WORLD BANK GROUP OFFICIAL BELLA BIRD Country Director for Burundi, Malawi, Tanzania, and Somalia DO CUM ENTS Africa Region r ,201WE, Honourable Goodall E. Gondwe Minister of Finance, Economic Planning and Development Ministry of Finance, Economic Planning and Development P.O. Box 30049 Lilongwe 3, Malawi Dear Honourable Gondwe: Malawi: Skills Development Project (Credit Number 5472-MW and Grant Number H-959-MW) Second Amendment to the Financin2 Agreement We refer to the Financing Agreement (the Agreement) for the above-mentioned Project, dated August 13, 2014, as amended, between the Republic of Malawi ("Recipient") and the International Development Association ("Association"). We further refer to our recent discussions regarding (1) the reallocation of proceeds out of the Financing from category 3 of Eligible Expenditures to category 2, and (2) the revision of a number of Disbursement Linked Results to ensure consistency between the Project Appraisal Document and the Agreement. The Association proposes to amend the Agreement as follows: 1. The table in Section IV.A.2 of Schedule 2 to the Agreement shall be deleted in its entirety and replaced as follows: Amount of the Percentage of Amount of the Grant Allocated Expenditures to be Category Credit Allocated (expressed in SDR) Financed (expressed in SDR) (inclusive of Taxes) (1) Goods, works, non- consulting services, consultant services, Training and Operating 25,920,000 100% Costs required for Sub- Projects and to be financed out of Sub-project Grants under Part A of the Project Honourable Goodall E. Gondwe -2- February 7, 2018 (2) Goods, non-consulting services, consultant services, Training and 513,033 100% Operating Costs under Part 3,200,000 B of the Project Amount payable (3) Refund of Preparation 458,967 - pursuant to Section Advance 2.07 of the General Conditions (4) Unallocated/Amount 2,908,000 Cancelled TOTAL AMOUNT 29,800,000 3,200,000 2. The tables set forth in Schedule 4 to the Agreement shall be deleted in their entirety and replaced with the tables set forth in the Annex to this letter. All other provisions of the Agreement, except as herein amended, shall remain in full force and effect. Please indicate your agreement with the foregoing amendment by countersigning on the two original copies of this letter and returning one original countersigned copy to us. Upon receipt by the Association of this countersigned copy, this amendment shall become effective as of the date of its countersignature. Sincerely INTERNATIONAL DEVELOPMENT ASSOCIATION Bell ird Country Director for Tanz a, Malawi, Burundi and Somalia Africa Region Honourable Goodall E. Gondwe -3- February 7, 2018 CONFIRMED: REPUBLIC OF MALAWI By: Name: \ 06dO Title: m"CAQ A C Gvi Date:_______ _ Honourable Goodall E. Gondwe -4- February 7, 2018 Annex SCHEDULE 4 A. Disbursement Linked Indicators under Part A of the Project- University of Malawi-The Polytechnic Amount of the Financing Allocated Disbursement Disbursement (expressed in Calculation Linked Indicator Action to be Completed SDR) Formula DLI #1: Each of the DLR# 1.1: The Polytechnic has 970,000 DLR 1.1: 970,000 Participating Skills developed and adopted its Institution Development Improvement Plan in FY 2014-2015 Institution has developed and adopted its Institution Improvement Plan DLI #2: Student DLR#2.1: The number of student 1,100,000 DLR 2.1: enrollment in agreed enrolled in agreed skills development 1,100,000 skills development programs increases by: (a) 100% programs increases (a) 80% and above of 900; (b) 90% (b) 70-79% of 900; (c) 80% (c) 60-69% of 900; (d) 60% (d) 50-59% of 900 DLI #3: Each of the DLR#3.1: The Polytechnic has adopted 1,380,000 DLR 3.1: 275,000 Participating Skills a procurement plan for infrastructure DLR 3.2: 275,000 Development development and has signed at least Institution achieves its 20% of contracts for the implementation DLR 3.3: 830,000 infrastructure of infrastructure works in FY 2014-2015 (a) 100% development targets as DLR#3.2: The Polytechnic has signed (b) 75% set out in the 100% of contracts for the (c) 35% Institution implementation of infrastructure works Improvement Plan in FY 2015-2016 DLR#3.3: Overall, works under the infrastructure contracts have been completed by: (a) No less than 80%; (b) 40-79%; (c) 15-39%; Honourable Goodall E. Gondwe -5- February 7, 2018 Amount of the Financing Allocated Disbursement Disbursement (expressed in Calculation Linked Indicator Action to be Completed SDR) Formula DLI #4: Each of the DLR#4.1: The Polytechnic has 1, 325,000 DLR 4.1: 465,000 Participating Skills developed all the agreed skills DLR 4.2: 465,000 Development development programs in consultation Institution develops with the private sector in FY 2014-2015 DLR 4.3: 395,000 and implements the DLR#4.2: The Polytechnic has agreed skills implemented at least 50% of all the promint agreed skills development programs in programs in FY 2015-2016 consultation with the private sector DLR#4.3: The Polytechnic has implemented all the agreed skills development programs in FY 2016- 2017 DLI #5: Each of the DLR#5.1: The Polytechnic has adopted 1,155,000 DLR 5.1: 230,000 Participating Skills all staff training plans and at least 25% DLR 5.2: 230,000 Development of staff have commenced training in FY Institution achieves its 2014-2015 DLR 5.3: 290,000 staff development DLR#5.2: At least 20% of staff have DLR 5.4: 290,000 targets as set out in the been trained and resumed work in FY DLR 5.5: 115,000 Institution2015-2016 Improvement Plan DLR#5.3: At least 50% of staff have been trained and resumed work in FY 2016-2017 DLR#5.4: At least 80% of staff have been trained and resumed work in FY 2017-2018 DLR#5.5: All staff have been trained and resumed work in FY 2018-2019 DLI #6: Each of the DLR#6.1: The Polytechnic has carried 550,000 DLR 6.1: 55,000 Participating Skills out and published tracer studies on on- DLR 6.2: 275,000 Development going skills development programs in Institution carries out FY 2014-2015 DLR 6.3: 110,000 and publishes tracer DLR#6.2: The Polytechnic has traced DLR 6.4: 110,000 studies on on-going 50% of 2015 graduates through and new skills database creation in FY 2017-2018 development programs DLR#6.3: The Polytechnic has carried out and published on-going and new skills development programs in FY 2018-2019 Honourable Goodall E. Gondwe -6- February 7, 2018 Amount of the Financing Allocated Disbursement Disbursement (expressed in Calculation Linked Indicator Action to be Completed SDR) Formula DLR#6.4: The Polytechnic has traced 50% of 2016 graduates through database creation in FY 2018-2019 Honourable Goodall E. Gondwe -7- February 7, 2018 B. Disbursement Linked Indicators under Part A of the Project- University of Malawi-The Chancellor College Amount of the Financing Disbursement Allocated Disbursement Linked Indicator Action to be Completed (expressed in SDR) Calculation Formula DLI #1: Each of the DLR#1.1: The University of Malawi- 970,000 DLR 1.1: 970,000 Participating Skills Chancellor College has developed and Development adopted its Institution Improvement Institution has Plan in FY 2014-2015 developed and adopted its Institution Improvement Plan DLI #2: Student The number of student enrolled in 1,055,000 DLR 2.1: 1,055,000 enrollment in agreed agreed skills development programs (a) 100% skills development increases by: programs increases (a) 80% and above of 920; (b) 90% (b) 70-79% of 920; (c) 80% (c) 60-69% of 920; (d) 60% (d) 50-59% of 920 DLI #3: Each of the DLR#3.1: The University of Malawi- 1,050,000 DLR 3.1: 210,000 Participating Skills Chancellor College has adopted a DLR 3.2: 210,000 Development procurement plan for infrastructure Institution achieves development and has signed at least DLR 3.3: 630,000 its infrastructure 20% of contracts for the (a) 100% development targets implementation of infrastructure works (b) 75% as set out in the in in FY 2014-2015 (c) 35% Institution DLR#3.2: The University of Malawi- Improvement Plan Chancellor College has signed 100% of contracts for the implementation of infrastructure works signed in FY 2015- 2016 DLR#3.3: Overall works under the infrastructure contracts has been completed by: (a) No less than 80%; (b) 40-79%; (c) 15-39%; Honourable Goodall E. Gondwe -8- February 7, 2018 Amount of the Financing Disbursement Allocated Disbursement Linked Indicator Action to be Completed (expressed in SDR) Calculation Formula DLI #4: Each of the DLR#4.1: The University of Malawi- 1,015,000 DLR 4.1: 355,000 Participating Skills Chancellor College has developed all DLR 4.2: 355,000 Development the agreed skills development programs Institution develops in consultation with the private sector in DLR 4.3: 305,000 and implements the FY 2014-2015 agreed skills DLR#4.2: The University of Malawi- development Chancellor College has implemented at programs in least 50% of all the agreed skills consultation with development programs in FY 2015- the private sector 2016 DLR#4.3: The University of Malawi- Chancellor College has implemented all the agreed skills development programs in FY 2016-2017 DLI #5: Each of the DLR#5.1: The University of Malawi- 880,000 DLR 5.1: 175,000 Participating Skills Chancellor College has adopted all staff DLR 5.2: 175,000 Development training plans and at least 25% of staff Institution achieves have commenced training in FY 2014- DLR 5.3: 220,000 its staff 2015 DLR 5.4: 220,000 development targets DLR#5.2: At least 20% of staff have Insttutin Plan been trained and resumed work in FY Institution 2015-2016 Improvement Plan DLR#5.3: At least 50% of staff have been trained and resumed work in FY 2016-2017 DLR#5.4: At least 80% of staff have been trained and resumed work in FY 2017-2018 DLR#5.5: All staff have been trained and resumed work in FY 2018-2019 DLI #6: Each of the DLR#6.1: The University of Malawi- 210,000 DLR 6.1: 40,000 Participating Skills Chancellor College has carried out and DLR 6.2: Development published tracer studies on on-going Intentionally left Institution carries skills development programs in FY blank out and publishes 2014-2015 tracer studies on on- DLR#6.2: Intentionally left blank DLR 6.3: 85,000 going and new skills .#62DLR 6.4: 85,000 development DLR#6.3: The University of Malawi- programs Chancellor College has carried out and published tracer studies on on-going Honourable Goodall E. Gondwe -9- February 7, 2018 Amount of the Financing Disbursement Allocated Disbursement Linked Indicator Action to be Completed (expressed in SDR) Calculation Formula and new skills development programs in FY 2018-2019 DLR#6.4: The University of Malawi- Chancellor College has traced 50% of 2016 graduates through database creation in FY 2018-2019 Honourable Goodall E. Gondwe -10- February 7, 2018 C. Disbursement Linked Indicators under Part A of the Project- Lilongwe University of Agriculture and Natural Resources (LUANAR) Amount of the Financing Disbursement Disbursement Linked Allocated Calculation Indicator Action to be Completed (expressed in SDR) Formula DLI #1: Each of the DLR#1.1: LUANAR has developed 970,000 DLR 1.1: 970,000 Participating Skills and adopted its Institution Development Institution Improvement Plan in FY 2014-2015 has developed and adopted its Institution Improvement Plan DLI #2: Student The number of student enrolled in 1,055,000 DLR 2.1: enrollment in agreed agreed skills development programs 1,055,000 skills development increases by: (a) 100% programs increases (a) 80% and above of 1,100; (b) 90% (b) 70-79% of 1,100; (c) 80% (c) 60-69% of 1,100; (d) 60% (d) 50-59% of 1,100 DLI #3: Each of the DLR#3.1: LUANAR has adopted a 1,050,000 DLR 3.1: 210,000 Participating Skills procurement plan for infrastructure DLR 3.2: 210,000 Development Institution development and has signed at least achieves its infrastructure 20% of contracts for the DLR 3.3: 630,000 development targets as implementation of infrastructure (a) 100% set out in the Institution works in in FY 2014-2015 (b) 75% Improvement Plan DLR#3.2: LUANAR has signed (c) 35% 100% of contracts for the implementation of infrastructure works signed in FY 2015-2016 DLR#3.3: Overall works under the infrastructure contracts has been completed by: (a) No less than 80%; (b) 40-79%; (c) 15-39%; Honourable Goodall E. Gondwe -11- February 7, 2018 Amount of the Financing Disbursement Disbursement Linked Allocated Calculation Indicator Action to be Completed (expressed in SDR) Formula DLI #4: Each of the DLR#4. 1: LUANAR has developed 1,015,000 DLR 4.1: 355,000 Participating Skills all the agreed skills development DLR 4.2: 355,000 Development Institution programs in consultation with the develops and implements private sector in FY 2014-2015 DLR 4.3: 305,000 the agreed skills DLR#4.2: LUANAR has development programs in implemented at least 50% of all the consultation with the agreed skills development programs private sector in FY 2015-2016 DLR#4.3: LUANAR has implemented all the agreed skills development programs in FY 2016- 2017. DLI #5: Each of the DLR#5.1: LUANAR has adopted all 880,000 DLR 5.1: 175,000 Participating Skills staff training plans and at least 25% DLR 5.2: 175,000 Development Institution of staff have commenced training in achieves its staff FY 2014-2015 DLR 5.3: 220,000 development targets as DLR#5.2: At least 20% of staff have DLR 5:4: 220,000 set out in the Institution been trained and resumed work in DLR 5:5: 90,000 Improvement Plan FY 2015-2016 DLR#5.3: At least 50% of staff have been trained and resumed work in FY 2016-2017 DLR#5.4: At least 80% of staff have been trained and resumed work in FY 2017-2018 DLR#5.5: All staff have been trained and resumed work in FY 2018-2019 DLI #6: Each of the DLR#6.1: LUANAR has carried out 210,000 DLR 6.1: 40,000 Participating Skills and published tracer studies on on- DLR 6.2: Development Institution going skills development programs Intentionally left carries out and publishes in FY 2014-2015 blank tracer studies on on-going DLR#6.2: Intentionally left blank DLR 6.3: 85,000 and new skillsDL6.:8,0 development programs DLR#6.3: LUANAR has carried out DLR 6.4: 85,000 and published tracer studies on on- going and new skills development programs in FY 2018-2019 Honourable Goodall E. Gondwe -12- February 7, 2018 Amount of the Financing Disbursement Disbursement Linked Allocated Calculation Indicator Action to be Completed (expressed in SDR) Formula DLR#6.4: LUANAR has traced 50% of 2016 graduates through database creation in FY 2018-2019 Honourable Goodall E. Gondwe -13- February 7, 2018 D. Disbursement Linked Indicators under Part A of the Project- Mzuzu University Amount of the Financing Disbursement Disbursement Linked Allocated Calculation Indicator Action to be Completed (expressed in SDR) Formula DLI #1: Each of the DLR#1.1: Mzuzu University has 970,000 DLR 1.1: 970,000 Participating Skills developed and adopted its Institution Development Institution Improvement Plan in FY 2014-2015 has developed and adopted its Institution Improvement Plan DLI #2: Student The number of student enrolled in 1,220,000 DLR 2.1: enrollment in agreed skills agreed skills development programs 1,220,000 development programs increases by: (a) 100% increases (a) 80% and above of 2,700; (b) 90% (b) 70-79% of 2,700; (c) 80% (c) 60-69% of 2,700; (d) 60% (d) 50-59% of 2,700 DLI #3: Each of the DLR#3.1: Mzuzu University has 1,220,000 DLR 3.1: 245,000 Participating Skills adopted a procurement plan for Development Institution infrastructure development and has achieves its infrastructure signed at least 20% of contracts for the DLR 3.3: 730,000 development targets as set implementation of infrastructure (a) 100% out in the Institution works in in FY 2014-2015 (b) 75% Improvement Plan DLR#3.2: Mzuzu University has (c) 35% signed 100% of contracts for the implementation of infrastructure works signed in FY 2015-2016 DLR#3.3: Overall works under the infrastructure contracts has been completed by: (a) No less than 80%; (b) 40-79%; (c) 15-39%; Honourable Goodall E. Gondwe -14- February 7, 2018 Amount of the Financing Disbursement Disbursement Linked Allocated Calculation Indicator Action to be Completed (expressed in SDR) Formula DLI #4: Each of the DLR#4.1: Mzuzu University has 1,170,000 DLR 4.1: 410,000 Participating Skills developed all the agreed skills Development Institution development programs in consultation develops and implements with the private sector in FY 2014- DLR 4.3: 350,000 the agreed skills 2015 development programs in DLR#4.2: Mzuzu University has consultation with the DL#. :MuuUiest a . implemented at least 50% of all the private sector agreed skills development programs in FY 2015-2016 DLR#4.3: Mzuzu University has implemented all the agreed skills development programs in FY 2016- 2017 DLI #5: Each of the DLR#5.1: Mzuzu University has 1,020,000 DLR 5.1: 205,000 Participating Skills adopted all staff training plans and at Development Institution least 25% of staff have commenced achieves its staff training in FY 2014-2015 DLR 5.3: 255,000 development targets as set DLR#5.2: At least 20% of staff have DLR 5.4: 255,000 out in the Institution been trained and resumed work in FY Improvement Plan 2015-20DLR 5.5: 100,000 DLR#5.3: At least 50% of staff have been trained and resumed work in FY 2016-2017 DLR#5.4: At least 80% of staff have been trained and resumed work in FY 2017-2018 DLR#5.5: All staff have been trained and resumed work in FY 2018-2019 DLI #6: Each of the DLR#6. 1: Mzuzu University has 240,000 DLR 6.1: 50,000 Participating Skills carried out and published tracer DLR 6.2: Development Institution studies on on-going skills . carries out and publishes development programs in FY 2014- blank tracer studies on on-going 2015 and new skills DLR#6.2: Intentionally left blank DLR 6.3: 95,000 development programs DLR 6.4: 95,000 DLR#6.3: Mzuzu University has carried out and published tracer studies on on-going and new skills development programs in FY 2018- 2019 Honourable Goodall E. Gondwe -15- February 7, 2018 Amount of the Financing Disbursement Disbursement Linked Allocated Calculation Indicator Action to be Completed (expressed in SDR) Formula DLR#6.4: Mzuzu University has traced 50% of 2016 graduates through database creation in FY 2018-2019 Honourable Goodall E. Gondwe -16- February 7, 2018 E. Disbursement Linked Indicators under Part A of the Project- Technical, Entrepreneurial and Vocational Education and Training Authority (TEVETA) Amount of the Financing Disbursement Allocated Disbursement Linked Indicator Action to be Completed (expressed in SDR) Calculation Formula DLI #1: Each of the DLR#1.1: TEVETA has developed 650,000 DLR 1.1: 650,000 Participating Skills and adopted its Institution Development Improvement Plan in FY 2014- Institution has 2015 developed and adopted its Institution Improvement Plan DLI #2: Student The number of student enrolled in 745,000 DLR 2.1: 745,000 enrollment in agreed agreed skills development (a) 100% skills development programs increases by: programs increases (a) 80% and above of 6,500; (b) 90% (b) 70-79% of 6,500; (c) 80% (c) 60-69% of 6,500; (d) 60% (d) 50-59% of 6,500 DLI #3: Each of the Participating Skills Development Institution achieves its infrastructure development targets as set out in the Institution Improvement Plan DLI #4: Each of the DLR#4.1: TEVETA has 820,000 DLR 4.1: 205,000 Participating Skills developed ten (10) skills DLR 4.2: 205,000 Development development programs in Institution develops consultation with the private sector DLR 4.3: 205,000 and implements the in FY 2014-2015 DLR 4.4: 205,000 agreed skills DLR#4.2: TEVETA has developed development an additional five (5) skills programs in development programs and has consultation with the ponsvat n seto t implemented the ten (10) skills private sector Honourable Goodall E. Gondwe -17- February 7, 2018 Amount of the Financing Disbursement Allocated Disbursement Linked Indicator Action to be Completed (expressed in SDR) Calculation Formula development programs in FY 2015-2016 DLR#4.3: TEVETA has implemented thirteen (13) skills development programs in FY 2016-2017 DLR#4.4: TEVETA has implemented all the agreed skills development programs in FY 2017-2018 DLI #5: Each of the DLR#5.1: TEVETA has trained 725,000 DLR 5.1: 145,000 Participating Skills 100 master craftsmen in FY 2014- DLR 5.2: 145,000 Development 2015 Institution achieves DR53 8 0 Intits tiaff eve n DLR#5.2: TEVETA has trained DLR 5.3: 180,000 . 150 master craftsmen in FY 2015- DLR 5.4: 180,000 targets as set out in 2016 the Institution DLR 5.5 75,000 Improvement Plan DLR#5.3: TEVETA has trained 200 master craftsmen in FY 2016- 2017 DLR#5.4: TEVETA has trained 250 master craftsmen in FY 2017- 2018 DLR#5.5: TEVETA has trained 250 master craftsmen in FY 2018- 2019 DLI #6: Each of the DLR#6.1: TEVETA has carried 300,000 DLR 6.1: 60,000 Participating Skills out and published tracer studies on DLR 6.2: 60,000 Development on-going skills development Institution carries out programs in FY 2014-2015 DLR 6.3: Intentionally and publishes tracer DLR#62: TEVETA has caed left blank studies on on-going out and published tracer studies on DLR 6.4: 60,000 and new skills on-going skills development development programs in FY2015-2016 DLR 6.5: 60,000 programsFY205-01 DLR#6.3: Intentionally left blank DLR 6.6: 60,000 DLR#6.4: TEVETA has carried out and published tracer studies on on-going skills development programs in FY 2017-2018 Honourable Goodall E. Gondwe -18- February 7, 2018 Amount of the Financing Disbursement Allocated Disbursement Linked Indicator Action to be Completed (expressed in SDR) Calculation Formula DLR#6.5: TEVETA has carried out and published tracer studies on on-going and new skills development programs in FY 2018-2019 DLR#6.6: TEVETA has traced 50% of 2016 graduates through database creation in FY 2018-2019,