13-Mar-2024 Date: ________________________ Honourable Simplex Chithyola-Banda, M.P. Minister of Finance and Economic Affairs Ministry of Finance and Economic Affairs P.O. Box 30049 Capital City Lilongwe Malawi Re: Equity with Quality and Learning at Secondary Project (Credit No. 6379-MW) Amendment 3 to the Financing Agreement Dear Honourable Minister: We refer to the Financing Agreement dated July 25, 2019, as amended, between the Republic of Malawi (“Recipient”) and the International Development Association (“Association”) (“ Financing Agreement”), and the additional financing agreement between the Recipient and the Association dated July 19, 2021, in support of the Equity with Quality and Learning at Secondary Project (“Project”). We also refer to your letter dated December 7, 2023, requesting to revise the Results Framework (RF) including reformulation and redefinition of indicators, baseline, and target values of affected indicators. Please note that the capitalized terms used in this letter (“Amendment Letter”) and not defined herein have the meanings ascribed to them in the Financing Agreement. We are pleased to inform you that the Association agrees to your request and proposes to amend the Financing Agreement as follows: [remainder of page intentionally left blank] -2- 1. The table under Part II of Schedule 4 to the Financing Agreement is hereby amended as follows: Performance Action to Be Completed Amount of the Amount Based Financing Allocated per Conditions Allocated Per PBC for the PBC Disbursement Calculation (expressed in SDR) (expressed in SDR) PBC 3. PBC 3.1 PBC 3. PBC 3.1. Complimentary Secondary education 7,956,000 720,000 streams for delivery streams (open delivery of secondary schools, double- secondary shift, ODL, public private education partnership schools) and established financing formula/model reviewed, and clear policy direction provided to inform expansion plan PBC 3.2 PBC 3.2 Secondary education 2,160,000 sustainable expansion plan finalized and endorsed for implementation PBC 3.3-3.6 PBC 3.3-3.6 SDR451 disbursed for every 5,076,000 additional student enrolled to the complementary stream of secondary education up to a maximum of SDR5,076,000 corresponding to 11,250 additional students in the pilot stream PBC 4. PBC 4.1.1 PBC 4. PBC 4.1. Percentage of ICT enabled examination 7,848,000 360,000 public secondary management system schools developed conforming to PBC 4.1.2 PBC 4.1.2 class size range of 40-60 in form school selection digitized 360,000 1 in the 13 with flexibility in selected Districts admissions at school level established -3- PBC 4.2-4.6 PBC 4.2-4.6 SDR1,018,286 disbursed for 7,128,000 every percentage point improvement on the proportion of schools meeting the prescribed class size in form 1 up to a maximum of SDR7,128,000 corresponding to 50% of CDSS meeting this norm PBC 5. PBC 5.1.1 PBC 5. PBC 5.1.1 Number of 100% compliance to civil 21,234, 240 720,000 schools expanded works procurement or upgraded procedures that enhance based on agreed value for money minimum PBC 5.1.2. Environmental PBC 5.1.2 infrastructure and social management 1,296,000 package plans (ESMPs) for each site cleared PBC 5.2.1 PBC 5.2.1 100% contracts signed 3,654,720 PBC 5.2.2 PBC 5.2.2 Civil works commenced at 3,600,000 90% of the PBC 5.3-5.4 PBC 5.3-5.4 SDR105,235 disbursed for 10,523, 520 every school that is completed up to a maximum of SDR10,523,520 corresponding to 100% completion of civil works PBC 5.5 - 5.6 PBC 5.5-5.6 SDR19,440 disbursed for 1,440,000 every school that is well maintained up to a maximum of SDR1,440,000corresponding to 75% of the CDSS meeting this norm -4- All the terms and conditions of the Financing Agreement that have not been amended herein shall remain unchanged and in full force and effect. Please indicate your agreement to the foregoing, on behalf of the Recipient, by countersigning and dating this letter. This amendment shall become effective as of the date of its countersignature. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION By: ________________________ Hugh Riddell Country Manager for Malawi Eastern and Southern Africa Region AGREED: REPUBLIC OF MALAWI By__________________________________ Authorized Representative Simplex Chithyola Banda Name _______________________________ Hon Title ________________________________ 21-Mar-2024 Date ________________________________