February 25, 2020 H.E. Nina Angelovska Minister of Finance Ministry of Finance Dame Gruev 12 Skopje, 1000 Republic of North Macedonia Re: IBRD Loan 9034 - MK Local Road Connectivity Project First Revision Additional Instructions: Disbursement and Financial Information Letter Dear Ms. Angelovska, I refer to the Loan Agreement between Republic of North Macedonia (the “Borrower”) and the International Bank for Reconstruction and Development (the “Bank”) for the above-referenced Project. The General Conditions, as defined in the Loan Agreement, provide that the Borrower may from time to time request withdrawals of Loan Amount from the Loan Account in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Bank may specify from time to time by notice to the Borrower. This first revised DFIL includes a minor editorial change on the Reimbursement disbursement method and supersedes the previous version dated December 20, 2019. 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 Loan Funds, and Reporting of Uses of Loan Funds The Disbursement Guidelines for Investment Project Financing, dated February 2017, (“Disbursement Guidelines”) are available in the Bank’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 Disbursement Guidelines apply to the Loan is specified below. (i) Disbursement Arrangements The table in Schedule 1 sets out the disbursement methods2/ which may be used by the Borrower, [and conditions3/], information on registration of authorized signatures4/, processing of withdrawal applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account5/. (ii) Electronic Delivery. Section 10.01 (c) of the General Conditions. The Borrower will deliver Withdrawal Applications (with supporting documents) electronically through the Bank’s web-based portal “Client Connection” at https://clientconnection.worldbank.org. This option will be effected after the officials designated in writing by the Borrower 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 Borrower confirms that it is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Bank by electronic means. The Borrower 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 Bank. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Borrower 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 World Bank'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 Borrower shall prepare and furnish to the Bank not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports (“IFR”) for the Project covering the quarter. (ii) Audits. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six (6) months after the end of such period, and will be publicly disclosed in a timely fashion and in a manner acceptable to the Bank. III. Other Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Bank’s website (http://www.worldbank.org/) and “Client Connection”. The Bank 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 Loan, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements, or if you have any queries in relation to the above, please contact the World Bank by email at AskLoan@WorldBank.org using the above reference. Yours sincerely, ________________________________ Luis Schwarz Senior Finance Officer Loans Client Services, WFACS Attachments 1. Form of Authorized Signatory Letter 2. Form of Statement of Expenditure (SOE) 3. Form of Designated Account Reconciliation Statement Schedule 1 : Disbursement Provisions Basic Information Country Republic of North Macedonia Closing Date Section III.B.2. of Schedule 2 to Borrower Republic of North Macedonia the Loan Agreement. Loan IBRD Loan Name of the Projects Local Road Connectivity Project Disbursement Four months after the closing Number 9034 - MK Deadline Date date. 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 Statement of Expenditure (SOE) in the format provided in Attachment 2 to the DFIL Advance (into a Designated Yes Statement of Expenditure (SOE) in the format provided in Attachment 2 to the DFIL Designated Account) Accounts Reconciliation Statement provided in the Attachment 3 of the DFIL Special Commitments No n/a Designated Account (Sections 5 and 6 **) Type Segregated Ministry of Transport and Communications (MoTC) Ceiling Fixed Financial Institution - National Bank of the Republic of North Macedonia EUR Currency Name Frequency of Reporting Quarterly 10,000,000 Amount Subsection 6.3 (**) Minimum Value of Applications (subsection 3.5) The minimum value of applications for Direct Payment is EUR 200,000 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 **) The World Bank Radnicka cesta 80, 9th floor Zagreb, HR-10000 Croatia Attention: Loan Department (WFALN) ** Sections and subsections relate to the “Disbursement Guidelines for Investment Project Financing”, dated February 2017. [Attachment 1 – Form of Authorized Signatory Letter] 8/ [Letterhead] Ministry of Finance [Street address] [DATE] The World Bank 1818 H Street, N.W. Washington, D.C. 20433 United States of America Attention: [Country Director] Re: IBRD Loan ____- __ Local Road Connectivity Project Additional Instructions: Disbursement and Financial Information Letter Dear Country Director, I refer to the Loan Agreement between the Republic of North Macedonia (the “Borrower”) and the International Bank for Reconstruction and Development (the “Bank”) for the above -referenced Project. The General Conditions, as defined in the Loan Agreement, provide that the Borrower may from time to time request withdrawals of Loans Amounts from the Loan Accounts in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Bank may specify from time to time by notice to the Borrower For the purposes of Section 2.03 of the General Conditions as defined in the Agreement, any 1[one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Borrower to sign applications for withdrawal under this Loan. For the purpose of delivering Applications to the World Bank, 2[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Borrower, acting 3 [individually] 4[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the World Bank. 1 Instruction to the Borrower: 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 Bank. 2 Instruction to the Borrower: 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 Bank. 3 Instruction to the Borrower: 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 Bank. 4 Instruction to the Borrower: 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 Bank. This confirms that the Borrower 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 Borrower represents and warrants to the World Bank that it will cause such persons to abide by those terms and conditions. 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] Attachment 2 – Form of Statement of Expenditure Statement of Expenditure (SOE) Payments made during the period from ________________ to ______________ Loan No.: Application No.: Category No.: SOE No.: _______ The following expenditures have been incurred during the retroactive financing period (please tick) Yes No The following expenditures have been incurred during before the closing date of the loan (please tick) Yes No 1 2 3 4 5 6 7 8 9 10 11 Supplier’s WB Type of Good or Currency and Total Currency and % Financed Amount Currency and Exchange Date of Remarks Name Contract Service Amount, and Date of Total Amount by Eligible Amount Paid Rate Payment Number in (CW/GO/CS/OP/TR) Contract of Invoice IBRD/IDA/TF for from Client / Brief Description Covered by Financing Designated Connection Application (5 x 6) Account (if (for Prior Applicable) Review Contracts) TOTALS Supporting documents for this SOE retained at __________________________________________ (location) Attachment 3 – Form of Designated Account Reconciliation Statement DESIGNATED ACCOUNT RECONCILIATION STATEMENT LOAN/CREDIT/PPF/COFINANCIER NUMBER ______________ ACCOUNT NUMBER ______________ WITH (BANK) __________________________ 1. TOTAL ADVANCED BY WORLD BANK (OR COFINANCIER) US$/EUR _______________________ 2 LESS: TOTAL AMOUNT RECOVERED BY WORLD BANK - US$/EUR _______________________ 3. EQUALS PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED ACCOUNT (NUMBER 1 LESS NUMBER 2) = US$/EUR _______________________ =========================================================== 4. BALANCE OF DESIGNATED ACCOUNT PER ATTACHED BANK STATEMENT AS OF DATE ______________________ US$/EUR _______________________ 5. PLUS: TOTAL AMOUNT CLAIMED IN THIS APPLICATION NO. _______________ + US$/EUR _______________________ 6. PLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET CLAIMED REASON: ___________________________________ + US$/EUR _______________________ 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 + US$/EUR _______________________ 8. MINUS: INTEREST EARNED - US$/EUR _______________________ 9. TOTAL ADVANCE ACCOUNTED FOR (NO. 4 THROUGH NO. 9) = US$/EUR _______________________ 10. EXPLANATION OF ANY DIFFERENCE BETWEEN THE TOTALS APPEARING ON LINES 3 AND 9: ____________________________________________________________________________________________________ ________________________________________________________________________________________________ 11. DATE: __________________________ SIGNATURE: _________________________ TITLE: _____________________