ANNEX 6 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE COVENANT

This Environmental, Social, and Governance (ESG) Covenant is designed to promote the financial sector’s engagement in promoting inclusive, resilient and sustainable linear infrastructure planning and construction. This ESG Covenant aims to clarify financial institutions’ obligations in the feasibility studies, design and construction of linear infrastructure projects. It is recognized that the responsibilities of financial institutions will differ between primary financing and refinancing of operational linear infrastructure. Primary financing will require an assessment of compliance with mostly procedural commitments (such as EIA laws and regulations). Refinancing will be based on compliance with the EIA, EMP, compliance with conditions of project approvals, including community engagement, grievance mechanisms and any breaches of these regulatory obligations.

Esg Covenant

IMPORTANT NOTICE: To avoid doubt, this document is in a non-binding, recommended form. The intention is that this document be used as a starting point for negotiations.

For Lenders

The lender warrants that before financial close, it will conduct an ESG due diligence and risk assessment based on the relevant environmental information. The lender shall determine if the project has fully assessed and considered potential environmental impacts in the project’s design, environmental management, operation, and closure. This assessment shall consider any landscape plan, strategic environmental assessment (SEA), cumulative impact assessment (CIA) and other planning or biodiversity assessments.

The lender warrants that it has been provided with the following environment information from the borrower:

1. Environmental Impact Assessment Report

2. Environmental approval or other permit, including conditions of consent

3. Environmental Management Plan

4. EMP monitoring reports, including any reports of grievance mechanisms or reports from community consultations

5. Any Environmental Audits and responses to these Environmental Audits (if conducted)

If the linear infrastructure project involves any resettlement or livelihood assistance, the lender warrants that it has been provided with the following additional information:

1. Resettlement Action Plan

2. Livelihood Restoration Plan

3. Monitoring and Management Reports on the Resettlement Action Plan

For Borrowers

The borrower warrants that it will comply with the obligations under the ESG covenant and undertake due diligence and risk assessment during the pre-feasibility, design, construction and operation of the linear infrastructure project.

The borrower warrants that the information and disclosures are accurate and not misleading.

The borrower warrants that it will [it is] operating in compliance with relevant environmental legal requirements. It has obtained all required permits and consents for the construction or operations of the linear infrastructure.

The borrower warrants that it will [it has] complied with the conditions of the environmental approval or other permit and the EMP.

The borrower warrants that it will [it has] complied with the recommendations and conditions under any:

1. Resettlement Action Plan

2. Livelihood Restoration Plan

3. Recommendations from any monitoring reports on the Resettlement Action Plan or Livelihood Restoration Plan

The borrower warrants that it has disclosed to the lender any complaints received under the project grievance mechanism, investigations, breaches of any conditions of approval, and any other material issues.