OFFICtALDOCUMMNTS

CREDIT NUMBER 5025-BD

Financing Agreement

(Leveraging ICT for Growth, Employment and Governance Project)

between

PEOPLE'S ]REPUBLIC OF BANGLADESH

and

INTERNATIONL DEVELOPMENT ASSOCIATION

Daled ,SJP 2012

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CREDIT NUMBER 5025 -BD

FINANCING AGREEMENT

AGREEMENT dated i L K , 2012, entered into betweenPEOPLE'S REPUBLIC 01' BANGLADESH ("Recipient") and INTERNATIONALDEVELOPMENT ASSOCULTION ("Association"). The Recipient and the Associationhereby 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 te context requires otherwise, the capitalized terms used in thisAgreement have the meanings ascribed to them in the General Conditions or inthe Appendix to this Agreement.

ARTICLE H - FINANCING

2.01. The Association agr,.es t extend to the Recipient, on the terms and conditionsset forth or referred to in this Agreement, a credit in an amount equivalent toforty four million two hundred thousand Special Drawing Rights(SDR 44,200,000) (%ariously, "Credit" and "Financing") to assist in financing theproject described in Schedule 1 to this Agreement ("Project").

2.02. The Recipient may withdraw the proceeds of the Financing in accordance withSection rv of Schedule 2 to this Agreement.

2.03. The Maimum Coramitment Charge Rate payable by the Recipient on theUnwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) perannum.

2.04. The Service Charge payable by the Recipient on the Withdrawn Credit Balanceshall be equal to three-fourths of one percent (3/4 of 1%) per annum.

2.05. The Payment Dates are March I and September I in each year.

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2 06. The principal amount of the Credit shall be repaid in accordance with therepayment szhedule set fortl in Schedule 3 to this Agreement.

2 07. The Payment Currency is Dollars.

ARTICLE III - PROJECT

1,.01. The Recipient declares its commitment to the objectives of the Project. To this

end, the Recipient shalI carry out the Project through the Bangladesh ComputerCouncil in accordanc, with the provisions of Article IV of the GeneralConditions.

3.02. Without liritation upon the provisions of Section 3.01 of this Agreement, andexcept as the Recipieni and the Association shall otherwise agree, the Recipientshall ensure that the Piojeci is carried out in accordance with the provisions ofSchedule 2 10 this Agreement.

ARTICLE IV -- EFFECTIVENESS; TERMINATION

4.01. The Effectiveness Deadline is the date ninety (90) days after the date of thisAgreement.

4.02. For purposes of Section 8.05(b) of the General Conditions, the date on which theobligations of the Recipient under this Agreement (other than those providing forpayment obligations) shall terminate is twenty (20) years after the date of thisAgreement.

ARTICLE V -- REPRESENTATIVE; ADDRESSES

5.01. The Recipient's Repre;entative is the Secretary or the Additional Secretary, orany Joint Secretary, Joini Chief, Deputy Secretary, Deputy Chief, SeniorAssistant Secretary, Senior Assistant Chief, Assistant Secretary, or AssistantChief of the Economic Relations Division of its Ministry of Finance.

5.02. The Recipient's Address is:

Eccnomic RelEtions DivisionMinistry of FinanceGovernment of the People's Republic of BangladeshSher-E-Bangla NagarDhaka, Banglaiesh

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Facsimile:

88028113088

5.03. The Association's Add -ess is:

International Development Association1818 H Street, N.W.Washington, D.C. 20433United States cf America

Facsimile:

1-202-477-6391

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AGREED it Dhaka, People's Republic of Bangladesh, as of the day and year

:irst above written.

PEOPLE'S REPUBLIC OF BANGLADESH

By

Authorized Representative

Name: mA4xnA

Title: 3 j

INTER;NATIONAL DEVELOPMENT ASSOCIATION

By

Authorized Representative

Name: I

Title: -\-l k

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SCHEDULE 1

Project Description

The objectives of the Project are to: (i) catalyze the growth of the Recipient's

[iformation Technology (IT) and IT-enabled services (IT/ITES) industry for employmentcreation and export diversifica:ion; and (ii) establish basic e-government foundations to

support public sector modernization.

The Project consists of the following parts:

Part 1. IT/ITES Industry Development

1.1. Training of abou: 10,000 non-computer science graduates from universitiesand colleges in IT services skills, and training and certification of faculty.

1.2. Training of about 20,000 trainees in language, customer service, culturalsensitization, and PC keyboarding, and the provision of Grants to eligiblecompanies accorling to eligibility criteria agreed with the Association andset forth in the Operational Manual.

1.3. Provision of support to a local leading academic institution to provideIT/ITES focusec supervisory/ middle management training programs in

partnership with overseas institutions.

1.4. Building of capacity in BCC as an anchor institution for IT/ITES industrydevelopment, includ ng the setting up of an IT/ITES unit in BCC;provision of assistance to BCC in the development of an industrydevelopment strztegy and roadmap; and the setting up of an advisory bodyto guide BCC's efforts.

1.5. Building of capacity of the local industry, including the setting up of a

forum among t ie various industry associations, and the provision ofsupport to local -ompanies in adopting globally accepted certifications forIT/ITES.

1.6. Provision of industry promotion support to improve investor awareness and

perception of th, Recipient as an IT/ITES destination, including thereforthe dvelopment of an industry promotion plan; the provision of businessdevelopment assistance in the form of contact databases; the carrying outof outreach programs to chief executive officer-level clients, the provisionof support to higri-level achievers among the industry champions within the

government for external client engagements; and the development ofpromotional tools and materials.

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Part 2. e-Government

2.1. Expar sion and ,trengthening of BCC's capacity to provide shared IThosting facilities (including the existing datacenter and shared disasterrecovery site) to other agencies of the Recipient; and setting up of remoteconferencing facilities as communication technologies for virtual "face-to-face" 3ollaboration between the agencies, particularly within Dhaka.

2.2. Establishment of a suitable enterprise architecture for coordinatinginvestments acro:;s the Recipient's agencies, including the development ofan e-government interoperability framework to facilitate the exchange ofinformation acro;s agencies; the establishment of a suitable informationsecurity prograrr; and the setting up of a national computer incidentresponse team to facil tate and support said program.

2.3. Carrying out of capacity building for public sector staff on e-governmentskills, including: [a) the development of a public sector e-government skillsdevelopment prc gram; (b) training of relevant staff of the Recipient'sagencies on basic sys:ems, networks, computer support, management, anduse of Informal ion Communication Technology (ICT) for enhancedtransparency anc social accountability (including Right to Informationservices); and (c) training of higher level staff in IT planning, strategizing,and project and ciange management skills.

Part 3. Project Ma agement Support

3.1. Provision of support ]or: (a) the establishment of the Project CoordinationUnit; (b) the coordination and management of Project activities, includingprocurement, firancial management, monitoring and evaluation, socialimpact assessments, and IT/ITES industry surveys; and (c) theestablishment of ICT-based communication channels for, inter alia, thedissemination of Project-related information to the public, the reporting offeedback and c:mplaints, and the verification of training sites andactivi-ies.

3.2. Provision of support to hire, based on applicable provisions of Section IIIof Schedule 2 tc this Agreement, of required Project component leadersand specialists in, inter alia, procurement, financial management,accounting, corimunications, and monitoring and evaluation; andsuppcrting the or erational needs of the PCU.

3.3. Provision of support to hire specialists and associates in the areas ofIT/IT 7S industri development, e-government and capacity building tosuppcrt Project inplementation, based on applicable provisions of SectionIII of Schedule 2 to this Agreement.

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SCHEDULE 2

Project Execution

Section I. Implementation Arraneements

A. Institutional Arrangemenis

1. The Recipient shall, not later than November 15, 2012, establish and thereaftermaintain, throughout the period of Project implementation, a Project SteeringCommittee to provide overall guidance to the Project, monitor functions, andaddress inter-ministeri il issues. The PSC shall be chaired by the Secretary,MOICT and include th. following as members: Executive Director, BCC; seniorrepresentatives from the Prime Minister's Office, Finance Division andEconomic Relations Division of the Ministry of Finance, Socio-EconomicInfrastructure Division of the Planning Commission, Implementation Monitoringand Evaluation Division, Ministry of Commerce, and such other ministries as theMOICT may decide; two (2) representatives from the academe; seniorrepresentatives of the 3angladesh Computer Samity, Bangladesh Association ofSoftware and Information Services, Bangladesh Association of Call CenterOperators, and Association of Mobile Operators of Bangladesh; and the ProjectDirector (PD).

2. The Recipient shall, not later than November 15, 2012, establish and thereaftermaintain, throughout the period of Project implementation, a ProjectImplementation Comr ittee to provide technical and policy support to the PD.The PIC shall be headed by the Executive Director, BCC and include thefollowing as members: de-uty secretary-level representatives from the PrimeMinister's Office, Sccio-Economic Infrastructure Division of the PlanningCommission, MOICT, IMED, and Finance Division of the Ministry of Finance;representatives from EASIS, BCS, and BACCO; and representatives from theExport Promotion Burt au and the Business Promotion Council.

3. The Recipient shall, not later than November 15, 2012, establish and thereaftermaintain, throughout the period of Project implementation, a ProjectCoordinaticn Unit in IICC to implement the Project. The PCU shall be headedby the PD, who shall be a Joint Secretary or its equivalent seconded to theMOICT, ar.d shall be staffed by two (2) Project component leaders and otherconsultants and staff under terms of reference satisfactory to the Association.

B. Anti-Corruption

The Recipient shall ensure that the Project is carried out in accordance with theprovisions of the Anti-Corruption Guidelines and those of the GAAP.

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C. Operational Manual

The Recipient shall:

(a) cause the preparation, not later than six (6) months after the EffectiveDate, of an opcraticnal manual for the Project, satisfactory in substanceto tie Associaion, which shall set out, inter alia: (i) the guidelines,eligibility crite,ria, and disbursement arrangements for Grants tocompanies under Part 1.1.2 of the Project; (ii) the detailed operationalprocedures, inc luding those for the transfer of funds; and (iii) internalconTrols for the Proj ect; and

(b) ensure that the disbursement of Grants and the internal controls for theProject are implemented in accordance with the Operational Manual.

Section II. Project Monitoring, Reporting and Evaluation

A. Project Reports

(a) The Recipient :;hall monitor and evaluate the progress of the Project andprepare Projec: Reports in accordance with the provisions of Section4.08 of the Ger eral Conditions and on the basis of the indicators set forthbelow in sub-piragiaph (b) of this paragraph. Each Project Report shallcov,er the pericd of one (1) calendar semester, and shall be furnished tothe Associatior, not later than one (1) month after the end of the periodcov-red by suc 1 report.

(b) The performance indicators referred to above in sub-paragraph (a)con 3ist of the following:

(i) numbe -of direct Project beneficiaries, including women;

(ii) numbe - of persons employed in the IT/ITES industry;

(iii) inclusion as one of the preferred countries for outsourcing in

global [T/ITES rankings by major consulting firms

(iv) ranking in the World Economic Forum's Network ReadinessIndex; and

(v) percen :age of public sector (Ministries/Divisions andDepart menis)officials who have taken one or more e-governmenttrainin.y courses.

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:2. The Recipient shall:

(a) prepare, under terms of reference satisfactory to the Association, andfurnish to the Association, not later than thirty (30) months from theEffective Date, a report integrating the results of the monitoring andevaluation activities (including the social impact assessments) performedpursuant to paiagraph I above, on the progress achieved in the carryingout of the Project during the period preceding the date of said report, andsetting out the measures recommended to ensure the efficient carryingout of the Project znd the achievement of the objectives thereof duringthe period follkwing such date; and

(b) review with the Association the report referred to in sub-paragraph (a)above, and, thereafter, take all measures required to ensure the efficientcompletion of the Project and the achievement of the objective thereof,based on the conclusions and recommendations of the said report and theAssociation's views on the matter.

B. Financial Management, Financial Reports and Audits

1. The Recipient shall maintain or cause to be maintained a financial managementsystem in accordance with the provisions of Section 4.09 of the GeneralConditions.

2. Without limitation on the provisions of Part A of this Section, the Recipient shallprepare and furnish to :he Association not later than forty-five (45) days after theend of each calendar c uarter, interim unaudited financial reports for the Projectcovering the quarter, ir form and substance satisfactory to the Association.

3. The Recipient shall have its Financial Statements audited in accordance with theprovisions of Section 4.09(b) of the General Conditions. Each audit of theFinancial Slatements shall cover the period of one (1) fiscal year of the Recipient.The audited Financial Statements for each such period shall be furnished to theAssociation not later than six (6) months after the end of such period.

L. The Recipient shall en.ure that:

(a) by not later than the Effective Date, the services of a financialmanagement specialist and an accountant, both with education,exrerience and terms of reference satisfactory to the Association, havebeen engaged Ior the Project; and

(b) by not later than six (6) months after the Effective Date, a computerizedaccounting sy! tem for the Project, satisfactory to the Association, is inpla,e and opentional.

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:Section II. Procurement

A. General

1. Goods, Works and Non-consulting Services. All goods, works and non-

consulting services req jired for the Project and to be financed out of the proceeds

of the Financing shall )e procured in accordance with the requirements set forth

or referred 1o 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 -roceeds of the Financing 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 procuremeni me:hods or methods of review by the Association of

particular czontracts, refer to the corresponding method described in Sections II

and III of the Procuremert Guidelines, or Sections II, III, IV and V of the

Consultant Guidelines, as the case may be.

B. Particular Methods (f Procurement of Goods, Works and Non-consultingServices

1. International Compel itive Bidding. Except as otherwise provided in paragraph

2 below, goods, works ard non-consulting services shall be procured under

contracts awarded on the basis of International Competitive Bidding.

2. Other Methods of 'rocurement of Goods, Works and Non-consulting

Services

(a) The following table specifies the methods of procurement, other than

International Competitive Bidding, which may be used for goods, works

and non-const Iting services. The Procurement Plan shall specify the

circumstances under which such methods may be used:

Procurement Method

(i) National Competitive Bidding, following the procedures of the

Procurement Laws subject to :aragraph (b) below

(ii) Shopping, following the request for quotation method of the Procurement

Laws

(iii) Direct Contracting

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(b) The following provisions apply for the contracting of goods, works andnon-consulting services under National Competitive Bidding, usingbidding documents acceptable to the Association:

(i) post bidding negotiations shall not be allowed with the lowestevalua ed o: any other bidder;

(ii) bids s iould be submitted and opened in public in one (1)location immediately after the deadline for submission;

(iii) rebidding s'lall not be carried out, except with the Association'sprior a reenent;

(iv) lottery in award of contracts shall not be allowed;

(v) bidderm' qualification/experience requirement shall bemanda :ory;

(vi) bids shall not be invited on the basis of percentage above orbelow the estimated cost and contract award shall be based onthe lowiest evaluated bid price of compliant bid from eligible andqualifi ed bidder; and

(vii) single stage two (2) envelope procurement system shall not beallowed.

C. Particular Methods o rProcurement of Consultants' Services

I1. Quality- and Cost-baed Selection. Except as otherwise provided in paragraph2 below, consultants' ,ervices shall be procured under contracts awarded on thebasis of Quality- and Cost-based Selection.

2. Other Methods of Procurement of Consultants' Services. The following tablespecifies mthods of p.ocurement, other than Quality- and Cost-based Selection,which may be used for consultants' services. The Procurement Plan shall specifythe circumstances und r which such methods may be used:

Procurement Method

(a) Quality-basec Selection

(b) Fixed Budget Selection

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(c) Consultants Qualifications-Based Selection

(d) Least Cost Selection

(e) Single-Source Selection

(f) Selection of Individual Consultants

D). Review by the Associ2tion of Procurement Decisions

The Procurement Plan shall set forth those contracts which shall be subject to theAssociation's Prior Re view, All other contracts shall be subject to Post Reviewby the Association.

E. Other Undertakings

The Recipient shall:: (a) Dy not later than October 15, 2012, nominate aprocurement focal point fo- the Project; (b) by not later than March 31, 2013,engage the services of a part-time internationally recruited procurementconsultant; (c) establish a finctional webpage for BCC with procurement-relatedinformation accessible to the public; (d) establish in BCC a system for handlingcomplaints and a database for recording, monitoring and follow up on allprocurement activities under the Project; and (e) implement the ProcurementRisk Mitigation Plan in a manner acceptable to the Association, including thepreparation and submission of semi-annual reports to the Association onprocurement activities undertaken during the previous period covered by saidreport.

Section IV. Withdrawal or the Proceeds of the Financing

A. General

I. The Recipient may withdraw the proceeds of the Financing in accordance withthe provisions of Arti :le II of the General Conditions, this Section, and suchadditional i-istructions as the Association shall specify by notice to the Recipient(including the "World Bank Disbursement Guidelines for Projects" dated May2006, as revised from ime to time by the Association and as made applicable tothis Agreement pursuant to such instructions), to finance Eligible Expenditures asset forth in the table in paragraph 2 below.

2. The following table sp-cifies the categories of Eligible Expenditures that may befinanced out of the proceeds of the Financing ("Category"), the allocations of theamounts of the Financing to each Category, and the percentage of expenditures tobe financed for Eligible Expenditures in each Category:

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Category Amount of the Percentage ofCredit Allocated Expenditures to be

(expressed in SDR) Financed (inclusiveof Taxes)

(1) Goods, works, non-consul:ing 35,160,000 100%services and consultants' services

(2) Training 4,040,000 100%

(3) Grants 3,160,000 100%

(4) Operating Costs 540,000 100%

(5) Unallocated 1,300,000

TOTAL AMOUNT 44,200,000

For the purpose of this paragraph:

(a) the term "T aining" means expenditures (other than those forconsultants' scrvices) to finance the reasonable cost of the services oftrainers, meeting rooms, publications, travel costs, per diem allowancesfor trainees, workshops, seminars and study tours as agreed with theAssociation; and

(b) the term "Op ,rating Costs" means the reasonable incremental costsincurred on a -count of the implementation of the Project for officeutilities, stationery, printing and publication, maintenance and rental ofvehicles and equirment, events, bank charges, advertising costs, andsalaries, and vertime allowances of support staff (e.g. drivers andmessengers), and Froject-related travel and training allowances of civilseriants deputed to the Project but excluding salaries of the Recipient'sciv:l servants.

B. Withdrawal Conditions; Withdrawal Period

1. Notwithstanding the piovis Ions of Part A of this Section, no withdrawal shall bemade:

(a) for payments rade prior to the date of this Agreement; or

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(b) under Categor) 3 until the Operational Manual referred to in Section I.Cof Schedule 2 :o this Agreement has been prepared and adopted by theRecipient, satisfactcry to the Association.

2. The Closing Date is December 31, 2017.

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SCHEDULE 3

Repayment Schedule

Principal Amount of the Creditrepayable

Date Payment Due (expressed as a percentage)*

On each March 1 and Septemb!r 1:commencing March 1, 2023 to ind including 1%September 1, 2032commencing March 1, 2033 to ind including 2%September 1, 2052

* The percentages represent the percentage of the principal amount of the Credit to be

:-epaid, except as the Association may otherwise specify pursuant to Section 3.03(b) of

:he General Conditions.

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APPENDIX

Section I. DefRnitions

I "Anti-Corruption Guidelines" means the "Guidelines on Preventing andCombating Fraud and Corruption in Projects Financed by IBRD Loans and IDACredits and Grants", da:ed October 15, 2006 and revised in January 2011.

2. "Association of Mobile Operators of Bangladesh" means the industryassociation of licensed 3angladeshi mobile telecommunication operators.

3. "Bangladesh Association of Call Center Operators" and the acronym "BACCO"mean the industry assoc iation of authorized call center operators.

4. "Bangladesh Associatlon of Software and Information Services" and theacronym "E ASIS" mean the industry association of Bangladeshi software andinformation service businesses.

5. "Bangladesh Computer Council" and the acronym "BCC" mean the BangladeshComputer Council of tl.e Ministry of Information & CommunicationTechnology, or any suc-.essor thereto acceptable to the Association.

6. "Bangladesh Computer Sam ity" and the acronym "BCS" mean the association ofBangladeshi ICT Comranies.

7. "Business Promotion Council" means the ICT business promotion council of theMinistry of Commerce.

3. "Category" means a ca:egory set forth in the table in Section IV of Schedule 2 tothis Agreement.

9. "Consultant Guideline." means the "Guidelines: Selection and Employment ofConsultants under IBFD Loans and IDA Credits and Grants by World BankBorrowers" dated January 2311.

10. "Export Prc motion Bu -eau" means the national export promotion agency of theRecipient's Ministry of Commerce.

11. "e-Government" means the use of information and communication technologiesto improve the activities of public sector organizations.

12. "General Conditions" means the "International Development AssociationGeneral Conditions for Credits and Grants", dated July 31, 2010.

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13. "GAAP" means the R-cipient's Governance and Accountability Action Plan,dated August 14, 2012, acceptable to the Association, which identifies key

governance issues undcr the Project and sets forth mitigating actions to address

said issues, as said plan may be modified from time to time with the prior written

agreement of the Assoc ation.

14. "Grant" means a grant by the Recipient to eligible ITES companies in support of

the development of training programs for interns and as shall be made in

accordance with eligiEility criteria set forth in the Operational Manual, and"Grants" means more tian one (1) Grant.

15. "Implementation Monitoring and Evaluation Division" and the acronym "IMED"mean the Irplementation Monitoring and Evaluation Division of the Recipient'sMinistry of Planning.

6. "Ministry of Commerct" means the Recipient's Ministry of Commerce.

7. "Ministry of Informat on & Communication Technology" and the acronym

"MOICT" mean the Recirient's Ministry of Information & CommunicationTechnology. or any suc:essor thereto.

8. "Operational Manual" means the manual referred to in Section I.C of Schedule 2

to this Agreement.

[9. "Planning Commission' means the Recipient's Planning Commission.

20. "Procurement Guidelin,-s" means the "Guidelines: Procurement of Goods, Works

and Non-co-isulting Se:vices under IBRD Loans and IDA Credits and Grants byWorld Bank Borrowers" dated January 2011.

21. "Procurement Laws" means, collectively, the Recipient's Public ProcurementAct 2006, the Recipiont's Public Procurement Rules, 2008 (as amended in

August 2009), and thc Recipient's Public Procurement Act (1" Amendment)

2009.

22. "Procurement Plan" tr eans the Recipient's procurement plan for the Project,

dated November 14, 2011 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 ti ne in accordance with the provisions of said paragraphs.

23. "Procurement Risk Mitigation Plan" means the framework of measures and

actions pre'ared by tie Recipient and dated November 14, 2011, aimed at

mitigating procuremeni related risks in the carrying out of the Project, and whichhas been ag-eed with tf e Association.

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24. "Project Coordination Jnit" and the acronym "PCU" mean the unit referred to inparagraph 3 of Section '.A of Schedule 2 to this Agreement.

25. "Project Implementati m Committee" and the acronym "PIC" mean thecommittee referred to in paragraph 2 of Section L.A of Schedule 2 to thisAgreement.

26. "Project Steering Cort mittee" and the acronym "PSC" mean the committeereferred to in paragraph I of Section L.A of Schedule 2 to this Agreement.

27. "Socio-Economic Infrastructure Division" means the Socio-EconomicInfrastructure Division 3f th. Planning Commission.