OFFICIAL THE WORLD BANVOCUMENTS IBRD * IDA I WORLD BANKGROUP MARTIN RAISER Country Director - Brazil Latin America and the Caribbean Region December 1, 2017 Mr. Aldenir Paraguassfj Director-President Fundagdo Pr6-Natureza (Funatura) SCLN 107, Bloco B, S/201 Asa Norte Brasilia - DF, 70743-520 Brazil Dear Sirs: BRAZIL. ProCerrado Federal Project Grant No. TFOA0093 Amendment to the Grant Agreement Please refer to the Grant Agreement for the above-captioned Project between Fundagdo Pr6-Natureza - Funatura ("Recipient") and the International Bank for Reconstruction and Development ("World Bank"), acting as administrator of grant funds provided by the Department for Environment, Food and Rural Affairs United Kingdom of Great Britain and Northern Ireland ("Donor") under the Brazil Cerrado Climate Change Mitigation Trust Fund (BCCCMTF), dated April 27, 2015 ("Grant Agreement"). Please note that capitalized terms used in this letter ("Amendment Letter") and not defined herein have the meaning ascribed to them in the Grant Agreement. In response to your letter No. 065/2017 dated November 17, 2017, and MMA letters Oficio No. 045/2017/DFCD/SMCF/MMA dated May 19, 2017, and Oficio No. 53140/2017-MMA dated November 6, 2017, wherein a request is made to amend the Grant Agreement to include the Bank's Procurement Regulations of July 2016; reallocate funds between Categories; and extend the Project Closing Date by 5-months, the World Bank hereby proposes to amend the Grant Agreement, as follows: 1. Section 2.02 of Article II of the Annex to the Grant Agreement is hereby amended as follows: "2.02. Project Execution Generally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out the Project with the technical collaboration of MMA and ICMBio in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) this Article II; (c) the Project Operational Manual; (d) the Technical Cooperation Agreement; and (e) either, for Project activities financed out of the proceeds of the Grant before the date of countersignature of this Amendment Letter: (i) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, and revised in January 2011; (ii) the Procurement Guidelines as defined in paragraph 2.06.B.(a)(i); and (iii) the Consultant Guidelines, as defined in paragraph 2.06.B.(a)(ii); or, SCN Quadra 2 Lote A - Ed. Corporate Financial Center, 70 Andar - 70712-900 - Brasilia - DF, BRASIL Tel 55 (61) 3329-1000 Fax 55 (61) 3329-1010 for Project activities financed out of the proceeds of the Grant on or after the date of the countersignature of this Amendment Letter: (i) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, revised in January 2011 and as of July 1, 2016; and (ii) the Procurement Regulations as defined in paragraph 2.06.A; all in a manner acceptable to the World Bank." 2. Section 2.06 of Article II of the Annex to the Grant Agreement is hereby amended to read in its entirety as follows: " 2.06. Procurement A. Procurement Regulations All goods, works, non-consulting services and consulting services required for the Project, to be financed out of the proceeds of the Loan, and for which the procurement process starts on or after the date of the countersignature of this Amendment Letter, shall be procured in accordance with the requirements set forth or referred to in the "World Bank Procurement Regulations for Borrowers under Investment Project Financing", dated July 1, 2016 ("Procurement Regulations") and the provisions of the Procurement Plan. B Procurement Guidelines and Consultant Guidelines (a) General. All goods, works, non-consulting services and consultants' services required for the Project and to be financed out of the proceeds of the Grant and for which the procurement process started before the date of the countersignature of this Amendment letter, shall be procured in accordance with the requirements set forth or referred to in: (i) "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011, revised July 2014 ("Procurement Guidelines"), in the case of goods, works and non-consulting services; (ii) "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011, revised July 2014 ("Consultant Guidelines") in the case of consultants' services; and (iii) the provisions of this Section, as the same shall be elaborated in the procurement plan prepared and updated, by the Recipient for the Project in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines ("Procurement Plan"). The procurement plan shall be prepared, and updated at least annually or as required to reflect actual project implementation needs and improvements in institutional capacity. (b) Definitions. The capitalized terms used in the following paragraphs of this Section to describe particular procurement methods or methods of review by the World Bank of particular contracts, refer to the corresponding method described in Sections II -2- and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. (c) Particular Methods of Procurement of Goods, Works, and Non-consulting Services (i) Except as otherwise provided in sub-paragraph (ii) below, goods, works, and non-consulting services shall be procured under contracts awarded on the basis of National Competitive Bidding, including the method known as "pregdo eletronico" as provided in the Member Country's law No. 10520 of July 17, 2002, under any e-procurement system acceptable to the Bank, subject to the following additional procedure, namely, that the bidding documents shall be acceptable to the Bank. (ii) The following methods, other than National Competitive Bidding, may be used for procurement of goods for those contracts which are specified in the Procurement Plan: (A) Shopping (including the method known as "pregdo eletr6nico", as provided in the Member Country's Law No. 10520, of July 17, 2002, under any e-procurement system acceptable to the World Bank); and (B) Direct Contracting. (d) Particular Methods of Selection of Consultants' Services (i) Except as otherwise provided in item (ii) below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. (ii) The following methods, other than Quality- and Cost-based Selection, may be used for the procurement of consultants' services for those assignments which are specified in the Procurement Plan: (A) Quality-based Selection; (B) Selection under a Fixed Budget; (C) Least Cost Selection; (D) Selection based on Consultants' Qualifications; (E) Single-source Selection of consulting firms; or (F) Selection of Individual Consultants. (e) Review by the World Bank of Procurement Decisions. The Procurement Plan shall set forth the thresholds over which contracts will be subject to Prior Review by the World Bank. All other contracts shall be subject to Post Review by the World Bank." 3. Article III of the Annex to the Grant Agreement is hereby amended to read in its entirety, as follows: "Article III Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) the Standard Conditions; (b) this Section; and (c) such additional instructions as the World Bank may specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated February 2017, as revised from time to time by the World Bank and as made applicable to this Agreement pursuant to such instructions), to finance 100% Eligible Expenditures as set forth in the -3- following table. The table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant ("Category"), the allocations of the amounts of the Grant to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Category Amount of the Grant Percentage of Expenditures Allocated to be Financed (expressed in USD) (exclusive of Taxes) (1) Goods, non-consulting 3,308,000 100% services, consultants' services, and Training (2) Works 270,000 100% (3) Operating Costs: 100% (a) MMA 241,000 (b) Funatura 430,000 (c) Auditing 51,000 TOTAL AMOUNT 4,300,000 For the purposes of this Table, the term: (a) "Operating Costs" means the costs incurred for the purposes of project implementation, including: (i) operation and maintenance of vehicles; (ii) incremental office equipment and supplies; (iii) shipment costs (whenever these costs are not included in the cost of goods); (iv) office supplies; (v) rent for office facilities; (vi) utilities; (vii) travel and per diem costs for administration and technical staff carrying out supervisory and quality control activities; (viii) communication costs, including advertisement for procurement purposes; (ix) administrative and operational support staff; and (x) auditing. (b) "Training" means the costs associated with the preparation and carrying out of seminars and workshops, including event logistics, transportation, catering, material preparation, course enrollment fees, per diems and other costs directly related to the preparation and implementation of seminars and workshops. 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawal shall be made for payments made prior to the date of countersignature of this Agreement by the Recipient, except that withdrawals up to an aggregate amount not to exceed $100,000 equivalent may be made for payments made during the 12 months immediately prior to the date of the countersignature of the Grant Agreement, for Eligible Expenditures under Category (3). 3.03. Withdrawal Period The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is May 30, 2018." -4- Please confirm your agreement with the foregoing amendment by signing and dating this Amendment Letter in the spaces provided below. All other provisions of the Grant Agreement except as amended through this Amendment Letter shall remain in full force and effect. This Amendment Letter shall be executed in two (2) counterparts each of which shall be an original. The provisions set forth in this Amendment Letter shall become effective as of the date of the countersignature upon receipt by the World Bank of one fully executed original of this Amendment Letter. Please also note that the approved Restructuring Paper will be disclosed on the World Bank's external website. Sincerely, INTERNATION FOR RECONSTRUCTIO E OPMIENT artin Raiser Director Brazil Latin America and the Caribbean Region AGREED: FundaVa-o Pr6-Nat - Funatura By: , Authorize IMsentative Name: ALDENIR CHAVES PARAGUASSU Title: Diretor Presidente Date: 05/12/2017 Enclosures: (1) First Amendment to the Disbursement Letter of the same date as this Amendment letter, together with the "World Bank Disbursement Guidelines for the Projects" dated February 2017 (2) "Procurement Regulations" dated July 1, 2016 (3) "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants" dated October 15, 2006 and revised in January 2011 and as of July 1, 2016 -5- cc: Sr. Otaviano Canuto, Diretor Executivo para o Brasil, Banco Mundial Sra. Diana Margarita Quintero Cuello, Diretora Executiva Adjunta para o Brasil, Banco Mundial Sr. Marcello Estevão, Secretário, SAIN/MF, gabinete.df.sain@fazenda.gov.br Sr. Jair Schmitt, MMA/SMCF, jair.schmitt@mma.gov.br, dpcd@mma.gov.br - 6-