THE WORLD BANK WORLD BANi GROUP 19-Aug-2021 H.E. Luis Fernando Mata Echeverri Minister of Finance Secretary of State in the Office of Finance General Directorate of Public Credit Avenida Cervantes. Barrio El Jazmin Tegucigalpa, M.D.C. Honduras, C.A RE: Social Protection Integration Project (Credit Number IDA 6401-HN) First Amendment to the Financing Agreement ("Amendment Letter") Excellency, We refer to the Financing Agreement ("Agreement") between the Republic of Honduras ('Recipient") and the International Development Association ("Association"), dated July 17, 2019, for the above-captioned project ("Project"), and to your request to introduce amendments to the Agreement to reflect changes to the Project description and the extension of the Closing Date. The Agreement is hereby amended as set forth below. I1. The Project Development Objective and the Project Description, as set forth in Schedule I to the Agreement, are hereby amended to read in their entirety as described in Annex 1 to this Amendment Letter. 2. Section 1.A.1 of Schedule 2 to the Financing Agreement is hereby amended to read in its entirety as follows: l. The Recipient, through SSIS. shall maintain throughout the execution of the Project, key technical and fiduciary staff in numbers and with experience and functions satisfactory to the Association, and as further described in the Project Operational Manual." 3. Section I.A.2 of Schedule 2 to the Financing Agreement is hereby amended to read in its entirety as follows: -2. To facilitate the implementation of Part 1(b) of the Project, the Recipient. through SSIS. shall operate and maintain, throughout the execution of the Project, the CCT Program Technical Committee, with composition and functions acceptable to the Association, as further described in the Project Operational Manual." 4. Section I.A.3 of Schedule 2 to the Financing Agreement is hereby amended to read in its entirety as follows: "3. To facilitate the implementation of Part 1(c) and Part 2(b) of the Project, the Recipient. through SSIS, shall maintain the Inter-agency Coordination Agreement with the Relevant Agency. with terms and conditions acceptable to the Association. Except as the Recipient and the Association may otherwise agree in writing. the Recipient, through SSIS. shall not, abrogate, amend, suspend, waive, or otherwise fail to enforce the Inter- Agency Coordination Agreement or any provision thereof. In case of any conflict between the terms of this Agreement and the Inter-Agency Coordination Agreement. the provisions of this Agreement shall prevail." 5. The following provision is hereby incorporated to the Agreement as Section I.B.2 of Schedule 2 to the Financing Agreement. Consequently, the remaining provisions under Section L.B are renumbered accordingly. "2. Except as the Recipient and the Association may otherwise agree in writing, the Recipient. through SSIS. shall not, abrogate, amend, suspend. waive, or otherwise fail to enforce the Financial Institution Agreement or any provision thereof." 6. Section I.C. of Schedule 2 to the Agreement is hereby amended to read in its entirety as follow s: "C. Project Operational Manual I. The Recipient, through SSIS, shall carry out the Project. in accordance with the provisions of a manual (the "Project Operational Manual"), which shall include, inler alia: (a) the criteria for identification, registration and selection of Eligible Beneficiaries: (b) the Education CCT Co- responsibilities to be complied with by Eligible Beneficiaries as conditions for the provision of Education CCTs; (c) the Health CCT Co-responsibilities to be complied with by Eligible Beneficiaries as conditions for the provision of Health CCTs, (d) the mechanisms for verification of compliance with Education CCT Co-responsibilities and Health CCT Co-responsibilities; (e) the description of the mechanism for the provision of CCTs; (f) the format of the Project unaudited interim financial reports and financial statements, (g) the terms of reference, functions and responsibilities for the personnel of SSIS; (h) the detailed procedures for coordination and collaboration among the relevant Recipient's institutions, and other stakeholders in the carrying out of the Project, including the Relevant Agencies; (i) Personal Data collection and processing requirements in accordance with good international practices: (j) the terms of reference for carrying out the Compliance Reviews of the CCTs and the Project financial audits; (k) the Project performance indicators; (1) the disbursement. procurement, and environmental and social managlement procedures for the Project; and (m) the criteria and process for the selection of the municipalities under the Project. 2. Except as the Recipient and the Association may otherwise agree in writing. the Recipient, through SSIS, shall not. abrogate, amend, suspend. waive, or otherwise fail to enforce the Project Operational Manual or any provision thereof. 3. In case of any conflict between the terms of this Agreement and either the Project Operational Manual or any Financial Institution Agreement, the provisions of this Agreement will prevail." 7. Section I.D. of Schedule 2 to the Agreement is hereby amended to read in its entirety as follows: "D. Contingent Emergency Response 1. In order to ensure the proper implementation of contingent emergency response activities 41 under Part 4 of the Project (*Contingent Emergency Response Part"). the Recipient shall ensure that: 2 (a) a manual ("CERC Manual") is prepared and adopted in form and substance acceptable to the Association, which shall set forth detailed implementation arrangements for the Contingent Emergency Response Part. including: (i) any structures or institutional arrangements for coordinating and implementing the Contingent Emergency Response Part; (ii) specific activities which may be included in the Contingent Emergency Response Part, Eligible Expenditures required therefor ("Emergency Expenditures"), and any procedures for such inclusion: (iii) financial management arrangements for the Contingent Emergency Response Part: (iv) procurement methods and procedures for the Contingent Emergency Response Part: (v) documentation required for withdrawals of Financing amounts to finance Emergency Expenditures: (vi) a description of the environmental and social assessment and management arrangements for the Contingent Emergency Response Part: and (vii) a template Emergency Action Plan; (b) the Emergency Action Plan is prepared and adopted in form and substance acceptable to the Association; (c) the Emergency Response Part is carried out in accordance with the CERC Manual and the Emergency Action Plan; provided. however, that in the event of any inconsistency between the provisions of the CERC Manual or the Emergency Action Plan and this Agreement. the provisions of this Agreement shall prevail: and (d) neither the CERC Manual or the Emergency Action Plan is amended, suspended. abrogated, repealed or waived without the prior written approval by the Association. 2. The Recipient shall ensure that the structures and arrangements referred to in the CERC Manual are maintained throughout the implementation of the Contingent Emergency Response Part. with adequate staff and resources satisfactory to Association. 3. The Recipient shall ensure that: (a) the Safeguard Instruments required for the Contingent Emergency Response Part are prepared, disclosed and adopted in accordance with the CERC Manual. and in form and substance acceptable to the Association: and (b) the Contingent Emergency Response Part is carried out in accordance with the Safeguard Instruments in a manner acceptable to the Association. 4. Activities under the Contingent Emergency Response Part shall be undertaken only after an Eligible Crisis or Emergency has occurred." 8. Section 1l of Schedule 2 to the Agreement is hereby amended to read in its entirety as follows: "Section II. Project Monitoring, Reporting and Evaluation 1 . The Recipient, through SSIS, shall furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. 2. Except as may otherwise be explicitly required or permitted under this Agreement or as may be explicitly requested by the Association. in sharing any information. report or document 35 related to the activities described in Schedule I of this Agreement, the Recipient, through SSIS, shall ensure that such information, report or document does not include Personal Data." 9. The withdrawal table under Section Ill.A of Schedule 2 to the Agreement is hereby amended to read in its entirety as follows: Amount of the Percentage of Category Credit Allocated Expenditures to be Financed (expressed in USD) (in.uie (meclusive) (I) Goods, non-consulting services. and consulting services. Training and Operating Costs under Parts 1, 2. and 3 for the Project (2) Health CCTs and Education CCTs 100% under Part 1(b) of the Project (3) Emergency Expenditures under 0 Part 4 of the Project TOTAL AMOUNT 30,000.000 10. The disbursement condition set forth in Section IlI.B. I.(c) of Schedule 2 is hereby amended to read in its entirety as follows: -(c) for Emergency Expenditures under Category (3), unless and until all of the following conditions have been met in respect of said expenditures: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred. and has furnished to the Association a request to withdraw Financing amounts under Category (3); and (B) the Association has agreed with such determination, accepted said request and notified the Recipient thereof: and (ii) the Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Association." I1. Section lil.B.2. of Schedule 2 to the Agreement is hereby amended to read in its entirety as follows: "2. The Closing Date is June 30, 2024." 12. The Appendix to the Agreement is hereby amended by deleting the following terms and definitions: * "CCT" means a conditional cash transfer, in an amount calculated as set forth in the Project Operational Manual. made out of the proceeds of the Financing under Category (2) to an Eligible Beneficiary who complies with the CCT Co-responsibilities, in accordance with the criteria and procedures set forth in the Project Operational Manual. 4 * "CCT Co-responsibilities" means the Eligible Beneficiary's co-responsibilities included in the Project Operational Manual, including that children from I't to 12"' grade (primary and secondary levels) be enrolled in school and attend classes. * "Contingent Emergency Response" means the operational response carried out under Part 4 of the Project and to be financed out of the proceeds of the Financing allocated from time to time to Category (3) in response to an Eligible Emergency. * "Coordinating Authority" means the Recipient's entity, ministry or agency responsible for coordinating and implementing Part 4 of the Project. * "Emergency Response Operational Manual" means the operational manual to be adopted by the Recipient for Part 4 of the Project in accordance with the provisions of Section I.D.1(a) of Schedule 2 to this Agreement. 13. The Appendix to the Agreement is hereby amended by amending the following definition, to read in its entirety as follows: * "Eligible Beneficiary" means any individual living in the Recipient's rural and urban areas of the Recipient's departments, who meets the eligibility to benefit from a Health CCT or Education CCT, and who has been selected through public and transparent mechanism, all set forth in the Project Operational Manual. * "Emergency Expenditures" means any of the eligible expenditures set forth in the CERC Manual referred to in Section D of Schedule 2 to this Agreement and required for the Contingent Emergency Response Part. * "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 14. The Appendix to the Agreement is amended by adding, and placing in alphabetical order the following terms and definition (and, as a result, the remaining terms and definitions are renumbered to maintain alphabetical order): * "Beneficiary Care System" means Modulo de Atenci6n al Participante, the Recipient's beneficiary care system under the CCT Program, which provides CCT related services. * "CCTs" means jointly Education CCTs and Health CCTs. * "CERC Manual" means the manual referred to in Section D of Schedule 2 to this Agreement. as such manual may be updated from time to time with the agreement of the Association, and which is an integral part of the Project Operational Manual. * "Contingent Emergency Response Part" means any activity or activities to be carried out under Part 4 of the Project to respond to an Eligible Crisis or Emergency. * "Education CCT" means a conditional cash transfer, in an amount calculated as set forth in the Project Operational Manual, made out of the proceeds of the Financing to an Eligible Beneficiary who complies with the Education CCT Co-responsibilities, in accordance with the criteria and procedures set forth in the Project Operational Manual. 5 * "Education CCT Co-responsibilities" means the Eligible Beneficiary's co-responsibilities included in the Project Operational Manual, including that children from 1 " to I2" grade (primary and secondary levels): (i) be enrolled in school, and (ii) attend classes (unless, due to a cause acceptable to the Association, the Recipient has mandated temporary school closure and ceased to request this co-responsibility, under the CCTs Program). * "Emergency Action Plan" means the plan referred to in Section D of Schedule 2 to this Agreement. detailing the activities. budget, implementation plan. and monitoring and evaluation arrangements, to respond to the Eligible Crisis or Emergency. * "-Health CCT" means a conditional cash transfer, in an amount calculated as set forth in the Project Operational Manual. made out of the proceeds of the Financing to an Eligible Beneficiary who complies with the Health CCT Co-responsibilities, in accordance with the criteria and procedures set forth in the Project Operational Manual. * "Health CCT Co-responsibilities" means the Eligible Beneficiary's co-responsibilities included in the Project Operational Manual, including that: (a) children between 0 and 59 months old and pregnant mothers attend preventive health check-ups in the frequency set forth in the Project Operational Manual; and (b) pregnant women complete their pre-natal check-ups. (unless, due to a cause acceptable to the Association, the Recipient has temporarily ceased to request the co- responsibilities mentioned above, under the CCTs Program). * "Personal Data" means any information relating to an identified or identifiable individual. An identifiable individual is one who can be identified by reasonable means, directly or indirectly, by reference to an attribute or combination of attributes within the data, or combination of the data with other available information. Attributes that can be used to identify an identifiable individual include, but are not limited to, name, identification number. location data, online identifier, metadata and factors specific to the physical, physiological, genetic, mental, economic. cultural or social identity of an individual. Except as specifically amended herein, all other terms and conditions of the Agreement shall remain in full force and effect. Please confirm your agreement to the foregoing amendments to the Agreement on behalf of the Recipient, by signing and dating the confirmation on the enclosed copy of this Amendment Letter and returning it to us. This Amendment Letter will become effective upon: (i) receipt by the Association of one fully executed original of this Amendment Letter (ii) evidence that the execution and delivery of the Amendment Letter on behalf of the Recipient has been duly authorized by all necessary governmental action; and (iii) dispatch by the Association to the Recipient of the notice of its acceptance of the evidence required herein. 6 Please note that it is the Association's policy to make publicly available this Amendment Letter and any information related thereto, after this Amendment Letter has become fully signed. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION Michel Kerf Country Director Central America and the Dominican Republic Latin America and the Caribbean Region AGREED: REPUBLIC OF HONDURAS By: Name: Luis Fernando Mata Echeverri Title: Secretary of Finance Date: 20-Aug-2021 7 Annex 1 SCHEDULE I Project Description The objectives of the Project are to improve the outcomes of the CCT Program. including the CCT Program response to COVID-19. and to strengthen the integration of the social protection system for the extreme poor and the vulnerable. The Project consists of the following parts: Part 1: Stren2thening of the Conditional Cash Transfer Program and Implementation of the Inte2rated Transition Strategy (a) Strengthening the CCT Program through. inter alia: (i) redesigning the structure of the urban component of the CCT Program; and (ii) carrying out activities to standardize the operation of the CCT Program and improve its compliance verification system. (b) Providing Education CCTs and Health CCTs to Eligible Beneficiaries. (c) Developing and implementing an integrated transition strategy of the CCT Program in selected municipalities through, inter alia: (i) expanding alternative modalities of education for secondary education; (ii) providing soft skills training to students, including Eligible Beneficiaries, in targeted schools; and (iii) providing vocational training and technical assistance to vulnerable individuals request for financial support to the Recipient's government micro credit programs (i.e. Credito Solidario). Part 2: Institutional Strengthenin2 for the CCT Program and Integration of the Social Protection System (a) Strengthening the CCT Program delivery system through, inter alia: (i) carrying out activities to strengthen the effectiveness and transparency of the CCT Program payment mechanisms; (ii) strengthening the existing Beneficiary Care System, including a grievance redress mechanism; (iii) updating the SIG Platform; (iv) strengthening the CCT Program communications strategy and developing and implementing a communications campaign; (v) designing a rural transition strategy of the CCT Program: and (vi) carrying out the monitoring and evaluation of the CCT Program. (b) Strengthening the Recipient's institutional capacity to integrate the social protection system through. inter alia: (i) providing technical assistance to update and implement the Recipient's existing social protection policy framework; (ii) strengthening the quality of data of the existing registry of beneficiaries of social programs and financing its certification: (iii) strengthening the institutional capacity of the CENISS; and (iv) updating the existing instruments to identify Eligible Beneficiaries. Part 3: Proiect Management Supporting the SSIS in the coordination. implementation management and supervision (including. fiduciary aspects and monitoring and evaluation, and reporting of Project activities and results), including the carrying out of Project audits. 8 Part 4: Contingent Emer2ency Response Provision of immediate response to an Eligible Crisis or Emergency. as needed. 9