LOAN NUMBER 4013-CAM(COL)

LOAN AGREEMENT (Ordinary Operations [Concessional])

(Agricultural Value Chain Competitiveness and Safety Enhancement Project)

between

KINGDOM OF CAMBODIA

and

ASIAN DEVELOPMENT BANK

DATED 0 7 DEC 2020 ----------

CAM 50264

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SCHEDULE 3

Allocation and Withdrawal of Loan Proceeds

General

1. The table attached to this Schedule sets forth the Categories of items of expenditure to be financed out of the proceeds of the A Loan and the allocation of the A Loan proceeds to each such Category ("Table"). (Reference to "Category" in this Schedule is to a Category of the Table.)

Basis for Withdrawal from the Loan Account

2. Except as ADB may otherwise agree, the proceeds of the A Loan shall be allocated to items of expenditure, and disbursed on the basis of the withdrawal percentage for each item of expenditure set forth in the Table.

Reallocation

3. Notwithstanding the allocation of the A Loan proceeds and the withdrawal percentages set forth in the Table,

(a) if the amount of the A Loan allocated to any Category appears to beinsufficient to finance all agreed expenditures in that Category, ADB may,by notice to the Borrower, (i) reallocate to such Category, to the extentrequired to meet the estimated shortfall, amounts of the A Loan which havebeen allocated to another Category but, in the opinion of ADB, are notneeded to meet other expenditures, and (ii) if such reallocation cannot fullymeet the estimated shortfall, reduce the withdrawal percentage applicableto such expenditures in order that further withdrawals under such Categorymay continue until all expenditures thereunder shall have been made; and

(b) if the amount of the A Loan allocated to any Category appears to exceedall agreed expenditures in that Category, ADB may, by notice to theBorrower, reallocate such excess amount to any other Category.

Disbursement Procedures

4. Except as ADB may otherwise agree, the A Loan proceeds shall be disbursed in accordance with the Loan Disbursement Handbook.

Condition for Withdrawals from Loan Account

5. Notwithstanding any other provision of this Loan Agreement, no withdrawals shall be made from the Loan Account for [Financial services Category] until Subsidiary Loan Agreements with both PFls, in form and substance satisfacto

r

y to ADB, shall have been duly executed and delivered on behalf of respective PFI, and shall have become fully effective and binding on the parties thereto in accordance with their terms.

15 Attachment to Schedule 3

TABLE

ALLOCATION AND WITHDRAWAL OF A LOAN PROCEEDS

Total Amount Allocated for ADB

Number Item Financing

($) Cateaorv

1 Goods, Services, and

13,509,000 research and development

2 Cooperative support 3,223,000

3 Financial services 49,000,000

4 Incremental operating cost 1,586,000

5 Unallocated 2,682,000

TOTAL 70,000,000 . .

• Exclusive of taxes and duties imposed w1th1n the territory of the Borrower.•• Subject to the condition for withdrawal described in paragraph 5 of Schedule 3.

Basis for Withdrawal from the Loan Account

100% of total expenditure claimed*

100% of total expenditure claimed

100% of total expenditure claimed**

100% of total expenditure claimed

16

SCHEDULE 4

Execution of Project; Financial Matters

A. Project - General

Implementation Arrangements

1. The Borrower shall ensure, and cause the Project Implementing Agencies and PFls to ensure, that the Project is implemented in accordance with the detailed arrangements set forth in the PAM. Any subsequent change to the PAM shall become effective only after approval of such change by the Borrower, PFls, and ADB. In the event of any discrepancy between the PAM and this Loan Agreement, the provisions of this Loan Agreement shall prevail.

Counterpart Support

2. The Borrower shall ensure that funds necessary for the Project are provided,including without limitation, the financial charges during implementation and the exemption oftaxes and duties. The Borrower shall ensure that additional counterpart funds are made availableto cover any funding shortfalls that may occur under the Project.

3. The Borrower shall ensure that the Project Implementing Agencies provide counterpart funds necessary for the Project, including the amount sufficient to finance land acquisition costs. In addition to the foregoing, the Borrower shall ensure that (i) the Project Implementing Agencies have sufficient funds to satisfy its liabilities arising from any Works, Goods and/or Services contract, as well as additional funds to meet any shortfall or cost overruns in completing the Project; and (ii) PFls make available funds to the Eligible Activity and the AIF Eligible Activity on a timely basis.

Gender and Development

4. The Borrower shall ensure, and cause each Project Implementing Agency and PFI to ensure, that (a) the GAP is implemented in accordance with its terms; (b) the bidding documents and contracts include relevant provisions for contractors to comply with the measures set forth in the GAP; (c) adequate resources are allocated for implementation of the GAP; and (d) progress on implementation of the GAP, including progress toward achieving key gender outcome and output targets, are regularly monitored and reported to ADB

Prohibited List of Investments

5. The Borrower shall cause each Project Implementing Agency ar:,d each PFI to ensure that no proceeds of the A Loan and B Loan, and JFPR Grant are used to finance any activity included in the list of prohibited investment activities provided in Appendix 5 of the SPS.

Governance and Anticorruption

6. The Borrower, the Project Executing Agency, the Project Implementing Agencies, and the PFls shall (a) comply with ADB's Anticorruption Policy (1998, as amended to date) and acknowledge that ADB reserves the right to investigate directly, or through its agents, any alleged

17 Schedule 4

corrupt, fraudulent, collusive or coercive practice relating to the Project; and (b) cooperate with any such investigation and extend all necessary assistance for satisfactory completion of such investigation.

7. The Borrower, the Project Executing Agency, the Project Implementing Agencies,and the PFls shall ensure that the anticorruption provisions acceptable to ADB are included in allbidding documents and contracts, including provisions specifying the right of ADB to audit andexamine the records and accounts of the executing and implementing agencies and allcontractors, suppliers, consultants, and other service providers as they relate to the Project.

B. Component 1-Agricultural Value Chain Loan, Equity Capital Loan and Credit Guarantee

Eligible PF Is

8. The Borrower shall ensure that each PFI shall, at all times, fulfill the followingeligibility criteria:

(a) corporate, financial, management and governance practices acceptable toADB and MEF;

(b) satisfied ADB's financial, integrity, anti-money laundering and counter­financing of terrorism due diligence requirements;

(c) satisfy the financial covenant set out in paragraph 9; and

(d) comply with the terms and conditions of the Subsidiary Loan Agreementbetween MEF and each PFI.

Financial Covenant for PFls

9. The Borrower shall ensure that each PFI complies with the following:

(a) gross non-performing loan ratio of less than 5%;

(b) capital adequacy ratio of 15% or as other ratio required by the NationalBank of Cambodia;

(c) liquidity coverage ratio as required by the National Bank of Cambodia;and

(d) return on equity of at least 2%.

For purposes of this paragraph, the definitions for non-performing loans ratio, capital adequacy ratio, and liquidity coverage ratio, as adopted by the National Bank of Cambodia shall be applied. In the absence thereof, the Cambodia International Financial Reporting Standards and the PFl's operating and risk management framework and policies shall be used. The return on equity is expressed as a percentage of net income of the PFI before dividends over average shareholder's equity. The financial criteria shall be measured at the end of each year based on the annual audited entity financial statements of each PFI, with an auditor's opinion on the compliance of the financial covenants. The PFls will furnish to the administrator (project

18 Schedule 4

implementing unit) and ADB a copy of supplemental financial information showing compliance with National Bank of Cambodia's prudential regulations.

Eligible Sub-borrowers

10. The Borrower shall cause each PFI to ensure that Eligible Sub-borrowers areagricultural cooperatives, farmer groups and farmers engaged in value chains of the specifiedagricultural commodities, engaged in agricultural commodity value chain business activities takingplace in the agreed provinces, and that meet such other additional criteria such as registration,ownership, as are specified in the PAM.

Eligible Activity

11. The Borrower shall cause each PFI to ensure that: (a) Eligible Activities areactivities that: (i) involve the agreed eligible economic investment as set out in the PAM; (ii) complywith the environmental and social safeguard criterion set out in the PAM; and (iii) are not includedin the list of prohibited investment activities provided in Appendix 5 of the SPS; and (b) otherwisecomply with additional terms set out in the PAM. The Borrower shall further cause each PFI toensure that AIF Eligible Activities are a subset of Eligible Activities that are economic investmentsin technologies, facilities or business operations that: (a) reduce greenhouse gases and otherpollution; (b) improve energy efficiency; or (c) reduce resource-use, as further described in thePAM.

Agricultural Value Chain Subloans

12. The Borrower shall cause each PFI to ensure that each Subloan: (a) isdenominated and withdrawn in Dollar and disbursed to Eligible Sub-borrowers in accordance withprocedures specified in the PAM; (b) carries interest at an appropriate rate that takes into accountthe cost of funds, administrative costs, credit and other applicable risks associated with theSubloan and an adequate profit margin for the PFI charged on a declining balance basis; andotherwise aligned with the market rate; (c) has a repayment period as specified for the relevanttype of Subloan as specified in the PAM; and (d) otherwise comply with the terms set out in thePAM for (i) the farm production loan, (ii) the short-to-medium term small business loan for workingcapital and equipment, (iii) the inventory procurement loan, and (iv) the term loan for fixedinvestment and working capital. The Borrower shall cause each PFI to ensure that each AIFSubloan satisfies the requirements of the Subloan and that AIF Subloans are offered for short-to­medium term small business loans for working capital and equipment or term loans for fixedcapital investment and working capital, as further described in the PAM.

Credit Guarantees

13. The Borrower shall cause each PFI to ensure that each Credit Guarantee isextended to the Eligible Sub-borrowers in accordance with the terms and procedures specified inthe PAM. Notwithstanding the foregoing, the Borrower shall ensure that the Credit Guarantee isoffered only after appropriate governance structure and operational safeguards to addressfinancial risks involved with Credit Guarantee, have been established by the Borrower to overseethe Credit Guarantee scheme, as reasonably agreed by ADB.Equity Capital Loans

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14. The Borrower shall cause each PFI to ensure that each Equity Capital Loan isextended to the Eligible Sub-borrowers in accordance with the terms and procedures specified inthe PAM.

Procurement

15.

Safeguards

The Borrower shall ensure, or shall cause each PFI to ensure, that:

(a) the procurement of Goods, Works and Services is carried out inaccordance with the Procurement Policy and the ProcurementRegulations;

(b) each Eligible Sub-borrower undertakes procurement of Goods, Works andServices with due attention to economy and efficiency and in accordancewith established private sector or commercial practices, acceptable to ADB;and

(c) (i) all Goods and Works procured and Services obtained (including allcomputer hardware, software and systems, whether separately procuredor incorporated within other goods and services procured) do not violate orinfringe any industrial property or intellectual property right or claim of anythird party; and (ii) all contracts for the procurement of Goods, Works andServices contain appropriate representations, warranties and, ifappropriate, indemnities from the contractor, supplier, consultant or serviceprovider with respect to the matters referred to in this subparagraph.

Screening, Categorization, and Environmental and Social Assessment and Planning

16. The Borrower shall cause each PFI to ensure that before any subproject isapproved as an Eligible Activity or AIF Eligible Activity: (a) adopts the ESMS, (b) the PFI hasappointed designated staff for implementation of safeguard under Component 1 of the Project;(c) the ESMS is used to screen and categorize the significance of potential environmental,involuntary resettlement or indigenous peoples impacts associated with such subproject; and(d) if such subproject is Category B for environment within the meaning of the SPS, the IEE andthe EMP are prepared for each such subproject in accordance with ESMS.

17. Notwithstanding any other provision of this Loan Agreement or B Loan Agreement,no withdrawals shall be made from the A Loan Account or B Loan Account for the purpose of anyEligible Activity or AIF Eligible Activity until the Borrower has caused the PFls to establish theESMS in a manner satisfactory to ADB.

18. The Borrower shall cause each PFI to ensure that each Eligible Activity and Al FEligible Activity involves no involuntary resettlement or indigenous peoples impacts, all within themeaning of the SPS.

19. Without limiting paragraph 18 of this Schedule: (a) in the event that any subprojectthat has been assessed as an Eligible Activity or AIF Eligible Activity does have an impact of thetype described in paragraph 18 of this Schedule, the Borrower shall cause the applicable PFI to

20 Schedule 4

promptly notify ADS and ensure that all steps are taken to ensure that the Eligible Activity and AIF Eligible Activity comply with the applicable laws and regulations of the Borrower and with the SPS; and (b) the Borrower shall cause each PFI to ensure that in respect of any proposed Eligible Activity and AIF Eligible Activity that involves the acquisition or transfer of any interest in land, such acquisition or transfer is between willing parties and not under eminent domain.

20. The Borrower shall cause each PFI to ensure that (a) Eligible Sub-borrowerprepare, design, construct, implement, operate and decommission the Eligible Activity and AIFEligible Activity in accordance with (i) all applicable laws and regulations of the Borrower relatingto environment, health and safety; (ii) the Environmental Safeguards; (iii) the ESMS; (iv) allmeasures and requirements set forth in the respective IEE and EMP, where such measures arerequired for an Eligible Activity and AIF Eligible Activity with environmental safeguards categoryB under the ESMS; and (v) any corrective or preventative actions set forth in a SafeguardsMonitoring Report; and (b) any adverse impact on the environment that may arise from EligibleActivity and AIF Eligible Activity implementation activities is promptly mitigated or minimized andreported to ADS in accordance with the ESMS.

21. The Borrower shall cause each PFI to ensure that (a) necessary budgetary andhuman resources are made available to fully implement the ESMS; and (b) each Eligible Sub­borrower under the Eligible Activity and AIF Eligible Activity makes necessary budget and humanresources to fully implement the respective EMP.

ESMS Monitoring and Reporting

22. The Borrower shall cause each PFI to do the following: (a) submit semiannualreports about the PFl's implementation of its ESMS to the Borrower for compilation and timelysubmission by the Borrower to ADS; (b) inform ADB of the occurrence of any unanticipatedenvironmental and/or social risks and impacts arise during Eligible Activity and AIF Eligible Activityimplementation, with detailed description of the event and proposed corrective action plan; and(c) report to the Borrower and ADS any actual or potential breach of compliance with themeasures and requirements set forth in the ESMS and any EMP promptly after becoming awareof the breach. The Borrower shall cause each PFI to review the effectiveness of its ESMSimplementation after 12 months of Project implementation, and report to the Borrower as part ofthe semiannual report on ESMS implementation, and make any necessary changes as requiredby ADB and Borrower following such review.

Grievance Redress Mechanism

23. Each PFI to ensure that, grievance redress mechanism acceptable to ADS isestablished at the PMU under MAFF. In addition, each PFI to ensure that its respective existingcustomer service which includes letter boxes at branch offices, telephone hotline and on-linesocial media platform will be made available for Component 1.

Labor Standards

24. The Borrower shall cause each PFI to ensure that core labor standards and applicablelaws and regulations of the Borrower, including workplace occupational safety requirements, arecomplied with during implementation of any Eligible Activity and AIF Eligible Activity.

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Schedule 4

Combating Money Laundering and Financing of Terrorism

25. The Borrower shall ensure that each PFI:

(a) complies with applicable laws and regulations of the Borrower oncombating money laundering and financing of terrorism and that A Loan,B Loan, and JFPR Grant proceeds are not used, directly or indirectly, inmoney laundering or financing of terrorism;

(b) formulates and implements internal control procedures, including customerdue diligence procedures, to prevent violation of subparagraph (a)hereinabove; and

(c) promptly informs the Borrower and ADB if there is any violation or potentialviolation of subparagraph (a) hereinabove. In the event that ADB informsthe relevant PFI of its concern that there has been such an allegedviolation, the relevant PFI shall (i) cooperate in good faith with ADB and itsrepresentatives so that ADB can determine whether such a violation hasoccurred, (ii) respond promptly and in reasonable detail to any query fromADB, and (iii) furnish documentary support for such response upon ADB'srequest.

Post-Project Utilization

26. Following completion of the Project, the Borrower shall assess whether fundsrepaid by PF ls to the Borrower are to be recycled for further lending to financial intermediaries inaccordance with the following: (a) selected in a manner consistent with the selection of the PFlsunder Component 1 of the Project; and (b) for subloans, credit guarantees and/or Equity CapitalLoans to sub-borrowers for subprojects, in each case similar in terms and nature to Subloans,Credit Guarantees, Equity Capital Loans, Eligible Sub-borrowers Eligible Activity and AIF EligibleActivity under Component 1 of the Project.

C. Component 2 and Component 3- Project

Procurement

27. The Borrower shall ensure, or cause the Project Implementing Agencies to ensure,that:

(a) the procurement of Goods, Works and Services is carried out inaccordance with the Procurement Policy and the ProcurementRegulations;

(b) Goods, Works and Services shall be procured based on the detailedarrangements set forth in the Procurement Plan, including the procurementand selection methods, the type of bidding documents, and ADB's reviewrequirements. The Borrower may modify the detailed arrangements setforth in the Procurement Plan only with the prior agreement of ADB, andsuch modifications must be set out in updates to the Procurement Plan;and

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Schedule 4

(c) (i) all Goods and Works procured and Services obtained (including allcomputer hardware, software and systems, whether separately procuredor incorporated within other goods and services procured) do not violate orinfringe any industrial property or intellectual property right or claim of anythird party; and (ii) all contracts for the procurement of Goods, Works andServices contain appropriate representations, warranties and, ifappropriate, indemnities from the contractor, supplier, consultant or serviceprovider with respect to the matters referred to in this subparagraph.

28. The Borrower shall cause each Project Implementing Agency not to award anyWorks or Nonconsulting Services contracts which involves environmental impacts until suchProject Implementing Agency has:

Safeguards

Environment

(a) obtained the final approval of the applicable IEE from the Borrower'srelevant authority; and

(b) incorporated the relevant provisions from the EMP into the Works contract.

29. For Component 2, the Borrower shall cause MAFF to implement the rapidenvironmental assessment checklist for screening and assessing small infrastructuredevelopments by agricultural cooperatives, as set out in the EMP, and ensure compliance withthe terms and conditions of the IBP agreement, as applicable. For Component 3, the Borrowershall ensure or cause the MRD to ensure that the preparation, design, construction,implementation, operation and decommissioning of the Project and all Project facilities complywith (a) all applicable laws and regulations of the Borrower relating to environment, health andsafety; (b) the Environmental Safeguards; and (c) all measures and requirements set forth in theIEE, the EMP, and any corrective or preventative actions set forth in a Safeguards MonitoringReport.

Land Acquisition and Involuntary Resettlement

30. The Borrower shall ensure that the Project does not have any involuntaryresettlement impacts, all within the meaning of the SPS. In the event that the Project does haveany such impact, the Borrower shall take necessary steps to ensure that the Project complies withthe applicable laws and regulations of the Borrower and with the SPS.

31. For Component 2, the Borrower shall ensure that the MAFF implements thesafeguards criteria set out in PAM to screen and categorize small scale infrastructure projects,and ensure compliance with the terms and conditions of the IBP agreement. For Component 3,the Borrower shall ensure or cause MRD to ensure: (a) the due diligence report on the Projectroads is updated upon completion of detailed engineering design on those Project roads toconfirm that there is no involuntary resettlement or land acquisition impacts, and submitted,together with all the relevant supporting document, to ADB for review; and (b) no Works contractwill commence until ADB has given its no-objection.

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Schedule 4

32. In the case of land donations for the Project, the Borrower shall ensure that:(a) eminent domain or other powers of the Borrower is not involved in the acquisition; (b) suchdonations are implemented in accordance with the CPF; (c) there was informed consent andpower of choice of affected persons through a prior and informed consultation(s) with them; and(d) such donations do not severely affect the living standards of the affected persons but benefitthem directly.

33. The Borrower shall ensure that all land and all rights-of-way required for the Projectare made available to the Works contractor in accordance with the schedule agreed under therelated Works contract.

Indigenous Peoples

34. The Borrower shall ensure or cause the Project Implementing Agencies to ensurethat the Project does not have any indigenous peoples impacts within the meaning of the SPS.In the event that the Project does have any such impact, the Borrower shall carry out a socialimpact assessment and prepare an indigenous peoples plan for the Project to ensure that theProject complies with the applicable laws and regulations of the Borrower and with the SPS.

Human and Financial Resources to Implement Safeguards Requirements

35. The Borrower shall make available or cause the Project Implementing Agencies tomake available necessary budgetary and human resources to fully implement the EMP, the IBPagreement, and the CPF.

Safeguards - Related Provisions in Bidding Documents and Works Contracts

36. The Borrower shall'ensure or cause the Project Implementing Agencies to ensurethat all bidding documents and contracts for Works contain provisions that require contractors to:

(a) comply with the measures relevant to the contractor set forth in the IEE,the EMP, and the Screening Report prepared for Component 2 and CPFand Due Diligence Report prepared for Component 3, and any correctiveor preventative actions set forth in a Safeguards Monitoring Report;

(b) make available a budget for all such environmental and social measures;

(c) provide the EA with a written notice of any unanticipated environmental,resettlement or indigenous peoples risks or impacts that arise duringconstruction, implementation or operation of the Project that were notconsidered in the IEE, the EMP, the IBP agreement and the CPF;

(d) adequately record the condition of roads, agricultural land and otherinfrastructure prior to starting to transport materials and construction; and

(e) reinstate pathways, other local infrastructure, and agricultural land to atleast their pre-project condition upon the completion of construction.

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Schedule 4

Safeguards Monitoring and Reporting

37. The Borrower shall do the following or cause the Project Implementing Agenciesto do the following:

(a) submit consolidated environment and social semi-annual SafeguardsMonitoring Reports to ADB and disclose relevant information from suchreports to affected persons promptly upon submission;

(b) if any unanticipated environmental and/or social risks and impacts ariseduring construction, implementation or operation of the Project that werenot considered in the IEE, the EMP, the IBP agreement, and the CPF,promptly inform ADB of the occurrence of such risks or impacts, withdetailed description of the event and proposed corrective action plan;

(c) report any actual or potential breach of compliance with the measures andrequirements set forth in the EMP, the IBP agreement or the CPF promptlyafter becoming aware of the breach; and

(d) prior to the commencement of the Works, prepare and submit to ADB aDue Diligence Report which certifies that all activities, measures andrequirements set forth in the CPF are duly accomplished.

Grievance Redress Mechanism

38. The Borrower shall ensure that: (a) a separate local safeguards grievance redressmechanism, acceptable to ADB, that has been established for the Project in accordance with theprovisions of the EMP, the CPF and the SPS, is maintained throughout the Projectimplementation, to consider any safeguards complaint; and (b) the local grievance redressmechanism is functioning effectively to (i) review and document eligible complaints of Projectstakeholders; (ii) proactively address grievances; (iii) provide the complainants with notice of thechosen mechanism/action; (iv) prepare periodic reports to summarize the number of complaintsreceived and resolved, chosen actions; and final outcomes/status of the grievances; and (v) makethese reports available to ADB as part of the Safeguard Monitoring Report, including semiannualreports and reports upon request. Eligible complaints include those related to the Project, any ofthe service providers, any person responsible for carrying out the Project, complaints on misuseof funds and other irregularities, and gender-related grievances.

Labor Standards, Health and Safety

39. The Borrower shall cause the Project Implementing Agencies to ensure that thecore labor standards and the Borrower's applicable laws and regulations are complied with duringProject implementation. The Borrower shall include specific provisions in the bidding documentsand contracts financed by ADB under the Project requiring that the contractors, among otherthings: (a) comply with the Borrower's applicable labor law and regulations and incorporateapplicable workplace occupational safety norms; (b) do not use child labor; (c) do not discriminateworkers in respect of employment and occupation; (d) do not use forced labor; (e) do not restrictthe workers from developing a legally permissible means of expressing their grievances andprotecting their rights regarding working conditions and terms of employment; and (f) disseminate,or engage appropriate service providers to disseminate, information on the risks of sexually

25

Schedule 4

transmitted diseases, including HIV/AIDS, to the employees of contractors engaged under the Project and to members of the local communities surrounding the Project area, particularly women.

40. The Borrower shall strictly monitor compliance with the requirements set forth inparagraph 39 above and provide ADB with regular reports.

Support for Laboratory Investment

41. MAFF will ensure that before any works or goods contract is advertised for biddingfor laboratory upgrading under Component 2, MAFF will: (a) prepare and adopt a ministerialstrategic plan for laboratory upgrading, which will be in line with the requirements of internationalaccreditation (ISO 17025 or the equivalent); and (b) prepare a business plan and financial viabilityanalysis for such laboratory. Both (a) and (b) should be acceptable for the MEF and ADB.

Support for ICT Investment

42. MAFF will ensure that before any works or goods contract is advertised for biddingfor any ICT under Component 2, MAFF will: (a) prepare and adopt a ministerial ICT developmentstrategic plan; and (b) the proposed ICT investment has been reviewed, and endorsed by theinter-ministerial working group for ICT Project Review and Evaluation established under MEFDecision No. 050 MEF dated 29 July 2020, as amended from time to time.

O&M of Project Facilities

43. The Borrower shall cause the Project Implementing Agencies to ensure that theProject facilities are operated and maintained appropriately and in accordance with the standardsand requirements prescribed by the applicable laws and regulations of the Borrower, and thatadequate budgetary and other resources are promptly provided for such O&M. Further, Borrowershall cause the Project Implementing Agencies to monitor operation and maintenance of theProject facilities, and update the financial sustainability analysis at least once a year throughoutthe Project implementation. Each Project Implementing Agency shall consult with ADB if any keyassumptions in the financial sustainability analysis cannot be realized and will require adjustmentor corrective action.