OFFICIAL TDOCUMENTS 4 The World Bank 1818 H Street N.W. (202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washincton, D.C. Z433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION ~U.S.A. Cable Address: INDEVAS July 2, 2014 Dear Mr. Lantz and Ms. Erickson, The purpose of this letter is to inform you of the Bank's intention to continue to improve its current cost recovery framework for Trust Funds and to provide additional clarifications with respect to the email sent by Sandra Bloemenkamp, Acting Director, Concessional Finance and Global Partnerships on March 7, 2014. In March, we informed you of changes in our internal charging processes that formed part of the implementation of the trust fund management reform endorsed by the Bank's Board in July 2013. Underlying the trust fund reforms is the aim of significantly improving cost recovery, as recognized in the new planning and budgeting framework endorsed by the Board in June 2014. As described in our March 2014 communication, in order to move towards full cost recovery, the Bank will now seek to recover the indirect costs related to Bank Short Term Consultants and Temporaries (STCs/STTs) as we do for Bank staff and Extended Term Consultants. This recognizes the fact that indirect costs are incurred for all categories of Bank personnel, As a result of introducing an indirect rate for STCs/STTs, the rate for staff and ETCs/ETTs was reduced, thereby achieving a more equitable treatment across all categories of Bank personnel. In reviewing your trust fund portfolio, it was noted that the Administration Agreements for the trust funds listed in the attached document provide for STCs/STTs as an eligible category of expenditure. However, these agreements are mostly silent with respect to indirect costs for STTs/STCs. In the interest of clarity, this letter seeks your written consent to apply the rate for indirect costs to STCs/STTs (as described in the March email). In addition, as the Bank introduced this change in methodology on February 16, 2014, we would also request that you authorize the Bank to apply indirect costs to STCs/STTs as of that date. Doing so would support the Bank's efforts to move towards full cost recovery and would be consistent with the trust fund management reforms. Kindly let us know in writing, as soon as possible and no later than July 31, 2014 if, with respect to the trust funds listed in the attachment, you agree to the approach outlined in the paragraph above by countersigning the attached document listing the affected trust funds. Sincerely, Jaehyang So Director, Trust Funds and Partnerships (DFPTF) Development Finance T +1 (202) 473-7654 M +1 (202) 243-9405 Ejso@worldbank.org W www.worldbank.orp WORLDBANKGROUP -2- July 2, 2014 The Administration Agreements for the trust funds listed below are amended to specifically allow for the charging of indirect costs on STCs/STTs with effect from February 16, 2014. TF N b Trust Fund Name Fund Type Agency Name Number TFO21945 Brazilian Rain Forest Trust Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TF023446 Prototype Carbon Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TF023589 Cities Alliance Multi Donor Trust Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TF027862 Nile Basin Initiative Trust Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TF050576 Afghanistan Reconstruction Trust Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TF050576 Afghanistan Reconstruction Trust Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TF050954 Multi Donor Trust Fund for Financing Multi Canada - Department of Foreign of the Global Gas Flaring Reduction Donor Affairs, Trade and Development Partnership TF050998 Community Development Carbon Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TFO51055 BioCarbon Fund Multi Canada - Department of Foreign Donor Affairs, Trade and Development TFO51061 Education for All Fast Track Initiative Multi Canada - Department of Foreign Catalytic Trust Fund (EFA-FTI Donor Affairs, Trade and Development Catalytic Trust Fund) TF053167 World Bank Iraq Trust Fund (World Multi Canada - Department of Foreign Bank ITF) Donor Affairs, Trade and Development TF053980 Public-Private Infrastructure Advisory Multi Canada - Department of Foreign Facility Trust Fund II Donor Affairs, Trade and Development TF054035 Multi Donor Trust Fund for the Multi Canada - Department of Foreign Republic of the Philippines' Mindanao Donor Affairs, Trade and Development Reconstruction and Development Program TF054402 Multi Donor Trust fund for Education Multi Canada - Department of Foreign for All-Fast Tract Initiative Education Donor Affairs, Trade and Development Program Development Fund (EPDF) -3- July 2, 2014 TF054674 The Cities Alliance Multi Donor Trust Multi Canada - Department of Foreign Fund Donor Affairs, Trade and Development TF070561 Multi Donor Trust Fund for Statistical Multi Canada - Department of Foreign Capacity Building - III Donor Affairs, Trade and Development TF070611 Mainstreaming Disaster Reduction Multi Canada - Department of Foreign Initiative of the Global Facility for Donor Affairs, Trade and Development Disaster Reduction and Recovery TF070711 Multi Donor Trust Fund for Low- Multi Canada - Department of Foreign Income Countries for the Financial Donor Affairs, Trade and Development Sector Reform and Strengthening Initiative (FIRST) TF070723 Multi Donor Trust Fund for Middle- Multi Canada - Department of Foreign Income Countries for the Financial Donor Affairs, Trade and Development Sector Reform and Strengthening Initiative (FIRST) TF070742 Multi Donor Trust Fund for the Multi Canada - Department of Foreign Agriculture Markets and Agribusiness Donor Affairs, Trade and Development Development Project in Senegal TF070758 Multi Donor Trust Fund for Ethiopia Multi Canada - Department of Foreign Public Sector Capacity Building Donor Affairs, Trade and Development Program Support Facility TF070941 Multi Donor Trust Fund to Support Multi Canada - Department of Foreign Analytical Work within the Context of Donor Affairs, Trade and Development the Zimbabwe IDA's Interim Strategy Note FYO8-09 TFO71074 The Multi Donor Trust Fund for Food Multi Canada - Department of Foreign Price Crisis Response Core - FPCR Donor Affairs, Trade and Development Core TF071076 Readiness Fund ofthe Forest Carbon Multi Canada - Department of Foreign Partnership Facility Donor Affairs, Trade and Development TF071077 Car-bon Fund of the Forest Carbon Multi Canada - Department of Foreign Partnership Facility Donor Affairs, Trade and Development TF07 1094 Multi Donor Trust Fund to Support Multi Canada - Department of Foreign Public Financial Management Donor Affairs, Trade and Development Modernization in Vietnam TF071 104 Support to the Association for Multi Canada - Department of Foreign Strengthening Agricultural Research in Donor Affairs, Trade and Development Eastern and Central AfDica (ASARECA) TF07 1185 Multi Donor Trust Fund for Co- Multi Canada - Department of Foreign financing of the Ethiopia Protection of Donor Affairs, Trade and Development Basic Services Program (Phase II) Project (Health MDG Support TF07 1187 Multi Donor Trust Fund for Multi Canada - Department of Foreign Strengthening Public Expenditure Donor Affairs, Trade and Development Management Program (SPEMP) -4- July 2, 2014 TFO71192 Multi Donor Trust Fund for support to Multi Canada - Department of Foreign the Forum for Agricultural Research in Donor Affairs, Trade and Development Africa (FARA) TF071202 Multi Donor Trust Fund for the Debt Multi Canada - Department of Foreign Management Facility for Low-Income Donor Affairs, Trade and Development Countries TF071211 Multi Donor Trust Fund for the Ethiopia Multi Canada - Department of Foreign Joint Governance Assessment and Donor Affairs, Trade and Development Measurement Initiative TF071220 Multi Donor Trust Fund for the Trade Multi Canada - Department of Foreign Facilitation Facility Donor Affairs, Trade and Development TFO71265 Multi Donor Trust Fund for the Multi Canada - Department of Foreign Extractive Industries Technical Donor Affairs, Trade and Development Advisory Facility (EI-TAF) TFO71295 Multi Donor Trust Fund for Forced Multi Canada - Department of Foreign Displacement Donor Affairs, Trade and Development TFO71329 Learning for Equality, Access and Multi Canada - Department of Foreign Peace (LEAP) Program Donor Affairs, Trade and Development 'FF071375 Support to Public Financial Multi Canada - Department of Foreign Management and Revenue Donor Affairs, Trade and Development Administration in Indonesia TF071414 Philippines Decentralization and Local Multi Canada - Department of Foreign Government (DIALOG) Reforms Multi Donor Affairs, Trade and Development Donor Trust Fund TF071441 Trust Fund for Support to the West and Multi Canada - Department of Foreign Central African Council for Agricultural Donor Affairs, Trade and Development Research and Development TFO71468 Ethiopia Productive Safety Net APLIII Multi Canada - Department of Foreign Project Donor Affairs, Trade and Development TFO71579 Multi-Donor Trust Fund Supporting Multi Canada - Department of Foreign Economic Management in the Donor Affairs, Trade and Development Caribbean TFO71599 African Capacity Building Foundation- Multi Canada - Department of Foreign Partnership for Capacity Building in Donor Affairs, Trade and Development Africa-Strategic Medium Term Plan 2 TFO71619 Support for Entrepreneurship Program Multi Canada - Department of Foreign for Innovation in the Caribbean Multi- Donor Affairs, Trade and Development Donor Trust Fund TF071778 Bangladesh Health Sector Development Multi Canada - Department of Foreign Program Multi-Donor Trust Fund Donor Affairs, Trade and Development TFO71823 Middle East and North Africa - Micro, Multi Canada - Department of Foreign Small and Medium Enterprises Donor Affairs, Trade and Development (MSME) Regional Facility -5- July 2, 2014 TF071861 Support for Nutrition Activities and Multi Canada - Department of Foreign Policies in Malawi Donor Affairs, Trade and Development TFO71884 Strengthening the Investment Climate in Multi Canada - Department of Foreign Latin America and Caribbean (LAC) Donor Affairs, Trade and Development TFO71919 Multidonor Umbrella Facility for Multi Canada - Department of Foreign Capacity Development (MFCD) Donor Affairs, Trade and Development TF072022 Support for the Bangladesh Skills and Multi Canada - Department of Foreign Training Enhancement Project Donor Affairs, Trade and Development TF072034 Energy Sector Capacity Building Single Canada - Department of Foreign Project (ESCBP) Donor Affairs, Trade and Development TF072072 Multi-Donor Trust Fund for the Women Multi Canada - Department of Foreign Entrepreneurship Development Donor Affairs, Trade and Development TF072080 Supporting the Implementation, Multi Canada - Department of Foreign Sustainability and Outreach of the Donor Affairs, Trade and Development Extractive Industries Transparency Initiative in Indonesia TF072092 Jordan Emergency Services and Social Multi Canada - Department of Foreign Resilience Project Trust Fund Donor Affairs, Trade and Development TF072102 Economic Management and Multi Canada - Department of Foreign Competitiveness Credit Multi-Donor Donor Affairs, Trade and Development Trust Fund TF072228 Legislative Reform and Combatting the Single Canada - Department of Foreign Financing of Terrorism in Southeast Donor Affairs, Trade and Development Asia TFM20992 Water and Sanitation Programme Multi Canada - Department of Foreign (WSP) Global Program Management Donor Affairs, Trade and Development TFM29008 Global Environment Facility (GEF) Multi Canada - Department of Foreign Voluntary Fund Donor Affairs, Trade and Development TFM52033 Biocarbon Technical Assistance Trust Multi Canada - Department of Foreign Fund Donor Affairs, Trade and Development TFM53195 Consultative Group to Assist the Poor Multi Canada - Department of Foreign (CGAP) Donor Affairs, Trade and Development -6- July 2, 2014 By: Name: M Title: Date: Fax: +1 (202) 522-0739