OFFICIAL DH DWoLD(,1"PCUMENTS May 10, 2019 Hon. Pohiva Tu'i'onetoa Minister of Finance Ministry of Finance Vuna Road PO Box 87 Nuku'alofa, Kingdom of Tonga Dear Minister, IDA Grant Number D448-TO (Pathway to Sustainable Oceans Project) Additional Instructions: Disbursement and Financial Information Letter I refer to the Financing Agreement between the Kingdom of Tonga (the "Recipient") and the International Development Association (the "Association") for the above-referenced Project. The General Conditions, as defined in the Financing Agreement, provide that the Recipient may from time to time request withdrawals of IDA Grant No. D448-TO ("Grant") in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Association may specify from time to time by notice to the Recipient. The General Conditions also provide that the Disbursement and Financial Information Letter may set out Project specific financial reporting requirements. This letter constitutes such Disbursement and Financial Information Letter ("DFIL"), and may be revised from time to time. I. Disbursement Arrangements, Withdrawal of Grant Funds, and Reporting of Uses of Grant Funds The Disbursement Guidelines for Investment Project Financing, dated February 2017, ("Disbursement Guidelines") are available in the Association's public website at https://www.worldbank.orz and its secure website "Client Connection" at https://clientconnection.worldbank.org. The Disbursement Guidelines are an integral part of the DFEL, and the manner in which the provisions in the guidelines apply to the Grant is specified below. (i) Disbursement Arrangements General Provisions (Schedule 1). The table in Schedule 1 sets out the disbursement methods which may be used by the Recipient, and conditions, information on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account. (ii) Electronic Delivery. Section 11.01 (c) of the General Conditions. The Association may permit the Recipient to electronically deliver applications (with supporting documents) through the Association's web-based portal (https://clientconnection.worldbank.or ) "Client Connection". This option may be effected if the officials designated in writing by the Recipient who are 1818 H Street NW - Washington, DC 20433 USA authorized to sign and deliver Applications 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". By signing the Authorized Signatory Letter, the Recipient confirms that it is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Association by electronic means. The Recipient may continue to exercise the option of preparing and delivering Applications in paper form. The Association reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Recipient. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Recipient 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 Association'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 Recipient must prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports ("IFR") for the Project covering the quarter. (ii) Audits. Each audit of the Financial Statements must cover the period of one fiscal year of the Recipient, commencing with the fiscal year in which the first withdrawal was made. The audited Financial Statements for each such period must be furnished to the Association not later than six (6) months after the end of such period. III. Other Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Association's website (http://www.worldbank.org/) and "Client Connection". The Association 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 Grant, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements, please contact the Association by email at askloans(&@worldbank.or . If you have any queries in relation to the above, please contact Chau-Ching Shen, Senior Finance Officer at cshen@worldbank.org, with copy to Joan Toledo, Finance Analyst at itoledo(aworldbank.org using the above reference. Sincerely, Michel Kerf Country Director Papua New Guinea & Pacific Islands East Asia and Pacific Region Page 2 of 7 Attachments 1. Statement of Expenditure (SOE) 2. Form of Authorized Signatory Letter With copies: Ministry of Finance St. George Government Building Nuku'alofa, Tonga ceo(a,finance.gov.to Ministry of Fisheries Vuna Road Sopu, Tonga ceo@tongafish.gov.to Page 3 of 7 Schedule 1: Disbursement Provisions Country Kingdom of Tonga Closing Date Section III.B.2 of Schedule 2 to the IDA Grant Recipient Ministry of Finance Financing Agreement. Number D448-TO Name of the Project Pathway to Sustainable Oceans Disbursement Four (4) months after the closing Project Deadline Date date. Subsection 3.7 ** Disbursement Methods Methods Supporting Documentation Section 2 (**) Subsections 4.3 and 4.4 (**) Direct Payment Yes Copy of records Reimbursement Yes Statement of Expenditure (SOE) (Attachment 1) Advance Yes Statement of Expenditure (SOE) (Attachment 1) Special Commitments Yes Copy of Letter of Credit Segregated; one (1) segregated designated account will be Fixed Type established under the Project and managed by the Ministry of Ceiling Finance. Financial Institution - To be established at a commercial bank or financial institution Tonga Pa'anga Name acceptable to the Association. Currency Frequency of Reporting Quarterly or more often if needed. Amount TOP2,000,000 Subsection 6.3 (**) The minimum value of applications for Reimbursement, Direct Payment and Special Commitment is TOP400,000. Authorized Signatures Letter Withdrawal and Documentation Applications: The World Bank The World Bank Level 19, 14 Martin Place 261 Floor, One Global Place CML Building 51 Avenue corner 25' Street Sydney NSW 2000, Australia Bonifacio Global Taguig Philippines Attention: Country Director Attention: Loan Department ** Sections and subsections relate to the "Disbursement Guidelines for Investment Project Financing", dated February 2017. Page 4 of 8 Attachment 1 - Statement of Expenditures . . ..... ... Grant # Payment made during the period Application from | .to _ Category # The following expenditures have been incurred during the retroactive financing period (please tick) Yes No Page # The following expenditures have been incurred during before the closing date of the credit (please tick) Yes No In case of DA payments 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Contrac Total Amount Prior Contract # t Date amount paid from Service Brief Review (Client currenc Invoice of of invoice % Designated Item Srovy Desription Contract Connectio a t number payme covered Fi e Expenditure Amount Account No Supplier / of the #or amount cover d Finance Amount Eligible claimed (which Remarks 0 Payee's n#fr (original nt b dbyte for Financing Name expenditure (YES or Prior + Applicatio Bank should be NO) Review amend n (net of equal to contracts) ment) retention) #11) TOTAL Supporting documents for this SOE retained at:(insert location) Prepared by: Authorized Representative: *A separate form should be used for each category Page 5 of 7 Attachment 2 - Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] International Development Association Level 19, 14 Martin Place CML Building Sydney NSW 2000 Australia Attention: Country Director IDA Grant No. D448-TO (Pathway to Sustainable Oceans Project) I refer to the Financing Agreement ("Agreement") between the Kingdom of Tonga ("Recipient") and the International Development Association (the "Association"), dated providing the above Financing. For the purposes of Section 2.03 of the General 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 and applications for a special commitment under this Financing. For the purpose of delivering Applications to the Association, 2[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 Association. 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 I Instruction to the Recipient: 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 Association. 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 Association. 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 Association. 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 Association. 5 Instruction to the Recipient: Add this paragraph if the Recipient 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 Association. Page 6 of 8 the Association by electronic means. In full recognition that the Association shall rely upon such 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 Recipient represents and warrants to the Association that it will cause such persons to abide by those terms and conditions.] This Authorization replaces and supersedes any Authorization currently in the Association records with respect to this Agreement. [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: Yours truly, / signed / Page 7 of 7