DOCUMENTS The World Bank Ethiopia Country Office Tel: (251-11) 6627700 INTERNATIONAL BANK FOR RECONSTRUCTION AND DE VELOPMEIIT Africa Avenue, Bole Road Fax: (251-11) 6627717 INTERNATIONAL DEVELOPMENT ASSOCIATION Addis Ababa February 12, 2013 Ref: WB/CD/046/02/12/2013 H. E. Ato Sufian Ahmec Minister Ministry of Finance and Economic Development Addis Ababa Re: FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA Re: Grant No. TF013952 -ET (Promoting Basic Services (PBS) Phase Three Project) A(Iditiona Instructions: Disbursement Dear mto Sufian: I refer to the Letter Agre em ent ('Agreement") between International Development Assoc iation ("World Baik"), ac ting as in Administrator of the Multi-donor Trust Fund for the Cofinancing of the Promoting Basi, Services Program Phase Ill) and the Federal Republic of Ethiopia (the "Recipient") for tl e a:ove -referenced project, dated February 12, 2013. The Agreement provides tha. the World Bar k may issue additional instructions regarding the withdrawal of the proceeds of C rant Nc. TF013952-ET ("Grant"). This letter ("Disbursement Letter"), as revised from time tc time, c:nstitutes the additional instructions. The attached World Bant Disbu sement Guidelines for Projects, dated May 1, 2006, ("Disbursement Guidelines") (A ttachment 1), are an integral part of the Disbursement Letter. The manner in which the provis Ion; in 1 he Disbursement Guidelines apply to the Grant 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 neanin, ,s ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangemen ts (i) Disbursement Methods (section 2). The following Disbursement Methods may be used under the Grant: * Reimbursement * Advance * Direct Payment * Special Comm tment (ii) Disbursement Deadine Dai e (subs,!ction 3.7). The Disbursement Deadline Date is four months after the Closing Date spec fled in the Grant Agreement. Any changes to this date will be notified by the World Bank. H.E. Ato Sufian Ahmed -2- February 12, 2013 [(W) Disbursement Conditions (subsection 3.8). Please refer to the Disbursement Condition(s) in the Grant Agreement.] II. Withdrawal of Financing Proceecs (i) Authorized Signatures (subs ect !on 3.1). An authorized signatory letter in the Form attached (Attachment 2) should be furnis ec to t ie Association at the address indicated below providing the name(s) and specimen signai:ure(s) of the official(s) authorized to sign Applications: The World E ank P. O. Bo) 5515 Addis At abz., Ethiopia Attention: G lang Z. Chen, Country Director (ii) Applications (subsections 3.2 - 3.3) Please provide completed and signed (a) applications for withdrawal, together with su pportin g documents, and (b) applications for special commitments, together with a copy oft ie commercial bank letter of credit, to the address indicaied below: The World E ank 4 Fricker Roid Illovo 2196 Jchannes)urg, Rcpublic of South Africa Attention: Loan Department (iii) Electronic Delivery (subsectioni 3.4,) The World Bank may permit the Recipient to electronically deliver to the Wo ld 3anl;: Applications (with supporting documents) through the World Bank's Client Connectio:i, vieb-based portal. The option to deliver Applications to the World Bank by electronic meani may be effected if: (a) the Recipient has designated in writing, pursuant to the terms of subparagraph ( ) of this Section, its officials who are authorized to sign and deliver Applications and to ieceive secure identification devices ("Tokens") from the World Bank for the purpose of deliveriag ;uch 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 wi 11 provi de the Recipient with Tokens for the designated officials. Follow,ing which, the designate officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection (https://clientconnection.worldbanl<.org)1. The Recipient may continue to exercise the option of preparing and delivering Applications ii paper form. The World Bank reserves the right and may, in its sole discretion, temp )ra-ily or permanently disallow the electronic delivery of Applications by the Recipient. (iv) Terms and Conditions ofU ve qf Tokens to Process Applications. By designating officials to accept Tokens and by choosing to de iver the Applications electronically, the Recipient confirms through the authorized sig natc ry letter its agreement to: (a) abide by the Terms and Cond!'ions of Use of Secure Ide tijf cati,n Devices in connection with Use of Electronic Means to Process Applications and Suppo,-ting Documentation ("Terms and Conditions of Use of Tokens") provided in Attachmei it 3; and (b) to deliver the Terms and Conditions of Use of Tokens to each such official anc to cau e such official to abide by those terms and conditions. H.E. Ato Suflan Ahmec -3- February 12, 2013 (v) Minimum Value of 4pplicctiozs (5ubsection 3.5). The Minimum Value of Applications for Direc: Payments and issuance (if Speci 11 Commitments is United States Dollars (USD) 200,000. (vi) Advances (sections 5 and I). Type of Designated A ccunt, s/ (subsection 5.3): 2 new Pooled Designated Accounts will be opened exclusively fo- PBS Phase Three 1. Designated Poole iAcco nt A for Subprogram A 2. Designated PooledJ Accoint B for Subprogram B * Currency of Designai ed 4cco Punts (subsection 5.4): USD * Financial Insitution at which the Designated Account[s] Will Be Opened (subsection 5.5): National Bank if Ethio )ia * Ceiling (subsection 6.1): fore cast for 2 quarters as provided in respective the quarterly Interim Financial Report. III. Reporting on Use of Financing Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each application for withdrawa' as set out below: * For requestsfor Rein bu rsen ient and for reporting eligible expenditures paid from the Designated Accotint:: o Interir Financial Rep )rt in the form attached (Attachment 4) for Subprogram A; o Interimr Financial Rep )rt in the form attached (Attachment 5) for Subprogram B; o List of paymer ts against contracts that are subject to the Association's prior review, in the on n ati ached (Attachment 6) * For requests for Dire t P'aynent: records evidencing eligible expenditures, e.g., copies of receipts, supplier ir voices (ii) Frequency of Reporting Eiligible E,,xpenditures Paid from the Designated Account (subsection 6.3): the period se out in he Financing Agreement for provision of Interim Financial Reports: quarterly. Ir terim Financial Reports for Subprogram A will be submitted to the Bank within 90 days of the and of t1le quarter and for Subprogram B, within 75 days of the end cf-the quarter. (iii) Other Supporting Documintktion Instructions - Interim Financial Reports for Subprogram A wi Il report actual expenditures (as opposed to transfers) incurred with salaries and operating costs, H.E. Ato Sufian Ahmed -4- February 12, 2013 IV. Other Disbursement Instructions - Advances into Designated Pooled Accounts A and B can only be made upon Ihe fulfilment of the disbursement conditions applicable to relevant disbursement Category. Since Designal.ed Accounts under the Project will be composed of resources pooled from different fur.dinj, resources, including the IDA Financing, other Bank- administered trust fund resources, and possibly bilateral sources (non-Bank-administered), it is essential that each Withdrawal Applica ion should specify clearly the amount(s) to be withdrawn by funding source; bearing in mind that, for a given disbursement period (normally, a six-month period), the total Donor Contribuation A mount may have been capped at a given value, by virtue of decision of the Contributing ')arners made in the applicable Joint Review of Implementation Support (JRIS) meeting under t ie PBS Program, and as well, that the relative shares of contributions made by the varioius fund ng sources which are due to be pooled into any given Designated Account, may vary Froin period to period, according to the respective funding exigencies of the respective Pocled Fur ding Partners, or, may have been capped at a given value for a given period. V. Other Important InformalioE For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on tie World Bank's public website at https://www.worldbank.og and its sect re website "Client Connection" at https://clientconnection.worldbaink,org. Print copies are available upon request. From the Client Connec ior website, you will be able to download Applications, monitor the near real-time status of the Grant, and retrieve related policy, financial, and procurement information. If you have not already Jor e so., the World Bank recommends that you register as a user of the Client Connectior websitl (ttps //clientconnection.worldbank.org). From this website you will be able to download Applications, monitor the near real-time status of the Grant, and retrieve related policy, fnancial, ard pr:curement information. All Recipient officials authorized to sign and deliver Applications by electronic means are required to register with Client Connection before electronic delivery can be effected. For more information about the websile and registration arrange meits, please contact the World Bank by email at . If you have any queries :n rlatin to the above, please contact Jose Janeiro, Senior Finance Officer at jjaneiro@worldhank org using the above reference. Sincerely, A gata E. Pawlowska Country Director for Ethiopia, a.i. Africa Region H.E. Ato Sufian Ahmed -5- February 12, 2013 Encl. P I. Korld Bank Disbursement Guidlelines for Projects, dated May 1, 2006 V2. Form for Authorized Signat ires \3. Terms and Conditions of Use o, 'Sec ure Identification Devices in connection with Use of Electronic Means to Proces., Applications and Supporting Documentation, dated January 20, 2010 P 4. Form of "Interim Financial Re )ort' for Subprogram A f' 5. Form of "Interim Financial Report" for Subprogram B pt f6. Form of Payments Against Contracis Subject to the Bank's Prior Review H.E. Ato Sufian Ahmed -6- February 12, 2013 Attachment 2 [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] The World Bank 1818 -1 Street, N.W. Washington, D.C. 20433 United States of America Attention: [Country Director] Dear [Country Director]: Re: Grant No. - ( Project) I refer to the Grant AgreEnnEmt ("Agreement") between the [International Bank for Reconstruction and Developme nt/ Inte rnational Development Association] ("World Bank")], acting as [an implementing aget cy of t. e Global Environmental Facility] [administrator of the Global Partnership on Output-tasdAi d] [administrator of name of the trust fund], and [name of recipi. nt] (the "Recipient"), dated -__ - , providing the above Grant For the purposes of Section 3.04 (b) of the Standard Co:-diti ons, as defined in the Agreement, any [one] of the persons whose authenticated sqecimen signatures appear below is authorized on behalf of the Recipient to sign applications for withc rawal [and applications for a special commitment] under this Grant. For the purpose of delivering Applications to the World Bank, [each] of the persons whose authenticated specimen ;ignatu -es appears below is authorized on behalf of the Recipient, acting [individually] [jointly!, to deliver Applications, and evidence in support there.f on the terms and conditions specified by the World Bank. [This confirms taat the Zec ipie it is authorizing such persons to accept Tokens and to deliver the Applications and su. porting documents to the World Bank by electronic means. In full recognition that the World 3ark shall rely upon such representations and warranties, including without limitation, the repre!ientations and warranties contained in the Terms and Condilions of Use of Secure Identi icaiion Devices in connection with Use of Electronic Means to Process Applications and Supporting Doctneutation ("Terms and Conditions of Use of Tokens"), the Recipient represents and warra ts to tf e World Bank that it will deliver to each such person a copy of the Terms and Conditic ns of U;e of Tokens and will cause such persons to abide by those terms and conditions.] This Authorization reph Lce,. anc supersedes any Authorization currently in the World Bank records with respect to this A gre( ment. H.E. Ato Sufian Ahmed -7- February 12, 2013 [Name], [position] S :eci nen Signature: [Name], [position] S :eci nen Signature: [Name], [position] S eci nen Signature: Yours truly, / signed / [Position] Attachment 3 Teras and Co:indition:s of Use of Secure Identification Devices in coineitiou with Use of Electronic Means to ?rocess Applications and Supporting Documentation January 20, 2010 The World Bank (3ank)' wil provide secure identification devices (Tokens) to permit the Borrower2 to deliver applicatiors fbr withdrawal and applications for special commitments under the Agreement(s) and sL.pporting d:curnentation (such applications and supporting documentation together referre& to in these Terms and Conditions of Use as Applications) to the Bank electronically, on the ternr s aid conditions of use specified herein. A. Identification of Users. 1. The Borrower will be re:iui -ed to identify in a completed Authorized Signatory Letter (ASL) duly delivered to and rec,ived by the Bank each person who will be authorized to deliver Applications. The Bank will provide Tokens to each person identified in the ASL (Signatory), as provided be ow. The Borrower shall also immediately notify the Bank if a Signatory is no longer authori-ed by the Borrower to act as a Signatory. 2. Each Signatory must reg,ister as a user on the Bank's Client Connection (CC) website (https://clientconnection,worldbank.org ) prior to delivery of Tokens. Registration on CC will require that the Sigi atc ry eftablish a CC password (CC Password). The Signatory shall not reveal his/her CC "ass word to anyone or store or record the CC Password in written or other form. L pon reE istration as a CC user, the Signatory will be assigned a unique identifying account iam:. B. Distribution, Initializai ior, and Return of Tokens. 1. The Bank will physicallit deliver a Token to each Signatory in a manner to be determined by and satisfactory to th. B ink. 2. At the time of delivery cf a Tok-n to a Signatory, the Signatory will receive a copy of these Terms and Conditi on, of I Jse for purposes of initializing the Token. 3. The Bank will verify that the Tc ken, Temporary Password and Terms and Conditions of Use have been duly deliierod to and received by the CC User. '"Bank" includes IBRD and IDA. 2 "Borrower" includes the borrower oi an [BRE loan, IDA credit, or Project Preparation Facility advance and the recipient of a grant. H.E. hto Sufian Ahmed -9- February 12, 2013 4. Promptly upon receipt of the Tc ken and Terms and Conditions of Use, the Signatory will access CC using his/her accouni name and CC Password and register his/her Token and set a personal identification nun ber (PIN) to be used in connection with the use of his/her Token, after which the Token vN ill be initialized for use by the Signatory exclusively for purposes of delivering App icat ons. Upon initialization of the Token, the Signatory will be a "Token User". The Bank will maintain in its database a user account (Account) for each Token User for put po, es o IF managing the Token of the Token User. Neither the Borrower nor the Token User will have any access to the Account. 5. Prior to first use of the T oken b,, the Token User for delivering Applications, the Borrower shall ensure tf at the I oken User has received training materials provided by the Bank in use of the Token. 6. Tokens shall be promptly rturned to the Bank upon request of the Bank. C. Management of Token;. 1. Tokens will remain the property of the Bank. 2. Use of the Token is strictly limi ed to use in the delivery of Applications by the Token User in the manrer prescribed by the Bank in the Agreement(s) and these Terms and Conditions. Any other Use )f the Token is prohibited. 3. The Bank assumes no re3pcnsibility or liability whatsoever for any misuse of the Token by the Token User, othei re resontatives of the Borrower, or third parties. 4. The Borrower urdertake s tco ensijre, and represents and warrants to the Bank (such representation and warrEnty being expressly relied upon by the Bank in delivery of a Token to each Token Us er) that each Token User is provided, understands and will abide by, these Terms and Coriditions of Use, including without limitation the following: Security 4.1. The Token User ihall not reveal his/her PIN to anyone or store or record the PIN in written or other form. 4.2. The Token User ;hall not allow anyone else to utilize a Token to deliver an Application to the Bank. 4.3. The Token User ;hall alvays logout from CC when not using the system. Failure to logout properly can cieate a r )ute into the system that is unprotected. 4.4. If the Token User bclieves a third party has learned his/her PIN or has lost his/her Token he/she shall immcdiately notify clientconnection@worldbank.or . H.E. Ato Sufian Ahmed -10- February 12, 2013 4.5. The Borrower shall imtr ediately notify the Bank at clientconnection kworldbank.oi g of any lost, stolen or compromised Tokens, and take other reasonable steps tc ensure such Tokens are disabled immediately. Care of Tokens 4.6. Tokens contain cdelicate and sophisticated instrumentation and therefore should be handled with due care, a ad shot Id not be immersed in liquids, exposed to extreme temperatures, crushed oi bent. Also, Tokens should be kept more than five (5) cm from devices that generate elc ctromagnetic radiation (EMR), such as mobile phones, phone- enabled PDAs, smart phone s anI other similar devices. Tokens should be carried and stored separate from an) EMR device. At close range (less than 5 cm), these devices can output high levels of EMR :hat :an interfere with the proper operation of electronic equipment, including th Token. 4.7 Without derogating from these Terms and Conditions of Use, other technical instruc:ions on the prc per use and care Tokens are available at http://www.rsa.com. 5. Replacement 5.1. Lost, damaged, c onpror iised (in terms of 4.5, above) or destroyed Tokens will be replaced at the expense of tie Borrower. 5.2. The Bank reserv,s tie right, in its sole discretion, not to replace any Token in the case of misuse, or not to re.ctiv ite a Token User's Account 6. Reservation of Right to dis 7ble Token 6.1. The Borrower shall resei ve the right to revoke the authorization of a Token User to use a Token for any n ason. 6.2. The Bank reserv,s tie right, in its sole discretion, to temporarily or permanently disable a Token, de-activatc a Token User's Account or both.