THE WORLD BANK IBRD*IDA I WORLDBANKGROUP DOCUMO RODRIGO A. CHAVES Country Director, Indonesia Letter No.: CD-051 /PFM/III/2016 March 2, 2016 Mr Marwanto Harjowiryono Director General of Treasury Ministry of Finance J. Lapangan Banteng Timur 2-4 Jakarta Pusat Dear Mr. Harjowiryono: Re: Grant No TFOA 1903 PFM MDTF Support to Indonesia Public Financial Management Reform Project Additional Instructions: Disbursement Letter I refer to the Letter Agreement ("Agreement") between the Republic of Indonesia ("Recipient") and the International Bank for Reconstruction and Development ("World Bank"), acting as administrator of grant funds provided by multiple donors ("Donors)" under the Support to Public Financial Management and Revenue Administration in Indonesia Multi-Donor Trust Fund ("PFM MDTF"), for the above-referenced project, dated March 2, 2016. The Agreement provides that the World Bank may issue additional instructions regarding the withdrawal of the proceeds of Grant TFOAl903 ("Grant"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. The attached World Bank Disbursement Guidelines fin Projects, dated May 1, 2006. ("Disbursement Guidelines") (Attachment 1), are an integral part of the Disbursement Letter. The manner in which the provisions in the 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 meanings ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangements (i) Disbursement Methods (section 2). The following Disbursement Methods may be used under the Grant: * Reimbursement * Advance * Direct Payment (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is four (4) months after the Closing Date specified in the Grant Agreement. Any changes to this date will be notified by the World Bank. ISEB Tower 2, 12th Floor, i. Jend. Sudirman Rav. 52-53, Jakarta 12190 2 +6221 5299 3000 0 +6221 5299 3111 O www.worldbank.org/id Grant No. TFOA1903 2 of 4 March 2, 2016 (iii) Disbursement Conditions (subsection 3.8). Please refer to the Withdrawal Condition(s) in Section 3.02 of the Grant Agreement. II. Withdrawal of Grant Proceeds (i) Authorized Signatures (subsection 3.1) Applications for this Loan be signed by the officials authorized to sign Applications as indicated in Ministry of Finance letter No.S1297/PB/2016, dated Feb 12, 2016 and S-6027/PB/2014 dated September 18. Please notify us promptly should there be any change in the authorized officials in this regard. The World Bank office Jakarta (WBOJ) Jakarta Stock Exchange Building, Tower 2, 1 2th Floor J1. Jenderal Sudirman Kay. 52-53, Jakarta 12190. Indonesia Attention: Country Director (ii) Applications (subsections 3.2- 3.3). Please provide completed applications for withdrawal, together with supporting documents, through the World Bank's Client Connection, web-based portal, following the instructions for electronic delivery. In the case the recipient does not have internet access, the World Bank may permit the delivery of applications for withdrawal, together with supporting documents, in accordance with subsection 3.3. to the following address: The World Bank office Jakarta (WBOJ) Jakarta Stock Exchange Building, Tower 2. 1 2th Floor J1. Jenderal Sudirman Kav. 52-53, Jakarta 12190, Indonesia Attention: Loan Department (iii) Electronic Delivery (subsection 3.4) The World Bank may permit the Recipient to electronically deliver to the Association Applications (with supporting documents) through the Association's Client Connection, web-based portal. The option to deliver Applications to the World Bank by electronic means may be effected if: (a) the Recipient has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its officials who are authorized to sign and deliver Applications and to receive secure identification credentials ("SIDC") from the World Bank for the purpose of delivering such 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 will provide the Recipient with SIDC for the designated officials. Following which, the designated officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection (https://c lientconnection. worldbank.org). The Recipient may continue to exercise the option of preparing and delivering Applications in paper form. The World Bank reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Recipient. ISEB Tower 2, 12tm Floor, JL Jend. Sudirman Kay. 52-53, Jakarta 12190 a+6221 5299 3000 0 +6221 5299 3111 O www.worldbank.org/id Grant No. TFOAl903 3 o[ 4 March 2, 2016 (iv) Terms and Conditions of Use of SIDC to Process Applications. By designating officials to accept SIDC and by choosing to deliver the Applications electronically, the Recipient confirns through the authorized signatory letter its agreement to: (a) abide by the Terms and Conditions of Use ofSecure Idcntification Credentials in connection with Use ofElectronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of SIDC") provided in Attachment [3]; and (b) to deliver the Terms and Conditions of Use of SIDC to each such official and to cause such official to abide by those terms and conditions. (v) Minimum Value of Applications (subsection 3.5). The Minimum Value of Applications for Reimbursements and Direct Payments is USD 100.000 (vi) Advances (sections 5 and 6) * Type of Designated Account (Subsection 5.3): Segregated * Currency of Designated Account (subsection 5.4): USD * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5): Bank Indonesia * Ceiling (subsection 6.1) Forecast of two quarters as provided in the Interim financial report III. Reporting on Use of Grant Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each application for withdrawal as set out below: * For requests .for Reimbursement: o Interim Financial report in the form attached. * For reporting eligible expenditures paid .from the Designated Account: o Interim Financial report in the form attached o Designated Account Reconciliation Statement with a copy of the bank statements, * For requests for Direct Payment: records evidencing eligible expenditures, e.g., copies of receipts, supplier invoices (ii) Frequency of Reporting Eligible Expenditures Paid from the Designated Account (subsection 6.3): The period set out in the letter agreement for provision of Interim Financial Reports (i.e) Quarterly. IV. Other Important Information For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on the World Bank's public website at https://www.worldbank.org and its secure website "Client Connection" at https://clientconnection.worldbank.oro. Print copies are available upon request. ISEB Tower 2, 12th Floor, JI. Jend. Sudirman Kay. 52-53, Jakarta 12190 i +6221 5299 3000 *+6221 5299 3111 0 www.worldbank.org/id Grant No. TFOA1903 4 of 4 March 2, 2016 From the Client Connection 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 done so, the World Bank recommends that you register as a user of the Client Connection website (https://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, financial, and procurement 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 affected. For more information about the website and registration arrangements, please contact the World Bank by email at . If you have any queries in relation to the above, please contact WFALD-TF by sending an email to WFALD-ttaworldbank.org and using the trust fund number as a reference. Very tl rs, Rodrigo . Chav s Country Direct I on sia Attachments 1. World Bank Disbursement Guidelines for Projects, dated May 1, 2006 2. Form for Authorized Signatures 3. Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation, dated March 1, 2013 4. Interim Financial reports Cc with copies: PSSU GFMRAP Djuanda II Building 1 8th Floor Jl. Dr. Wahidin Raya No. I Jakarta, Indonesia Email: pssu.gfmrap(a)gmail.com>: pssu nfmrap(alkemenkeu.go.id; pssu gfmrap(a)depkeu.go.id ISEB Tower 2, 12th Floor, J. Jend. Sudirman Kay. 52-53, Jakarta 12190 2+6221 5299 3000 0+6221 5299 3111 Owww.worldbank.org/id Attachment 12] Form of Authorized Signatory letter [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] The World Bank 8th floor 63 Ly Thai To Street Ha Noi, Vietnam Attention: Mr. Chaves Dear Mr. Chaves: Re: Grant No TFOA1903 PFM MDTF Support to Indonesia Public Financial Management Reform Project I refer to the Letter Agreement ("Agreement") between the Republic of Indonesia ("Recipient") and the International Bank for Reconstruction and Development ("World Bank"), acting as administrator of grant funds provided by multiple donors ("Donors)" under the Public Financial Management and Revenue Administration Reform multi-door trust fund, dated _ , providing the above Grant. For the purposes of Section 3.04 (b) of the Standard Conditions, as defined in the Agreement, any ['one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Recipient to sign applications for withdrawal under this Grant. For the purpose of delivering Applications to the World Bank, '[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 World Bank. 5[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 World Bank by electronic means. In full recognition that the World Bank shall rely upon such representations and 1 Instruction to the Recipient when sending this letter to the World Bank: 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 World Bank. 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 World Bank. 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 World Bank. 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 World Bank. s Instruction to the Recipient: Add this paragraph if the Recipient wishes to authorize the listed persons to accept Tokens 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 World Bank. 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 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 [31 Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation March 1, 2013 The World Bank (Bank)' will provide secure identification credentials (SIDC) to permit the Borrower7 to deliver applications for withdrawal and applications for special commitments under the Agreement(s) and supporting documentation (such applications and supporting documentation together referred to in these Terms and Conditions of Use as Applications) to the Bank electronically, on the terms and conditions of use specified herein. SIDC can be either: (a) hardware-based (Physical Token), or (b) software-based (Soft Token). The Bank reserves the right to determine which type of SIDC is most appropriate. A. Identification of Users. 1. The Borrower will be required to identify in a completed Authorized Signatory Letter (ASL) duly delivered to and received by the Bank each person who will be authorized to deliver Applications. The Bank will provide SIDC to each person identified in the ASL (Signatory), as provided below. The Borrower shall also immediately notify the Bank if a Signatory is no longer authorized by the Borrower to act as a Signatory. 2. Each Signatory must register as a user on the Bank's Client Connection (CC) website (https://clientconnection.worldbank.org) prior to receipt of his/her SIDC. Registration on CC will require that the Signatory establish a CC password (CC Password). The Signatory shall not reveal his/her CC Password to anyone or store or record the CC Password in written or other form. Upon registration as a CC user, the Signatory will be assigned a unique identifying account name. B. Initialization of SIDC. 1. Prior to initialization of SIDC by a Signatory, the Signatory will acknowledge having read, understood and agreed to be bound by these Terms and Conditions of Use. 6 "Bank" includes IBRD and IDA. 7 "Borrower" includes the borrower of an IBRD loan, IDA credit, or Project Preparation Facility advance and the recipient of a grant. 2. Where a Physical Token is to be used, promptly upon receipt of the Physical Token, the Signatory will access CC using his/her account name and CC Password and register his/her Physical Token and set a personal identification number (PIN) to be used in connection with the use of his/her Physical Token, after which the Physical Token will be initialized for use by the Signatory exclusively for purposes of delivering Applications. Where a Soft Token is to be used, the Signatory will access CC using his/her account name and CC Password and set a personal identification number (PIN) to be used in connection with the use of his/her Soft Token, after which the Soft Token will be initialized for use by the Signatory exclusively for purposes of delivering Applications. Upon initialization of the SIDC, the Signatory will be a "SIDC User". The Bank will maintain in its database a user account (Account) for each SIDC User for purposes of managing the SIDC of the SIDC User. Neither the Borrower nor the SIDC User will have any access to the Account. 3. Prior to first use of the SIDC by the SIDC User, the Borrower shall ensure that the SIDC User has received training materials provided by the Bank in use of the SIDC. 3. Use of SIDC. Use of the SIDC is strictly limited to use in the delivery of Applications by the SIDC User in the manner prescribed by the Bank in the Agreement(s) and these Terms and Conditions. Any other use of the SIDC is prohibited. The Bank assumes no responsibility or liability whatsoever for any misuse of the SIDC by the SIDC User, other representatives of the Borrower, or third parties. The Borrower undertakes to ensure, and represents and warrants to the Bank (such representation and warranty being expressly relied upon by the Bank in granting SIDC) that each SIDC User understands and will abide by, these Terms and Conditions of Use, including without limitation the following: 4. Security 4.1. The SIDC User shall not reveal his/her PIN to anyone or store or record the PIN in written or other form. 4.2. The SIDC User shall not allow anyone else to utilize his/her SIDC to deliver an Application to the Bank. 4.3. The SIDC User shall always logout from CC when not using the system. Failure to logout properly can create a route into the system that is unprotected. 4.4. If the SIDC User believes a third party has learned his/her PIN or has lost his/her Physical Token he/she shall immediately notify clientconnection@&worldbank.org. 4.5. The Borrower shall immediately notify the Bank at clientconnectionLa@worldbank.org of any lost, stolen or compromised SIDC, and take other reasonable steps to ensure such SIDC are disabled immediately. 5. Reservation of Right to Disable SIDC 5.1. The Borrower shall reserve the right to revoke the authorization of a SIDC User to use a SIDC for any reason. 5.2. The Bank reserves the right, in its sole discretion, to temporarily or permanently disable a SIDC, de-activate a SIDC User's Account or both. 6. Care of Physical Tokens 6.1. Physical Tokens will remain the property of the Bank. 6.2. The Bank will physically deliver a Physical Token to each Signatory designated to receive one in a manner to be determined by and satisfactory to the Bank. 6.3. Physical Tokens contain delicate and sophisticated instrumentation and therefore should be handled with due care, and should not be immersed in liquids, exposed to extreme temperatures, crushed or bent. Also, Physical Tokens should be kept more than five (5) cm from devices that generate electromagnetic radiation (EMR), such as mobile phones, phone-enabled PDAs, smart phones and other similar devices. Physical Tokens should be carried and stored separate from any EMR device. At close range (less than 5 cm), these devices can output high levels of EMR that can interfere with the proper operation of electronic equipment, including the Physical Token. 6.4. Without derogating from these Terms and Conditions of Use, other technical instructions on the proper use and care of Physical Tokens are available at http://www.rsa.com. 7. Replacement 7.1. Lost, damaged, compromised (in terms of 4.5, above) or destroyed Physical Tokens will be replaced at the expense of the Borrower. 7.2. The Bank reserves the right, in its sole discretion, not to replace any Physical Token in the case of misuse, or not to reactivate a SIDC User's Account. 1-A Loan abc ........ Designated/Special Account Activity Statement for the Reporting Period ....... Bank and Account No.: USD Part I 1. Cummulative advances to end of current reporting period 2. Cummulative expenditures to end of last reporting period 3. Outstanding advances to be accounted (1-2) 0 Part II 4. Opening SA balance at beginning of reporting period (as of ........... me 5. Add/Substract:Cummulative adjustments (if any) * /Iaste3 6. Advances from the World Bank during reporting period 7.add 5 and 6 8. Outstanding advances to be accounted for (4+7) (must be same as item 3) 0 must reconcile with 9. Closing SA balance at end of current reporting (as of ................ Expenditures in this 10. Add/substract: Cummulative adjusment (if any) Quarter from W's 11. Expenditures for current reporting period Special Account. i.e. Forms 11+1C or 12. Add 10+11 0_ Form IFR-2 13. Add 9+12 0 14. Difference (if any) 8-13 *** must reconcile Part III withForm1D 15. Total Forecasted amount to be paid by World Bank 16. Less: Closing SA balance (as per item 9) 17. Cumulative adjustment (if any) **** 18. Add 16+17 0 19. Cash requirement from WB for next six months (15-18) 0 20. Amount requested for advance to SA (rounding) *Explanation for item 5 (if not zero): FMR & AW Ref. Amount (+/-) Remarks *Explanation for item 10 (if not Zero): FMR & AW Ref. Amount (+/-) Remarks **Explanation for item 14 (if not Zero): JFMR & AW Ref. Amount (+/-) Remarks ***Explanation for item 17 (if not Zero): JFMR & AW Ref. Amount (+/-) Remarks 1-C Loan abc ........ Summary Statement of Expenditures (Sum-SOE) for those NOT Subject to Prior Review Quarter: -- Ln/Cr/TF No. : Sheet No. : 1 2 3 4 5 6 7 8 9 10 Item Disbursement Category Threshold Number of Country of Total Paid WB Amount of Average Amount No. for SP2D supplier/ to Contractors/ Financing WB portion Exchange Charged Cat No. Description SOEs covered consultant/ Expenditures % paid Rate to SA (USD eqv) training (GOI+IBRD+PPN) (USD eqv) (1) Category 1 */ (2) Category 2 (3) Category 3 (4) Category 4 GRAND TOTAL must reconcile with Form */ Please have a seperate line item if the WB' financing percentage is different 1A Item 11 1-C2 Loan abc ........ Statement of Expenditures for those NOT Subject to Prior Review Quarter: -- Ln/CrrTF No. : Sheet No. : 1 2 3a 3b 4 5 6 7 8 9 10 11 12 Item Disbursement Category Office Cross-Ref Date of Contract Supplierl Contract Total Amount WB Amount of Exchange Amount No. Issuing SP2D Payment No. Contractor Value Paid to Financing WB portion Rate Charged Cat No. Description SP2D No. (SP2D) and Date Name (incl. Add) Contractor % paid Applied to SA i(GOI+IBRD+PPN) (USD eqv) (1) Category 1 */ 2 3 Subtotal (2) Category 2 4 5 6 Subtotal (3) Category 3 7 8 9 Subtotal (4) Category 4 10 11 12 Subtotal GRAND TOTAL */ Please have a seperate line item if the WB' financing percentage is different 1-B Loan abc ........ Summary Sheet for Payments of Contracts Subject to Prior Review Quarter: -- Ln/Cr/TF No. : Sheet No.: 1 2 3a 3b 4 5 6 7 8 9 10 11 12 13 Item Disbursement Category Office Cross-Ref Date of Contract Supplierl Contract Total Amount WB Amount of Exchange Amount WB's No. Issuing SP2D Payment No. Contractor Value Paid to Financing WB portion Rate Charged contract Cat No. Description SP2D3 No. (SP2D) and Date Name (incl. Add) Contractor % paid Applied to SA ref. (GOI+IBRD+PPN) (USD eqv)**I (1) Category 1 / 2 3 Subtotal (2) Category 2 4 5 6 Subtotal (3) Category 3 7 8 9 Subtotal (4) Category 4 10 11 12 Subtotal GRAND TOTAL must reconcile with */ Please have a seperate line item if the WB' financing percentage is different Form 1A item 11 **/ Please check these ref. through Client Connection I-D Loan abc ........ Project Cash Forecast For the Quarter Ending rmlddlyyyy (a) (b) (c)=(a)+(b) (d) (e) (f GOI+WB GOI+WB Total Cash GOI WB WB Disbursement Category Cash Requirement Cash Requirement Requirement for Cash Requirement Cash Requirement Cash Requirement for Quarter ending for Quarter ending next two quarters next two quarters next two quarters next two quarters mm/dd/yyyy mm/dd/yyyy (six months) (six months) (six months) (six months) (IDR) (IDR) (IDR) (IDR) (IDR) (USD) 1 ... 2 ... 3 ... 4 ... Non Bank Financed (Rupiah Murni) Total NOTE: must reconcile with Exchange rate applied = Rp................../ USD Form 1A Item 15 IFR-1 Loan abc ........ Project Sources and Uses of Funds for the quarter ending dd/mmlyy currency: _ Actual / i Planned Variance % Current Year-To Cumulative Current Year-To Cumulative Current Year-To Cumulative Quarter lii Date To-Date/iii Quarter lii Date To-Date/iii Quarter lii Date To-Date/iii 1 2 3 4 5 6 7=1/4 8=5/5 9=3/6 Sources of Funds GOI ( Counterpart; RPMurni; Outstanding; SBUN) The World Bank Other Donor/lender Total Sources of Fund Uses of Funds (by Category) 2 ... 3 ... 4 ... Sub Total * Non Bank Financed (Rupiah Murni) Total Uses of Fund NOTE: must reconcile with 1 Sources of Fund: Form IFR2 Actual: include WB portions and GOI counterpart funds Planned: to be completed with the appoved budget; especially for the current quarter this must be completed with the previous quarter's cash forecast 2 Uses of Fund Actual: project expenditures by categories for the WB portions plus GOI counterpart funds Planned: "Year todate" to be completed with the appoved budget (DIPA); " Cummulative todate" to be completed with amount in PAD 3 "Current Quarter" covers the expenditures claimed to be eligible reported in the quarter 4 "Year to Date" covers accumulative expenditures during the year 5 "Cummulative to Date" covers expenditures since the beginning of the project until the current quarter 6 "Non Bank Financed" covers GOI expenditures related to the project other than the GOI counterpart funds IFR-2 Loan abc ........ Project Uses of Funds by Category for the quarter ending ............ E xpenditures in the Current Quarter Uses of Funds (by Category) * GOI Others Outstan charged to charged to Total counterpart Donor SBUN ding WB Sp.Acc WB Sp.Acct Rp Rp Rp Rp Rp US$ 1 2 3 4 5 6 7 1 ... 2 ... 3... 4... Non Bank Financed (Rupiah Murni) Total Uses of Fund Average Exchange rate: [must reconcile with Form IFR1 must reconcile with Form 1A item 1 Expenditures in Year to Date Uses of Funds (by Category) */ GOI Others Outstan charged to charged to Total counterpart Donor SBUN ding WB Sp.Acc WB Sp.Acct Rp Rp Rp Rp Rp US$ 8 9 10 11 12 13 14 1 ... 2 ... 3 ... 4 ... Non Bank Financed (Rupiah Murni) Total Uses of Fund must reconcile Average Exchange rate: with Form IFR1 Cumulative Expend' ures to Date Uses of Funds (by Category) */ GOI Others Outstan charged to charged to Total counterpart Donor SBUN ding WB Sp.Acc WB Sp.Acct Rp Rp Rp Rp Rp US$ 15 16 17 18 19 20 21 1 ... 2 ... 3 ... 4 ... Non Bank Financed (Rupiah Murni) Total Uses of Fund Average Exchange rate: must reconcile with Form IFR1 */ Please have a seperate line item if the WB' financing percentage is different