External Financial Auditor "EDL" — Lebanon Renewable Energy and System Reinforcement Project

REQUEST FOR EXPRESSIONS OF INTEREST (CONSULTING SERVICES -FIRMS SELECTION) REPUBLIC OF LEBANON Lebanon Renewable Energy and System Reinforcement Project (P180501) Loan No.: IBRD-97310 Assignment Title: Project External Audit Reference No. (as per Procurement Plan): LB-EDL-553964-CS-LCS The Government of Lebanon has received financing from the International Bank for Reconstruction and Development (IBRD) toward the cost of the Lebanon Renewable Energy and System Reinforcement Project (P180501) and intends to apply part of the proceeds for consulting services. The consulting services (“the Services”) includes the carrying out of Financial Audit of LRESRP over the period starting October 2025 till December 31, 2028. The detailed Terms of Reference (TOR) for the assignment can be found attached to this procurement notice below. Electricite du Liban now invites eligible consulting firms (“Consultants”) to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The shortlisting criteria are: (a) core business and years in business, (b) relevant experience, (c) technical and managerial capability of the firm. Key Experts will not be evaluated at the shortlisting stage. The detailed Terms of Reference (TOR) for the assignment are attached to this request for expressions of interest and can be found below. The EDL now invites eligible consulting firms (“Consultants”) to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The attention of interested Consultants is drawn to Section III, paragraphs 3.13, 3.15 and 3.16 of the World Bank’s Procurement Regulations for IPF Borrowers (February 2025) , which set forth the World Bank’s policy on conflict of interest. A Consultant will be selected in accordance with the Least Cost Selection method (LCS) set out in the World Bank’s Procurement Regulations for IPF Borrowers, dated February 2025. Further information can be obtained at the address below during office hours from 10:00 to 14:00 (Beirut local time). Interested firms should submit an Expression of Interest including: Company profile and relevant experience. Description of similar assignments. Availability of key experts and technical capacity. References and contact details. Key experts will not be evaluated at the shortlisting stage. Expressions of Interest must be delivered in written form to the address below (in person) or e-mail to LRESRP-PROC@edl.gov.lb by Monday, August 10, 2026 at 12:00 PM (noon) Beirut Time. Electricité Du Liban Prefabricated Cell No. 38 Newly Installed on the West Side of the EDL Central Building Within its Headquarters in Beirut Attn: Mrs. Rachel Chebl – Secretary of Purchase Committee RUE DU FLEUVE P.O. BOX 131, BEIRUT LEBANON Tel: +961-1-442720 / 442729 Fax: +961-1-583084 E-mail: lresrp-proc@edl.gov.lb TERMS OF REFERENCE Project External Audit Consolidated EDL and LRA Project Components (IBRD Loan) EDL Project Components (Grant) 1. Project Background The International Bank for Reconstruction and Development (IBRD) has agreed to provide a loan in the amount of two hundred and fifty million United States Dollars (US$250,000,000) to the Lebanese Republic to assist in financing the Lebanon Renewable Energy and System Reinforcement Project (LRESRP), Project No. P180501. In addition, an Energy Sector Management Assistance Program (ESMAP) Grant in the amount of one million five hundred thousand United States Dollars (US$1,500,000), Grant No. IFOC8460, has been made available to support EDL-related activities under the Project. The objective of the Project is to enable cleaner, more reliable and efficient grid electricity services in Lebanon. The Project is the first operation of a proposed Series of Projects supporting electricity sector recovery and development. It contributes to restoring basic functionality of the electricity network through transmission network rehabilitation and reinforcement, operational and commercial system modernization at EDL, rehabilitation of hydropower assets implemented by LRA, and an increased share of utility-scale solar photovoltaic generation. The Project also integrates environmental, social, disaster risk, and climate resilience measures in its design and implementation. This Terms of Reference (TOR) applies to the external audit of the Project financial statements and financial management arrangements for the parts of the LRESRP implemented by Electricité du Liban (EDL), including the EDL components financed under IBRD Loan No. 9731-LB and the EDL activities financed under ESMAP Grant No. IFOC8460. The TOR is prepared in line with the Loan Agreement, the ESMAP Grant Agreement, the Project Operations Manual (POM), the EDL Subsidiary Agreement under the Loan, the Subsidiary Agreement under the Grant, the applicable World Bank Procurement Regulations for IPF Borrowers, the applicable World Bank disbursement and financial management requirements, and International Standards on Auditing (ISA). For the purposes of this TOR, the term “Financing Agreements” means, as applicable, the Loan Agreement for IBRD Loan No. 9731-LB and the ESMAP Grant Agreement, Grant No. IFOC8460, including any related subsidiary agreements, supplemental letters, disbursement arrangements, and applicable World Bank requirements. 2. EDL Project Scope Under the Financing Agreements Under Article III of the Loan Agreement, the Borrower shall cause Parts 1, 2.1, 2.3 and 3.1 of the Project to be carried out by EDL. In addition, under the ESMAP Grant Agreement, the Recipient, through MoEW, shall cause EDL to carry out the Grant-financed Project activities. Accordingly, this TOR covers the audit of EDL Project components, Grant-financed activities, funds, expenditures, contracts, assets, and related financial management and procurement records. Parts 2.2 and 3.2 of the Loan-financed Project are implemented by LRA and are outside the direct audit scope of this TOR, except where coordination or consolidation is required under the Financing Agreements, the POM, or the World Bank requirements. For clarity, the Loan-financed EDL part of the LRESRP consists of the following: EDL Part Description of Activities to be Considered by the Auditor Component 1: Strengthening of EDL Operational and Commercial Systems EDL operational systems and commercial systems, including the National Control Center (NCC), SCADA, energy management system, telecommunications, AMI center, billing system, consumer portal, ERP platform, related IT infrastructure, training, deployment, and operation and maintenance arrangements. Component 2.1: Development of a Grid-connected Solar PV Plant Supply and installation of a utility-scale solar PV power plant at the Selected Site in the Hermel, Ras Baalbek and Qaa area, with an installed capacity estimated at around 150 MWp, including design, PV modules, inverters, balance of plant, control and monitoring systems, auxiliary systems, civil works, grid connection interface, and an operation and maintenance contract with on-the-job training. Component 2.2: Rehabilitation of LRA HPPs and Strengthening of Dam Safety Implemented by LRA and are outside the direct audit scope of this TOR. Component 2.3: Strengthening of EDL Transmission Network Rehabilitation of Ashrafieh 220 kV substation; rehabilitation of the 220 kV Deir Nbouh - Baalbek overhead transmission line; upgrade of Baalbek substation; construction of a new 220 kV point-of-connection substation; connection of the solar PV plant to the grid; and connection of the point of connection to the EDL grid through the existing Deir Nbouh - Baalbek double-circuit 220 kV line. Component 3.1: Project Implementation Support and Technical Studies for EDL EDL Owner's Engineer, consultancy services for EDL business process review and ERP leverage, consultancy support to EDL-PMT and Project Steering Committee, project management and coordination, monitoring and evaluation, environmental and social compliance, gender sensitization, fiduciary administration, internal controls, audits, third-party monitoring, communication and outreach, grievance mechanism and citizen engagement mechanism, and capacity building for EDL. Sub-component 3.2: Project Implementation Support, Technical Studies for LRA, and Dam Safety Panel of Experts Implemented by LRA and are outside the direct audit scope of this TOR. 2.1 Detailed EDL Activities Component 1.1: Strengthening of EDL Operational Systems Demolition of the existing Chiah Building and construction of a new National Control Center (NCC) building at the site within the perimeter of EDL headquarters in Beirut, including necessary electromechanical systems needed to establish NCC functionality. Supply and installation of SCADA, energy management system, telecommunication equipment connecting EDL substations and feeders, reserve power supply equipment for emergency cases, dispatch control functions, and other required functionalities and interface systems. Upgrade of remote terminal units and rehabilitation of communication links between EDL substations and the NCC. Operation and maintenance contract for the operational software required for the NCC, and training of EDL staff, including on-the-job training on NCC systems. Component 1.2: Strengthening of EDL Commercial Systems Development of a center for Advanced Metering Infrastructure (AMI), including meter data management and customer information system. Billing system including invoicing, collection and reporting functionalities. Consumer portal and fiber optic and 4G gateways. Supply and installation of an Enterprise Resource Planning (ERP) platform covering company asset management, financial management, supply chain management, human resources, and customer service, including ERP design, customization, licensing, data migration, training, system deployment, IT infrastructure, and hardware. Component 2.1: Development of a Grid-connected Solar PV Plant Supply and installation of a utility-scale solar PV power plant at the Selected Site, with an installed capacity estimated at around 150 MWp. Design, supply and installation of PV modules, inverters, structural components, electrical components, control and monitoring systems, auxiliary systems, balance of plant, and civil works. Operation and maintenance contract for the solar PV plant, including on-the-job training. Component 2.3: Strengthening of EDL Transmission Network Rehabilitation of Ashrafieh 220 kV substation, including high voltage and auxiliary transformers, switchgear, busbars, disconnecting switches, capacitor banks, and secondary equipment. Rehabilitation of the 220 kV Deir Nbouh - Baalbek overhead transmission line, including damaged towers, partial replacement of conductors, insulators, optical ground wire, and other required equipment. Upgrade of Baalbek substation, including 220 kV air-insulated line bays and all necessary equipment and upgrades to secondary systems, and connecting the Deir Nbouh - Ksara circuits as in-out into Baalbek substation. Construction of a new substation at the selected 220 kV point of connection, connection of the solar PV plant to the grid, and connection of the point of connection to the EDL grid through an in-out connection to the existing Deir Nbouh - Baalbek double-circuit 220 kV line. Component 3.1: Project Implementation Support and Technical Studies for EDL Financing of the EDL Owner's Engineer to support procurement documents, tendering process, technical supervision of contracts, contractors' compliance with environmental and social instruments, site supervision, quality control, financial management and reporting, review and approval of payment certificates, and other contract management aspects. Consultancy services for the review of EDL business processes to leverage the ERP system. Consultancy services to support EDL-PMT and the Project Steering Committee. Support for project management and coordination, monitoring and evaluation, environmental and social compliance, gender sensitization for implementation purposes, fiduciary administration, internal controls and audits, third-party monitoring, communication and outreach, and establishment and maintenance of a grievance mechanism and citizen engagement mechanism. Capacity building for EDL, including strengthening in-house capacity for power system planning and modeling, distribution and transmission system maintenance, procurement, and environmental and social aspects. External audits and support for strengthening financial management and reporting at EDL. 2.2 Grant-Financed EDL Activities In addition to the EDL activities financed under the IBRD Loan, this TOR also covers the activities financed under the ESMAP Grant, Grant No. IFOC8460, to the extent implemented by EDL and recorded under the Project financial management arrangements. The Grant-financed Project consists of the following activities: Part 1: Feasibility studies for solar PV generation Supporting preliminary studies and feasibility assessments for a solar photovoltaic generation facility with battery energy storage system, including detailed geospatial analysis of the site based on earlier studies and criteria agreed with EDL; analysis and selection of system technologies, including specifications for PV panels and inverters; high-resolution modeling to estimate energy outputs based on PV module, inverter and equipment characteristics; and review of site preparation, equipment costs, control systems, meteorological hardware, electrical networks and decommissioning requirements. Part 2: Site-specific environmental and social studies as per the Environmental and Social Framework Supporting EDL in preparing site-specific environmental and social instruments to identify potential environmental, social, health and safety risks related to the construction and operation of the solar PV plant, including preparation of a site-specific Environmental and Social Impact Assessment; consultations with stakeholders and integration of their feedback into the designs and the ESIA; and preparation of terms of reference for the engineering, procurement and construction contractor to prepare a construction environmental and social management plan and an occupational health and safety risk assessment. 3. Financing of the Project Components and Grant Activities (EDL & LRA) The auditor will reconcile EDL expenditures directly and consolidate the final statements after receiving the separate independently audited report from the LRA. The Loan Agreement allocates the following financing categories to EDL. The Auditor shall reconcile audited Loan expenditures, withdrawals, replenishments, direct payments, special commitments, statements of expenditure, contract commitments, and unpaid balances to these EDL categories and to the approved Annual Work Plans and Budgets, as applicable. Category Description Amount Allocated (USD) Percentage of Expenditures to be Financed 1 Goods, works, non-consulting services, consulting services, Operating Costs and Training for Parts 1, 2.3 and 3.1 of the Project implemented by EDL. 128,678,000 100% 2 Goods, works, non-consulting services, consulting services, Operating Costs and Training for Part 2.1 of the Project implemented by EDL. 90,772,000 100% 3 Goods, works, non-consulting services, consulting services, Operating Costs and Training for Part 2.2 of the Project implemented by LRA. 24,937,000 100% 4 Goods, works, non-consulting services, consulting services, Operating Costs and Training for Part 3.2 of the Project implemented by LRA. 4,988,000 100% 5 Emergency Expenditures under Part 4.1 of the Project. 0 100% 6 Emergency Expenditures under Part 4.2 of the Project. 0 100% 7 Front-end Fee for Parts 1, 2.1, 2.3 and 3.1 of the Project implemented by EDL. 550,000 Amount payable pursuant to Section 2.03 of the Loan Agreement, in accordance with Section 2.07(b) of the General Conditions 8 Front-end Fee for Parts 2.2 and 3.2 of the Project implemented by LRA. 75,000 Amount payable pursuant to Section 2.03 of the Loan Agreement, in accordance with Section 2.07(b) of the General Conditions 9 Interest Rate Cap or Interest Rate Collar premium for EDL. Amount due Amount payable pursuant to Section 4.05(c) of the General Conditions 10 Interest Rate Cap or Interest Rate Collar premium for LRA. Amount payable pursuant to Section 4.05(c) of the General Conditions TOTAL AMOUNT 250,000,000 Source: Project Appraisal Document (PAD), Table 5, pages 41–42. The aggregate amount allocated to EDL Categories 1 and 2 is US$219,450,000, excluding the EDL front-end fee and any Interest Rate Cap or Interest Rate Collar premium. Including the EDL front-end fee, the identified EDL allocation is US$220,000,000, subject to the terms of the Loan Agreement. The Closing Date of the Loan is December 31, 2030, unless otherwise amended in accordance with the Loan Agreement. The Closing Date of the Grant is June 30, 2027, unless otherwise amended in accordance with the Grant Agreement. The ESMAP Grant Agreement allocates the following financing category to EDL-related Grant activities. The Auditor shall reconcile audited Grant expenditures, withdrawals, direct payments, statements of expenditure, contract commitments, unpaid balances and supporting documents to this Grant category, the approved Annual Work Plans and Budgets, the Grant Agreement, the Subsidiary Agreement under the Grant, the POM and applicable World Bank requirements. Category Description Amount Allocated (USD) Percentage of Expenditures to be Financed 1 Goods, works, non-consulting services, consulting services, Training and Operating Costs under the Project 1,500,000 100% inclusive of taxes Total 1,500,000 The total Grant amount is US$1,500,000. No withdrawal shall be made for payments made prior to the date of the Grant Agreement. 4. Project Implementation Arrangements for EDL The Ministry of Energy and Water (MoEW) has overall responsibility for the implementation of the Project. A Project Steering Committee, chaired by the Minister of Energy and Water, is to provide overall strategic guidance and Project oversight, approve the Annual Work Plan and Budget, and review implementation and evaluation reports, as applicable. EDL shall maintain the EDL Project Management Team (EDL-PMT) throughout Project implementation, with composition, mandate and resources satisfactory to the Bank and as further detailed in the POM. The EDL-PMT shall include, inter alia, a Project manager, procurement specialist, financial management specialist, and environmental and social specialist, all with terms of reference, qualifications and experience acceptable to the Bank. The EDL-PMT is responsible for the day-to-day coordination of EDL Project activities, including financial management, procurement, monitoring and evaluation, preparation of Project progress and monitoring reports, compliance with the Environmental and Social Commitment Plan (ESCP) and Environmental and Social Standards, and coordination with stakeholders on implementation. Before the commencement of any works under Parts 1, 2.1 and 2.3, EDL shall select and hire the EDL Owner's Engineer with terms of reference and under terms and conditions acceptable to the Bank. The EDL Owner's Engineer is responsible for assisting MoEW and EDL in the supervision of the activities under Parts 1, 2.1 and 2.3 of the Project. The EDL Subsidiary Agreement shall govern the transfer and use of the relevant Loan proceeds for EDL Parts 1, 2.1, 2.3 and 3.1. The Subsidiary Agreement under the Grant shall govern the transfer and use of the relevant Grant proceeds for the Grant-financed EDL activities. EDL is required to carry out the Loan-financed Project parts and the Grant-financed activities with due diligence and efficiency and in conformity with appropriate administrative, economic, engineering, managerial, financial, environmental, social and technical standards and practices, including the Anti-Corruption Guidelines, Procurement Regulations, Environmental and Social Standards, and applicable provisions of the Financing Agreements and POM. 5. Financial Management and Audit Requirements EDL shall maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Bank, in a manner adequate to reflect the operations, resources and expenditures related to Parts 1, 2.1, 2.3 and 3.1 of the Loan-financed Project and the activities financed under the Grant. EDL is expected to maintain a ring-fenced accounting and reporting arrangement for the Project until the relevant integrated system or ERP platform is acquired, installed, customized and operational. The system should allow the recording of daily transactions, tracking of commitments and payments, separate identification of Loan and Grant financing sources, preparation of quarterly interim unaudited financial reports (IFRs), annual Project financial statements, and a fixed assets registry for assets financed under the EDL Project components and Grant-financed activities. Each audit of the Project Financial Statements shall cover one fiscal year of the Borrower, commencing with the fiscal year in which the first withdrawal under the Loan or Grant was made, unless otherwise agreed with the Bank. The audited financial statements, audit report, and management letter shall be furnished to the Bank not later than six months after the end of each audit period. The Project Financial Statements shall separately identify Loan and Grant funds, expenditures, categories, contracts and balances, as applicable. The EDL-PMT shall ensure that all necessary records are available to the Auditor, all accounting entries and adjustments have been made, and all actions required for the Auditor to issue the final audit report within the deadline have been completed. The Project Financial Statements for EDL should include, at minimum: Statement of Project sources and uses of funds, by financing source, for the fiscal year under audit and cumulatively from inception. Statement of uses of funds by EDL Project part, Grant activity, component, category and activity. Statement of expenditures and withdrawal applications, including replenishments, direct payments, special commitments, reimbursements and any other disbursement methods used under the Loan and Grant, as applicable. Designated Account(s) reconciliation statement, showing opening and closing balances and movements during the fiscal year, where applicable. Contract expenditures and contract listing, showing committed, paid and unpaid amounts under each contract. Fixed assets listing, including all fixed assets purchased under EDL Project components and Grant-financed activities, categorized and inventoried. Accounting policies and explanatory notes. Context According to Schedule 2 section I, part A (3) of the Loan agreement, the Governing Body of the Project through the Project Management Team (PMT) shall at all times maintain a financial management system, including records and accounts, and prepare project financial statements in a format acceptable to the World Bank and adequate to reflect the operations, resources and expenditures related to the Project. Also, the Governing body shall maintain records and supporting documents for all expenditures with respect to which withdrawals from the Loan or Grant account were made (the records should reflect all categories of withdrawals, SOEs, direct payments and replenishments of Designated Accounts). The General Purpose Project Financial Statements (“PFS”) are comprised of a (i) Statement of Funds Receipts and Payments for the year then ending and cumulatively from inception date up till the year ending including funds received from various sources (ii) Statement of Payments classifying the uses of funds i.e. project expenditures by component, category and activity showing yearly and cumulative balances (iii) Reconciliation statement for the balance of the Project’s Designated Account as of year-end showing the opening & closing balances (iv) Statement of payments made using Statements of Expenditures (SOE) basis as defined in the Loan or Grant agreements (v) Contract listing of all contracts showing amounts committed, paid, and unpaid under each; (vi) list of inventoried fixed assets and (vii) accounting policies and explanatory notes. The Loan Agreement require that the records, accounts and project financial statements mentioned above and the records and accounts for the Designated Account for each fiscal year to be audited, in accordance with auditing standards acceptable to the Bank, consistently applied, by independent Auditors acceptable to the Bank. Audited PFS should be submitted to the World Bank as soon they become available but not later than six months after the end of the fiscal year. In fulfillment of this statutory requirement, the Governing Body should engage a qualified independent audit firm according to terms of reference and scope of work acceptable to the World Bank, as summarized below. 6. Objective of the Audit The primary objective of the audit engagement is to enable the Auditor to express a professional opinion as to whether: the EDL Project Financial Statements give a true and fair view of the financial position of the EDL Project components, and of the funds received and expenditures incurred, in accordance with International Public Sector Accounting Standards (IPSAS), Cash Basis of Accounting, or other accounting standards acceptable to the Bank; all funds provided to EDL under the Loan and Grant, including replenishments, direct payments, special commitments and reimbursements based on statements of expenditure, have been used, accounted for and classified in accordance with the Financing Agreements, the EDL Subsidiary Agreement under the Loan, the Subsidiary Agreement under the Grant, the applicable Disbursement and Financial Information Letter or grant disbursement arrangements, the POM and World Bank requirements; the internal controls over financial reporting and disbursement processes can be relied upon to support the related withdrawals and financial statements; the Designated Account(s), if used, have been used exclusively for eligible expenditures and have been accounted for and reconciled in accordance with the Financing Agreements and World Bank disbursement requirements; the EDL Project components and Grant-financed activities are, in all material respects, in compliance with the relevant financial covenants, procurement requirements, disbursement procedures, applicable laws and regulations, and World Bank requirements. For this purpose, the Auditor shall carry out the examinations, tests and procedures necessary to obtain sufficient appropriate audit evidence, including review of the underlying records, contracts, supporting documents, internal control systems, withdrawal applications, statements of expenditure, designated account(s), and physical existence of assets where applicable. The auditor is expected to consolidate the audit of the loan after receiving the audit from LRA. 7. Scope of the Audit The audit subject to this Terms of Reference is considered as a special purpose audit engagement for which, in addition to compliance with international standards as explained below, the Auditor needs to take into consideration the effectiveness of internal controls over financial reporting, and compliance with World Bank Reporting requirements, Disbursement guidelines, and Procurement Guidelines in order to provide assurance on the financial management and procurement arrangements of the project in accordance with ISA 800. Accordingly, the Auditor should review and assess the conclusions drawn from the audit evidence during the special purpose audit engagement as the basis for the expression of a clear written audit opinion. Moreover, the Auditor should obtain from management a Representation Letter as evidence of management’s assertions in the project financial statements in accordance with ISA 580. The audit will be carried out in accordance with International Standards on Auditing, having regard to relevant Loan/Grant agreements and World Bank particular requirements. The audit shall provide assurance on the effectiveness of the internal controls surrounding statements of expenditure. The scope of the audit procedures must be aligned with the World Bank scope requirements to ensure compliance with the engagement. Planning and conducting the audit will be in accordance with a risk-based framework and a detailed and documented audit work program. The audit coverage will consider the risk of material misstatement as a result of error or fraud. A description of the nature, timing, and extent of the planned risk assessment procedures sufficient to assess the risk of material misstatement should be properly documented. In complying with International Standards on Auditing, the Auditor shall pay particular attention to the following standards and related requirements, including special considerations for public sector entities In planning and performing the audit to reduce audit risk to an acceptably low level, the auditor should consider the risks of material misstatements in the financial statements due to fraud, as required by International Standard on Auditing 240. When designing and performing audit procedures and in evaluating and reporting the results thereof, the auditor should recognize that noncompliance by the entity with laws and regulations may materially affect the financial statements, as required by International Standard on Auditing 250. The auditor should communicate audit matters of governance interest arising from the audit of financial statements to those charged with governance of an entity, as required by International Standard on Auditing 260. The auditor should appropriately communicate to those charged with governance and to management any deficiencies in internal control that the auditor has identified in an audit of financial statements, as required by International Standard on Auditing 265. To reduce audit risk to an acceptably low level, the auditor should determine overall responses to assessed risks at the financial statement level and should design and perform further audit procedures to respond to assessed risks at the assertion level, as required by International Standard on Auditing 330. A documentation of the assessment and determining of the audit materiality and its relationship with audit risk when conducting an audit should be done (ISA 320) When certain aspects of an entity’s operations are performed by a third-party service provider, the auditor is expected to include an understanding and assessment of the internal control environment of the service provider during the audit process, as required by International Standard on Auditing 402. As part of the audit process, the auditor is expected to obtain written representations from management and, where appropriate, those charged with governance, as required by International Standard on Auditing 580. When the external auditor decides to use the work of an entity’s internal audit function to modify the nature or timing, or reduce the extent, of audit procedures to be performed directly by the external auditor, the determination shall be in accordance with International Standard on Auditing 610. In determining whether to use the work of an auditor’s expert or the extent to which the work of an auditor’s expert is adequate for audit purposes, the determination shall be made in accordance with International Standard on Auditing 620. ISA 800: special considerations for audits of financial statements prepared in accordance with special purpose frameworks. 8. Specific Audit Procedures and Areas of Attention The Auditor shall perform, for the loan and the grant, at minimum, the following procedures and any additional procedures considered necessary in the circumstances: All funds disbursed under the Project are eligible, have been used, accounted for and classified in accordance with the relevant Loan or Grant agreements and all the disbursements made on behalf of the project are in accordance with the World bank disbursement guidelines; The PFS are prepared in accordance with the International Public Sector Accounting Standards, under the cash basis of accounting and give a true and fair view of the financial operations of the project within the year. Any material deviations from those standards and the impact of such departures on the project financial statements as presented would be stated; An assessment of the effectiveness of the internal controls over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements i.e. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals; Goods and services financed have been procured in accordance with World Bank Procurement framework and Guidelines/Regulations revised September 2025[1] ; All necessary copy of supporting documents, records, and accounts have been kept in respect of all project. Clear linkages should exist between the books of account and the Project Financial Statements (PFS) presented to the Bank; Where Designated Accounts have been used, they have been maintained in accordance with the provisions of the relevant Loan or Grant agreements; Project expenditures as reported by the Governing Body are reconciled with the amounts withdrawn from the Designated Account and the amounts deposited to the Designated account are reconciled with the amounts disbursed from the Loan/ Grant agreements. Eligibility of expenditures claimed under Statement of Expenditures submitted to the World Bank for replenishment. This is in addition to substantiation of these expenditures; An assessment of project implementation and whether financial and physical progress is consistent during the project period. The monitoring of the expenditures in relation to physical progress is validating that physical progress and disbursements are under proper financial control Ensure that the fixed assets financed by the project are purchased in accordance with contracts and payment documents, are used for the purpose for which they were acquired and are physically existent; Verify that checks are signed by those authorized by management and negotiated by the intended payee under a specific contract and as required under the terms of the Loan/Grant agreements; The Auditor will be expected to review all correspondences with the World Bank in relation to the Project including copies of the Aide Memoires, Mission Reports, and assess progress on all financial issues. The Auditor will pay special attention to any specific risk area as mentioned in the project documents (such as PAD, etc.) [1] Depending on the complexity of procurement activities, the auditor may consider involving technical experts during the audit engagement, in compliance with provisions of International Standard on Auditing 620. Consideration of using of the work of experts should be brought to the early attention of the borrower and the World Bank for mutual agreement and appropriate guidance. 9. Audit Deliverables The auditor should verify that the financial statements have been prepared in accordance with International Public Sector Accounting Standards, Cash Basis of Accounting. The financial statements should include: Project funds received and payments by financing source and category of expenditure made by the World Bank, other financiers and counterpart contributions from the borrower, as applicable, all presented separately. Expenditures paid, presented under project account headings and main categories, activities, components and Grant-financed activities of expenditures; and Additional disclosures in explanatory notes, including details of statements of expenditures (SOE) supporting Withdrawal Applications submitted during the period, a reconciliation of movements on the Designated Account(s), and a statement of fund balances. Fixed assets listing, including all fixed assets purchased under the project, including Loan-financed and Grant-financed activities, categorized and inventoried. For the project, the following is requested as deliverables covering each period of the engagement: I. Consolidated Audit Report for the loan (EDL and LRA Components) and Audit Report (Grant-Financed Activities) covering each period which shall include an explicit professional opinion whether (i) the General Purpose Project Financial Statements (PFS) show true and fair view of the Project’s financial position as of the end of the period and sources and uses of funds incurred during the year then ending in accordance with International Public Sector Accounting Standards, under the cash basis of accounting; (ii) all funds provided to the Project, including replenishments, direct payments, payments through special commitments, and reimbursements, including expenditures reimbursed on the basis of Statements of Expenditures, are eligible, have been used, accounted for, and classified in accordance with the relevant Loan and Grant Agreements, as applicable, as of December 31 for each year; (iii) internal control over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements can be relied upon to support the related withdrawals as of December 31 for each year; (iv) replenishments and disbursements made during the year ended December 31 for each year under the Designated Account(s) have been used exclusively for payment of eligible expenditures and have been accounted for and classified in accordance with the relevant Loan and Grant Agreements, as applicable, as of the end of each period; and (v) the Project was in all material respects in compliance with the relevant financial covenants of the Financing Agreements, World Bank disbursement guidelines and applicable World Bank Procurement Regulations. The Auditor should take into account relevant statutory and other mandatory disclosures and accounting requirements stipulated in the Financing Agreements and express in the report any relevant exception and the impact of the exception on the PFS. II. A Consolidated Management Letter for the loan (EDL and LRA Components) and Management Letter (Grant-Financed Activities) covering each period which should report any significant accounting and control issues arising from the audit of the project, as identified during the internal control mechanisms review together with the related risk. The letter, with management responses, and recommendations to address the situation and insufficiencies, should be made available to the Governing Body in time. As annex of the Management Letter, the Auditor will mention whether or not recommendations issued in the previous Management Letter have been considered by the PMT. The Consolidated Audit Report and Management Letter for the loan to be submitted no later than 6 months (June 30) after the end of each period. The audit report and management letter for the grant will be submitted within 6 months after the grant closing date. The external auditor will work to consolidate the financial statements and audit reports from both EDL and LRA for the loan part and prepare a consolidated project financial statement and audit report. This consolidated report must be submitted no later than six months after the end of each fiscal year. 9.1 Review of Statements of Expenditure and Interim Unaudited Financial Statements The auditor is required to audit all SOE/IFS submitted to the World Bank in support of requests for periodic replenishment of the project designated account(s), including Loan and Grant accounts, where applicable. Expenditures should be examined for eligibility based on criteria defined in the terms of the relevant Financing Agreements and detailed in the Project documents. The auditor should report any ineligible expenditures identified as having been included in withdrawal applications and reimbursed. 9.2 Review of designated accounts During the audit of the project financial statements, the auditor is required to review the activities of the project’s designated account(s), including any separate Loan or Grant account(s), where applicable. Activities to be examined will include deposits received, payments made, interest earned, and reconciliation of period-end balances. 9.3 Audit opinion The auditor will issue an audit opinion on the financial statements. The auditor’s opinion shall be based on an evaluation of the conclusions drawn from the audit evidence obtained and shall be expressed clearly through a written report that also describes the basis for that opinion. The audit report shall be prepared in accordance with the International Standard on Auditing 700. A modified audit opinion shall be rendered in the financial statements when the auditor concludes, on the basis of the audit evidence obtained, that the financial statements as a whole are not free from material misstatement; or the auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement. Modified audit opinions shall be in accordance with the International Standard on Auditing 705. The auditor will include emphasis of matter paragraphs or other matter paragraphs in the audit opinion where the auditor, having formed an opinion on the financial statements, seeks to draw users’ attention, when in the auditor’s judgment it is necessary to do so, by way of clear additional communication in the auditor’s report. The paragraphs will refer to either a matter that, although appropriately presented or disclosed in the financial statements, is of such importance that it is fundamental to users’ understanding of the financial statements; or as appropriate, any other matter that is relevant to users’ understanding of the audit, the auditor’s responsibilities, or the auditor’s report. This form of opinion will be presented in accordance with the International Standard on Auditing 706. 9.4 Other audit reports In addition to the audit opinion, the auditor will also, either in the audit report or in the report to management: provide comments and observations on the accounting records, systems, and controls that were examined during the course of the audit. identify specific deficiencies and areas of weakness in systems and controls and make recommendations for their improvement. report on instances of noncompliance with the terms of the financial agreement(s); quantify and report expenditures that are considered to be ineligible and either paid out of the designated account(s) or claimed from the World Bank. communicate matters that have come to attention during the audit that might have a significant impact on the implementation of the project. draw to the borrower’s attention any other matters that the auditor considers pertinent; and responses from management, including implemented and proposed remedial actions. The auditor’s opinion on the financial statements and management letter should be received by the Bank no later than six months after the end of each fiscal year. 10. Audit Periods and Submission Deadline Each audit shall cover one fiscal year of the Borrower, commencing with the fiscal year in which the first withdrawal under the Loan or Grant was made. The first audit period shall cover the period from the first withdrawal date, or another date agreed with the Bank, through December 31 of the relevant fiscal year. The following indicative schedule should be prepared based on the actual Effective Date, first withdrawal date, Grant Closing Date, Loan Closing Date and World Bank guidance: For the Grant-financed activities, the Grant Closing Date is June 30, 2027. Grant expenditures shall be audited for each fiscal year or closing period during which withdrawals or eligible expenditures occur, through the applicable closing and documentation period, as agreed with the Bank. Audit Period /Loan Period Covered Submission Deadline Period 1 From October 01, 2025 to December 31, 2026 June 30, 2027 Period 2 January 1, 2027 to December 31, 2027 June 30, 2028 Period 3 January 1, 2028 to December 31, 2028 June 30, 2029 Audit Period/ Grant Period Covered Submission Deadline Period 1 Grant effectiveness (June 9, 2026) until June 30, 2027 and the four-month grace period ending October 31, 2027 Dec. 31, 2027 11. Key Experts for the Audit Assignment 11.1 Team Leader Role: Overall responsibility for leading the audit team, coordinating activities, ensuring compliance with this TOR, and serving as the main liaison with EDL, MoEW and the World Bank, as required. Qualifications and Experience: Advanced university degree in finance, accounting, auditing or a related field, in addition to a professional accountancy certification such as CPA, ACCA or equivalent. Minimum of 10 years of proven experience in audit, including at least 3 years in World Bank or donor-funded projects. Proven leadership in managing audit teams and complex public sector or infrastructure assignments. Experience in Lebanon, including public sector audit and donor-funded project audit. 11.2 Audit Supervisor Role: Review financial flows, financial reporting, disbursement records, procurement-related financial records and compliance for the EDL Project components and Grant-financed activities, detect irregularities, and ensure that financial transactions are accurately recorded. Qualifications and Experience: University degree, preferably advanced, in finance, accounting, business administration or a related field. A professional accountancy certification is an advantage. At least 7 years of experience in financial management and auditing of donor-funded projects. Familiarity with World Bank fiduciary procedures, disbursement procedures and auditing in the Lebanon context. 11.3 Audit Team Members Role: Assist the Team Leader and Audit Supervisor in conducting the financial audit, testing supporting documents, performing reconciliations, reviewing contract files, examining assets and preparing audit working papers for the EDL Project components and Grant-financed activities. Qualifications and Experience : University degree in finance, accounting, business administration or a related field. An advanced degree or professional certification is an advantage. At least 5 years of experience in financial management or audit of donor-funded projects. Familiarity with World Bank fiduciary procedures and auditing in Lebanon. 12. Firm Qualifications The Auditor should be registered as certified public accountant with the appropriate professional body in the country (Lebanese Association of Certified Public Accountants – LACPA) and registered at the Ministry of Finance and have at least 10 years of relevant experience including auditing major projects financed by donors, organizations and government entities as needed. The auditor should have a system of quality assurance as per international standards, ensure proper staffing with substantial experience and qualified international certification (CPA, CA or ACCA) for at least one or more senior staff. In case of government auditing, the audit team should be adequately staffed with qualified Auditors having relevant background and experience in auditing of public sectors and projects. Training and continued education should emphasize international auditing standards in addition to relevant international accounting and financial reporting standards (IPSAS, IFRS, ISA), work paper techniques and audit documentation to ensure engagements comply with international professional standards. The same audit principles should be applied if the audit is conducted by private or government Auditors. The Auditor should ensure that its audit firm’s system of quality control provides reasonable assurance that the work performed on an audit engagement meets the applicable professional standards and regulatory requirements. 13. Irregularities Including Fraud EDL, through its responsible governing and management bodies, is responsible for ensuring the establishment and maintenance of an adequate system of internal control, compliance with statutory and other regulations, and prevention and detection of irregularities, including fraud. The Auditor is not required to search specifically for fraud unless the audit evidence indicates that such an investigation is necessary. However, the Auditor shall plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error, and shall report in writing and without delay any serious weaknesses, fraud, irregularities, suspected corruption, or accounting breakdowns identified during the audit to the designated office holder, EDL, MoEW and the World Bank, as appropriate. 14. Access to Information The Auditor shall have rights of access to the books, accounts, vouchers, Financing Agreements, related Supplemental Letters, Project Appraisal Document, Grant Agreement documents, correspondence, and all other documents in relation to the Project and to such information and explanations as Auditors consider necessary to perform their duties and fulfill their responsibilities. In addition, the Auditors will be provided with copies of the World Bank relevant publications and documents that the Governing Body has to recognize, including: (i) World Bank policy and procedures for Investment Project Financing (IPF): Guidelines for Borrowers; (ii) the World Bank Procurement Regulations for IPF Borrowers dated September 2023 for the Loan and February 2025 for the Grant, as applicable; (iii) the World Bank Disbursement Guidelines, including Disbursement Guidelines for Investment Project Financing (February 2017), the Loan Handbook for World Bank Borrowers (February 2017), and any applicable grant disbursement instructions; and (iv) the Financing Agreements, POM, Subsidiary Agreements and related supplemental letters. In turn, on occasions the World Bank representatives may wish to meet with Projects' Auditors, in connection with a visit to the Auditor’s office, review of the audit working papers files and discussion of the work performed and conclusion reached by the Auditors. The Auditor should not limit access in any way and must reply to all inquiries raised by the World Bank representative. Failure to comply with this provision may disqualify the Auditors from dealing with all projects funded or administered by the World Bank. Formal discussion should normally be arranged through the Project's designated office holder or representative. The World Bank will have this exclusive right during performance of the audit and within two years after the completion of the audit engagement. 15. Meetings and Miscellaneous Requirements Annual Meetings The Auditor may be requested to attend meetings at which the Project annual reports and financial statements are presented. The Auditor shall receive relevant notices and communications relating to such meetings. Exit Conference The Auditor shall hold a closing or exit conference with senior officials of EDL and the EDL-PMT before concluding the audit. Upon completion of fieldwork, the Auditor shall present audit results, discuss key findings and recommendations, and document the exit conference for inclusion in the audit working papers. Termination of Appointment If there are serious shortcomings on the part of the Auditor, EDL, after consultation with the World Bank and in accordance with the applicable contract provisions, may take the necessary steps to terminate the appointment before expiry of the assignment. Restriction of Auditor Liability There shall be no limitation of the Auditor's liability in respect of audit opinions issued under this assignment, unless otherwise agreed in writing by EDL and the World Bank in accordance with applicable rules. 16. Payments Payments will be based on the satisfactory delivery and acceptance of the annual Audit Report, Management Letter and related deliverables for the EDL Project components and Grant-financed activities. Payment milestones and amounts shall be specified in the contract with the selected audit firm and shall be consistent with the applicable procurement and contract provisions. Deliverable Package Description Payment Audit period deliverables Audit Report, Management Letter, SOE/withdrawal application review, Designated Account(s) review where applicable, fixed assets schedule, and follow-up table on prior recommendations, covering Loan-financed and Grant-financed activities as applicable. As per contract