" means both agreements. -20- 13. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 14. "DBS" means Development Bank of Seychelles, a development finance institution with a specific mandate to assist in the economic development of the Borrower pursuant to the DBS Legislation. 15. "DBS' Legislation" means the Borrower's Decree [Chapter 63], dated February 1, 1978, establishing DBS. 16. "DBS Subsidiary Agreement" means the agreement referred to in Section I.C. of Schedule 2 to this Agreement pursuant to which the Borrower shall make part of the proceeds of the SWIOFish 3 Blue Bond available to DBS. 17. "Environmental and Social Management Framework" or "ESMF" means the framework disclosed in the Borrower's territory on May 11, 2017 and on the Bank's website on May 12, 2017, in form and substance satisfactory to the Bank, outlining environmental and social implementation procedures, mitigation measures and monitoring procedures for the Project, as said framework may be amended from time to time with the Bank's prior written approval, and such term includes any schedules or annexes to the framework. 18. "Environmental and Social Management Plan" or "ESMP" means a plan to be prepared by the Borrower for the purposes of the Project proposing appropriate mitigation, monitoring and institutional measures designed to mitigate potential adverse environmental impacts, offset them, reduce them to acceptable levels or enhance positive impacts, as the same may be amended from time to time with the agreement of the Bank, and such term includes any schedules or annexes to the plan. 19. "Fisheries Economic Intelligence Unit" means the specialized unit to be established within the Borrower's territory to provide monitoring, analysis and reporting of economic information for the fisheries sector. 20. "Fisheries Monitoring Center" means the sub-unit of the monitoring, control and surveillance section of the Seychelles Fishing Authority that is responsible for ensuring fishing vessel compliance with reporting and vessel monitoring system requirements, as well as validation of statistical reporting documents for regional fisheries bodies and catch certificates. 21. "Fishers and Boat Owners Association" means a non-governmental organization with a membership comprising boat owners and fishermen operating in the domestic fisheries sector of Seychelles, registered under the Borrower's Registration of Associations Act (CAP201), Section 4, on the 22nd March 2017 (number A431416). 22. "GEF Grant" means the proceeds provided by the International Bank for Reconstruction and Development, acting as an Implementing Agency of the Global Environment Facility (GEF), to the Borrower, under the GEF Grant Agreement. 23. "GEF Grant Agreement" means the agreement to be entered into between the Borrower and the International Bank for Reconstruction and Development, acting as an Implementing -21- Agency of the Global Environment Facility (GEF) providing for the GEF Grant, of the same date as this Agreement, as such agreement may be amended from time to time. 24. "GEF Loan" means the proceeds provided by the International Bank for Reconstruction and Development, acting as an Implementing Agency of the Global Environment Facility (GEF), to the Borrower, under the GEF Loan Agreement. 25. "GEF Loan Agreement" means the agreement to be entered into between the Borrower and the International Bank for Reconstruction and Development, acting as an Implementing Agency of the Global Environment Facility (GEF) providing for the GEF Loan, as such agreement may be amended from time to time. 26. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for Loans", dated March 12, 2012, with the modifications set forth in Section II of this Appendix. 27. "IOC" means the Indian Ocean Commission. 28. "Livelihood Restoration Plan" or "LRP" means a plan to be prepared by the Borrower for the purposes of the Project, in form and substance satisfactory to the Bank, setting forth the specific modalities for compensation of Affected Persons under the Project, as said document may be amended and/or supplemented from time to time with the prior written concurrence of the Bank and subject to the initial consultation and disclosure requirements carried out on the LRP, and such term includes any schedules or annexes to the plan. 29. "Mah6 Plateau" means the Borrower's plateau that hosts the granitic islands. 30. "MAF" means the Borrower's ministry responsible for agriculture and fisheries, and any successor thereto. 31. "METT" means management effectiveness tracking tool. 32. "MFTEP" means the Borrower's ministry responsible for finance, and any successor thereto. 33. "National Bureau of Statistics" means the institution established by the Borrower's National Bureau of Statistics Act 2010, responsible for the production and dissemination of statistics in the Borrower's territory. 34. "Operating Costs" means incremental recurrent expenditures incurred on account of Project implementation, including: local contractual support staff salaries; travel expenditures and other travel-related allowances; equipment rental and maintenance; materials and supplies; and utilities, media information campaigns and communications' expenses, but excluding the salaries of officials and public servants of the Borrower's civil service. 35. "Preparation Advance" means the advance referred to in Section 2.07 (a) of the General Conditions, granted by the Bank to the Borrower pursuant to the letter agreement signed on behalf of the Bank on April 11, 2016 and on behalf of the Borrower on April 28, 2016. 36. "Priority Fisheries Beneficiaries" means individuals and/or firms to which a Blue Grant is provided pursuant to Part B.4 of the Project. -22- 37. "Process Framework" or "PF" means the Borrower framework disclosed in the Borrower's territory on May 11, 2017 and on the Bank's website on May 12, 2017, outlining the participatory process to be followed for activities implemented under the Project that lead to restrictions of access to natural resources in Targeted Zones, including legally designated parks and protected areas, including the criteria for eligibility of project affected persons for receiving any mitigating or compensating measures under the Project, as said framework may be amended and/or supplemented from time to time with the prior written consent of the Bank, and such term includes any schedules to such framework. 38. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non- consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 39. "Procurement Plan" means the Borrower's procurement plan for the Project, dated June 20, 2017 and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 40. "Program" or "South West Indian Ocean Fisheries Governance and Shared Growth Program "means the program designed to increase the economic, social, and environmental benefits to SWIO countries from sustainable marine fisheries. 41. "Project Implementation Unit" or "PIU" means the unit established within MFTEP pursuant to the Borrower's letter dated June 1, 2017, responsible for the day to day implementation of the Project. 42. "Project Operations Manual" means the manual to be prepared and adopted by the Borrower in accordance with the provisions of Section I.E of Schedule 2 to this Agreement, as the same may be revised from time to time with the prior written consent of the Bank. 43. "Project Steering Committee" means the steering committee established by the Borrower pursuant to the Borrower's letter dated June 1, 2017. 44. "Protected Areas Network Beneficiaries" means individuals and/or firms to which a Blue Grant is provided pursuant to Part A.3 of the Project. 45. "Providence Fish Center" means a fish auction and marketing facility proposed to be established and located within the Providence port in Mah6, Seychelles. 46. "Safeguards Instruments" means, collectively, the ESMF, PF and any Supplemental Safeguards Instrument. 47. "SeyCCAT" means the Seychelles Conservation and Climate Adaptation Trust, established pursuant to SeyCCAT's Legislation. 48. "SeyCCAT's Legislation" means the Borrower's Conservation and Climate Adaptation Trust of Seychelles Act, dated November 19, 2015. -23- 49. "SeyCCAT Subsidiary Agreement" means the agreement referred to in Section I.B. of Schedule 2 to this Agreement pursuant to which the Borrower shall make part of the proceeds of the SWIOFish 3 Blue Bond available to SeyCCAT. 50. "Seychelles Fishing Authority" means the independent entity established pursuant to the Borrower's Fishing Authority Establishment Act 1984, which has the oversight responsibility over the fisheries sector pursuant to the Borrower's Fisheries Act 2014. 51. "Supplemental Safeguards Instrument" means collectively, any ESMP, LRP or any other instrument required under the terms of the Safeguards Framework Documents, to be prepared by the Borrower and approved by the Bank for purposes of the Project, proposing appropriate mitigation, monitoring and institutional measures designed to mitigate potential adverse environmental and social impacts, offset them, reduce them to acceptable levels or enhance positive impacts, as the said plan may be amended and/or supplemented from time to time with the prior written concurrence of the Bank. 52. "Sustainable-use Marine Protected Areas" means designated areas of the marine environment that contain modified or unmodified natural systems, managed to ensure long term protection and maintenance of ecosystems and services, while providing at the same time a sustainable flow of natural products and services compatible with nature conservation, pursuant to the Borrower's Protected Areas Policy 2013. 53. "Sustainable-use Marine Protected Areas Network" means the network of Sustainable-use Marine Protected Areas. 54. "SWIO" means South West Indian Ocean. 55. "SWIOFish 3 Blue Bond" means the bond issued by the Borrower to finance part of the cost of Parts A.3, B.4 and C.5 of the Project. 56. "SWIOFish 3 Blue Bond Account" means the special account to be established in accordance with Section I.A.3. of the GEF Loan Agreement, to receive the proceeds of the GEF Loan. 57. "SWIOFish 3 Blue Bond Account Manual" means the operations manual for the SWIOFish 3 Blue Bond Account, to be prepared as part of the Project Operations Manual, in accordance with Section I.E. of Schedule 2 to this Agreement. 58. "Targeted Zones" means any geographical areas where Project activities will be implemented, including Sustainable-use Marine Protected Areas and the Mah& Plateau. 59. "Training" means the training of persons under the Project based on the Annual Work Program approved by the Bank, including through seminars, workshops, knowledge sharing activities and study tours, and covers the following costs associated with such activity: travel and subsistence costs for training participants, costs associated with securing the services of trainers, rental of training facilities, preparation and reproduction of training materials, and other costs directly related to training preparation and implementation. -24- Section II. Modifications to the General Conditions The General Conditions are hereby modified as follows: 1. In the Table of Contents, the references to Sections, Section names and Section numbers are modified to reflect the modifications set forth in the paragraphs below. 2. Section 3.01. (Front-end Fee) is modified to read as follows: "Section 3.01. Front-end Fee; Commitment Charge (a) The Borrower shall pay the Bank a front-end fee on the Loan amount at the rate specified in the Loan Agreement (the "Front-end Fee"). (b) The Borrower shall pay the Bank a commitment charge on the Unwithdrawn Loan Balance at the rate specified in the Loan Agreement (the "Commitment Charge"). The Commitment Charge shall accrue from a date sixty days after the date of the Loan Agreement to the respective dates on which amounts are withdrawn by the Borrower from the Loan Account or cancelled. The Commitment Charge shall be payable semi-annually in arrears on each Payment Date." 3. In the Appendix, Definitions, all relevant references to Section numbers and paragraphs are modified, as necessary, to reflect the modification set forth in paragraph 2 above. 4. The Appendix is modified by inserting a new paragraph 19 with the following definition of "Commitment Charge", and renumbering the subsequent paragraphs accordingly: "19. "Commitment Charge" means the commitment charge specified in the Loan Agreement for the purpose of Section 3.0 1(b)."