The World Bank 1818 H Street N.W. (202) 477-1234 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS CONFORMED COPY November 18, 2011 H.E. Bedri Hamza Ministry of Economy and Finance One Mother Teresa Street 10000 Pristina Republic of Kosovo Re: IDA Grant No. H342 KOS (Institutional Development for Education Project) Amendment to the Financing Agreement Dear Excellency: We refer to the Financing Agreement for the above-referenced Project, dated December 14, 2007 between the Republic of Kosovo (the Recipient) and the International Development Association (the Association), as amended and to your request dated July 25, 2011. We are pleased to inform you that the Association hereby agrees to amend the Financing Agreements as follows: 1. Schedule 1 (“Project Description�), Part B.3 to the Financing Agreement shall be amended to read as follows: “3. Strengthening the institutional capacities and management processes of the key department in MEST concerning the quality of education, including teacher training and assessment.� 2. Schedule 1 (“Project Description�), Part C.3 to the Financing Agreement shall be amended to read as follows: “3. Constructing a school based on the new design standards and school mapping.� 3. Schedule 2 (“Project Execution�), Section II.A.2 shall be revised to read as follows: “The performance indicators referred to above in sub-paragraph 1 consist of the following: (a). MEST establishes baseline of assessment and examination instruments to measure the student learning outcomes at grade 5 by 2010; (b). MEST/MFE monitors, analyzes and publishes capital and recurrent expenditures (by level of education, by municipality, per student, by spending composition) each year; RCA 248423. WUI 64145 FAX (202) 477-6391 2 (c). sixty percent (60%) of municipalities are able to report, using EMIS data, on the status of dropout and retention disaggregated by gender and community by 2012; (d). sixty percent (60%) of schools receiving School Grants produce school improvement plans and monitoring reports by the Project Closing Date; and (e). seventy percent (70%) of teachers are licensed as regular teachers by 2011. 4. The table in Schedule 2 (“Project Execution�), Section IV, Part A.2 to the Financing Agreement is hereby amended as follows: Amount of the Grant Allocated Percentage of (expressed in Expenditures to be Category SDR) Financed 1. Goods, works, consultants’ services, Training, 2,310,000 100% School Grants, Municipal Grants, and Incremental Operating Costs under Part A 2. Goods, works, consultants’ services, Training, and 1,382,000 100% Incremental Operating Costs under Part B 3(a). Goods, consultants’ services, Training, and Incremental Operating Costs under Part C 908,000 100% 3(b). Works under Part C 1,350,000 75% 4. Goods, works, consultants’ services, Training, and Incremental Operating Costs under Part D 156,000 100% 5. Unallocated 294,000 TOTAL AMOUNT 6,400,000 5. The Closing Date in Schedule 2 (“Project Execution�), Section IV, Part B.2 to the Financing Agreement is extended to “June 30, 2013.� 3 Please confirm your agreement on behalf of the Recipient with the above amendments by signing, dating and returning to us one of the original copies of this Amendment Letter. The amendments will become effective as of the date of your countersignature, upon the receipt of your countersigned letter. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Jane Armitage Country Director and Regional Coordinator for Southeast Europe Europe and Central Asia Region AGREED: REPUBLIC OF KOSOVO By: /s/ Bedri Hamza Authorized Representative Date: December 2, 2011