LOAN NUMBER 9127-HR

LOAN AGREEMENT
(EARTHQUAKE RECOVERY AND PUBLIC HEALTH PREPAREDNESS PROJECT) BETWEEN REPUBLIC OF CROATIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

LOAN AGREEMENT

AGREEMENT dated as of the Signature Date between REPUBLIC OF CROATIA («Borrower») and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT («Bank»). 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) apply to and form 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 the amount of one hundred and eighty three million and nine hundred thousand Euro (€183,900,000), as such amount may be converted from time to time through a Currency Conversion («Loan»), to assist in financing the project described in Schedule 1 to this Agreement («Project»).

2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section III of Schedule 2 to this Agreement.

2.03. The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount.

2.04. The Commitment Charge is one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance.

2.05. The interest rate is the Reference Rate plus the Fixed Spread or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions.

2.06. The Payment Dates are May 15 and November 15 in each year.

2.07. The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement.

Article III
PROJECT

3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall carry out Part 1 and Part 3.1 of the Project through MOCPP and Part 2 and Part 3.2 of the Project through MOH in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement.

Article IV
EFFECTIVENESS; TERMINATION

4.01. The Additional Condition of Effectiveness consists of the following, namely that the Borrower shall adopt a Project Operations Manual (POM) under terms satisfactory to the Bank.

4.02. The Effectiveness Deadline is 90 days after the Signature Date.

Article V
REPRESENTATIVE; ADDRESSES

5.01. The Borrower’s Representative is the Minister in charge of finance.

5.02. For purposes of Section 10.01 of the General Conditions the Borrower’s address is:

Ministry of Finance

Katanciceva 5

10000 Zagreb

Republic of Croatia

Facsimile: (385-1) 4922-598

5.03. For purposes of Section 10.01 of the General Conditions: (a) the Bank’s address is:

International Bank for Reconstruction and Development

1818 H Street, N.W.

Washington, D.C. 20433

United States of America; and

(b) the Bank’s Electronic Address is:

AGREED as of the Signature Date.

SCHEDULE 1

PROJECT DESCRIPTION

The objective of the Project is to assist the Borrower with earthquake reconstruction efforts in Zagreb and the surrounding arreas, improve institutional capacity for reconstructionand strengthen national systems for public health preparedness.

The Project consists of the following parts:

Part 1: Earthquake Recovery and Reconstruction

1. Immediate Public Safety Interventions

Provision of support to carry out the immediate recovery works to ensure safety measures on public and/or private infrastructure damaged as a result of an earthquake in the Borrower’s territory, through carrying out minor civil works for the removal of debris and repair of damaged roofs, chimneys, and other nonstructural elements.

2. Rehabilitation and Reconstruction of Health and Education Facilities

Provision of support to carry out focused rehabilitation and reconstruction of Health and Education Facilities to ensure the continuity of health and education services and to improve resilience to seismic events through, inter alia:

(a) Carrying out of a detailed engineering assessment of selected Health and Education Facilities that were damaged as a result of an earthquake in the Borrower’s territory.

(b) On the basis of the assessment undertaken under (a) above, carrying out of demolition of unsafe public buildings, construction of new public buildings, and rehabilitation and reconstruction of selected public buildings, including services required for the design and supervision of civil works and functional upgrading of said buildings through energy efficiency measures.

(c) Purchasing equipment for Health and Education Facilities that have been damaged as a result of an earthquake in the Borrower’s territory.

3. Housing Reconstruction Support Program Design

(a) Providing technical assistance for the development of the design of a financial support program for medium-term reconstruction of private housing. The technical assistance will focus on data collection and defining options for eligibility criteria, funds flow, oversight structure, as well as social and environmental safeguards.

(b) Carrying out of awareness raising campaigns and outreach activities to attract additional financing to leverage the impact of the housing reconstruction program.

Part 2: Public Health Surveillance and Preparedness

1. Case management and Surveillance

Provision of support to strengthen public health outbreak preparedness including for detection and confirmation, contact tracing, recording, reporting capabilities and surveillance capacity through, inter alia:

(a) Strengthening disease surveillance systems and equipment, public health laboratories, and epidemiological capacity for early detection and confirmation of cases, as well as repairs and rehabilitation of selected public health laboratories’ infrastructure.

(b) Developing systems for active contact tracing and reporting of new cases.

(c) Supporting epidemiological and/or laboratory investigation of selected health conditions.

2. Public Health Preparedness

Provision of support to strengthen the health care system of the Borrower for preparedness planning to provide optimal medical care, maintain essential community services, and minimize risks for patients and health personnel, in part by training health facilities staff and front-line workers on risk mitigation measures and providing them with supplies and equipment to strengthen public health surveillance and support response to future public health outbreaks, through, inter alia:

(a) Providing emergency medical vehicles, medical and laboratory equipment and supplies, medicines, technical assistance and training to public health officials and health care workers, all to strengthen capacity of the health system to respond to public health outbreaks.

(b) Providing personal protective equipment and gear for health care workers and public health rapid response personnel (such as relevant medical specialists, veterinarians, entomologists).

(c) Providing equipment and supplies for telemedicine to monitor and support patients and the health system as needed.

(d) Repurposing and equipping selected health care facilities to deliver critical medical services and cope with increased demand for services in the event of a public health outbreak.

(e) Supporting institutional and organizational restructuring of facilities for the purposes of managing public health outbreaks and training of healthcare staff accordingly, including sector-wide planning activities for medium and long term needs.

Part 3: Project Management

1. Provision of goods, technical assistance, Training, and Operating Costs to support the PIU-1 in the overall day-to-day implementation of Part 1 of the Project, including procurement, financial management, monitoring, and evaluation, carrying out of audits, safeguards and implementation of grievance redress mechanisms, as well as procurement for works for Part 2 of the Project and consolidated reporting for the Project.

2. Provision of goods, technical assistance, Training, and Operating Costs to support the PIU-2 in the overall day-to-day implementation of Part 2 of the Project, including procurement (other than works), financial management, monitoring, and evaluation, carrying out of audits, safeguards and implementation of grievance redress mechanisms.

SCHEDULE 2

PROJECT EXECUTION

Section I.
Implementation Arrangements

A. Institutional Arrangements

1. Without limitation to the provisions of Article V of the General Conditions, and except as the Bank shall otherwise agree, the Borrower shall:

(a) by not later than one (1) month after Effective Date establish and thereafter maintain at all times during the implementation of the Project, a PIU-1, within the MOCPP, with composition, resources, terms of reference and functions acceptable to the Bank. The PIU-1 shall be responsible for the day-to-day implementation of Part 1 of the Project including disbursement, procurement, monitoring and evaluation, consolidated reporting, and ensuring safeguards compliance under the Project as well as procurement for works for Part 2 of the Project, as further elaborated in the Project Operations Manual;

(b) by not later than one (1) month after Effective Date establish and thereafter maintain at all times during the implementation of the Project, a PIU-2, within the MOH, with composition, resources, terms of reference and functions acceptable to the Bank. The PIU-2 shall be responsible for the day-to-day implementation of Part 2 of the Project including disbursement, procurement (other than works), monitoring and evaluation, reporting, and ensuring safeguards compliance under the Project as further elaborated in the Project Operations Manual; and

(c) establish by not later than three months following the Effective Date and thereafter maintain at all times during the implementation of the Project, a high-level Steering Committee, with composition, resources, terms of reference and functions acceptable to the Bank. The Steering Committee shall be responsible for providing strategic guidance, overall oversight of the Project and coordination and monitoring of the Project.

B. Project Operations Manual (POM)

1. The Borrower, through the PIU-1 and PIU-2 respectively, shall carry out the Project, in accordance with POM, satisfactory to the Bank, which shall include the rules, methods, guidelines, standard documents and procedures for the carrying out of the Project, including the following: (a) the detailed description of the Project activities and the institutional arrangements of the Project; (b) the detailed description of prioritization and eligibility criteria for the Project activities; (c) the Project accounting, auditing, reporting, financial, procurement and disbursement procedures; (d) the monitoring indicators for the Project; and (e) the detailed Project costs and financing.

2. The POM may not be assigned, amended, abrogated or waived, or permitted to be assigned, amended, abrogated or waived, or any provision thereof, in a manner which, in the opinion of the Bank, may materially and adversely affect the implementation of the Project. The POM may only be amended in consultation with, and after approval of, the Bank. In case of any conflict between the terms of the POM and those of this Agreement, the terms of this Agreement shall prevail.

C. Annual Work Plan and Budget

The Borrower, jointly through PIU-1 and PIU-2, shall:

(a) unless otherwise agreed with the Bank, prepare and furnish to the Bank not later than December 1 of each year during the implementation of the Project, starting in 2020, a proposed Annual Work Plan and Budget for the next calendar year containing: (i) all activities to be carried out under the Project during that calendar year; and (ii) a proposed financing plan for expenditures required for such activities, setting forth the proposed amounts and sources of financing; and

(b) provide the Bank a reasonable opportunity to exchange views with the Borrower on each such proposed Annual Work Plan and Budget, and shall thereafter ensure that the Project is implemented with due diligence during said following year, in accordance with such Annual Work Plan and Budget as shall have been approved by the Bank; and not make or allow to be made any change to the approved Annual Work Plan and Budget without the Bank’s prior written approval.

D. Environmental and Social Standards

1. The Borrower shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Bank.

2. Without limitation upon paragraph 1 above, the Borrower shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan («ESCP»), in a manner acceptable to the Bank. To this end, the Borrower shall ensure that:

(a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, and provided in the ESCP;

(b) sufficient funds are available to cover the costs of implementing the ESCP;

(c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and

(d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Bank shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter.

3. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail.

4. The Borrower shall ensure that:

(a) all measures necessary are taken to collect, compile, and furnish to the Bank through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Bank, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Bank, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and

(b) the Bank is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards.

5. The Borrower shall establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Bank.

6. The Borrower shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, and subcontractors and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts.

Section II.
Project Monitoring Reporting and Evaluation

1. The Borrower, through the PIU-1 shall submit to the Bank each consolidated Project Report not later than forty-five days after the end of each calendar semester, covering the calendar semester.

2. Unless otherwise agreed with the Bank, the Borrower shall:

(a) Not later than December 1, 2022 undertake a mid-term review of the progress of the Project.

(b) Not later than one month prior to the review referred to in
paragraph (a) above, the Borrower shall furnish to the Bank for its comments a report, in such detail as the Bank shall reasonably request, on the progress of the Project and the various matters to be discussed at such review.

(c) Following the review referred to in paragraph (a) above, the Borrower shall undertake to act promptly and diligently in order to take any corrective action deemed necessary to remedy any shortcoming noted in the implementation of the Project, and/or to implement such other measures as may have been agreed upon between the Borrower and the Bank in furtherance of the objectives of the Project.

Section III.
Withdrawal of Loan Proceeds

A. General

Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Borrower may withdraw the proceeds of the Loan to: finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table:

B. Withdrawal Conditions; Withdrawal Period

1. Notwithstanding the provisions of Part A above, no withdrawal shall be made for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed seventy three million and five hundred and sixty thousand euro (€73,560,000) may be made for payments made prior to this date but on or after March 22, 2020 for Eligible Expenditures under Category (1) of the table above.

2. The Closing Date is June 30, 2024.

SCHEDULE 3

APPENDIX

DEFINITIONS

1. «Annual Work Plan and Budget» means the work plan and budget prepared annually by the Borrower and approved by the Borrower in accordance with Section I.C of Schedule 2 to this Agreement; «Annual Work Plans and Budgets» means more than one such Annual Work Plan and Budget.

2. «Anti-Corruption Guidelines» means, for purposes of paragraph 5 of the Appendix to the General Conditions, the «Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants», dated October 15, 2006 and revised in January 2011 and as of July 1, 2016.

3. «Category» means a category set forth in the table in Section III.A of Schedule 2 to this Agreement.

4. «Environmental and Social Commitment Plan» or «ESCP» means the environmental and social commitment plan for the Project, dated May 25, 2020, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Borrower shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder.

5. «Environmental and Social Standards» or «ESSs» means, collectively: (i) «Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts»; (ii) «Environmental and Social Standard 2: Labor and Working Conditions»; (iii) «Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management»; (iv) «Environmental and Social Standard 4: Community Health and Safety»; (v) «Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement»; (vi) «Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources»; (vii) «Environmental and Social Standard 7: Indigenous Peoples/Sub-Saharan Historically Underserved Traditional Local Communities»; (viii) «Environmental and Social Standard 8: Cultural Heritage»; (ix) «Environmental and Social Standard 9: Financial Intermediaries»; (x) «Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure»; effective on October 1, 2018, as published by the Bank.

6. «General Conditions» means the «International Bank for Reconstruction and Development General Conditions for IBRD Financing, Investment Project Financing», dated December 14, 2018.

7. «Health and Education Facilities» means for the purpose of this Agreement a building, part of a building or area connected to the building, that is used for health and/or education purposes in Zagreb and surrounding area, and is listed in further detailed in the POM (as defined hereinafter).

8. «MOCPP» means the Borrower’s ministry of construction and physical planning, or its successor thereof.

9. «MOF» means the Borrower’s ministry of finance, or its successor thereof.

10. «MOH» means the Borrower’s ministry of health or its successor thereof.

11. «MOSE» means the Borrower’s ministry of science and education or its successor thereof.

12. «Operating Costs» means expenditures incurred by the Borrower on account of the Project implementation including for office supplies, utilities, bank charges, communication tools, advertisement fees, translation and interpretation services, car rental and fuel costs, office rental and maintenance, moving expenses, equipment insurance, maintenance and repair, printing and publications, travel per diem allowances and accommodation costs for PIU-1 and PIU-2 staff, and salaries for PIU-1 and PIU-2 staff, including social charges, but excluding salaries for the Borrower’s civil servants.

13. «PIU-1» or «Project Implementation Unit – 1» means the project implementation unit to be established within MOCPP as described in Section I.A paragraph (a) of Schedule 2 to the Agreement.

14. «PIU-2» or «Project Implementation Unit – 2» means the project implementation unit to be established within MOH as described in Section I.A, paragraph (b) of Schedule 2 to the Agreement.

15. «Procurement Regulations» means, for purposes of paragraph 85 of the Appendix to the General Conditions, the «World Bank Procurement Regulations for IPF Borrowers», dated July 2016, revised November 2017 and August 2018.

16. «Project Operations Manual» or «POM» means the Borrower’s manual to be prepared by the Borrower, through the PIU in consultation with the MOF, MOH, MOCPP, and MOSE, referred to in Section I.B of Schedule 2 to this Agreement, as said manual may be amended from time to time by the Borrower, through the PIU, with the agreement of the Bank.

17. «Signature Date» means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to «the date of the Loan Agreement» in the General Conditions.

18. «Steering Committee» means the committee to be established for the Project by the Borrower in accordance with Section I.A, paragraph (c) of Schedule 2 to this Agreement.

19. «Training» means the Project related study tours, training courses, seminars, workshops and other training activities, including costs of training materials, space and equipment rental, travel, accommodation and per diem costs of trainees and trainers, trainers’ fees, and other training related miscellaneous costs.