OFFICIAL THE ~A WORLD BANK HD WORLDBANK DOCUMENTS July 24, 2018 Hon. Pohiva Tu'ionetoa Minister for Finance & National Planning Ministry of Finance & National Planning P.O. Box 87 Vuna Road, Nuku'alofa Kingdom of Tonga Dear Minister, APIP Grant Number TFOA 7818 (Additional Financing for the Pacific Resilience Project under the Pacific Resilience Program) Additional Instructions: Disbursement I refer to the Grant Agreement ("Agreement") between Kingdom of Tonga ("Recipient") and the International Bank for Reconstruction and Development and International Development Association (collectively "World Bank") for the above-referenced Grant, acting as administrator of grant funds provided by the Government of Australia, represented by the Department of Foreign Affairs and Trade ("Donor") under the Australia-Pacific Islands Partnership Trust Fund for the above referenced project dated July 23, 2018. The Grant Agreement provides that the World Bank may issue additional instructions regarding the withdrawal of the proceeds under APIP Grant Number TFOA7818 ("Grant"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. The Disbursement Guidelines for Investment Project Financing dated February 2017 ("Disbursement Guidelines") (Attachment 1), are an integral part of the Disbursement Letter. The manner in which the provisions in the Disbursement Guidelines apply to the Funding is specified below. Sections and subsections in parentheses below refer to the relevant sections and subsections in the Disbursement Guidelines and, unless otherwise defined in this letter, the capitalized terms used have the meanings ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangements (i) Disbursement Methods (section 2). The following Disbursement methods may be used under the Grants: * Reimbursement * Advance * Direct Payment * Special Commitment 1818 H Street NW * Washington, DC 20433 USA (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is 4 months after the Grant's Closing Date specified in the Grant Agreement. Any changes to this date will be notified by the World Bank. II. Withdrawal of Financing Proceeds (i) Authorized Signatures (subsection 3.1). A letter in the Form attached (Attachment 2) 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: The World Bank Level 19, 14 Martin Place CML Building NSW 2000, Australia Attention: Country Director (ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed applications for withdrawal, together with supporting documents to the address indicated below: The World Bank 26th Floor, One Global Place 5th Avenue corner 25th Street, Bonifacio Global City Taguig City, Philippines Attention: Senior Regional Team Leader, WFACS (iii) Electronic Delivery (subsection 3.4) The World Bank may permit the Recipient to electronically deliver to the World Bank Applications (with supporting documents) through the World Bank's Client Connection, web-based portal. The option to deliver Applications to the World Bank by electronic means may be effected if: (a) the Recipient has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its officials who are authorized to sign and deliver Applications and to receive secure identification credentials ("SIDC") from the World Bank for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Recipient have registered as users of Client Connection. If the World Bank agrees, the World Bank will provide the Recipient with SIDC for the designated officials. Following which, the designated officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection https://clientconnection.worldbank.org). The Recipient may continue to exercise the option of preparing and delivering Applications in paper form. The World Bank reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Recipient. (iv) Terms and Conditions of Use of SIDC to Process Applications. 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 Page 2 of 20 Applications and Supporting Documentation ("Terms and Conditions of Use of Secure Identification Credentials") provided in Attachment 3; and (b) to cause such official to abide by those terms and conditions. (v) Minimum Values of Applications (subsection 3.5). The minimum value of Reimbursement, Direct Payment and Special Application is equivalent of USD 10,000 (vi) Advances (sections 5 and 6). * Type of Designated Account (subsection 5.3): Segregated to be operated by Ministry of Finance and National Planning * Currency of Designated Account (subsection 5.4): USD * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5): Commercial Bank acceptable to the World Bank * Ceiling (subsection 6.1): USD 250,000 III. Reporting on Use of Financing Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each Application for Withdrawal as set out below: * For requests for reimbursement and reporting eligible expenditures paid from the Designated Account: o Statement of Expenditures ("SOE") in the form attached (Attachment 2); * For requests for direct payment: Records evidencing eligible expenditures like invoice. (ii) Frequency of Reporting Eligible Expenditures Paid from the Designated Account (subsection 6.3): Quarterly. TV. Other Important Information For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on the World Bank's public website at http://www.worldbank.org and its secure website "Client Connection" at http://clientconnection.worldbank.org. Print copies are available upon request. If you have not already done so, the World Bank recommends that you register as a user of the Client Connection website (https://clientconnection.worldbank.org). From this website, you will be able to download Applications, monitor the near real-time status of the Grants, and retrieve Page 3 of 20 related policy, financial, and procurement information. For more information about the website and registration arrangements, please contact clientconnection@worldbank.org. If you have any queries in relation to the above, please contact Mr. Satish Kumar Shivakumar, Finance Officer at satishkumarl @worldbank.org. Sincerely, Michel Kerf Country Director Papua New Guinea & Pacific Islands East Asia and Pacific Region Attachments 1. The Disbursement Guidelines for Investment Project Financing dated February 2017 2. Form of Authorized Signatory Letter 3. Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation 4. Format of Statement of Expenditures Page 4 of 20 Attachment 1 Disbursement Guidelines for Investment Project Financing February 2017 WORLD BANK GROUP Page 5 of 20 CONTENTS PAGE 1. Purpose 1 2. Disbursement Methods 1 3. Withdrawal of Funds from Financing Account 2 4. Supporting Documentation Requirements 3 5. Designated Accounts 4 6. Terms and Conditions Applicable to Advances 6 7. Ineligible Expenditures 8. Refunds S Page 6 of 20 1. Purpose I I The purpose of the Disbursement Guidelnes for Investment Project FinancMg (the guidehnes) is to set out the World Bank-s procedures and requirements for disbursement of funds an projects I Specifically the guidelnes set out (a) the different arrangements used by the World Bank to disburse funds from the Financing Account, (b} the requirements for withdrawal from the Financing Account (c) the tpes of supportin documentation that the borrower may be requsred to provide to demonstrate the use of funds of the Financing Account for eligible expenditures. (d) the critena for establishmg Designated Accounts-. (e) the terms and conditions applicable to advances. (f) the types of disbursement-related actions that the World Bank may take if it determines that funds of the Financig Account are not needed or have been used for mehgible purposes- and (g) the disbursement consequence of refunds. 2. Disbursement Methods 1I The World Bank establishes disbursement arrangements for a project in consultation with the borrower. taking into consideration among other things. an assessment of the borrower's financial management and procurement arrangements. the cash flow needs of the project, and its disbursement expenence with the borrower Those arrangements are stated in the Fmancmz Agreement' and additional information is provided in the Disbursement Letter ' 2 2 The World Bank disburses funds from the Financing Account established for each loan, to or on the order of the borrower, using one or more of the following disbursement methods, as determined by the World Bank In this document the Worid Bank includes the Internationl Bank for Reconsruction and Development (IBRD) and the Insernational Development Assoczation (IDA). whether actmr on its OWi accoun or in the capaar as aduamstras of trust hads ftuded by donors Financng or Bank loan mcindes ay loan. credit, or pant made by the World Bank ftom ts own resowces. from trust funds funded by other donors and adinimstered by the World Bank. or from a comanaron of these Bomower means a borrower or recpsewa of a Bank loan fix a project and any other enty tvolved in the mplemenaon of the proect fnanced by the Bank loan. These amdelines apply to all Bank loans for an Investment Project Fianamzg They do not apply to Propam-For-Resufs Fnancing and Developmear Pohey Fanang or for pants made by the World Bank from trust funds handed by other donors and adaimstered by the World Bank. when- exceptionally. the terms of he agreement with the donor provde for dIfferent requsremens . . The Fmancing Account refers to the account opened by the World Bank in its acounimg system an the name of the borrower to wiach the amouna of the fmancing as credited A Designated Account as a bank account into which the World Bank may deposit amounts wihdrawn from the Financw Account to pay fi eligible expenditures as thry ae incuwed. The Functng Agrement is the agreement betwmen the World Bank and the Borrower providmg for the Bank loan The Disbursement Letter cootains additional msuctons descnbing the disbursement arangemnts for wthdrawm= proceeds from the Financmz Account under a partcular investment project Page 7 of 20 (a) Reimbursement The World Bank may reimburse the borrower for expenditures eligible for financing pursuant to the Fmancmg Agreement (eliible expenditures) that the borrower has prefinanced from its own resources (b) Advance: The World Bank may advance funds from the Financing Account into a Designated Account of the borrower to fiance eligible expenditures as they are incurred and for winch supporting documents will be provided at a later date (see section 5. Designated Accounts) (c) Direct Pa'yent The World Bank may make payments at the borrower-s request directly to a third party (for example. supplier. contractor. or consultant) for elgible expenditures (d) Special Commitment: The World Bank may pay amounts to a third party for elghible expenditures under special commitments entered into. m writing. at the borrower's request and on terms and conditions agreed between the World Bank and the borrower 3. Withdrawal of Funds from the Financing Account 3 1 Anthori:ed Signantres. Before funds from the Financing Account may be withdrawn or commtted, the authonzed representative of the borrower (as dessonated m the Financing Agreement) must funnish to the World Bank- electromcally through the Client Connection website (http. chentconnection-workdbank-or). or through an authorized signatory designation letter. the name(s) of the officald(s) authorized (a) to sign and subaut applications for withdrawal and apphcations for a special commitment (collectively. Applications), and (b) to receive Secure Identificaton Credentials (SIDC) from the World Bank The borrower must notify the World Bank of any changes n signature authority either electronically in Client Connection or through an updated authonzed signatory desisnation letter 3 2 Teris and Conditions of Ve of Secure Idendfication Credenials (SIDC to Process Applications. By designatmng officials to use SIDC and by choosing to submit the applic2tions electromcallv the borrower confirms its agreement to abide by the tems and conditions of use of SIDC 6 3,3 Applications. Applications must be provided to the World Bank in such form as is required to access funds from the Financing Account and must include such information as the World Bank may reasonably request 3 4 Applications and necessary supporting documents (see section 4 Supporting Documentation Requirements) should be submitted to the World Bank electronically, in a A Term and condnonw of use of SIDC ae provudd m the Dismwement Letter Page 8 of 20 manner and on terms and conditions specified by the World Bank through the Client Connection website at http clientconnection worldbank org The World Bank may. at as discreton- temporarily or permanently disallow the electronic submission of applications by the borrower The World Bank may permit the borrower to complete and submit applications manually in paper form Paper applications forms can be found in the Client Connection website at http. chentconnection.worldbankorg or may be obtamed from the World Bank upon request 3 5 Minimum Value of Applicaions. The World Bank establishes a inunnum value for applications for reimbursement, direct payment. and special commitment The World Bank reserves the right not to accept applications that are below such minimnum value, 3 6 Loan Disbursing Period. The World Bank processes Applications only after the Fiancmg Agreement has been declared effective in accordance with the terms of the Financing Agreement The expenditures for which the Applications are made must be (a) Paid for on or after the date of the Financing Agreement. or alternatively, in the case of projects that permit retroactive financmg. on or after the earlier date specified in the Financing Agreement for that purpose. and (b) Incurred on or before the closing date specified or referred to in the Financing Agreement (the Closing Date). except as otherwise specifically agreed with the World Bank 3 7 The loan disbursing period ends on the final date established by the World Bank for receipt by the World Bank of applications for withdrawal and supporting documentation (the Disbursement Deadhne Date)- The Disbursement Deadline Date may be the same as the Closing Date, or up to four months after the Closing Date To support orderly project completion and closure of the Fmiancing Account. the World Bank does not accept applications for withdrawal or supporting documentation received after the Disbursement Deadline Date The borrower must promptly inform the World Bank of any expected unplementation delays or exceptional administrative issues before those dares The World Bank notifies the borrower of any exception that the World Bank may make to the Disbursement Deadline Date 3 8 Disbursement Conditons. If the Financing Agreement contains a disbursement condition for a specific expenditure category the World Bank will disburse funds from the Financmg Account for that category only after the disbursement condition has been fulfilled and the World Bank has notified the borrower to that effect 4. Supporting Documentation Requirements 4-1 The borrower provides supporting documentation to the World Bank to show that funds from the Financing Account have been or are being used to finance eligible expenditures Page 9 of 20 4,2 For special commitments. the commercial bank provides its confirmation directly to the World Bank that conditions for the release of payments comntted for withdrawal have been met 4 3 TApes of Supporting Documentation. The World Bank requires either copies of the original documents evidencing ehgiable expenditures (Records) or summary reports of expenditure (Summary Reports) in such form and substance as the World Bank may specify Records include such documents as invoices and receipts A Summary Report may be either (a) the mtertm unaudited financial report required under the Fiancing Agreement (Intenm Financial Report) or (b) a statement of expenditure summarzing eligible expenditures paid during a stated penod (Statement of Expenditure). In all cases- the borrower is responsible for retaining the original documents evidencmg eligible expenditures and making them available for audit or inspection 44 The World Bank determines the types of supporting documentation that the borrower must provide. taking into consideration the disbursement method used The supportmag documentation may be the following (a) For applications for Reimbursement (i) Intenm Financial Reports (n) Statements of Expenditure. or (in) Records (b) For reporting on the use of Advances (i) Interim Financial Reports. (u) Statements of Expenditure. or (mu) Records (c) For applications for Direct PaYments: (J) Records such as copies of supplier invoices. (u) a bank guarantee for advance or retention payment id) For applications for Special Commitment Copy of the Letter of Credit (with valid expiry date) that the commercial bank. known as the opening bank. has issued For payment, a SWIFT (Society for Worldwide Interbank Telecommunication) message must be sent by the commercial bank: and (e) Any other suppomng documentation that the World Bank may request by notice to the borrower or as specified in the Disbursement Letter 4,5 Failure to Provide Audited Financial Statements. If the borrower fails to provide any of the audited financial statements required in accordance with. and within the period of time specified m- the Fmancing Agreement- the World Bank may. at its discretion. decide not to accept applications for withdrawal supported by Summary Reports. even if such reports are accompanied by Records 5. Designated Accounts Page 10 of 20 5 1 The borrower may open one or more designated accounts into which the World Bank may. at the borrower s request- deposit amounts withdrawn from the Financing Account for the purpose of paying for eligible expenditures as they are incurred Before the World Bank authorizes establishment of a Designated Account. the botrower must have adequate administrative capability, internal controls. and accounting and auditing procedures to ensure effective use of the Designated Account 5 2 The World Bank may decide not to permit the use of Designated Accounts in new projects if the borrower has failed to refund undocumented advances an the Designated Account of any other loan to or guaranteed by. the borrower within two months after the Disbursement Deadline Date for that loan 5-3 Tpe of DesignatedAccount. A Designated Account may be estabbshed n one of two ways - as a segregated account or pooled account as appropriate for the project concerned and as determined and notified by the World Bank (a) Segregated Account An account of the borrower into which only proceeds of the Financing Account may be deposited- (b) Pooled Account An account of the borrower into which the fuinds from the Financing Account and funds of other financtng for the project (such as borrower resources or financing by other development partners) may be deposited 5 4 CurrencY of the Designated .-ccount. Designated Accounts must be in a currency acceptable to the World Bank In countries that have a freely convertible currency Designated Accounts may be held n the currency of the borrower or any freely convertible currency. The World Bank may also agree to local currency Designated Accounts when, among other things, the country s currency (even if not freely convertible) is stable and the expenditures to be financed are primarily n local currency. The borrower bears all risks associated with foreign exchange fluctuations between (a) the currency of denomination of the loan and that of the borrower s Designated Account. and (b) the currency of denomination of the borrower*s Designated Account and the currency or currencies of project expenditures 5 5 Financial Iustitution. Designated Accounts must be opened and maintainedi a financial instituton7 selected by the borrower and acceptable to the World Bank- A financial institution is acceptable if it meets all the following requtrements: (a) It is fnanciallv sound. (b) It is an good standmg (c) It is authorized to maintain the Designated Account an the currency agreed between the World Bank and the borrower: (d) It is audited regularly, and receive satisfactory audit reports. A financal uttuun may be de ccutry s cental bank. a local development bank or a conmercial bank Page 11 of 20 (e) It can execute a large number of transactions promptly, (f) It can satisfactonly perform a wide range of bankmg services (g) It can provide a detailed statement of the Designated Account. (h) It is part of a sattsfactory correspondent banking network: (s) It charges reasonable fees for its services 5 6 The World Bank reserves the nght not to transfer funds to a financial istitution if that institution has asserted or asserts a claim to set off seize. or attach the proceeds of any Bank loan on deposit in a Designated Account maintained by the tustitution 6. Terms and Conditions Applicable to Advances 6-1 Ceiling- The World Bank notifies the borrower of the maximum amount of funds from the FmIancMg Account that may be on deposit in a Designated Account (the Ceiling). The World Bank at its discretion may establish the Ceilmg as either (a) a fixed amount. or (b) an amount that is adjusted from tune to tune during project implementation on the basis of periodic forecasts of project cash flow needs. 6.2 Applications for Advances. The borrower may apply for an advance in an amount up to the Ceding less the aggregate amount of those advances previously received by the borrower for wich the borrower has not vet provided supportmg documentation Normath to support orderly closure of the Fmancmg Account. the World Bank does not advance funds from the Fiancmg Account into the Designated Account after the Closing Date 63 Frequenci of Reporting Eligible Expenditures Paid from the Designated Account. The borrower reports on the use of funds from the Financing Account advanced to the Designated Account at intervals specified by the World Bank by notice to the borrower. The borrower must ensure that all amounts deposited into the Designated Account are accounted for and that their use is reported pnior to the Disbursement Deadline Date. After that date. the borrower must refund to the World Bank any advances still unaccounted for or remaining in the Designated Account 6 4 ffIthholding .Advances. The World Bank is not required to make any deposit into the Designated Account if any of the following conditions apply (a) The World Bank deterines that payment of the deposit would result in exceeding the Ceiling (see subsecton 6 1. Applications for Advances). (b) The World Bank is not satisfied that the borrower s planned project expenditures justify the deposit The World Bank may adjust the amount it deposits or withhold further deposits into the Designated Account until it is satisfied that the financial needs of the project warrant further deposits, Page 12 of 20 (c) The borower fails to take the action required pursuant to the determinations made by the World Bank nder subsections 7 1 and 72 of these guidelines, (d) The borrower fls to provide any of the audited financial statements required in accordance with. and within the period of time specified in. the Financing Agreement (e) The World Bank determines that all further withdrawals of funds from the Financing Account should be made by the borrower directly from the Fmancmg Account or (fD The World Bank has noafied the borrower of its intention to suspend in whole or in part the borrower s right to make withdrawals from the Fmancmg Account- 6.5 Excess Advances. If at any time the World Bank determmes that any amount deposited in the Designated Account will not be required to cover further payments for eligible expenditures (the Excess Amount). it may. at its discretion. require the borrower to take one of the following two disbursement-related actions (a) Provide evidence satisfactory to the World Bank withm a period specified by the World Bank that the Excess Amount will be used to pay for eligible expenditures If the evidence is not furnushed within the tume period specified, the borrower must promptly refund the Excess Amount to the World Bank: or (b) Refund the Excess Amount promptly The borrower must perform the action requested promptly after receiving notification from the World Bank that it must do so 7. Ineligible Expenditures 7.1 Ineligible Lvpenditsres Generallh. If the World Bank determines that any amount of the funds from the Financing Account was used to pay for an expenditure that is not eligible pursuant to the Financing Agreement (an ineligible expenditure), the World Bank may. at its discretion, require the borrower to take one of the following two disbursement-related actions, without prejudice to the Bank s ight to exercise remedies under the General Conditions' or Standard Conditions9 and Fmancing Agreement (a) Refund an equivalent amount to the World Bank (b) Exceptionally. provide substitute documentation evidencing other eligible expenditures The borrower must perform the action requested promptly after receiving notification from the World Bank that it must do so The Gmeral Condiions et foinh certan terms and condston generally apphcable to IBRD loans and IDA credas and zrant The Standard Condinon: set forth cenm trms and conditkons that are generally apphcable to tnut ftnds and advmcet made by the Bank under the Project Preparaton Facihty Page 13 of 20 72 Ineligible Expenditures Paid from the Designated Account. If the World Bank determines that any payment out of the Designated Account was not justified by the evidence furmshed to the World Bank or was made for an mieligible expenditure. the World Bank may at its discretion. require the borrower to take one of the following actions (a) Provide the additional evidence requested by the World Bank (b) Deposit an equivalent amount into the Desgnated Account (c) Refund an equivalent amount to the World Bank (d) Exceptionally. provide substitute documentation evidencing other eligible expenditures The borrower must perform the action requested promptly after receiving notification from the World Bank that it must do so 8. Refunds 8 1 Borrower Decision to Refund. The borrower may. upon notice to the World Bank. refund all or any amount of the loan on deposit in the Designated Account to the World Bank for credit to the Fnancing Account 82 Consequence of Reftnds. The World Bank shall determine whether refunds made to the World Bank in accordance with sections 6 and 7 and subsection 8.1 of these guidehnes will be credited to the Financing Account. Refunds of funds into the Fmanctig Account may result in (a) swap termmanon fees (b) unwinding costs for amounts for which the interest rate basis or currency has been convened or hedged. (c) both- 8.3 Other Rights and Obligations Unafected by Refunds. Refunds of loan amounts do not affect other legal rights and obhgations of the parties under the Financing Agreement. Page 14 of 20 Attachment 2 Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [DATE] The World Bank Level 19, 14 Martin Place CML Building Sydney NSW 2000, Australia Attention: Country Director APIP Grant Number TF0A7818 (Additional Financing for the Pacific Resilience Project under the Pacific Resilience Program) I refer to the Grant Agreement ("Agreement") between International Bank for Reconstruction and Development and International Development Association (collectively "World Bank"), acting as administrator of grant funds provided by the Government of Australia, represented by the Department of Foreign Affairs and Trade ("Donor") under the Australia-Pacific Islands Partnership Trust Fund and Kingdom of Tonga ("Recipient"), dated , providing the above Grant. For the purposes of Section 3.04 (b) of the Standard Conditions, as defined in the Agreement, any ['one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Recipient to sign applications for withdrawal under these Grant accounts. For the purpose of delivering Applications to the World Bank, '[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient, acting '[individually] [jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the World Bank. s[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 World Bank by electronic means. In full recognition that the World Bank 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 World Bank that it will cause such persons to abide by those terms and conditions.] I Instruction to the Recipient when sending this letter to the World Bank: 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 World Bank. 2 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 World Bank. 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 Jootnote in final letter that is sent to the World Bank. 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 infinal letter that is sent to the World Bank. Instruction to the Recipient: Add this paragraph if the Recipient wishes to authorize the listed persons to accept Secure Identfication Credentials and to deliver Applications by electronic means; if this is not applicable, please delete the paragraph. Please delete this footnote infinal letter that is sent to the World Bank. Page 15 of 20 This Authorization replaces and supersedes any Authorization currently in the World Bank records with respect to this Agreement. [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: Yours truly, / signed / [Position] Page 16 of 20 Attachment 3 Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation March 1, 2013 The World Bank (Bank)' will provide secure identification credentials (SIDC) to permit the Borrower' to deliver applications for withdrawal and applications for special commitments under the Agreement(s) and supporting documentation (such applications and supporting documentation together referred to in these Terms and Conditions of Use as Applications) to the Bank electronically, on the terms and conditions of use specified herein. SIDC can be either: (a) hardware-based (Physical Token), or (b) software-based (Soft Token). The Bank reserves the right to determine which type of SIDC is most appropriate. A. Identification of Users. 1. The Borrower will be required to identify in a completed Authorized Signatory Letter (ASL) duly delivered to and received by the Bank each person who will be authorized to deliver Applications. The Bank will provide SIDC to each person identified in the ASL (Signatory), as provided below. The Borrower shall also immediately notify the Bank if a Signatory is no longer authorized by the Borrower to act as a Signatory. 2. Each Signatory must register as a user on the Bank's Client Connection (CC) website (https://clientconnection.worldbank.org) prior to receipt of his/her SIDC. Registration on CC will require that the Signatory establish a CC password (CC Password). The Signatory shall not reveal his/her CC Password to anyone or store or record the CC Password in written or other form. Upon registration as a CC user, the Signatory will be assigned a unique identifying account name. B. Initialization of SIDC. 1. Prior to initialization of SIDC by a Signatory, the Signatory will acknowledge having read, understood and agreed to be bound by these Terms and Conditions of Use. 2. Where a Physical Token is to be used, promptly upon receipt of the Physical Token, the Signatory will access CC using his/her account name and CC Password and register his/her Physical Token and set a personal identification number (PIN) to be used in connection with the use of his/her Physical Token, after which the Physical Token will be initialized for use by the Signatory exclusively for purposes of delivering Applications. Where a Soft Token is to be used, the Signatory will access CC using his/her account name and CC Password and set a personal identification number (PIN) to be used in connection with the use of his/her Soft Token, after which the Soft Token will be initialized for use by the Signatory exclusively for purposes of delivering Applications. Upon initialization of the SIDC, the Signatory will be a 6 "Bank" includes IBRD and IDA. 7 "Borrower" includes the borrower of an IBRD loan, IDA credit, or Project Preparation Facility advance and the recipient of a grant. Page 17 of 20 "SIDC User". The Bank will maintain in its database a user account (Account) for each SIDC User for purposes of managing the SIDC of the SIDC User. Neither the Borrower nor the SIDC User will have any access to the Account. 3. Prior to first use of the SIDC by the SIDC User, the Borrower shall ensure that the SIDC User has received training materials provided by the Bank in use of the SIDC. C. Use of SIDC. 1. Use of the SIDC is strictly limited to use in the delivery of Applications by the SIDC User in the manner prescribed by the Bank in the Agreement(s) and these Terms and Conditions. Any other use of the SIDC is prohibited. 2. The Bank assumes no responsibility or liability whatsoever for any misuse of the SIDC by the SIDC User, other representatives of the Borrower, or third parties. 3. The Borrower undertakes to ensure, and represents and warrants to the Bank (such representation and warranty being expressly relied upon by the Bank in granting SIDC) that each SIDC User understands and will abide by, these Terms and Conditions of Use, including without limitation the following: 4. Security 4.1. The SIDC User shall not reveal his/her PIN to anyone or store or record the PIN in written or other form. 4.2. The STDC User shall not allow anyone else to utilize his/her SIDC to deliver an Application to the Bank. 4.3. The SIDC User shall always logout from CC when not using the system. Failure to logout properly can create a route into the system that is unprotected. 4.4. If the SIDC User believes a third party has learned his/her PIN or has lost his/her Physical Token he/she shall immediately notify clientconnectionaworldbank.orz. 4.5. The Borrower shall immediately notify the Bank at clientconnectionaworldbank.oru of any lost, stolen or compromised SIDC, and take other reasonable steps to ensure such SIDC are disabled immediately. 5. Reservation of Right to Disable SIDC 5.1. The Borrower shall reserve the right to revoke the authorization of a SIDC User to use a SIDC for any reason. 5.2. The Bank reserves the right, in its sole discretion, to temporarily or permanently disable a SIDC, de-activate a SIDC User's Account or both. 6. Care of Physical Tokens 6.1. Physical Tokens will remain the property of the Bank. 6.2. The Bank will physically deliver a Physical Token to each Signatory designated to receive one in a manner to be determined by and satisfactory to the Bank. Page 18 of 20 6.3. Physical Tokens contain delicate and sophisticated instrumentation and therefore should be handled with due care, and should not be immersed in liquids, exposed to extreme temperatures, crushed or bent. Also, Physical Tokens should be kept more than five (5) cm from devices that generate electromagnetic radiation (EMR), such as mobile phones, phone- enabled PDAs, smart phones and other similar devices. Physical Tokens should be carried and stored separate from any EMR device. At close range (less than 5 cm), these devices can output high levels of EMR that can interfere with the proper operation of electronic equipment, including the Physical Token. 6.4. Without derogating from these Terms and Conditions of Use, other technical instructions on the proper use and care of Physical Tokens are available at http://www.rsa.com. 7. Replacement 7.1. Lost, damaged, compromised (in terms of 4.5, above) or destroyed Physical Tokens will be replaced at the expense of the Borrower. 7.2. The Bank reserves the right, in its sole discretion, not to replace any Physical Token in the case of misuse, or not to reactivate a SIDC User's Account. Page 19 of 20 Attachment 4 - Statement of Expenditures for category Grant # Payment made during the period from to Application # Category # The following expenditures have been incurred during the retroactive financing period (please tick) Yes No Page # The following expenditures have been incurred during before the closing date of the credit (plcase tick) Yes No in me of DA paynents 1 2 3 4 5 6 7 8 9 10 11 12 13 14 contract # Contract Total Service Prior currency amount of Amount paid from provider/ BriefDescription Review and Invoice Dateof invoice Fi d Expenditure Amount Amount Designated Item Spplier / of the Contract? (Client amount number payment covered by Financed Account Remarks No Supplier I fte cnrc?aon yteclaimed nhcsoudb Payee's expenditure (YES or Connection # (original Application Bank (which should be Name NO) for Prior amendme (net of equalto#11)) Review nt) retention) controcts) TOTAL Supporting documents for this SOE retained at:(insert location) Prepared by: Authorized Representative: *A separate form should be used for each category Page 20 of 20