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AGREEMENTBETVVEEN

THE GOVERNMENT OF THE REPUBLIC OF FINLANDAND

THE GOVERNMENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIAON

THE FINANCIAL SUPPORTTO THE ONE VVATER, SANITATION & HYEGIENE (VVASH) NATIONAL PROGRAM (OWNP) THROUGH THE CONSOLIDATED WASH ACCOUNT (CWA) IN

ETHIOPIA 2017-2019

The Government of the Republic of Finland ("Finland"), represented by the Ministry for Foreign Affairs of Finland, and the Government of the Federal Democratic Republic of Ethiopia ("Ethiopia"), represented by the Ministry of Finance and Economic Cooperation (MoFEC) jointly referred to as "the Parties", have,

on the basis of the Agreement on General Terms and Procedures for Development Co-operation betvveen Finland and Ethiopia, signed on 9 March 1989, and on the basis of consultations on the development co-operation held in Helsinki, Finland on 24lh of October 2013 betvveen the representatives of the two Governments,

agreed, in respect of the support to the One VVASH National Programme through the Consolidated VVASH Account (CWA) in Ethiopia, as follovvs:

ARTICLE IScope and Objective

1. The Programme shall be implemented in accordance vvith the Programme Operation Manual (POM) and the Budget, dated September 2014 and attached as Annex I to this Agreement, as well as in accordance with the annual work plans and budgets to be mutually agreed upon.

2. The overall objective of the One VVASH National Programme is to improve the health and well-being of communities in rural and urban areas in an equitable and sustainable manner by increasing access to water supply and sanitation and adoption of good hygiene practices based on the GTP targets.

ARTICLE IIPrinciples of Co-operation

1. Respect for human rights, democratic principles, good governance and the rule of law shall form the basis for the co-operation between Finland and Ethiopia and constitute the essential elements of this Agreement.

2. The Programme shall be implemented in accordance with the principles of transparency and open dialogue.

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ARTICLE IIICompetent Authorities and Implementing Agency

1. The Ministry for Foreign Affairs of Finland, represented in Ethiopia by the Embassy of Finland, and the Ministry of Finance and Economic Cooperation (MoFEC) in Ethiopia shall be the Competent Authorities in matters relating to this Agreement.

2. The responsibility for the implementation of the Programme lies with the Ministry of Water, Irrigation and Electricity (MoVVIE) which shall also have the right to represent Ministry of Finance & Economic Cooperation (MoFEC) in matters pertaining to the implementation of the Programme and not affecting the overall responsibilities of MoFEC.

ARTICLE IV Financing by Finland

1. The contribution of Finland to the implementation of the Programme in 2017 - 2019 shall, on a grant basis and subject to annual parliamentary approval in Finland, be a maximum of two million Euros (€ 2 000 000).

2. Any remaining balance of the Finnish contribution and the interest accrued thereto shall, upon the completion of the Programme, be returned to Finland in proportion to Finland's contribution tovvards the Programme unless othervvise agreed by the Parties.

ARTICLE V Financing by Ethiopia

1. Ethiopia shall cover the costs, amounting approximately to forty six million three hundred thousand USD (USD 46 300 000), as a contribution to the implementation of the Programme as specified in the Programme Document (POM).

2. Ali financial and other resources required for the implementation of the Programme exceeding the Finnish contribution shall be provided by Ethiopia.

ARTICLE VI Disbursements

1. Finland shall make payments against a vvritten request by Ethiopia into the bank account agreed upon by the Competent Authorities. MoFEC will prepare the requests and accompanied documents according to the instructions in the POM.

2. The schedule for the instalment of the fund will be as follovvs.

(A) Upon effectiveness of this Agreement, € 500,000(B) € 500,000 by no later than May 2018(C) € 1,000,000 by no later than May 2019

3. The Deposit Instructions, any notice, request or other Communication to be given or made under this Agreement shall be in vvriting and delivered by mail, fax or e-mail to the respective Party's address specified below:

ForJMFA: The person designated by the Ministry to be in charge of the project:Ms. Anu Eskonheimo

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Desk OfficerUnit for Eastern and Western Africa Department for Africa and the Middle East Ministry for Foreign Affairs of Finland P.O. Box 176FI-00023 Government of Finland Tel. +358 295 350 531

E-mail: anu.eskonheimo@formin.fi

For MoFEC: The person designated by MoFEC to be in charge & Project account number:

Ato Getachevv Negera,DirectorChannel One Programs Coordinating Office (COPCO)Ministry of Finance & Economic Cooperation E-mail: aetneaera@vahoo.com

OrAto Ababu TadesseWASH, ULGDP & GEQIP Programs Coordinator of COPCOMinistry of Finance & Economic CooperationTel: +251-111-569216Mobile: + 251-929-046941E-mail: ababutad@vahoo.com

4. Any amount, including interest, vvhich has already been disbursed but has not been fully used shall be taken into account when requests are made.

5. The Government of Ethiopia through MoFEC shall keep proper financial records in accordance vvith professionally accepted bookkeeping rules and practices.

ARTICLE VII Procurements

1. Ethiopia shall carry out the procurements and shall conclude the contracts as agreed for the Programme. Finland shall not become a party to such contracts.

2. Ethiopia shall provide Finland vvith access to ali records and documents concerning the procurements. Finland may also require access to Information during that stage of the procurement procedure vvhich is restricted to the officers performing the function.

3. No offer, gift, payment or benefit of any kind, vvhich vvould or could be construed as an illegal or corrupt practice, shall be accepted, either directly or indirectly, as an inducement or revvard for the avvard or execution of procurement contracts.

4. Ali procurements shall be made in accordance vvith generally accepted principles and good procurement practices. Invitations to tender as well as procurement contracts shall, respectively, include a clause on the possibility of the tender being rejected and the contract being cancelled, in case any illegal or corrupt practices have been connected vvith the avvard or execution of the

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contract. Furthermore, the damage or loss caused to the buyer shall, in case of the cancellation of the contract, be compensated by the supplier.

5. Finnish suppliers shall be given the same opportunities to participate in the deliveries as other suppliers.

ARTICLE Vili Information

1. The Parties shall:

(a) promptly inform each other of any event or situation which might affect the implementation of the Programme; and

(b) ensure that ali relevant authorities and organisations are informed of this Agreement and the Programme.

2. Both Parties shall have the right to disseminate information about the Programme, including this Agreement, to the general public and other interested parties.

3. Any publication or other material produced in connection with the Programme shall mention that the Programme is being or has been implemented with the financial contribution of Finland and vvithin the framevvork of the Finnish development co-operation.

ARTICLE IXMonitoring and Reporting

1. Ethiopia shall submit to Finland reports on the implementation of the Programme as specified in the Programme Operation Manual (POM) attached to this Agreement. The reports will be prepared in accordance with the mutually agreed principles.

2. Finland shall participate in monitoring, revievv and evaluation as well as other relevant activities organised in support of the partner Governmenfs reporting system. In case of Joint financing, this will be done jointly with other partners that contribute to the implementation of the Programme according to principles mutually agreed upon and recorded in the Programme documentation.

ARTICLE X Auditing

1. Auditing will be conducted as stated in the POM. Annual audit reports on the Programme accounts with complete Management Letter shall be submitted to Finland vvithin 6 months of the end of each financial year. The audit shall be performed by an Independent and authorised auditor. The audit report shall certify vvhether submitted financial reports are correct and give a true and fair view of the results and financial position of the Programme. The audit shall include, on a test basis, an examination of the evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the management of the Programme.

2. Ethiopia shall permit the representatives of Finland to carry out any inspection or audit in respect of the implementation of the Programme. Such an inspection or audit may also be initiated by Ethiopia.

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ARTICLE XI Suspension

1. Both Parties shall have the right, after Consulting the other Party, to suspend in vvhole or in part the financing of the Programme if:

(a) the financing by the other Party is not forthcoming in accordance with this Agreement and the Programme Operation Manual;

(b) any other obligation under this Agreement, the Agreement on General Terms and Procedures for Development Co-operation orthe Programme Operation Manual (POM) is not fulfilled;

(c) the management of the Programme is deemed to be unsatisfactory;

(d) a condition has arisen vvhich interferes or threatens to interfere with the implementation of the Programme or the attainment of the objectives and purposes of the Programme; or

(e) the suspension is warranted by a fundamental change in the circumstances under vvhich the Programme vvas started.

2. Finland shall have the right, after Consulting the other Party, to suspend in vvhole or in part the financing of the Programme if the other Party has failed to fulfil one of the essential elements referred to in Article II of this Agreement.

3. The suspension shall cease as soon as the event or events vvhich gave rise to suspension have ceased to exist.

4. Finland reserves the right to claim repayment in full or in part of the Finnish contribution if it is found to be misused or not satisfactorily accounted for.

ARTICLE XII Commodities

Commodities procured in or imported into Ethiopia under this Agreement for the purposes of the Programme shall be at the exclusive disposal of the Programme.

ARTICLE XIII Liability

1. Ethiopia shall bear ali the risks arising from the implementation of the projects and programmes under this Agreement. Ethiopia shall be responsible for dealing with claims vvhich may be brought by third parties against Finland, Consulting Agencies or any member of their Personnel or against a person employed by Finland. Ethiopia shall hold Finland, Consulting Agencies or any member of their Personnel or a person employed by Finland harmless in respect of claims and liabilities arising in connection with the implementation of the projects and programmes.

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2. Paragraph 1 above shall not apply vvhere a claim or liability arises from gross negligence, wilful misconduct or criminal conduct established by a court of Ethiopia to the satisfaction of Finland.

3. Ethiopia shall be entitled, in the event any claim is brought under paragraph 1 above, to exercise and enforce any right of set off, counterclaim, Insurance, indemnity, contribution or guarantee to vvhich Finland, Consulting Agencies or a member of their Personnel or a person employed by Finland may become entitled.

ARTICLE XIV Special Provisions

1 .Other obligations of the Parties are specified in the Programme Operation Manual (POM).

2. The Parties shall have the right to carry out an evaluation during the implementation of and after the completion of the Programme.

3. The implementation of the Programme shall be governed by the provisions of the Agreement on General Terms and Procedures for Development Co-operation, unless othervvise provided for in this Agreement.

ARTICLE XVEntry Into Force, Termination, Amendments and Settlement of Disputes

1. This Agreement shall enter into force 30 days after its signature and remain valid until ali the obligations under this Agreement have been duly fulfilled by the Parties, unless terminated earlier by either Party by giving a notice in vvriting to that effect three months prior to the termination.

2. Should either Party consider it desirable to amend any provision of this Agreement it may request consultations with the other Party through its Competent Authority. Any amendment shall be agreed upon in vvriting betvveen the Competent Authorities.

3. Any dispute arising from the implementation or interpretation of this Agreement shall be settled amicably by negotiations betvveen the Competent Authorities.

Done in Addis Ababa on March 24/2017 in two originals in the English language.

1. One WASH National Programme, Programme Operation Manual (POM), September 2014

UH2011-001992

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