OFFICIAL DOCUMENTS The World Bank 1818 H Street N.W. (202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS December 15, 2017 Mr. Adylbek Kasymaliyev Minister of Finance Ministry of Finance 58, Erkindik Boulevard Bishkek 720040 Kyrgyz Republic Dear Mr. Kasymaliyev, Re: Grant No. TF0A3998 (Second Capacity Building in Public Financial Management Project) Additional Instructions: Disbursement I refer to the Letter Agreement ("Agreement") between the International Bank for Reconstruction and Development and International Development Association ("World Bank"), acting as administrator of grant funds provided by various donors under the Kyrgyz Republic Capacity Building in Public Financial Management II Multi-Donor Trust Fund, and Kyrgyz Republic (the "Recipient") for the above-referenced project, dated December 15, 2017. The Agreement provides that the World Bank may issue additional instructions regarding the withdrawal of the proceeds of Grant TF0A3998 ("Grant"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. The attached Disbursement Guidelines for Investment Project Financing dated February 2017, ("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 Grant 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 Grant: * Reimbursement * Advance * Direct Payment (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is 4 months after the Closing Date specified in the Agreement. Any changes to this date will be 1 notified by the World Bank. (iii) Disbursement Conditions (subsection 3.8). Please refer to the Disbursement Condition(s) in the Agreement. II. Withdrawal of Grant Proceeds (i) Authorized Signatures (subsection 3.1). A letter in the Form attached (Attachment 2) should be furnished to the World Bank at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank 1818 H Street, N.W. Washington, DC 20433 United States of America Attention: Lilia Burunciuc, Regional Director, Central Asia (ii) Applications (subsections 3.2 - 3.3). Please provide completed applications for withdrawal, together with supporting documents, through the World Bank's Client Connection, web-based portal, following the instructions for electronic delivery. In case the Recipient does not have internet access, the World Bank may permit the delivery of applications for withdrawal, together with supporting documents, in accordance with subsection 3.3, to the following address: The World Bank Radnicka cesta 80, 9th floor Zagreb, HR - 10 000 Croatia Attention: Loan Department (iii) Electronic Delivery (subsection 3.4) The World Bank may permit the Recipient to electronically deliver to the World Bank Applications (with supporting documents) through the World Bank's Client Connection, web-based portal. The option to deliver Applications to the World Bank 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 credentials ("SIDC") from the World Bank 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 World Bank agrees, the World Bank will provide the Recipient with SIDC 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.worldbankorg). The Recipient may continue to exercise the option of preparing and delivering Applications in paper form. The World Bank reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Recipient. 2 (iv) Terms and Conditions of Use of SIDC to Process Applications. 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 ofSecure Identification Credentials in connection with Use ofElectronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of S IDC") provided in Attachment 3; and (b) to cause such official to abide by those terms and conditions. (v) Minimum Value ofApplications (subsection 3.5). The Minimum Value of Applications for Direct Payment and Reimbursement is US$ 50,000. (vi) Advances (sections 5 and 6). * Type ofDesignated Account (subsection 5.3): Segregated * Currency ofDesignated Account (subsection 5.4): US Dollar (US$) * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5): a commercial bank / financial institution acceptable to the World Bank. * Ceiling (subsection 6.1): US$ 250,000 III. Reporting on Use of Grant 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 the Designated Account: o Statement of Expenditure (SOE) in the form attached (Attachment 4) for all expenditures / contracts; and " A designated account reconciliation statement (Attachment 5) and related bank statements. * 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, or more frequently if needed. IV. Other Important Information For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on the World Bank'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. 3 If you have not already done so, the World Bank recommends that you register as a user of the Client Connection website (https://clientconnection.worldbank.org). From this website you will be able to download Applications, monitor the near real-time status of the Grant, 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 World Bank by email at . If you have any queries in relation to the above, please contact Jasna Mestnik, Finance Officer, at jmestnik@worldbank.org, using the above reference. Yours sincerely, Lilia Burunciuc Regional Director Central Asia Attachments: 1. Disbursement Guidelines for Investment Project Financing, dated February 2017 2. Form for Authorized Signatures 3. Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation, dated March 1, 2013 4. Form of Statement of Expenditure (SOE) 5. Form of Designated Account Reconciliation Statement Prepared by: Jasna Mestnik, Finance Officer - WFALN Cleared with and cc: Mohammad Nadeem, Country Lawyer - LEGLE Gregory Kisunko, Task Team Leader - GGO 15 4 Attachment 1 Disbursement Guidelines for Investment Project Financing February 2017 k)WORLD BANK GROUP 5 CONTENTS PAGE 1. Purpose 1 2. Disbursement Methods 1 3. Hithdrawal of Funds from Financing Account 2 4 Supporting Documentation Requirements 3 5- Designated Accounts 4 6- Terms and Conditions Applicable to Advances 6 7 Ineligible Expenditures 7 8- Refunds 8 6 ,1[114\1-,\11[!-,. 11棚-・ (a) Reinibursemmt The World Back may re~ the borrower for exp~^ eh~ fot fi~ pm~ to t1w Fmex=g Ap~nt (~ expendå~) that the bot~ has prefinumed fram its own res~- (b) Ad~ce- The World Bank may adv=ce fimds h= the Få~ng Accomt toto a Deu~ Accowt a the hm~ to expenditures as dåL-y am incurved and for which suRxxting donm~ will be ~ded at a hser date (see section 5, Den~ Acco~ (c) Direct Pa~ The World Bwk may make pa~utsý at the boff~ 's ~K dnectly to a tiärd party (for Marupk ~ con~ CK conmItant) Ex d~ ~~ (d) Språgd Commutment- The World Bank ~ pay ammats to a &" party for ~ expenditmes i s~ coremitix~ts ~ ed into. in wntm& at the botrower's r~ and m terms and cond~ a~ berween the World Back and the bon~ 3. Witbdrawal of ~ £mm the ~wing Account 3-1 Anthoiized S~ rm Befbre fiznå from the Fi=ncåg Accom may be wi~wn or ccvm~ the audx~ nyrewe~ of the borrower (as desl~ in the Fåenemg Agr~ ~ fhmish to the World ~ decirmcaUy ~ the ~ Com~ w~ ~/chentconne~wodmObbag&~ or thr~ an Mdh~ up~ deugutma ~ the ~s) of the ~s) m*murd (a) to såga and ~ applicatäm fbr vättkirawal and äpplämt~ for i z~ cowmä~ (ooäxhvely, Applicaihorts) and (b) to =w Secure Iden"catLm fram the World Back The b=~ ~ noftfy the World Bank of any cb~ m u~ at~ ~ ~mcany m ~ ~tion or d~ an u~ mm~ åg~ &å~ ~ 3.2 r~ and Conätions of Vw of Senin, Idendfic«ion Cre~ Aft (~ ) to Procem Affb~ons. By dm~ offi~ to use SIDC and by chwsmg to nkmit the applicaum electr~. the b=~ confi= ds agmement to abåde by die t= md ~~ of use of SIDC-6 3.3 Whcadons. Applicat*= ~ be pm~ to the World Bank m such fam as ås ax~ to m= fluxis from the F~cing Accomt and =W in~ such mfonnatöm as the World Bank may ~~ m~ 3.4 Applieaftons and n~sary supportåg documents (see secbm 4 Supportff Docurnentäm Requåtments) s~ be submåW to the World Back eiecbwåcany, in a Te= and emå~ of me of SIDC me pundåd m &e DEburs~ l~ 3 � 'Fл+ 'д' � f6 'oWO � • :й � �f '-w.i м � 'oW� � � v� � n `� ' и м ; $�� �� � • � �•� � �� � .�� �� ��,� .�� а �. � � �. • �r �. � � �" � . �. � �й ,� � р� �� �,���`$� �м 5�s ��� '� 8 к1 � ' f� � д. � .r � � � �� •� �� � � �� �. � .� ы � '�� �� � � ,. •��� � q • 8 � � ��° �� 8 �'� � � � ����. � � � � 8 s� � � '� н � �, � � �. � � � � 8•�. � я � � ` � � �8 � � �� �������� � �� �'� � �+• � `� .8 а.. � ��� � • � , � � � �� 8 � i5.� �� � R 8 , � �� и �i � � и° м1 � я'�""'� 8 � � ��� �' .� �Ч� � ., � �,�' :� � � • � . �, � • � � � � � . s, м � � . .�,� . , � .�. я � � � � ��� �� � � � � ��• � � •� � • ��� � • ��� �� � ��. � . � �. • � �� � �••. �� . ��� � . �� ,�� � � � � �� �.� � �" ��•� �� • � �� �' . � � • ��� ,Ё.� � ��., �. �� � ��. •, я��, •� s � � � � �' , р � � ��М �� � .�� ,�.� • � 8 я �.� , •�. �, а � , � �� � � � � � � � а � � � я �е � � �� �� � � � � �� � � .,�� ��' �� �• �.� к�� �� �' . ,� . �� ��' ������� •� � �� �� �� ���: �•� 42 Fm ~ cmm"mts, tbe commaczd bank pm-.dm gts cøflfimuhm to dæ Wodd ~ ~ coadi~ fcr the vek~ of pa~ coun~ for wiýb&~ have been met 4-3 ripet of S~ ~g Dømmentaflox The Wodd re~ c~ of Ihe ~ dmmments mýdý ~ enmmd~ (R~ds) cw som~ r~ of m4~~ (Sw=my R~) m swh fxm and mb~m as the WcM Bæk my specify. Reconb iwlude sa& doeuments as invoiees wd ~_ Å Su~ Repeft may be ~ (a) the m~ una~ fi~r, ~ m~ un ffle Fm~g Apýeøm~ ~m. Fm~ Report) or (b) a sta~ of eqwn~ ehlpble aTen~ ~ &ring a ~ p~ (State~ of Eqmiåih"). In 4 the bommff is req~le for ~amg the ~ dmumats ^ýdý eligible eqxmdit~ and -akýn diem ~le foc ~ or inspecum 44 The Wodd Bank deten~ ihe ~ of mw~ documentatton dut die bmmw ~ pgo~ takff ~ conm~m the dmbwsmeiLt mediod usecL 1-e 5%3p~ &xumen~ may be the "b~- (a) For qpUcadons for Reimbursøm~, (1) la~ Fm~91 &puts, (u) Statements of Expen~ ar (iii) Recor& (b) For r~ pig mi the am ofA,*~ : (i) Interim Fin~ai Rtparts, (li) Staten~ ofExpæ~e, ar (lå) Recm