OFFICIALDOCUMENTS

CREDIT NUMBER 5808-UG

Financing Agreement

(Grid Expansion and Reinforcement Project)

between

REPUBLIC OF UGANDA

and

INTERNATIONAL DEVELOPMENT ASSOCIATION

Dated , 2017

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CREDIT NUMBER 5808 -UG

FINANCING AGREEMENT

AGREEMENT dated Q oA , (r., 2017, entered intobetween REPUBLIC OF UGANDA ("Recipient") and INTERNATIONALDEVELOPMENT ASSOCIATION ("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) constitutean integral part of this Agreement.

1.02. Unless the context requires otherwise, the capitalized terms used in this Agreementhave the meanings ascribed to them in the General Conditions or in the Appendixto this Agreement.

ARTICLE II - FINANCING

2.01. The Association agrees to extend to the Recipient, on the terms and conditions setforth or referred to in this Agreement, a credit in an amount equivalent to seventy-one million Special Drawing Rights (SDR 71,000,000) (variously, "Credit" and"Financing"), to assist in financing the project described in Schedule 1 to thisAgreement ("Project").

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

2.03. The Maximum Commitment 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 The Service Charge payable by the Recipient on the Withdrawn Credit Balanceshall be equal to three-fourths of one percent (3/4 of 1%) per annum.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 February 15 and August 15 in each year.

2.06. The principal amount of the Credit shall be repaid in accordance with therepayment schedule set forth in Schedule 3 to this Agreement.

2.07. The Payment Currency is Dollar.

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ARTICLE III- PROJECT

3.01. The Recipient declares its commitment to the objective of the Project. To this end,the Recipient shall carry out Part C of the Project through the Ministry of Energyand Mineral Development ("MEMD") and cause Parts A and B of the Project tobe carried out by the Uganda Electricity Transmission Company Limited("UETCL") in accordance with the provisions of Article IV of the GeneralConditions.

3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, andexcept as the Recipient and the Association shall otherwise agree, the Recipientshall ensure that the Project is carried out in accordance with the provisions ofSchedule 2 to this Agreement.

ARTICLE IV - REMEDIES OF THE ASSOCIATION

4.01. The Additional Events of Suspension consist of the following:

(a) UETCL's Memorandum and Articles of Association, or the status of itsincorporation pursuant to the Companies Act, have been amended,suspended, abrogated, repealed or waived so as to materially and adverselyaffect the ability of UETCL to perform any of its obligations under thisAgreement.

(b) UETCL has failed to perform any of its obligations under the SubsidiaryAgreement.

4.02. The Additional Events of Acceleration consist of the following:

(a) The event specified in paragraph (a) of Section 4.01 of this Agreementoccurs.

(b) The event specified in paragraph (b) of Section 4.01 of this Agreementoccurs and is continuing for a period of ninety (90) days after notice of theevent has been given by the Association to the Recipient.

ARTICLE V - EFFECTIVENESS; TERMINATION

5.01. The Additional Conditions of Effectiveness consist of the following:

(a) The Subsidiary Agreement has been executed on behalf of the Recipientand the UETCL.

(b) The Recipient has: (i) caused UETCL to prepare and adopt the UETCLImplementation Manual; and (ii) through MEMD prepared and adopted

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the MEMD Implementation Manual, all in accordance with the provisionsof Section I.C.1 of Schedule 2 to this Agreement.

5.02. The Additional Legal Matter consists of the following, namely, that the SubsidiaryAgreement has been duly authorized or ratified by the Recipient and the UETCL,and is legally binding upon the Recipient and the UETCL in accordance with itsterms.

5.03. The Effectiveness Deadline is the date one hundred and twenty (120) days afterthe date of this Agreement.

5.04. 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 VI - REPRESENTATIVE; ADDRESSES

6.01. The Recipient's Representative is its minister responsible for finance.

6.02. The Recipient's Address is:

Ministry of Finance, Planning and Economic DevelopmentPlot 2-12 Apollo Kaggwa RoadP.O. Box 8147KampalaRepublic of Uganda

Telephone Facsimile

256-414-707000 256-414-230163

6.03. The Association's Address is:

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

Telex: Facsimile:

248423 (MCI) 1-202-477-6391

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AGREED at Kampala, Republic of Uganda, as of the day and year first abovewritten.

REPUBLIC OF UGANDA

By

L---Authorized Representative

Name: A -,->

Title: 7 1 ,

INTERNATIONAL DEVELOPMENT ASSOCIATION

By

Authorized Representative

Name: kevAb" OdV0Title: -COVf4fi M iAk-5e

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SCHEDULE 1

Project Description

The objective of the Project is to increase availability and efficiency of bulkelectricity supply in the Project areas.

The Project consists of the following parts:

Part A: Construction of Transmission Infrastructure

1. Construction of a 132kV double circuit transmission line from Lira through Guluand Nebbi to Arua.

2. (a) Extension of the existing 132kV double bus bar at Lira substation orconstruction of a switching station between Lira and Gulu; and

(b) construction of 132/33kV substations (including appropriate bays, powertransformers and short interconnections to existing distribution networks)in Gulu, Nebbi and Arua, respectively.

3. Provision of technical advisory services for supervision of Project activitiesincluding engineering, construction, and monitoring implementation of theSafeguards Instruments under Parts A. 1 and A.2 immediately above.

Part B: Project Implementation and Operational Support to UETCL

1. (a) Carrying out of a comprehensive assessment of UETCL's technical andoperational capabilities and preparation and implementation of anappropriate capacity development plan; and

(b) strengthening UETCL's capacity for day to day implementation of Projectactivities through provision of technical advisory services (to the extentnot covered under Part A. 3 above).

2. Supply and installation of planning, operational and analytical tools includingappropriate hardware and software, such as Project monitoring and evaluation,enterprise resource planning and tools for audit of system protection and controlfunctions.

3. Supporting UETCL's biodiversity offset program for the restoration of centralforest reserves and local forest reserves directly impacted by activities under PartsA.1 and A.2 above.

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Part C: Sectoral Strengthening Support

1. Supporting monitoring and supervision of the implementation of SafeguardsInstruments under Parts A. 1 and A.2 of the Project.

2. Conducting a comprehensive assessment of the technical and operational skills aswell as facilities of sector agencies so as to identify gaps and makerecommendations for improvement.

3. Implementation of the said recommendations so as to strengthen the capacities ofthe said sector agencies.

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SCHEDULE 2

Project Execution

Section I. Institutional and Implementation Arrangements

A. Institutional Arrangements

1. MEMD

(a) The Recipient shall designate, at all times during the implementation ofthe Project, the MEMD to be responsible for prompt and efficientoversight and coordination of the implementation of activities under PartC of the Project, and to collaborate with UETCL on implementation ofactivities under Parts A and B of the Project, and shall take all actionsincluding the provision of funding, personnel and other resourcesnecessary to enable the MEMD to perform these functions.

(b) To this end, the Recipient, through MEMD, shall maintain at all timesduring the implementation of the Project, a Project Implementation Unit("MEMD PIU") with a composition, mandate, staffing and other resourcessatisfactory to the Association. The MEMD PIU shall be responsible forday to day oversight and coordination of the implementation of activitiesunder the said Part C of the Project.

2. UETCL

(a) The Recipient shall designate, at all times during the implementation ofthe Project, the UETCL to be responsible for prompt and efficientoversight and coordination of the implementation of activities under PartsA and B of the Project, and shall take all actions including the provisionof funding, personnel and other resources necessary to enable the UETCLto perform its functions.

(b) To this end, the Recipient, shall cause UETCL to maintain at all timesduring the implementation of the Project, a Project Implementation Unit("UETCL PIU") with a composition, mandate, staffing and otherresources satisfactory to the Association. The UETCL PIU shall beresponsible for day to day oversight and coordination of theimplementation of activities under the said Parts A and B of the Project.

B. Subsidiary Agreement

1 . To facilitate the carrying out of Parts A and B of the Project, the Recipient shallmake part of the proceeds of the Financing allocated from time to time to Category(1) of the table set forth in Section IV.A.2 of this Schedule available to the UETCL

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("Subsidiary Financing") under a subsidiary agreement between the Recipient andthe UETCL, under terms and conditions approved by the Association, which shallinclude:

(a) the principal amount of the Subsidiary Financing shall be denominated inDollars;

(b) the Subsidiary Financing shall be made available on a non-refundablegrant basis; and

(c) the Recipient shall obtain rights adequate to protect its interests and thoseof the Association, including the right to:

(i) suspend or terminate the right of the UETCL, to use the proceedsof the Subsidiary Financing, or require UETCL to refund of all orany part of the amount of the Subsidiary Financing thenwithdrawn, upon the UETCL's failure to perform any of itsobligations under the Subsidiary Agreement; and

(ii) require the UETCL to:

(A) carry out the said Parts A and B of the Project with duediligence and efficiency and in accordance with soundtechnical, economic, financial, managerial,environmental and social standards and practicessatisfactory to the Association, including in accordancewith the provisions of the Anti-Corruption Guidelinesapplicable to recipients of credit proceeds other than theRecipient, the UETCL Implementation Manual and theSafeguards Instruments;

(B) provide, promptly as needed, the resources required forthe purpose of carrying out the said Parts A and B of theProject;

(C) procure the goods, works, non-consulting services andconsultants' services to be financed out of the SubsidiaryFinancing in accordance with the provisions of thisAgreement;

(D) maintain policies and procedures adequate to enable it tomonitor and evaluate in accordance with indicatorsacceptable to the Association, the progress of the saidParts A and B of the Project and the achievement of itsobjectives;

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(E) (1) maintain a financial management system and preparefinancial statements in accordance with consistentlyapplied accounting standards acceptable to theAssociation, both in a manner adequate to reflect theoperations, resources and expenditures related to the saidParts A and B of the Project; and (2) at the Association'sor the Recipient's request, have such financial statementsaudited by independent auditors acceptable to theAssociation, in accordance with consistently appliedauditing standards acceptable to the Association, andpromptly furnish the statements as so audited to theRecipient and the Association;

(F) enable the Recipient and the Association to inspect thesaid Parts A and B of the Project, its operation and anyrelevant records and documents; and

(G) prepare and furnish to the Recipient and the Associationall such information as the Recipient or the Associationshall reasonably request relating to the foregoing("Subsidiary Agreement").

2. The Recipient shall exercise its rights under the Subsidiary Agreement in suchmanner as to protect the interests of the Recipient and the Association and toaccomplish the purposes of the Financing. Except as the Association shallotherwise agree, the Recipient shall not assign, amend, abrogate or waive theSubsidiary Agreement or any of its provisions.

C. Implementation Arrangements

1. UETCL Implementation Manual; MEMD Implementation Manual

(a) Prior to effectiveness, the Recipient shall:

(i) cause UETCL to prepare, in accordance with terms of referenceacceptable to the Association and furnish to the Association forreview, a UETCL implementation manual for Parts A and B of theProject; and

(ii) through MEMD, in accordance with terms of reference acceptableto the Association and furnish to the Association for review, aMEMD implementation manual for Part C of the Project.

(b) The UETCL and MEMD implementation manuals shall each includeprovisions on the following matters:

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(i) capacity building activities for sustained achievement of theProject's objectives;

(ii) arrangements on financial management, setting forth the detailedpolicies and procedures for financial management under theProject;

(iii) procurement management procedures;

(iv) institutional administration, coordination and day to day executionof Project activities;

(v) monitoring and evaluation;

(vi) reporting;

(vii) information, education and communication of Project activitiesand results;

(viii) guidelines for assessing potential environmental and socialimpacts of Project activities and designing appropriate mitigation,management and monitoring measures in respect of the saidimpacts; and

(ix) such other technical and organizational arrangements andprocedures as shall be required for the Project.

(c) The Recipient shall afford the Association a reasonable opportunity toexchange views with the Recipient on:

(i) the said UETCL implementation manual, and thereafter shalladopt such UETCL implementation manual, as shall have beenapproved by the Association ("UETCL Implementation Manual);and

(ii) the said MEMD implementation manual, and thereafter shalladopt such MEMD implementation manual, as shall have beenapproved by the Association ("MEMD Implementation Manual").

(d) The Recipient shall ensure that:

(i) Parts A and B of the Project are carried out in accordance with theUETCL Implementation Manual; and

(ii) that Part C of the Project is carried out in accordance with theMEMD Implementation Manual; provided, however, that in case

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of any conflict between the provisions of the UETCLImplementation Manual or MEMD Implementation Manual,respectively, and the provisions of this Agreement, the provisionsof this Agreement shall prevail.

(e) Except as the Association shall otherwise agree, the Recipient shall notamend, abrogate or waive any provision of the UETCL ImplementationManual or MEMD Implementation Manual, respectively.

2. Annual Work Plan and Budget

(a) The Recipient shall:

(i) cause UETCL to prepare and furnish to the Association not later thanSeptember 30 of each Fiscal Year during the implementation of theProject, a work plan and budget containing all activities under Parts Aand B proposed to be included in the Project (including SafeguardsInstruments applicable to the said activities in accordance with theprovisions of Section I.E of this Schedule 2) during the followingFiscal Year, and a proposed financing plan for expenditures requiredfor such activities, setting forth the proposed amounts and sources offinancing ("UETCL Work Plan and Budget"); and

(ii) through MEMD, prepare and furnish to the Association not later thanSeptember 30 of each Fiscal Year during the implementation of theProject, a work plan and budget containing all activities under Part Cproposed to be included in the Project during the following FiscalYear, and a proposed financing plan for expenditures required for suchactivities, setting forth the proposed amounts and sources of financing("MEMD Work Plan and Budget").

(b) Each such proposed UETCL Work Plan and Budget and such proposed MEMDWork Plan and Budget shall specify any Training activities that may be requiredunder the Project, including:

(i) the type of Training;

(ii) the purpose of the Training;

(iii) the personnel to be trained;

(iv) the institution or individual who will conduct the Training;

(v) the location and duration of the Training; and

(vi) the cost of the Training.

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(c) The Recipient shall afford the Association a reasonable opportunity to exchangeviews with the Recipient on such proposed UETCL Work Plan and Budget andsuch proposed MEMD Work Plan and Budget and thereafter ensure that the Projectis implemented with due diligence during the said following Fiscal Year inaccordance with such proposed UETCL Work Plan and Budget and such proposedMEMD Work Plan and Budget as shall have been approved by the Association(collectively, "Annual Work Plan and Budget").

(d) The Recipient shall not make or allow to be made any change(s) to the approvedAnnual Work Plan and Budget without prior approval in writing by the Association.

D. Anti-Corruption

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

E. Safeguards Instruments

1 . The Recipient shall cause UETCL to ensure that Parts A.1 and A.2 of the Projectare carried out in accordance with the:

(a) Environmental and Social Impact Assessment (including theEnvironmental and Social Management Plan) ("ESIA"); and

(b) the Resettlement Action Plan ("RAP") (collectively, "SafeguardsInstruments").

2. Without limitation upon the provisions of paragraph I immediately above, theRecipient shall and shall cause UETCL to ensure that the following actions aretaken in a manner acceptable to the Association:

(a) if any Project activity would:

(i) require the carrying out of an environmental and social impactassessment, the Recipient shall ensure that an environmental andsocial impact assessment for such activity is:

(A) carried out and furnished to the Association for reviewand approval; and

(B) approved by the Association and disclosed in-countrybefore commencement of works under the said activity.

(ii) require the preparation of an environmental and socialmanagement plan, the Recipient shall ensure that suchenvironmental and social management plan is:

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(A) prepared and furnished to the Association for review andapproval; and

(B) approved by the Association and disclosed in-country beforecommencement of works under the said activity.

(b) if any Project activity would, pursuant to the Environmental and SocialManagement Plan ("ESMP"), require the preparation of a constructionworksite environmental and social management plan, such constructionworksite environmental and social management plan is prepared inaccordance with the ESMP and furnished to the Association for reviewand approval, before commencement of works under the said activity; and

(c) no works under Parts A. 1 and A.2 of the Project shall be commenced untilall measures required to be taken under the RAP prior to the initiation ofthe said works have been taken and approved by the Association.

3. The Recipient shall and shall cause UETCL to ensure that all measures requiredfor implementing the said Safeguards Instruments are taken in a timely manner.To this end, the Recipient shall cause UETCL to:

(a) acquire at least thirty percent (30%) of the full right of way for activitiesunder Part A. 1 of the Project (of which approximately fifty percent (50%)shall consist of the right of way for the Lira-Gulu section), prior toawarding the contract for the said Part A. 1 of the Project; and

(b) fully acquire land for all substation activities under Part A.2 of the Projectprior to awarding the contract for the said Part A.2 of the Project.

4. Without limitation upon its other reporting obligations under this agreement andunder Section 4.08 of the General Conditions, the Recipient shall include in theProject Reports referred to in Section II.A of this Schedule, adequate informationon the implementation of the Safeguards Instruments, giving details of:

(a) measures taken in furtherance of such Safeguards Instruments;

(b) conditions, if any, which interfere or threaten to interfere with the smoothimplementation of such Safeguards Instruments; and

(c) remedial measures taken or required to be taken to address such conditionsand to ensure the continued efficient and effective implementation of thesaid Safeguards Instruments.

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5. RAP Compensation Costs under Parts A.1 and A.2 of the Project

(a) Without limitation upon the provisions of Section 4.03 of the General Conditions,the Recipient shall, in each Fiscal Year ("FY") commencing FY2016/2017:

(i) cause UETCL to establish and thereafter maintain at all material timesduring the implementation of the Project, a budget line item for RAPcompensation costs under Parts A. 1 and A.2 of the Project; and

(ii) through the Ministry of Finance Planning and Economic Development,allocate counterpart funds required for the said RAP compensation costsunder the said Parts A. 1 and A.2 of the Project to the said budget line item,until payment(s) for the said RAP compensation costs shall fall due.

(b) The Recipient shall cause UETCL to ensure that all amounts allocated to the saidbudget line item shall be used exclusively to pay for the said RAP compensationcosts in a timely fashion and in a manner acceptable to the Association.

Section II. Project Monitoring, Reporting and Evaluation

A. Project Reports

1 . The Recipient shall monitor and evaluate the progress of the Project and prepareProject Reports in accordance with the provisions of Section 4.08 of the GeneralConditions and on the basis of indicators acceptable to the Association. EachProject Report shall cover the period of one calendar semester, and shall befurnished to the Association not later than one month after the end of the periodcovered by such report.

2. The Recipient shall, not later than one month prior to the mid-term review referredto in paragraph 3 of this Section II.A, furnish to the Association for comments, areport, in such detail as the Association shall reasonably request, on the progressof the Project, and giving details of the various matters to be discussed at suchreview.

3. The Recipient shall, not later than thirty-six (36) months after the Effective Date,undertake, in conjunction with UETCL and all agencies involved in the Project, acomprehensive mid-term review of the Project during which it shall exchangeviews with the Association and implementing agencies generally on all mattersrelating to the progress of the Project, the performance by the Recipient of itsobligations under this Agreement and the performance by the said implementingagencies, having regard to the performance indicators referred to in paragraph 1 ofthis Section II.A.

4. Following the mid-term review, the Recipient shall act promptly and diligently inorder to take any corrective action deemed necessary to remedy any shortcoming

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noted in the implementation of the Project, or to implement such other measuresas may be required in furtherance of the objectives of the Project.

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. The Recipient shall prepare and furnish to the Association not later than forty-five(45) days after the end of each calendar quarter, interim unaudited financial reportsfor the Project covering the quarter, in form and substance satisfactory to theAssociation.

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 Statements shall cover the period of one Fiscal Year of the Recipient.The audited Financial Statements for each such period shall be furnished to theAssociation not later than six months after the end of such period.

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 proceedsof the Financing shall be procured in accordance with the requirements set forth orreferred to in Section I of the Procurement Guidelines, and with the provisions ofthis Section.

2. Consultants' Services. All consultants' services required for the Project and to befinanced out of the proceeds of the Financing shall be procured in accordance withthe requirements set forth or referred to in Sections I and IV of the ConsultantGuidelines, and with the provisions of this Section.

3. Definitions. The capitalized terms used below in this Section to describe particularprocurement methods or methods of review by the Association of particularcontracts, refer to the corresponding method described in Sections II and III of theProcurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines,as the case may be.

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

1. International Competitive Bidding. Except as otherwise provided in paragraph2 below, goods, works and non-consulting services shall be procured undercontracts awarded on the basis of International Competitive Bidding.

2. Other Methods of Procurement of Goods, Works and Non-consultingServices. The following methods, other than International Competitive Bidding,may be used for procurement of goods, works and non-consulting services forthose contracts specified in the Procurement Plan:

(a) National Competitive Bidding, subject to the additional provisions inparagraph 3 below;

(b) Shopping, subject to the additional provision in paragraph 4 below;

(c) procurement under Framework Agreements in accordance withprocedures which have been found acceptable to the Association, subjectto the additional provision in paragraph 5 below;

(d) Direct Contracting;

(e) Force Account;

(f) Well-established Private Sector Procurement Methods or CommercialPractices which have been found acceptable to the Association;

(g) Procurement under Public Private Partnership Arrangements inaccordance with procedures which have been found acceptable to theAssociation; and

(h) Community Participation procedures which have been found acceptable tothe Association.

3. National Competitive Bidding ("NCB") shall be subject to the following:

(a) domestic preferences shall not apply under NCB;

(b) the charging of fees for dealing with bidder complaints at procuring entitylevel shall not be permitted;

(c) firms or individuals debarred or suspended by the Association shall not beeligible (in addition to firms or individuals suspended by PPDA);

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(d) Paragraph 6(1)(c) of the fourth schedule of the PPDA Act set out in Annex1 to this Agreement (restriction on contract amendments to an aggregateamount of twenty-five percent (25%) of the original contract amount) shallnot apply;

(e) Regulation 48(a) of the PPDA (Rules and Methods for Procurement ofSupplies, Works and Non-consultancy Services) Regulations set out inAnnex 1 to this Agreement (on rejection of a bid submitted by a bidderwho did not obtain the bidding document directly from the procuring anddisposing entity) shall not apply; and

(f) Regulation 53(9) of the PPDA (Rules and Methods for Procurement ofSupplies, Works and Non-consultancy Services) Regulations set out inAnnex 1 to this Agreement (restriction on the use of bid securingdeclarations to restricted domestic bidding and quotations procurement)shall not apply.

4. Shopping shall follow the request for quotations procedures (as defined in thePPDA Act and attendant regulations) subject to the provisions in sub-paragraphs(a) to (f) immediately above.

5. Framework Agreements ("FAs") shall be subject to the following, namely, that FAprocedures (as defined in the PPDA Act) shall be subject to competitive biddingunder NCB procedures (subject to the exceptions under paragraph 3 above).

C. Particular Methods of Procurement of Consultants' Services

1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2below, consultants' services shall be procured under contracts awarded on the basisof Quality- and Cost-based Selection.

2. Other Methods of Procurement of Consultants' Services. The followingmethods, other than Quality- and Cost-based Selection, may be used forprocurement of consultants' services for those contracts which are specified in theProcurement Plan:

(a) Quality-based Selection;

(b) Selection under a Fixed Budget;

(c) Least Cost Selection;

(d) Selection based on Consultants' Qualifications;

(e) Single-source Selection of consulting firms;

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(f) Well-established Private Sector Procurement Methods or CommercialPractices which have been found acceptable to the Association;

(g) Selection of consultants under Indefinite Delivery Contract or PriceAgreement;

(h) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelinesfor the Selection of Individual Consultants; and

(i) Single-source procedures for the Selection of Individual Consultants.

D. Review by the Association of Procurement Decisions

The Procurement Plan shall set forth those contracts which shall be subject to theAssociation's Prior Review. All other contracts shall be subject to Post Review bythe Association.

Section IV. Withdrawal of the Proceeds of the Financing

A. General

1. The Recipient may withdraw the proceeds of the Financing in accordance with theprovisions of Article II of the General Conditions, this Section, and such additionalinstructions as the Association shall specify by notice to the Recipient (includingthe "World Bank Disbursement Guidelines for Projects" dated May 2006, asrevised from time to time by the Association and as made applicable to thisAgreement pursuant to such instructions), to finance Eligible Expenditures as setforth in the table in paragraph 2 below.

2. The following table specifies 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:

Amount of the Financing Percentage ofAllocated (expressed in Expenditures to be

Category SDR) Financed

(1) UETCLGoods, works, non- 64,600,000 100%consulting services, (exclusive of taxes)consultants' services,Training andOperating Costs for

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Parts A and B theProject

(2) MEMDGoods, non-consulting 2,500,000 100%services, consultants' (inclusive of taxes)services, Training andOperating Costs forPart C of the Project

(3) Unallocated 3,900,000

TOTAL AMOUNT 71,000,000

B. Withdrawal Conditions; Withdrawal Period

1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall bemade for payments made prior to the date of this Agreement.

2. The Closing Date is October 31, 2022.

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SCHEDULE 3

Repayment Schedule

Principal Amount of theCredit repayable(expressed as a

Date Payment Due percentage)*

On each August 15 and February 15,commencing August 15, 2022, to and 1.5625%

including February 15, 2054

* The percentages represent the percentage of the principal amount of the Credit to berepaid, except as the Association may otherwise specify pursuant to Section 3.03(b) of theGeneral Conditions.

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APPENDIX

Definitions

1. "Affected Persons" means persons who, on account of the execution of the Projectwould suffer direct economic and social impacts resulting in: (a) relocation or lossof shelter; (b) loss of assets or access to assets; (c) loss of income sources or meansof livelihood, whether or not the affected persons must move to another location;and (d) adverse impacts on the livelihoods of the affected persons as determinedpursuant to the ESIA.

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

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

4. "Companies Act" means Act Number 2 of 2012, of the laws of the Recipient, asamended to date.

5. "Consultant Guidelines" means the "Guidelines: Selection and Employment ofConsultants under IBRD Loans and IDA Credits and Grants by World BankBorrowers" dated January 2011 and revised in July 2014.

6. "Environmental and Social Impact Assessment" or "ESIA" means the document ofthe Recipient entitled Environmental and Social Impact Assessment (ESIA) forLira-Gulu-Nebbi-Arua Transmission Line Project prepared and adopted byUETCL for purposes of activities under the Project and giving details of themagnitude of the environmental and social impacts, as well as the specific actions,measures and policies designed to mitigate the said environmental and socialimpacts, including the institutional, procedural and other measures needed toimplement such actions, measures and policies, as disclosed in-country on March29, 2016, and in the Association's InfoShop on March 21, 2016, and such termincludes all schedules and annexes to the ESIA, as the same may be amended fromtime to time with the written agreement of the Association.

7. "Environmental and Social Management Plan" or "ESMP" means the planprepared and adopted by UETCL under Chapter 8 of the ESIA, elaborating, amongothers, measures to be implemented in order to mitigate or optimize the Project'spotential impacts under the ESIA, responsibilities and costs of each measure,responsibilities for the implementation and oversight of the proposedenvironmental and social management measures, guidelines for a comprehensivemonitoring plan to ensure adequate implementation of the proposed environmental

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and social management measures on an ongoing basis and other capacity buildingrequirements for its successful implementation.

8. "Fiscal Year" or "FY" means the Recipient's twelve month period starting July 1and ending June 30 of the following year.

9. "General Conditions" means the "International Development Association GeneralConditions for Credits and Grants", dated July 31, 2010.

10. "MEMD Work Plan and Budget" means the Recipient's work plan and budgetreferred to in Section I.C.2 of Schedule 2 to this Agreement.

11. "MEMD Implementation Manual" means the Recipient's manual referred to inSection I.C. 1 of Schedule 2 to this Agreement.

12. "MEMD PIU" means the Recipient's unit established within MEMD and referredto in Section I.A. 1(b) of Schedule 2 to this Agreement.

13. "Ministry of Energy and Mineral Development" or "MEMD" means theRecipient's ministry responsible for energy, and any successor thereto.

14. "Ministry of Finance, Planning and Economic Development" means theRecipient's ministry responsible for finance, and any successor thereto.

15. "Operating Costs" means the incremental expenses incurred on account of Projectimplementation based on the Annual Work Plan and Budget, and consisting of,audit fees, expenditures for office supplies, vehicle operation and maintenance,maintenance of equipment, communication and insurance costs, officeadministration costs, utilities, rental, consumables, accommodation, travel and perdiem, and salaries of Project staff, but excluding the salaries of the Recipient's civilservice, meeting allowances, other sitting allowances, salary top ups and allhonoraria.

16. "PPDA" means the Recipient's Public Procurement and Disposal of Public AssetsAuthority established and operating pursuant to the PPDA Act, and any successorthereto.

17. "PPDA Act" means the Recipient's Public Procurement and Disposal of PublicAssets Act Number I of 2003, as amended to date.

18. "PPDA Regulations" means, for the purposes of this Agreement, the provisionsfrom the Recipient's Public Procurement and Disposal of Public Assets (Rules andMethods for Procurement of Supplies, Works and Non-Consultancy Services)Regulations 2014 (under section 96 of the PPDA Act), dated March 3, 2014, setout in Annex 1 to this Agreement.

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19. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Worksand Non-consulting Services under IBRD Loans and IDA Credits and Grants byWorld Bank Borrowers" dated January 2011 and revised in July 2014.

20. "Procurement Plan" means the Recipient's procurement plan for the Project, datedApril 4, 2016, and referred to in paragraph 1.18 of the Procurement Guidelines andparagraph 1.25 of the Consultant Guidelines, as the same shall be updated fromtime to time in accordance with the provisions of said paragraphs.

21. "Resettlement Action Plan" or "RAP" means the document of the Recipiententitled UETCL Lira-Gulu-Nebbi-Arua Transmission Line Project ResettlementAction Plan, prepared and adopted by UETCL for purposes of activities under theProject and setting forth a program of actions, measures and policies forcompensation and resettlement of Affected Persons, as well as the magnitude ofdisplacement, proposed compensation and resettlement arrangements, budget andcost estimates thereof, and sources of funding, together with adequate institutional,monitoring and reporting arrangements designed to ensure proper implementationof, and regular feedback on compliance with such plan, as disclosed in-country onMarch 29, 2016, and in the Association's InfoShop on March 21, 2016, and suchterm includes all schedules and annexes to the RAP, as the same may be amendedfrom time to time with the written agreement of the Association.

22. "Safeguards Instrument" means the ESIA, ESMP or RAP, and "SafeguardsInstruments" means, collectively, two or more such instruments.

23. "Subsidiary Agreement" means the agreement referred to in Section I.B ofSchedule 2 to this Agreement pursuant to which the Recipient shall make part ofthe proceeds of the Financing available to the UETCL.

24. "Subsidiary Financing" means such part of the proceeds of the Financing allocatedfrom time to time to Category (1) set forth in the table in Section IV of Schedule 2to this Agreement.

25. "Training" means the costs associated with training provided under the Projectbased on the Annual Work Plan and Budget, and consisting of reasonableexpenditures (other than expenditures for consultants' services) for: (a) travel,room, board and per diem expenditures incurred by trainers and trainees inconnection with their training and by non-consultant training facilitators;(b) course fees; (c) training facility rentals; and (d) training material preparation,acquisition, reproduction and distribution expenses.

26. "UETCL" means Uganda Electricity Transmission Company Ltd., a limitedliability company established and operating pursuant to the Companies Act.

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27. "UETCL Implementation Manual" means the Recipient's manual referred to inSection I.C. I of Schedule 2 to this Agreement.

28. "UETCL's Memorandum and Articles of Association" means the amendedmemorandum of association and amended articles of association of UETCL bothdated November 11, 2003.

29. "UETCL PIU" means the Recipient's unit established within UETCL and referredto in Section I.A.2(b) of Schedule 2 to this Agreement.

30. "UETCL Work Plan and Budget" means the Recipient's work plan and budgetreferred to in Section I.C.2 of Schedule 2 to this Agreement.

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ANNEX I

Subsections III.B.3(e) and (f) of Schedule 2 to the Financing Agreement

Exceptions to the PPDA Regulations

"48. Bidding documents not obtained directly from a procuring and disposingentity.

A bid shall be rejected during the preliminary examination of bids, if the bid isreceived from a bidder who -

(a) is not listed on Form 8 as having bought or obtained the bidding documentdirectly from the procuring and disposing entity.

53. Bid security and bid securing declaration.

(9) A procuring and disposing entity shall require a bid securing declaration where therestricted domestic bidding and quotations procurement methods are used."

Subsection III.B.3(d) of Schedule 2 to the Financing Agreement

Exception in Fourth Schedule to the PPDA Act

"Section 79 (1).

Fourth Schedule

Conditions for Use of Procurement Methods

6. Direct procurement.

(1) Direct procurement may be used-

(a) where-

(i) there is insufficient time for any other procedure such as in anemergency situation; or

(ii) the works, services or supplies are available from only oneprovider; or

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(iii) an existing contract could be extended for additional works,services or supplies of a similar nature and no advantage could beobtained by further competition, if the prices on the extendedcontract are reasonable; or

(iv) additional works, services or supplies are required to becompatible with existing supplies, works or services and it isadvantageous or necessary to purchase the additional works,services or supplies from the original supplier, provided the priceson the additional contract are reasonable; or

(v) it is essential or preferable to purchase additional works, servicesor supplies from the original supplier to ensure continuity fordownstream work, including continuity in technical approach, useof experience acquired or continued professional liability, if theprices on the additional contract are reasonable;

(b) in the circumstances specified in subparagraph (1)(a)(iii), (iv) and (v),where the value of the new works, services or supplies does not exceedfifteen percent of the value of the original or existing contract and theoriginal or existing contract is awarded through a competitive process; and

(c) where direct procurement is used more than once in the circumstancesspecified in sub paragraph (1)(b), the cumulative value of all new works,services or supplies shall not exceed twenty-five percent of the value ofthe original or existing contract."