The World Bank 1OF top (202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washin t ,. .433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION f DOCUMENTS Cable Address: INDEVAS .. September 10, 2014 H.E. Nikola Spiric Minister of Finance and Treasury Trg BiH 71000 Sarajevo Bosnia and Herzegovina Excellency: Re: IDA Financing 5444-BA (Drina Flood Protection Project) Additional Instructions: Disbursement I refer to the Financing Agreement between the International Development Association (the "Association") and Bosnia and Herzegovina (the "Recipient") for the above-referenced project, dated September 10, 2014. The Agreement provides that the Association may issue additional instructions regarding the withdrawal of the proceeds of financing 5444-BA ("Financing"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. The attached World Bank Disbursement Guidelines for Projects, dated May 1, 2006, ("Disbursement Guidelines") (Attachment 1), are an integral part of the Disbursement Letter. The manner in which the provisions in the Disbursement Guidelines apply to the Financing is specified below. Sections and subsections in parentheses below refer to the relevant sections and subsections in the Disbursement Guidelines and, unless otherwise defined in this letter, the capitalized terms used have the meanings ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangements (i) Disbursement Methods (section 2). The following Disbursement Methods may be used under the Financing: * Reimbursement * Advance * Direct Payment * Special Commitment (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is four months after the Closing Date specified in the Financing Agreement. Any changes to this date will be notified by the Association. (iii) Disbursement Conditions (subsection 3.8). Please refer to the Disbursement Condition(s) in the Financing Agreement. II. Withdrawal of Financing Proceeds (i) Authorized Signatures (subsection 3.1). An authorized signatory letter in the Form attached (Attachment 2) should be furnished to the Association at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank Vienna Office Praterstrasse 31 - 21st Floor 1020 Vienna Austria Attention: Ellen Goldstein, Country Director (ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed (a) applications for withdrawal, together with supporting documents, and (b) applications for special commitments, together with a copy of the commercial bank letter of credit, to the address indicated below: The World Bank Radnicka cesta, 9th floor. Zagreb, HR - 10 000 Croatia Attention: Loan Department (iii) Electronic Delivery (subsection 3.4) The Association may permit the Recipient to electronically deliver to the Association Applications (with supporting documents) through the Association's Client Connection, web-based portal. The option to deliver Applications to the Association by electronic means may be effected if: (a) the Recipient has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its officials who are authorized to sign and deliver Applications and to receive secure identification devices ("Tokens") from the Association for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Recipient have registered as users of Client Connection. If the Association agrees, the Association will provide the Recipient with Tokens for the designated officials. Following which, the designated officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection (https://clientconnection.worldbank.org). 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. (iv) Terms and Conditions of Use of Tokens to Process Applications. By designating officials to accept Tokens 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 ofSecure Identification Devices in connection with Use of Electronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of Tokens") provided in Attachment 5; and (b) to deliver the Terms and Conditions of Use of Tokens to each such official and to cause such official to abide by those terms and conditions. 2 (v) Minimum Value ofApplications (subsection 3.5). The Minimum Value of Applications is Euro 200,000 for Designated Account A, and Euro 200,000 for Designated Account B, for direct payments and special commitments. (vi) Advances (sections 5 and 6). Designated Account A - for Part A of the project to be implemented by the Republika Sprska : * Type of Designated Account (subsection 5.3): Segregated * Currency of Designated Account (subsection 5.4): Euro * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5): A commercial bank acceptable to the Association * Ceiling (subsection 6.1): Euro 1,000,000 Designated Account B - for Part B of the project to be implemented by the Federation of Bosnia-Herzegovina: * Type of Designated Account (subsection 5.3): Segregated * Currency of Designated Account (subsection 5.4): Euro * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5). A commercial Bank acceptable to the Association * Ceiling (subsection 6.1): Euro 1,000,000 III. Reporting on Use of Financing Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each application for withdrawal as set out below: * For requests for Reimbursement and for reporting eligible expenditures paid from either Designated Accounts: o List of payments against contracts that are subject to the World Bank's prior review, in the form attached (Attachment 4) o Records - "Statements of Expenditure (Attachment 3A) with supporting documentation - evidencing eligible expenditures (e.g., copies of receipts, supplier invoices) for payments for works against contracts valued at Euro 750,000 equivalent or more; for goods against contracts valued at Euro 250,000 equivalent or more; for consultant services against contracts valued at Euro 3 75,000 equivalent or more for firms and at Euro 35,000 equivalent or more for individual consultants, and o Statement of Expenditure without supporting documentation in the form attached (Attachment 3B) for all other expenditures / contracts, including training and incremental operating costs, and o A Designated Account reconciliation statement * For requests for Direct Payment: records evidencing eligible expenditures, e.g., copies of receipts, supplier invoices (ii) Frequency of Reporting Eligible Expenditures Paid from the Designated Account (subsection 6.3): Quarterly IV. Other Important Information For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on the Association's public website at https://www.worldbank.org and its secure website "Client Connection" at https://clientconnection.worldbank.org. Print copies are available upon request. From the Client Connection website, you will be able to prepare and deliver Applications, monitor the near real-time status of the Financing, and retrieve related policy, financial, and procurement information. If you have not already done so, the Association recommends that you register as a user of the Client Connection website (https://clientconnection.worldbank.org). From this website you will be able to prepare and deliver Applications, monitor the near real-time status of the Financing, and retrieve related policy, financial, and procurement information. All Recipient officials authorized to sign and deliver Applications by electronic means are required to register with Client Connection before electronic delivery can be effected. For more information about the website and registration arrangements, please contact the Association by email at . If you have any queries in relation to the above, please contact Jose Janeiro, Senior Finance Officer at jianeiro@worldbank.org using the above reference. Yours sincerely, Anabe Abreu Country Manager World Bank Office, Sarajevo 4 Attachments 1. World Bank Disbursement Guidelines for Projects, dated May 1, 2006. 2. Form for Authorized Signatures. 3. Form of Records - "Summary Sheet/Statement of Expenditures" (attachment 3A - with supporting documents) evidencing eligible expenditures; "Statement of Expenditure" in the form attached (Attachment 3B - without supporting documentation); "Statement of Expenditure" in the form attached. 4. Form of Payments against Contracts Subject to the Bank's Prior Review. 5. Terms and Conditions of Use of Secure Identification Devices in connection with Use of Electronic Means to Process Applications and Supporting Documentation, dated January 20, 2010. Prepared by: Jose Janeiro Cleared with and cc: Adam Shayne, Country Lawyer Guy Alaerts, Daniel Gerber, co-TTLs 5