DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 VICTOR ORDONEZ Senior Finance Officer, Pakistan South Asia Region February 17, 2021 Mr. Noor Ahmed Secretary Economic Affairs Division Ministry of Finance, Revenue and Economic Affairs Islamic Republic of Pakistan Islamabad, Pakistan Re: IDA Financing No. 6270-PK (Khyber Pass Economic Corridor Project) Additional Instructions: Disbursement and Financial Information Letter (DFIL) Dear Mr. Noor Ahmed: I refer to the Financing Agreement between Islamic Republic of Pakistan (the “Recipient”) and the International Development Association (the “Association”) for the above-referenced project. The General Conditions, as defined in the Financing Agreement, provide that the Recipient may request withdrawals of Financing funds in accordance with the instructions as the Association may specify by notice to the Recipient. The General Conditions also provide that the Disbursement and Financial Information Letter (“DFIL”) may set out Project specific financial reporting requirements. This letter constitutes such DFIL, and as revised from time to time, provides such additional requirements. 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 this Disbursement and Financial Reporting Letter, and the manner in which the provisions in the guidelines apply to the Financing is specified below. I. Disbursement Arrangements, Withdrawal of Financing Funds and Reporting of Uses of Financing Funds. (i) Disbursement Arrangements: Instructions (Schedule 1). The table provides the disbursement methods, information on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications), instructions on supporting documentation, and frequency of reporting on the Designated Account. (ii) Electronic Delivery. Section 10.01 (c) of the General Conditions:  The Association may permit the Recipient to electronically deliver applications (with supporting documents) through the Association’s web-based portal (https://clientconnection.worldbank.org) “Client Connection”. This option may be effected if: (a) the Recipient has designated in writing, its officials who are authorized to sign and deliver Applications and to receive Secure Identification Credentials (“SIDC”) from the Association for the purpose of delivering such Applications by DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 electronic means; and (b) all such officials designated by the Recipient have registered as users of “Client Connection”. The designated officials may deliver Applications electronically by completing the Form 2380, which is accessible through “Client Connection”. The Recipient may continue to exercise the option of preparing and delivering Applications in paper form. The Association reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Borrower. 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 shall prepare and furnish to the Association not later than forty five (45) days after the end of each calendar semester, interim unaudited financial reports (IFR) for the Project covering the semester by category and component. (ii) Audits. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower, 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 the end of such period. III. Other Important Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Association’s public website 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, please contact the Association by email at clientconnection@worldbank.org. If you have any queries in relation to the above, please contact at AskLoan@WorldBank.org using the following loan name and number: Khyber Pass Economic Corridor Project 6270-PK. Yours sincerely, ______________________________ Victor Ordonez Senior Finance Officer, Pakistan South Asia Region Attachments 1. Form of Authorized Signatory Letter 2. Interim unaudited Financial Report (IFR) DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 Schedule 1 to DFIL Disbursement Arrangements Basic Information Loan Number: 6270-PK Country: Islamic Republic of Pakistan Closing Date: Section III.B.2. of Schedule 2 to the Financing Agreement. Borrower/Beneficiary: Islamic Republic of Pakistan Disbursement Deadline Date Subsection 3.7 ** Name of the Project: Khyber Pass Economic Corridor Four months after the closing date. Project Disbursement Methods and Supporting Documentation Disbursement Methods Methods Supporting Documentation Section 2 (**) Subsections 4.3 and 4.4 (**) Direct Payment Yes Copy of records, including invoice Reimbursement Yes Interim unaudited Financial Report (IFR) in the format provided in Attachment 2 of the DFIL Designated Account Yes Interim unaudited Financial Report (IFR) in the format provided in Attachment 2 of the DFIL Special Commitments Yes Copy of Letter of Credit Designated Account (Sections 5 and 6 **) Ceiling: Fixed at USD 64,000,000 as follows: Type: Segregated (as follows) - DA-A USD 32,000,000; and DA-A Sustainable Development Unit (SDU) in the Planning and Development Department - DA-B USD 32,000,000. DA-B National Highway Authority Advances will be accessed based on a forecast for 1 semester, as provided in the IFR Financial Institution: National Bank of Pakistan (through the State Bank of Pakistan) Currency: United States Dollar (USD) Frequency of Reporting Subsection 6.3 (**): Semester Minimum Value of Applications (subsection 3.5) The minimum value of applications for Reimbursement, Direct Payment, and Special Commitment is USD 2,000,000 equivalent. 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 Signatures – The ASL will be sent to the following address: The Bank/Association Attention: Loan Operations Unit, WFACS (Pakistan) 20-A Shahrah-e-Jamhoriate, G-5/1 Khayaban-e-Suhrawardy Islamabad, Islamic Republic of Pakistan Withdrawal Applications (WAs)- All WAs and its supporting documentation will be electronically sent through the Bank’s system ClientConnection. Additional Instructions ** Sections and subsections relate to the “Disbursement Guidelines for Investment Project Financing”, dated February 2017. DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 Attachment 1 – Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] The World Bank 1818 H Street, N.W. Washington, D.C. 20433 United States of America Attention: Mr. Patchamuthu Illangovan, Country Director Re: Credit No. 6270-PK (Khyber Pass Economic Corridor Project) I refer to the Financing Agreement (“Agreement”) between the International Development Association (the “Association”) and [name of borrower] (the “Borrower”), dated _______, providing the above Financing. For the purposes of Section 2.02 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 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 Bank. 5[Thisconfirms that the Recipient is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Bank by electronic means. In full recognition that the Bank shall rely upon such 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. 5 Instruction to the Borrower: Add this paragraph if the Recipient wishes to authorize the listed persons to accept Secure Identification Credentials and to deliver Applications by electronic means; if this is not applicable, please delete the paragraph. Please delete this footnote in final letter that is sent to the Bank. DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 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 Bank that it will cause such persons to abide by those terms and conditions.] This Authorization replaces and supersedes any Authorization currently in the Bank records with respect to this Agreement. [Name], [position] Specimen Signature: ____________________ [Name], [position] Specimen Signature: ____________________ [Name], [position] Specimen Signature: ____________________ Yours truly, / signed / ______________ [Position] DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 Attachment 2 - Interim unaudited Financial Statements (IFR) Credit/Loan/Grant No. XXX-PK PXXXX:XXXX Interim Financial Report for the Semester ended MM/DD/YYYY STATEMENT OF SOURCES AND USES OF FUNDS For the Semester For the Semester Cumulative for the FY Cumulative - Inception Cumulative for the Cumulative - Particulars ended ended MM/DD/YYYY 20XX to Date FY 20XX Inception to Date MM/DD/YYYY Pak Rs. US$ OPENING BALANCE (As per Break Up given Below) SOURCES OF FUNDS Designated Account Receipts - DA- A - # - $ - $ - Designated Account Receipts - DA- B - # Direct Payments - XXXX Total Receipts - - - $ - $ - $ - USES OF FUNDS: Usage of Funds Component 1 - xxxx Goods (Hardware and Software) Non-Consulting Services Consultants' Services (Individuals and Firms) Trainings and Workshops - $ - $ - $ - Incremental operating cost (payroll, travel, etc) - $ - $ - $ - Total Component 1 - - - $ - $ - $ - Component 2 - XXXX Goods (Hardware and Software) Non-Consulting Services Consultants' Services (Individuals and Firms) Trainings and Workshops Incremental operating cost Total Component 2 - - - - - - Component 3 - XXXX (if applicable) Goods (Hardware and Software) Non-Consulting Services (Line of Credit) Consultants' Services (Individuals and Firms) Trainings and Workshops Incremental operating cost Total Component 3 - - - - - - Total Disbursement - - - $ - $ - $ - CLOSING BALANCE (As per Break up given below) - - - $ - $ - $ - Breakup of Opening and Closing Cash Balance - DA-1 (Component Opening Balance Closing Balance Opening Balance Closing Balance 1) Pak Rupees US$ Designated Account Balance - - $ - $ - Cash in Hand (if any) - IDA Advances with Implementing Partners (if any) - IDA Total - - $ - $ - Breakup of Opening and Closing Cash Balance - DA-2 (Component Opening Balance Closing Balance Opening Balance Closing Balance 2) Pak Rupees US$ Designated Account Balance - IDA - $ - Cash in Hand (if any) - IDA Advances with Implementing Partners (if any) - IDA Total - - $ - $ - DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 Credit/Loan/Grant No. XXX-PK PXXXX:XXXX Interim Financial Report for the Semester ended MM/DD/YYYY VARIANCE ANALYSIS OF USE OF FUNDS Semester (MM/DD/YYYY) Cumulative for the FY 20XX Cumulative - Inception to Date (Pak Rs) Variance Variance Variance Remarks Component Details Planned Rs Actual Rs Remarks for 10% above variation Planned Rs Actual Rs Planned Rs Actual Rs for 10% Amount Rs %age Amount Rs %age Amount Rs %age above Component 1 Goods (including Hardware and Software) Non-Consulting Services Consultants' Services (Individuals and Firms) - 0% Trainings and Workshops - Incremental operating cost(payroll, travel, etc) - Sub Total - Component 1 - - - Component 2 Goods (including Hardware and Software) Non-Consulting Services Consultants' Services (Individuals and Firms) - - - 0% Trainings and Workshops Sub Total - Component 2 - - - Component 3 (if applicable) Goods (including Hardware and Software) Non-Consulting Services (Line of Credit) - - - 0% Consultants' Services (Individuals and Firms) Trainings and Workshops Sub Total - Component 3 - - - Grand Total - - - Provide Resons for all Variances beyond 15% DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 Credit/Loan/Grant No. XXX-PK PXXXX:XXXX Interim Financial Report for the Semester ended MM/DD/YYYY CASH FORECAST FOR SEMESTER ENDING MM/DD/YYYY Cash Requirements Cash Requirements for Next Six Particulars Quarter ended Quarter ended Months mm/dd/yyyy mm/dd/yyyy Pak Rs. Pak Rs. Pak Rs. USD Component 1: XXXX Goods (Hardware and Softwarw) Non-Consulting Services Consultants' Services (Individuals and Firms) Trainings and Workshops Incremental Operating cost Sub Total - Component 1 - - - - Component 2:XXXX Goods (Hardware and Softwarw) Non-Consulting Services Consultants' Services (Individuals and Firms) Trainings and Workshops Incremental Operating cost Sub Total - Component 2 - - - - Component 3: XXXX Goods (Hardware and Software) Non-Consulting Services Consultants' Services (Individuals and Firms) Trainings and Workshops Incremental Operating cost Sub Total - Component 3 - - - - TOTAL - - - - DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 Credit/Loan/Grant No. XXX-PK PXXXX:XXXX Interim Financial Report for the Semester ended MM/DD/YYYY DESIGNATED ACCOUNT ACTIVITY STATEMENT Name of Implenting Agency Name of Implenting Agency DA - A DA -B I II III I II III Note US$ US$ Note US$ US$ PART I 1. Advances to the end of current semester $ - $ - 2. Expenditure to the end of last semester $ - $ - 3. Outstanding Advances to be accounted for (Line 1 minus Line 2) $ - $ - PART II 4. DA balance at beginning of semester $ - - 5. Subtract: Cumulative Adjustments (if any) $ - - 6. Advances from IDA during the semester $ - $ - 7. Sub total of Advances and Adjustments (5+6) $ - $ - 8. Outstanding Advances to be accounted for (Line 4 plus Line 7) $ - $ - 9. DA balance at end of semester $ - $ - 10. Subtract: Cumulative Adjustments (if any) $ - $ - 11. Expenditure for current reporting Semester $ - $ - a) Disbursement Category 3 $ - $ - 12. Sub total of Adjustments and Expenditure (10+11) $ - $ - 13. Advances accounted for (Add Line 9 and Line 12) $ - $ - 14. Difference if any (Line 8 minus Line 13) $ - $ - PART III 15. Total forecasted amount to be paid by IDA - $ - 16. Less: Closing DA balance $ - $ - 17. Forecasted Direct Payments $ - $ - 18. Sub total of closing DA balance and forecasted payments (Line 16 plus Line 17) $ - $ - 19. Cash requirement from IDA for the next reporting period (Line 15 minus Line 18) $ - $ - Note 1: Cumulative Adjustments (if any) - Line 5 20. Petty Cash on 07/01/2018 - - 21. Advances with partnering institution as at 07/01/2018 $ - - 22. Total petty cash balance and Advance at the start of the semester $ - - Note 2: Cumulative Adjustments (if any) - Line 10 23. Petty Cash on 12/31/2018 - - 24. Advances with the implementing partner as at 12/31/2018 $ - $ - 25. Total petty cash balance and Advance at the end of the semester $ - $ - Note: Bank reconciliation statement and copy of the bank statement for the period should be attached DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 IDA Credit No. XXXX-PK & XXXX-PK Pxxxxx:XXXXXXX Interim Financial Report for the Semester ended XX/XX/XXXX STATEMENT OF RECONCILIATION WITH CLIENT CONNECTION Amount in USD Total Project Cost A XXXX Expenditures Reported from DA in IUFRS Semester/Year B (XXX) Component XX Component XX Expenditures Reported from DA in IUFRS Semester/Year C (XXX) Component XX Component XX Direct Payments Semester/Year D (XX) Remaining Project Amount E= A-B-C-D Total Project Cost as Reported on Client Connection F XXXX Expenditures Documented from DA as reported in IUFRS Semester/Year G (XXX) Component XX Component XX Expenditures Documented from DA as reported in IUFRS Semester/Year H (XXX) Component XX Component XX Direct Payments as reported on Client Connection Semester/Year I (XX) Remaining Project Amount as per the Client Connection J= F-G-H-I Difference/ Reconciliation (Expenditure to be documented) K= E-J 0 DocuSign Envelope ID: DB846D9D-D28D-4FAA-A933-423499A8D6A6 FOR OFFICIAL USE ONLY Victor Ordonez, WFACS Cleared with and cc: Hasan Afzal Zaidi, ISAT2 Adja Mansora Dahourou Simpore, ESAF2 Helene Bertaud, LEGES Cc: Akram Abd El-Aziz Hussein El-Shorbagi, GGOAP Certificate Of Completion Envelope Id: DB846D9DD28D4FAAA933423499A8D6A6 Status: Completed Subject: Please DocuSign: AMENDED DFIL KPEC 6270-PK P15957 for DcSi.docx Source Envelope: Document Pages: 11 Signatures: 1 Envelope Originator: Certificate Pages: 1 Initials: 0 Victor Ordonez AutoNav: Enabled 1818 H St NW EnvelopeId Stamping: Enabled Washington, DC 20433-0002 Time Zone: (UTC-05:00) Eastern Time (US & Canada) vconde@worldbank.org IP Address: 172.58.187.254 Record Tracking Status: Original Holder: Victor Ordonez Location: DocuSign 2/25/2021 12:38:25 PM vconde@worldbank.org Security Appliance Status: Connected Pool: Security Pool Signer Events Signature Timestamp Victor Ordonez Sent: 2/25/2021 12:39:42 PM vconde@worldbank.org Viewed: 2/25/2021 12:39:55 PM World Bank Group Signed: 2/25/2021 12:40:15 PM Security Level: Email, Account Authentication (Optional) Signature Adoption: Uploaded Signature Image Using IP Address: 172.58.187.254 Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 2/25/2021 12:39:42 PM Certified Delivered Security Checked 2/25/2021 12:39:55 PM Signing Complete Security Checked 2/25/2021 12:40:15 PM Completed Security Checked 2/25/2021 12:40:15 PM Payment Events Status Timestamps