21-Jun-2022 Date: _____________, 22 H.E. Ato Ahmed Shide Minister Ministry of Finance Addis Ababa Ethiopia Excellency: Re: IDA Grant E059-ET (Development Response to Displacement Impacts Project in the Horn of Afirca Phase II) Additional Instructions: Disbursement and Financial Information Letter. I refer to the Financing Agreement between FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA (the “Recipient”) and the International Development Association (the “Association”) for the above-referenced Project. The General Conditions, as defined in the Financing Agreement, provide that the Recipient may from time-to-time request withdrawals of Grant amounts from the Grant Account in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Association may specify from time to time by notice to the Recipient. The General Conditions also provide that the Disbursement and Financial Information Letter may set out Project specific financial reporting requirements. This letter constitutes such Disbursement and Financial Information Letter (“DFIL”) and may be revised from time to time. I. Disbursement Arrangements, Withdrawal of Grant Funds and Reporting of Uses of Grant Funds. The Disbursement Guidelines for Investment Project Financing, dated February 2017, (“Disbursement Guidelines”) are available in the Association’s public website at https://www.worldbank.org and its secure website “Client Connection” at https://clientconnection.worldbank.org. The Disbursement Guidelines are an integral part of the DFIL, and the manner in which the provisions in the guidelines apply to the Grant specified below. (i) Disbursement Arrangements  General Provisions (Schedule 1). The table in Schedule 1 sets out the disbursement methods which may be used by the Recipient, and conditions, information on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account.  Special Provision. Projects in situations of urgent need of assistance or capacity constraints: Disbursements under contracts for goods, works, non-consulting services and consulting services procured or selected through international open or limited competition or Direct Selection, as set -2- out in the procurement plan, must be made only through Direct Payment and/or Special Commitment disbursement methods. (ii) Electronic Delivery. Section 11.01 (c) of the General Conditions. The Recipient will deliver Withdrawal Applications (with supporting documents) electronically through the Association’s web-based portal “Client Connection” at https://clientconnection.worldbank.org. This option will be effective after the officials designated in writing by the Recipient who are authorized to sign and deliver Withdrawal Applications have registered as users of “Client Connection”. The designated officials will deliver Applications electronically by completing the Form 2380, which is accessible through “Client Connection”. By signing the Authorized Signatory Letter, the Recipient confirms that it is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Association by electronic means. The Recipient may exercise the option of preparing and delivering Withdrawal Applications in paper form on exceptional cases (including those where the Borrower encounters legal limitations), and which were previously agreed with the Association. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Recipient confirms through the authorized signatory letter its agreement to: (a) abide by the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation, available in the Association's public website at https://worldbank.org and “Client Connection”; and (b) to cause such official to abide by those terms and conditions. II. Financial Reports and Audits. (i) Financial Reports. The Recipient must prepare and furnish to the Association not later than forty-five (45) days after the end of each Ethiopian Fiscal calendar quarter, interim unaudited financial reports (“IFR”) for the Project covering the quarter. (ii) Audits. Annual financial audits will be conducted commencing with the fiscal year in which the first withdrawal was made. The annual audited Financial Statements must be submitted not later than six (6) months of the end of the period. III. Other Information. For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Association’s website (http://www.worldbank.org/) and “Client Connection”. The Association recommends that you register as a user of “Client Connection”. From this website you will be able to prepare and deliver Applications, monitor the near real-time status of the Grant and Credit, and retrieve related policy, financial, and procurement information. -3- For more information about the website and registration arrangements, or if you have any queries in relation to the above, please contact the Association by email at AskLoans@WorldBank.org using the above reference. Yours sincerely, ______________________________ Boutheina Guermazi Director of Regional Integration Africa and Middle East and North Africa Attachments 1. Form of Authorized Signatory Letter 2. Interim unaudited Financial Report (IFR) With copies: Mr. Abebe Tadesse Director International Financial Institutions Cooperation Directorate Ministry of Finance Addis Ababa, Ethiopia Email: atadessef@mofed.gov.et Nigatu Bogale Email: nigatu_bogale@yahoo.com -4- Schedule 1 : Disbursement Provisions Basic Information Country Federal Democratic Republic of Closing Date Section III.B.2. of Schedule 2 to the Ethiopia Financing Agreement. Grant Recipient Ministry of Finance Number Name of the Project Development Response to Disbursement Four months after the closing date. Displacement Impacts Project in the Deadline Date Horn of Afirca Phase II Subsection 3.7 ** Disbursement Methods and Supporting Documentation Disbursement Methods Methods Supporting Documentation Section 2 (**) Subsections 4.3 and 4.4 (**) Direct Payment Yes Copy of records Reimbursement Yes Interim unaudited Financial Report (IFR) in the format provided in Attachment 2 of the DFIL Advance (into a Designated Yes Interim unaudited Financial Report (IFR) in the format provided in Attachment 2 of the DFIL Account) Special Commitments Yes Copy of Letter of Credit Designated Account (Sections 5 and 6 **) Segregated Variable DA A Type Ceiling DA B- (for CERC Category) Financial Institution – National Bank of Ethiopia (NBE) USD Currency Name Frequency of Reporting Quarterly Based on up to 6 months cash forecast as Amount Subsection 6.3 (**) per detail provided in the IFR Minimum Value of Applications (subsection 3.5) The minimum value of applications for, Reimbursement, Direct Payment and Special Commitment is USD 5,000 equivalent. Authorized Signatures (Subsection 3.1 and 3.2 **) The form for Authorized Signatories Letter is provided in Attachment 1 of this letter Withdrawal and Documentation Applications (Subsection 3.3 and 3.4 **) (i) Authorized Signatures A letter in the Form attached (Attachment 1) should be furnished to the World Bank at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: (ii) Applications. Please provide completed and signed (a) applications for withdrawal, together with supporting documents, to the address indicated below: The World Bank, Loan Department, Delta Center, 13th Floor, Upper Hill, Menengai Road, Nairobi, Kenya. Tel: 254 20 2936 000 Attention: Loan Department -5- Additional Instructions DA B will only be opened when CERC component is activated and is implemented by a different ministry from the one that is implementing the EDRDIP project. Other ** Sections and subsections relate to the “Disbursement Guidelines for Investment Project Financing”, dated February 2017 . -6- Attachment 1 – Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Grant No. _______-___ (Development Response to Displacement Impacts Project in the Horn of Afirca Phase II) Attention: _______________________, Country Director I refer to the Grant Agreement (“Agreement”) between the International Development Association (the “Association”) , acting as implementing of the ]1 and [name of recipient] (the “Recipient”), dated _______, providing the above [Grant] [Credit]. For the purposes of Section 2.03 of the General Conditions as defined in the Agreement, any 2[one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Recipient to sign applications for withdrawal [and applications for a special commitment] under this [Grant] [Credit]. For the purpose of delivering Applications to the Association, including by electronic means, 3[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient, acting 4[individually] 5[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the Association. This confirms that the Recipient is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Association 1 Instruction to the Recipient: add text in line with the Grant Agreement if applicable; if not applicable delete it. Please delete this footnote in final letter that is sent to the Associations 2 Instruction to the Recipient: stipulate if more than one person needs to sign Applications, and how many or which positions, and if any thresholds apply. Please delete this footnote in final letter that is sent to the Association. 3 Instruction to the Recipient: stipulate if more than one person needs to jointly sign Applications, if so, please indicate the actual number. Please delete this footnote in final letter that is sent to the Association. 4 Instruction to the Recipient: use this bracket if any one of the authorized persons may sign; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. 5 Instruction to the Recipient: use this bracket only if several individuals must jointly sign each Application; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. -7- by electronic means. In full recognition that the Association shall rely upon such representations and warranties, including without limitation, the representations and warranties contained in the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation (“Terms and Conditions of Use of SIDC”), the Recipient represents and warrants to the Association that it will cause such persons to abide by those terms and conditions. This Authorization replaces and supersedes any Authorization currently in the Association records with respect to this Agreement. [Name], [position] Specimen Signature: ____________________ [Name], [position] Specimen Signature: ____________________ [Name], [position] Specimen Signature: ____________________ Yours truly, / signed / ______________ -8- Attachment 2 - Interim unaudited Financial Statements Ministry of Agriculture (MoA) Second Development Response to Displacement Impacts Project (DRDIP II) IFR Reporting Template -Draft For the Quarter ending …………………………… 1. IFR Content i. Discussion of Financial performance, Notes & Explanations ii. Consolidated Statement of Sources and Uses of Fund iii. Summary of Expenditure by component iv. Summary of Expenditure by region and component v. Statement of Designated account activity by account vi. Six months Project Expenditure forecast and cash requirement vii. Fund Flow Statement by account, viii. Supporting schedules (Regional Cash movement, Regional sources and uses of fund by woreda breakdown, Advances and Payables aging analysis, bank reconciliations, Trial Balances ..etc) 2. Financial Performance Notes i. Project Ending Fund Balances (Cash, Receivables, and Payables) ii. Budget vs Actual comparison summary by Components iii. Budget vs Actual comparison summary by implementing Regions iv. Detailed budget Variance notes/explanations v. Foreign Exchange vi. Action on previous IFR Review Recommendations and agreed FM action plans vii. Key FM implementation Challenges -9- 1. Discussion of Financial performance, Notes & Explanations i. Project Ending Fund Balances (Cash, Receivables, and Payables) ii. Budget vs Actual comparison summary by Components iii. Budget vs Actual comparison summary by implementing Regions iv. Detailed budget Variance notes/explanations v. Foreign Exchange vi. Action on previous IFR Review Recommendations and agreed FM action plans vii. Key FM implementation Challenges -10- Ministry of Agriculture (MOA) Second Development Response to Displacement Impacts Project (DRDIP II) Sources & Uses of Funds (in both ETB and US$) For The Quarter Ended_____________________ Current Cumulative Cumulative Quarter Year to (To date) (In date (In (In Particulars ETB/US$) ETB/US$) ETB/US$) Remarks Opening Balance Designated IDA USD Account - - - Pooled Birr Account at Federal (see annex- 1a) - - - Bank Balance at Regional - - - Cash on hand - - - Advances/receivables to region - - - Advances/receivables to Suppliers and Contractors - - - Advances/receivables to UN - - - Advances/receivables to Others - - - Account Payables (-) - - - Total Opening Balance - - - Add: Sources IDA - - Community Contribution Others (state...) - - Total Source for the Period - - Total Available Fund for The Period - - - Less: Program Expenditures - Component 1: Social and economic services and infrastructure Component 2: Sustainable environmental management Component 3: Livelihoods program Component 4: Project Management, M&E and Learning Component 5: Contingent Emergency Response Component (CERC) Total Expenditures (Annex ..) - - - Total Available Fund Less Total Expenditures - - - Foreign Exchange Difference (Annex ….) - - Net Fund Available - - - Ending Balance Designated USD Account - - - -11- Pooled Birr Account at Federal (see annex 1a) - - - Bank Balance at Regional - - - Cash on hand - - - Advances/receivables to region - - - Advances/receivables to Suppliers and Contractors - - - Advances/receivables to UN - - - Advances/receivables to Others - - - Account Payables (-) - - - Total Ending Balance - - - NOTES: Exchange Rate i. Exchange rate used to determine ending Cash Balance - rate prevailing at the reporting date - ….................. ii. The gain or loss on exchange rate is determined by the rate prevailing at the reporting date. Prepared By___________________________ Approved By __________________________ Signature ___________________________ Signature ___________________________ Date ________________________________ Date ______________________________ -12- Ministry of Agriculture (MoA) Second Development Response to Displacement Impacts Project (DRDIP II) Consolidated Expenditures Summary (in Ethiopia Birr & USD) For The Quarter Ended__________________ Current Quarter Year to date (YTD) Project Life Cummulative to date Annual Budget Actual % % Particulars Budget Budget Actual Variance (YTD) (YTD) Variance Util. Budget Actual Variance Utiliz Expenditures (Applications) Comp 1: Social and economic services and infrastructure Sub-component 1(a): Community Investment Fund & Strategic Investment Fund Sub-component 1(b): Capacity Support for Local Planning & Decentralized Service Delivery Sub-component 1(c): Women’s Leadership and Voice Sub-component 1(d): Social Cohesion and Inclusion Sub Total Component 1 Comp 2: Sustainable environmental management Sub-component 2(a): Integrated Natural Resource Management Sub-component 2(b): Alternative Energy Sources subtotal component 2 Ministry of Agriculture -13- (MoA) Second Development Response to Displacement Impacts Project (DRDIP II) Consolidated Expenditures Summary (in Ethiopia Birr & USD) For The Quarter Ended__________________ Current Quarter Year to date (YTD) Project Life Cummulative to date Annual Budget Actual % % Particulars Budget Budget Actual Variance (YTD) (YTD) Variance Util. Budget Actual Variance Utiliz Comp 3: Livelihoods program Sub-component 3(a): Traditional Livelihoods Sub-component 3(b): Non-traditional Livelihoods Sub-component 3(c): Small-Scale, Micro and Household Irrigation Schemes sub total component 3 Component 4: Project Management, M&E and Learning Project Management, M&E and Learning Sub total component 4 Comp 5: Contingent Emergency Response Component (CERC) Grand Total of the Project Prepared By___________________________ Signature __________________ Approved By___________________________ Date ________________________________ Signature ___________________________ Date ________________________________ -14- Ministry of Agriculture (MoA) Second Development Response to Displacement Impacts Project (DRDIP II) Expenditure Apportionment Worksheet (in US$) For The Quarter Ended__________________ Quarter Year to date Cumulative to date Total Expenditure Direct Payments/Special Commitments Expenditure from Community/Govt Contributions Balance after direct payments & other sources Balance allocated to IDA DA as: Current Total quarter Remaining Allocation Documented expenditure Total undocumented Category (US$) so far allocated Documented balance Category 1 (goods, works, services, operating costs, grants) Category 2 (CERC) Total Prepared By___________________________ Approved By___________________________ Signature ___________________________ Signature ___________________________ Date ________________________________ Date ________________________________ -15- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Expenditures Forecasts & Cash Requirements (In Ethiopia Birr & US$) For the six Month From--------------------- to ---------------------------- Annua Quarter Total for Six Particulars Budget Quarter … …. Months Expenditures for the next Six Months ETB US$ 1: Social and economic services and infrastructure Sub-component 1(a): Community Investment Fund & Strategic Investment Fund Sub-component 1(b): Capacity Support for Local Planning & Decentralized Service Delivery Sub-component 1(c): Women’s Leadership and Voice Sub-component 1(d): Social Cohesion and Inclusion subtotal comp 1 2: Sustainable environmental management Sub-component 2(a): Integrated Natural Resource Management Sub-component 2(b): Alternative Energy Sources subtotal comp 2 3: Livelihoods program Sub-component 3(a): Traditional Livelihoods Sub-component 3(b): Non-traditional Livelihoods Sub-component 3(c): Small-Scale, Micro and Household Irrigation Schemes subtotal comp 3 4: Project Management, M&E and Learning 5: Contingent Emergency Response Component (CERC) Total Expenditures for the next Six Months Ending cash Balance Special Designated Account Pooled Local (Birr) Account -16- Receivables/Advances - to regions Receivables/Advances - to Suppliers & Contractors Receivables/Advances - to Others Cash on Hand Balance Accounts Payable (_) Total Ending Balance Cash Requirements for the Next Six Months Net Cash Requirements for the Next Six Months Note: - The Exchange rate used is the rate prevailing at the reporting date Approved Prepared By________________________ By___________________________ Signature ________________________ Signature _______________ Date _________________________ Date _________________________ -17- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Fund flow statement Local Bank a/c ______________ (Birr) As of ……………………………. Birr Birr Balance brought forward - - Cash Transfer From IDA- DA Account - Cash Transfer from Others (state...) - - - Funds available for use - - Fund transfer Tigray Afar Amhara Gambella Somali Benishangul Gumuz Total Transfer Bank service charge Other Payments & deposits Total Transfer & bank service Charge Cash at Bank Prepared Approved By By___________________________ __________________________ Signature Signature ___________________________ ___________________________ Date Date ________________________________ ______________________________ -18- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Statement Of Fund Flow Designated Dollar Account N# …........ The Period, From ……………………………... USD BIRR OPENING BALANCE Add: Receipt Credit Fund Received Fund Available for use Less: Transfer and Expenditure Transfer to Local Pool birr account as at Expenditures Bank services Charges Total transfer & expenditure closing balance Actual exchange rate of …………… ……………. closing balance /Leger birr account/ Add gain or (Loss) on foreign exchange Gain Balance After Gain of foreign exchange Approved By Prepared By___________________________ __________________________ Signature Signature ___________________________ ___________________________ Date Date ________________________________ ______________________________ -19- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Designated Account Reconciliation Statement For The Quarter Ended …......... ______, 20____ Particulars Amount in USD 1. Total Advanced to the DA by World Bank to the end of the reporting period 2. Less: Total Amount Documented to DA and/or Recovered by World Bank 3. Equals Present outstanding Amount Advanced to the Designated Account (Number 1 Less Number 2) - 4. Balance of Designated Account per Attached Bank Statement at the end of the reporting period 5. Plus: Total Amount Claimed in this application No. 6. Plus: Total Amount Withdrawn and not yet claimed Reason: ___________________________________ 7. Plus: Amounts claimed in previous applications not yet credited at date of Bank Statements Application No. Amount Subtotal of previous applications not yet credited 8. Minus: Interest Earned - 9. Total Advance accounted for (no. 4 Through No. 9) - 10. Explanation of any difference between the totals appearing on lines 3 and 9: - The difference is due to the USD equivalent of Account receivable balance at the end of the reporting quarter Account payable balance at the end of the reporting quarter Local account balance at the end of the reporting quarter Others - explain Direct Payment - Approved By Prepared By___________________________ __________________________ Signature Signature ___________________________ ___________________________ Date Date ________________________________ ______________________________ -20- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Statement of Cash Movement _________________Region For the Period, from …………………to …………... At Regional Total in the Particulars At Woreda office region Birr Birr Birr Opening Balance Add: Cash transfers Transfers from MOA Fund Available for use - - - Less: Expenditure 1: Social and economic services and infrastructure Sub-component 1(a): Community Investment Fund & Strategic Investment Fund Sub-component 1(b): Capacity Support for Local Planning & Decentralized Service Delivery Sub-component 1(c): Women’s Leadership and Voice Sub-component 1(d): Social Cohesion and Inclusion subtotal comp 1 2: Sustainable environmental management Sub-component 2(a): Integrated Natural Resource Management Sub-component 2(b): Alternative Energy Sources subtotal comp 2 3: Livelihoods program Sub-component 3(a): Traditional Livelihoods Sub-component 3(b): Non-traditional Livelihoods Sub-component 3(c): Small-Scale, Micro and Household Irrigation Schemes subtotal comp 3 4: Project Management, M&E and Learning 5: Contingent Emergency Response Component (CERC) -21- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Statement of Cash Movement _________________Region For the Period, from …………………to …………... At Regional Total in the Particulars At Woreda office region Birr Birr Birr Total expenditure - - - Closing balance - - - Breakdown of closing balance Cash and Bank balances Receivables Payables others Total Closing Balance Balances - - - Approved By Prepared By___________________________ __________________________ Signature Signature ___________________________ ___________________________ Date Date ________________________________ ______________________________ -22- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Fund Utilization Report of _________________Region For the Period from …………… to ……………... Currency- Birr Total Communit transferr y Name Beginning ed contributio Ending of balance during n during Comp Ending cash Advan Wored (From the the period Total Comp1 2 Comp 3 Total Ending Cash balanc ces Total a/Bure previous IFR) period Available Expend Balance balance e at /receiv Payabl ending No au (a) (b) (a)+(b) = © (g) ©-(g) in Bank hand ables es balance - Grand Total Approved By Prepared _________________________ By___________________________ _ Signature Signature _________________________ ___________________________ __ Date Date ______________________________ _________________________ __ _____ -23- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Receivables/Advances Aging Analysis _______________________________________ FPCU/ Region As at the Quarter ending __________________ A/C Details 1 - 3 months 3- 6 months 6 months - 1 year over 1 year over two years Total 4203 Staff Advance Subtotal Staff Advance 4210 Procurement Advance Subtotal Procurement Advance 4211 Suppliers Advance Subtotal Suppliers' Advance 4251 Contractors Advances Subtotal Contractors' Advance 4274 Other Advances Subtotal Other Advances Grand Total -24- Ministry of Agriculture Second Development Response to Displacement Impacts Project (DRDIP II) Payments Made during Reporting Period Against Contracts Subject to the Association's Prior Review Date of WB's non Amount paid to Contract Contract objection to supplier during WB's share of Amounts Number Supplier Contract Date Amount contract the period during the Period