NAJY BENHASSINE Country Director, Pakistan 21-Dec-2021 South Asia Region ________________ Mian Asad Hayaud Din Secretary Ministry of Economic Affairs Islamic Republic of Pakistan Islamabad, Pakistan Re: IBRD Loan No. 9318-PK (Electricity Distribution Efficiency Improvement Project) Disbursement and Financial Information Letter (DFIL). Mr. Mian Asad Hayaud Din, I refer to the Loan Agreement between Islamic Republic of Pakistan (the “Borrower”) and the International Bank for Reconstruction and Development (the “World Bank”) for the Electricity Distribution Efficiency Improvement Project, Loan 9318-PK. The General Conditions, as defined in the Loan Agreement, provide that the Borrower may request withdrawals of Loan funds in accordance with the instructions as the Bank may specify by notice to the Borrower. 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. I. Disbursement Arrangements, Withdrawal of Loan Funds and Reporting of Uses of Loan Funds. (i) Disbursement Arrangements. The table in Schedule 1 sets out the disbursement methods which may be used by the Borrower, conditions, information on registration of authorized signatures, processing of withdrawal applications, instructions on supporting documentation, advances, and frequency of reporting. (ii) Electronic Delivery- Section 10.01 (c) of the General Conditions. The Bank may permit the Borrower to electronically deliver applications (with supporting documents) through the Bank’s web-based portal (https://clientconnection.worldbank.org) “Client Connection”. This option may be effected if: (a) the Borrower has designated in writing, its officials who are authorized to sign and deliver Applications and to receive Secure Identification Credentials (“SIDC”) from the Bank for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Borrower 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 Borrower may continue to exercise the option of preparing and delivering Applications in paper form. The Bank 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 Borrower 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 Bank'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 Borrower shall prepare and furnish to the Bank not later than forth-five (45) days after the end of each calendar semester, interim unaudited financial reports (IFR) for the Project covering the semester, in the format stated in Attachment 2 to this DFIL. (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 Bank not later than six (6) months after the end of such period year. III. Other Important Information (i) Client Connection. For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Bank’s public website and “Client Connection”. The Bank 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 Loan, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements, please contact the Bank by email at clientconnection@worldbank.org. (ii) Communication. If you have any queries in relation to the above, please contact us at AskLoans@WorldBank.org using the reference: Electricity Distribution Efficiency Improvement Project 9318-PK. Yours sincerely, ______________________________ Najy Benhassine Country Director, Pakistan South Asia Region Attachments 1. Form of Authorized Signatory Letter 2. Interim unaudited Financial Report (IFR) Schedule 1 to DFIL Disbursement Arrangements Basic Information Country Islamic Republic of Pakistan Closing Date Section III.B.2. of Schedule 2 to Borrower/Beneficiary Islamic Republic of Pakistan the Loan Agreement. Loan 9318-PK Name of the Project Electricity Distribution Efficiency Disbursement Four months after the closing Number Improvement Project Deadline Date date. Subsection 3.7 ** Disbursement Methods and Supporting Documentation Disbursement Methods Methods Supporting Documentation Section 2 (**) Subsections 4.3 and 4.4 (**) Direct Payment Yes Copies of receipts or supplier’s invoices Reimbursement Yes Interim Unaudited Financial Reports (IFRs) in the format stated in Attachment 2 of this DFIL Advance (Designated Yes Interim Unaudited Financial Reports (IFRs) in the format stated in Attachment 2 of this DFIL Account) Special Commitments No Not Available Designated Account (Sections 5 and 6 **) Type Segregated Fixed at USD 23,000,000. Advances will be accessed based on a forecast for 1 semester, as provided in the IFR as follows: Ceiling -MOE at USD 2,500,000 -HESCO at USD 5,400,000 -MEPCO at USD 6,900,000 -PESCO at USD 8,200,000 National Bank of Pakistan (through United States Dollar (USD) Financial Institution Currency the State Bank of Pakistan) Frequency of Reporting Subsection 6.3 (**) Semiannual (Same as IFRs) Minimum Value of Applications (subsection 3.5 **) The minimum value of applications for Reimbursement and Direct payment is USD 1,000,000 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-Jamhuriat, G-5/1 Islamabad, Islamic Republic of Pakistan Withdrawal Applications (WAs)- All WAs and its supporting documentation will be electronically sent through the Bank’s system ClientConnection. Notes * Interest During Construction – The financing of IDC will be aligned to the provisions in section III of Schedule 2 to the Loan Agreement. ** 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 1818 H Street, N.W. Washington, D.C. 20433 United States of America Attention: Mr. Najy Benhassine, Country Director Re: Loan No. 9318-PK Electricity Distribution Efficiency Improvement Project I refer to the Loan Agreement (“Agreement”) between the International Bank for Reconstruction and Development (the “Bank”) and the Islamic Republic of Pakistan (the “Borrower”), dated _______, providing the above Loan. 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 Borrower to sign applications for withdrawal [and applications for a special commitment] under this Loan. 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 Borrower 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 Borrower 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. 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 Borrower 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] Attachment 2 – Interim unaudited Financial Reports (IFRs) Ministry or Energy P170230: Electricity Distribution Efficiency Improvement Project PMU-Ministry of Energy Interim Financial Report for the semester ended XXXX, 2022 STATEMENT OF SOURCES AND USES OF FUNDS For the Semester Year to Date Inception to Date Pak Rs. Pak Rs. Pak Rs. SOURCES OF FUNDS Designated Accounts IBRD GoP Direct Payments IBRD Total Receipts USES OF FUNDS Category 1 Component 1a: [Goods, works, non-consulting services, consulting services, Incremental Operating Costs, Training and Workshops for MoE’s Respective Parts of the Project (but excluding Land Expenditures)] Goods, works and services Incremental operating cost Training and workshop Category 2 Front End Fee Category 3 Interest Total Expenditure SURPLUS / (DEFICIT) OPENING BALANCE CLOSING BALANCE Breakup of Opening and Closing Cash Balance Cash in Hand Designated Account IBRD P170230: Electricity Distribution Efficiency Improvement Project PMU- Ministry of Energy Interim Financial Report for the semester ended XXXXX, 2022 DESIGNATED ACCOUNT ACTIVITY STATEMENT - IBRD Loan Note US$ US$ PART I 1. Cumulative Advances to the end of last semester 2. Cumulative 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 quarter 5. Add/Subtract: Cumulative Adjustments (if any) 6. Advances from IBRD during the quarter 7. Sub total of Advances and Adjustments 8. Outstanding Advances to be accounted for (Line 4 plus Line 7) * 9. DA balance at end of quarter 10. Add/Subtract: Cumulative Adjustments (if any) 11. Expenditure for current reporting period a) Disbursement Category 1 b) Disbursement Category 2 12. Sub total of Adjustments and Expenditure 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 IBRD 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 IBRD for the next reporting period (Line 15 minus Line 18) * Unadjusted advances from designated account Note: Bank reconciliation statement and copy of the bank statement for the period should be attached P170230: Electricity Distribution Efficiency Improvement PMU-MoE Interim Financial Report for the semester ended XXXX, 2022 VARIANCE ANALYSIS OF USE OF FUNDS Semester (Pak Rupees) Cumulative for the Year (Pak Rupees) Cumulative - Inception to Date (Pak Rupees) Variance Variance Variance Planned Actual Planned Actual Planned Actual Amount %age Amount %age Amount %age Component 1a Goods Works Cosulting and non-cosulting services Incremental operating cost Training and workshops Interest Front end fee Total P170230: Electricity Distribution Efficiency Improvement PMU - MoE Interim Financial Report for the semester ended xxxx, 2022 CASH FORECAST FOR THE 6 MONTHS ENDING xxxx, 2022 Cash Requirements Quarter ended Quarter ended Cash Requirements for Next Six Months June 30, 2022 September 30, 2020 Pak Rs. Pak Rs. Pak Rs. USD Category 1a TOTAL I USD=100 PKR Peshawar Electric Supply Company Limited P170230: Electricity Distribution Efficiency Improvement Project PESCO Interim Financial Report for the semester ended XXXX, 2022 STATEMENT OF SOURCES AND USES OF FUNDS For the Semester Year to Date Inception to Date Pak Rs. Pak Rs. Pak Rs. SOURCES OF FUNDS Designated Accounts IBRD GoP Direct Payments IBRD Total Receipts USES OF FUNDS Category 1 Component 1d: [Goods, works, non-consulting services, consulting services, Incremental Operating Costs, Training and Workshops for MoE’s Respective Parts of the Project (but excluding Land Expenditures)] Goods, works and services Incremental operating cost Training and workshop Category 2 Front End Fee Category 3 Interest Total Expenditure SURPLUS / (DEFICIT) OPENING BALANCE CLOSING BALANCE Breakup of Opening and Closing Cash Balance Cash in Hand Designated Account IBRD P170230: Electricity Distribution Efficiency Improvement Project PESCO Interim Financial Report for the semester ended XXXXX, 2022 DESIGNATED ACCOUNT ACTIVITY STATEMENT - IBRD Loan Note US$ US$ PART I 1. Cumulative Advances to the end of last semester 2. Cumulative 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 quarter 5. Add/Subtract: Cumulative Adjustments (if any) 6. Advances from IBRD during the quarter 7. Sub total of Advances and Adjustments 8. Outstanding Advances to be accounted for (Line 4 plus Line 7) * 9. DA balance at end of quarter 10. Add/Subtract: Cumulative Adjustments (if any) 11. Expenditure for current reporting period a) Disbursement Category 1 b) Disbursement Category 2 12. Sub total of Adjustments and Expenditure 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 IBRD 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 IBRD for the next reporting period (Line 15 minus Line 18) * Unadjusted advances from designated account Note: Bank reconciliation statement and copy of the bank statement for the period should be attached P170230: Electricity Distribution Efficiency Improvement PESCO Interim Financial Report for the semester ended XXXX, 2022 VARIANCE ANALYSIS OF USE OF FUNDS Semester (Pak Rupees) Cumulative for the Year (Pak Rupees) Cumulative - Inception to Date (Pak Rupees) Variance Variance Variance Planned Actual Planned Actual Planned Actual Amount %age Amount %age Amount %age Category 1d Goods Works Cosulting and non-cosulting services Incremental operating cost Training and workshops Interest Front end fee Total P170230: Electricity Distribution Efficiency Improvement PESCO Interim Financial Report for the semester ended xxxx, 2022 CASH FORECAST FOR THE 6 MONTHS ENDING xxxx, 2022 Cash Requirements Quarter ended Quarter ended Cash Requirements for Next Six Months June 30, 2022 September 30, 2020 Pak Rs. Pak Rs. Pak Rs. USD Category 1d TOTAL I USD=100 PKR Hyderabad Electric Supply Company Limited P170230: Electricity Distribution Efficiency Improvement Project HESCO Interim Financial Report for the semester ended XXXX, 2022 STATEMENT OF SOURCES AND USES OF FUNDS For the Semester Year to Date Inception to Date Pak Rs. Pak Rs. Pak Rs. SOURCES OF FUNDS Designated Accounts IBRD GoP Direct Payments IBRD Total Receipts USES OF FUNDS Category 1 Component 1b: [Goods, works, non-consulting services, consulting services, Incremental Operating Costs, Training and Workshops for MoE’s Respective Parts of the Project (but excluding Land Expenditures)] Goods, works and services Incremental operating cost Training and workshop Category 2 Front End Fee Category 3 Interest Total Expenditure SURPLUS / (DEFICIT) OPENING BALANCE CLOSING BALANCE Breakup of Opening and Closing Cash Balance Cash in Hand Designated Account IBRD P170230: Electricity Distribution Efficiency Improvement Project HESCO Interim Financial Report for the semester ended XXXXX, 2022 DESIGNATED ACCOUNT ACTIVITY STATEMENT - IBRD Loan Note US$ US$ PART I 1. Cumulative Advances to the end of last semester 2. Cumulative 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 quarter 5. Add/Subtract: Cumulative Adjustments (if any) 6. Advances from IBRD during the quarter 7. Sub total of Advances and Adjustments 8. Outstanding Advances to be accounted for (Line 4 plus Line 7) * 9. DA balance at end of quarter 10. Add/Subtract: Cumulative Adjustments (if any) 11. Expenditure for current reporting period a) Disbursement Category 1 b) Disbursement Category 2 12. Sub total of Adjustments and Expenditure 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 IBRD 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 IBRD for the next reporting period (Line 15 minus Line 18) * Unadjusted advances from designated account Note: Bank reconciliation statement and copy of the bank statement for the period should be attached P170230: Electricity Distribution Efficiency Improvement HESCO Interim Financial Report for the semester ended XXXX, 2022 VARIANCE ANALYSIS OF USE OF FUNDS Semester (Pak Rupees) Cumulative for the Year (Pak Rupees) Cumulative - Inception to Date (Pak Rupees) Variance Variance Variance Planned Actual Planned Actual Planned Actual Amount %age Amount %age Amount %age Category 1b Goods Works Cosulting and non-cosulting services Incremental operating cost Training and workshops Interest Front end fee Total P170230: Electricity Distribution Efficiency Improvement HESCO Interim Financial Report for the semester ended xxxx, 2022 CASH FORECAST FOR THE 6 MONTHS ENDING xxxx, 2022 Cash Requirements Quarter ended Quarter ended Cash Requirements for Next Six Months June 30, 2022 September 30, 2020 Pak Rs. Pak Rs. Pak Rs. USD Category 1b TOTAL I USD=100 PKR