Date: August 18, 2020 Hon. Tevita Lavemaau Minister for Finance Ministry of Finance P.O. Box 87 Vuna Road, Nuku’alofa Kingdom of Tonga Re: IDA Grant No. D359-TO Additional Financing for the Pacific Resilience Project under the Pacific Resilience Program Additional Instructions: Disbursement and Financial Information Letter (First Amendment and Restatement) Dear Minister: I refer to the Financing Agreement between the Kingdom of Tonga (“Recipient”) and the International Development Association (“Association”) for the above-referenced project (“Project”), dated August 16, 2018 (“Financing Agreement”). The General Conditions, as defined in the Financing Agreement, provide that the Association may issue additional instructions regarding the withdrawal of the proceeds of IDA Grant Number D359-TO (“Financing”), and specify certain financial management reporting and audit requirements. This letter (“Disbursement and Financial Information Letter” or “DFIL”), as may be revised from time to time, constitutes such additional instructions and replaces the disbursement and financial information letter dated July 24, 2018 in its entirety. 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 Financing is specified below. I. Disbursement Arrangements, Withdrawal and Reporting of Proceeds (i) Disbursement Arrangements • (ii) General Provisions (Schedule 1). The table in Schedule 1 sets out the disbursement methods which may be used by the Recipient, 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 out in the procurement plan, must be made only through Direct Payment and/or Special Commitment disbursement methods. However, in case of contracts signed and financed under IDA Credit Number 5689-TO and Grant Number IDA D078-TO, this is not applicable. (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 effected 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 calendar semester, Interim Unaudited Financial Reports (“IUFR”) of the Project covering the semester. (ii) Audits. Each audit of the Financial Statements must cover the period of one (1) fiscal year of the Recipient, commencing with the fiscal year in which the first withdrawal was made. The audited Financial Statements for each such period shall be furnished to the Association not later than six (6) months after end of such 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 Financing, 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 Association by email at AskLoan@WorldBank.org using the above reference. Yours sincerely, ______________________________ Michel Kerf Country Director Papua New Guinea and Pacific Islands East Asia and Pacific Region Attachments 1. Form of Authorized Signatory Letter 2. Form of Statement of Expenditure (SOE) With copies: Ms Pilimilose Balwyn Fa’otusia CEO for Finance Ministry of Finance PO Box 87 Nuku’alofa, Tonga ceo@finance.gov.to Mr Paula Ma’u CEO for MEIDECC Ministry of Meteorology, Energy, Information, Disaster Management, Environment, Climate Change and Communication PO Box 1380 Nuku’alofa, Tonga paulm@mic.gov.to Schedule 1 : Disbursement Provisions Basic Information Country Kingdom of Tonga Closing Date Section III.B.2 of Schedule 2 to Recipient Kingdom of Tonga the Financing Agreement. IDA Grant Name of the Project Additional Financing for the Disbursement Four months after the closing D359-TO Number Pacific Resilience Project under Deadline Date date. the Pacific Resilience Program 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 for contracts other than contracts Statement of Expenses (SOE) in the form attached (Attachment 2) referred in Clause I(i) of the DFIL Designated Account Yes for contracts other than contracts Statement of Expenses (SOE) in the form attached (Attachment 2) referred in Clause I(i) of the DFIL Special Commitments Yes Copy of Letter of Credit Proforma Invoice if cited in the Letter of Credit Designated Account (Sections 5 and 6 **) Pooled, one (1) pooled Designated Account will be Fixed Type Ceiling established under the Project Financial Institution - Bank of South Pacific Tonga Limited Tongan Pa’anga (TOP) Currency Name Frequency of Reporting Quarterly 2,500,000 Amount Subsection 6.3 (**) Minimum Value of Applications (subsection 3.5) The minimum value of applications for Reimbursement, Direct Payment and Special Commitment is TOP 50,000. 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 **) Authorized Signatories Letter: Withdrawal and Documentation Applications: The World Bank The World Bank Level 19, 14 Martin Place 26th Floor, One Global Place CML Building 5th Avenue corner 25th Street, Bonifacio Global City Sydney NSW 2000, Australia Taguig City, Philippines Attention: Country Director Attention: Senior Regional Team Leader, WFACS Additional Instructions (1) List of contracts selected through international open or limited competition or Direct Selection to be disbursed only using Direct Payment and/or Special Commitment disbursement methods are provided in the procurement plan. (2) The one (1) pooled Designated Account to be established in TOP under the Project will be used for receipts of funds only from the following financing: i) IDA Credit No. 5689-TO ii) IDA Grant No. D078-TO iii) IDA Grant No. D359-TO (3) Any outstanding balance in the existing one (1) segregated Designated Account opened in USD for IDA Grant No. D359-TO shall be refunded to the Association on or before October 31, 2020, so that this segregated Designated Account in USD can be closed properly and timely. ** Sections and subsections relate to the “Disbursement Guidelines for Investment Project Financing”, dated February 2017. Attachment 1 – Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] The World Bank Level 19, 14 Martin Place CML Building Sydney NSW 2000, Australia Attention: Country Director Re: IDA Grant No. D359-TO Additional Financing for the Pacific Resilience Project under the Pacific Resilience Program I refer to the Financing Agreement (“Agreement”) between the Kingdom of Tonga (“Recipient”) and the International Development Association (“Association”), providing the above Financing, dated August 16, 2018. 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 Recipient to sign applications for withdrawal and applications for a special commitment under this Financing. For the purpose of delivering Applications to the Association, including by electronic means, 2[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient, acting 3[individually] 4[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 by electronic means. In full recognition that the Association shall rely upon such representations 1 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. 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 Association. 3 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. 4 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. 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 / ______________