THE WORLD BANK lilJrti. I WOR.l.D BANl(GROUP t'-\ ex.LI J 9 1 lDB H. E. Nfoolas Kazadi Kadima Minister of Finance Ministry of Finance K.inshasa-Gombe Democratic Republic of Congo RE: Trust Fund No. TF0B~277 Mai-Ndombe Emission Reductions Program Disbursement and Financial Information Letter (DFIL) Excellency: .. I refer to the Emission Reductions Payment Agreement ("ERPA"} between the Democratic , Republic of Congo (the "Recipient" or as referred to in the ERPA, "Program Entity"}, and the International Bank for Reconstruction and Development ("IBRD"}, acting as trustee of Tranche A of the Carbon Fund of the Forest Carbon Partner:;hip Facility (No. TF0B9277) ("Tranche A ERPA"). This ERPA provides that the· World Bank may issue additional ins'tructions regarding application for payments under the,ERP A. This Disbursement and Financial Information Letter ("DFIL"), as revised from time to time, constitutes the additional instructions. The Disbursement Guidelines Jot Investment Project Financing dated February. 2017. ("Disbursement Guidelines") are an integral part of the Disbursement and Financial Information Letter and are available in the World Bank's public website at https://worldbank.org. The manner in which the provisions in the Disbursement Guidelines apply to payments under the ERPA is specified below. Sections and subsections in parenthesis 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 meaning .ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangements, Withdrawal of Funds,· and Reporting of Uses of Funds. General Provisions. The table in Schedule 1 sets out th,e disbursement methods which may be used by the Recipient, .infonnation on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications, and advances), and instructions on supporting documentation. Electronic Delivery. Reference for the Conditions ofEfil'A (FCPF), Section 4.05. 1 The Recipient will electronically deliver applications (with supporting documents) through the World Bank's web-based portal (https://clientconnection.worldbank.org)"Client Connection". This· option may be affected if the officials designated in writing by the Recipient who are authorized to sign and deliver Appli~ations 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 2 TF0B9277 supporting documents to the World Bank by electronic means. The World Bank may permit the Recipient 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. 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 World Bank'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) The recipient will prepare consolidated financial reports in a form agreed by the World Bank providing information on the use ofERPA payments by all beneficiaries. The report is made 6 months after the first ERP A payments made by the Bank and annually afterward and due 45 days after the end of each reporting period. (ii) 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 Bank 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 World Bank's website and "Client Connection". The World Bank 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 payment, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements or any queries in relation to the above, please contact the World Bank by email at wfaldtf@worldbank.org. Yours sincerely, Albert Zeufack Country Director Democratic Republic of Congo Africa Region 1818 H Street NW · Washington, DC 20433 USA 3 TF0B9277 Attachments: l. Form of Authorized Signatories. 2. Confurriation signed by the Climate Change Fqnd Management Unit (SCCFM team) i.e; Preauthorization of payment This confirmation will be attached with the form 2380 . (Withdrawal Application) as part of the supporting documentation. 3. ER Transfer Form- The format is provfried in Schedule 3 to the ERP A. This form will be uploaded with the form 2380 (Withdrawal Appiication) as part of the supporting doc~entation. This form is not applicable to Advance Payments. · 1818HStreetNW · Washington,DC2043J USA 4 TF0B9277 Schedule t: Disbursement Provisions Basic Information Country and Recipient Democratic Republic of Congo Termination Stated in section 10.01 of the Date Emission Reduction TF No. Payment Agreement. Number TF0B9277 Name of the Project Mai-Ndombe Emission Disbursement Same as termination date. Deadline Date Reductions Program Subsection 3.6 • Disbursement Methods, and Supporting Documentation (Section 4•) Disbursement Methods Methods Supporting Documentation Reimbursement i.e . actual Ye s . Confirmation signed by the Bank's SCCFM team i.e., pre-authorization of payments Emission Reductions Payment Advance Payments {Future ER payments) Yes . • . Transfer Form signed by the Recipient Format of confirmation signed by the Bank's SCCFM team i.e., pre-authorization of payments Use of advanced funds will be justified with actual Emission Reductions Payments, and if there is an outstanding balance that the Trustee requests for a refund, that balance w ill be refunded to the Bank by.the Termination Date. Advances and Designated Account (Section• 5 and 6 •) Flnonciol Institution A financial institution or commercial bank Amount USD34S,330 acceptable to the World Bank Same as stated in Schedule 2 of the ERPA Frequency of Reporting Type of the Designated Account Pooled DA for Tranche A TF No. TF0B9277 and Tranche B TF No. TF0B9276 Authorized 5lpatures {Subsection 3.1 and 3.2••J The form for Authorized SignotOMS Letter Is prrNlded In Attachment 1 of this letter Wlthdrowol and DoanMnCotlon Applcoflo,• (Subsection 3.3 and 3.4 .., Authorized Signatories Letter: Withdrawal and Documentation Appllcatloi"ls: All Withdrawal Applications and its supporting documentation will be The World Bank submitted 1818 H Street, N.W. electronically through the system Client Connection . Washington, DC 20433, USA If accepted in paper by the World Bank, it will be submitted to the following address : Attention: Country Director The World Bank No. 11, Taramani Main Road Taramani, Chennai - 600 113 India Attention : WFACS Department • Sections and subsections relate to the "Disbursement Guidelines for Investment Project Financing", dated February 2017. 5 TFOB9277 Additional Instructions (a) If requested by the Program Entity, the Trustee of Tranche A of the Fund.m ay make advance payments on behalf Of the Program Entity in the amount of the Tranche A Pro Rata Share for any fees, charges, .costs or other expenses charged by a Registry system or any other relevant authority or entity in relation to Registration, issuance and forwarcUng of Contract ERs orAddltional ERs or the .ER Transfer, payable by the Program.Entity in accordance with Section s.04(a) ofthe General Conditions ("Advanced Expense Payment" ). (b} ance payment byTr_ Whereas the. Tranche B ERPA provides for an upfront aclv_ anche B of the Fund to the Program Entity in the amount of USO 1,060,000 ("Tranche B Upfront Advance Payment''), no Upfront Advance Payment is being provided by Tranche A.of the Fund under this Agreement. (c) In additlon to Section 4.04(a} and starting at the end of Reporting Period 1, the Program Entity may request the Trustee to make Ol)e or more regular interim adyance payment(s) ("Regular interim Advance Payment"), provided that any payment by the Trustee of any Regular Interim Advance Payment shall be subject-to the following .conditions ; (i} The Program Entity has fulfilled all Conditions of Effectiveness referred to in Section 3.01 and .specified in Schedule 1 to this Agreement, in form and substance satisfactory to the Trustee following consultations with Tranche A Participants, and the Act. ion .Plan provided under No.5 of such C:onditions of Effectiveness has been implemented in full by the Program Entity, (ii) The Program Entity has fulfilled the interim ER Program implementation progress milestones for the Regular Interim Advance Payment installment, as specified in Schedule '6 to this Agreement, and has documented its fulfillment of the respective interim ER Program implementation progress milestones, by submission of an.interim progress report ("Interim Progress Report'"} to the Trustee, in form and substance satisfactory to·the Trustee following consultations with Tranche A Participants . As a- separate annex to the Interim Progress Report the Program Entity shall provide: A. Evidence satisfactory to the Trustee that the Program Activity fs being implemented in accordance with the Safeguards Plans and that the Benefit Shari B. ng Plan h;is been implemented in acc_ ordance with its terms· (including any feedback and grievance redress mechanism described in any of such documents); and C. Information on the generation and/or enhancement of Priority Non-Carbon Benefits (to the extent not yet provided for under any relevant Safeguards Plan . if applicable} under the ER Program, (Iii) Regular Interim Advance Payment instalments to be made by Tranche A of the Fund shall be limited to the Tranche A Pro Rata Share of the following amounts : A. Atthe end of Reporting Period 1 USO 1,060,000; B. One year prior to the end of Reporting Period 2: USO 1,060,000 C. At the.end of Reporting Period .2: USD 1,060,000 and D. One year after the end of Reporting Period 2: USD 1,060,000. 6 TF0B9277 IV) o fthe Tranche B Upfront Advance Payment and any Regular Advance.Payment instalment made under this Agreem·ent and the The sum • Tranche B ERPA shall not exceed USD 5,300,000 ("Upftont/Regular Interim Advance Payment C:ap'!). (V) Upon, all conditions for each Regular Interim Advance Payment.instalment under subparagraphs (i), (ii), {ill) and (iv) above being fulfilled, in form and substance satisfactory to the Trustee ofTr;rnche A of the Fund, .the Trustee .shall notify the program Entity accordingly and shall disburse the Tranche A Pro Ratc1 Share of the Regular Interim Advance Payment installment to the Program Entity within thir•v (:30) calendar days following receipt by the Progra rn Entity. of such notification. (d) Without prejudice to any rights of the Trustee Article XYI of the General ConditiQns (Events of Default and . Remedies) and with respect to the periodic payments due for transferred Contract ERs from Reporting Periods 1 and 2 under this Agreement and the Tranche B ERPA, if tlJe respective aggregate actual gross periodic payments under this Agreement and the Tranche B ERPA are less than USD 1,060,000 the Program Entity may request the Trµstee to top up the respective aggregate actual gross period it payment amount by an amot./ilt equal to the difference between the actual gross periodic payment amou,nt under this Agreement and the Tranche B ERPA and USD 1,060,Q00 provided that.the top up payment by Tranche A of Fund shall be limited to the Tranche A Pro Rata Share of such payment Such top up payment(s) shall be deemed part of the Regular Interim Advance Payments referred to n ditions listed .in s· above and shall be subject to the co· e ction 4.04(c) and the Upfront/Regular Interim Advance Payment Cap and the Upfront/Regular/Additional Interim Advance Payment Cap (see below), but shall .not require .·speciflc mil_ estones or Interim Progress Report(s). (e) In addition to Section.4.04(11), Sectiori.4.04(c) and Section 4.04(d), in the eventthat the funding secured in accordance with condition no.6 of a Schedulel {Conditions of Effectiveness cifSale and Purchase) does not materialize.or ihe related funding:is not disbursed in 'timely manner for reasons other than the Program Entity's non,compllahce.with the respective underlying funding requirements. the Program Entity may request the Trustee to· _ make an additional interim ·advance payment ("Additional Interim Advance Payment") in the atnount ofup to USD 2,200,000 provided·that the.Additional Interim Advance Payment shall be made by the Trustee subject-to the following conditions: .(i) The Trustee determines, following consultations with Tranch_ e A Participants while taking into account the financial heeds of the Program En.tity and the particular clrcumst_ ances.for the secured. fundt'ng not materiali~ing or' not disbµ,rslng in a timely .manner, that the cprresponding requirements for the Additional 111terim Advance Payment .ate fulfilled; · (ii) Any.Additional interim Advance Payment to be made by Tranche A of the Fund shall be· limited to the Tranche A. Pro Rata Share of such payment; (iii) The Program Entity has fulfilled all conditions of Effectiveness referred to in Section 3.01 and .specified in Schedule .1 to this Agreement, In form nd substance satisfactory to the Trustee following consultations with Trj:inche A Partlcipants, and the Action Plan pr:ovlded under- No.S of such a_ Cohditions of Effectiveness has been implemented In full by the P,rogram Entity, (iv) Specific milestones or- an Interim Progress Report are ni:>t required·for-this Additional Interim Advance Payment; and (v) Upon all condit_ ions for the Additional Interim Advance Payment under subparagraphs (i) (ii), {iii) and (Iv) above being fulfilled, in form and substance satisfactory to. the trustee of Tranche A of the .Fund, the Trustee shall notify the Program Entity accordingly and shall. disburse the Tranche A Pro Ri;!ta Share of the Additional Interim Advance Payment to the Program Entity within thirty (30) calenda~ days following receipt by the Program Entity . o f such notification. · 7 TF0B9277 (f) hi any-case, the sum of the Tranche B UpfrontAdvance Payment, any Regular Interim Advance Payment instalment and the Addhional Interim Advance Payment made under this Agreement-and the Tranche B ERPA shall not exceed USD 7,500,000 ("Upfront/Regular/Additional Interim Advance Payment Cap"}. (g) In addition to.Section 4.04(a}, Section 4.04(c), Section 4.04(d)- and Section 4.04(e), the Program Entity may request the Trustee to make an ER advanc.e payment ("ER Advance Payment"} to the Program, Entity for Contract ERs and/or Additional ERs generated by the ER Program during a Reporting Period, as evidenced in the ER Monitoring Report for that Reporting Period and pending subsequent final Verification and ER Transfer; provided that any payment of any ER Advance Payment shall be made by the Truste. it lons: e subject to the following cond_ (i} The Trustee determi nes, i_ n Its sole and absolute discretion following consultations with Tranche -A Participants, whether it is willing to make an ER Advance Payment; (ii) The ER Advance Payment to be made by Tranche A of the Fund shall be limited to the Tranche A Pro Rata Share of such payment; (Hi) The Program Entity has fulfilled all Conditions of Effectiveness refer.red to in Section 3.01 and specified in Schedule I to this Agreement, in form and Substance Satisfactory to the Trustee following consultations with Tranche A Participants, and the Action Plan provided undet No.S of such Conditions of Effectiveness has been implemented in full by the Program Entity; (iv} Upon all the conditions for the ER Advance Payment under subparagraphs·(i), (ii} and (iii) above being fulfilled, in form and substance satisfactory to the Trustee of Tranche A of the Fund, the Trustee shall notify the Program Entity accordingly and shall disburse the Tranche A Pro.Rata Share of the ER.Advance. Payment to the Program Entity within thirty (30) calendar days following receipt by the Program Entity of suc(:l notification; and M In the event that the subsequent final Verification Report for that Reporting Period verifies an ER amount that is less than the amount that was reported in the ER Monitoring Report and the value of such Verified amount of Contract ERs and/or Additional ERs, (i.e. Unit Price/Exercise Price (as applicable.} XContract ERs/Additional ERs (as applicable) generated during that Reporting Period (as evidenced in the final Verification Report} Is less than the ER Adva nee·Payment, the Trustee of Tranche A of the Fund sha If be entitled to recover the Tranche A Pro Rata Share of the overpaid amount from any future Periodic Payment to be made to the Program Entity under this Agreement for transferred ERs or, ifno such subsequent Perfoqic Payment wlll be due, request prompt repayment of such overpaid amount from the Program Entity. (h) The Trustee of Tranche A ofthe Fund shall be entitled to deduct in full any Advance Payment(s) made to the Program Entity by Tran.che A of the Fund as applicable, from Periodic Payments for transferred Contract ERs/Additional ERs under this Agreement provided that (l} with respect to the Periodic Payment due for transferred ERs from Reporting Period 11 no deduction shall take place, (2) with respect to the Periodic Payment due for transferred ERs from Reporting Period 2, (a) if the aggregate actuai gross.periodic payments under this.Agreement and the Tranche B ERPA are USO 1;0.60,000 or less; no deduction shalHake place, or (b} if the aggregate actual gross periodic payments llr\der this Agreement and the Tranche B ERPA are more than USO 1,060,000 the deduction will be limited to the Tranche A Pro Rata Share of an amount that allows aggregate actual net periodic payments under this Agreement and the Tranche B ERPA to be made to the Program Entity of at least USD 1,060,000 (minus any potentially overpaid ER Advance Payment amount under this Agreement and the Tranche B ERPA). 8 TF0B9277 (i) In the event that any outstanding Advance Payment made under this Agreement cannot be · recovered 1n full from the last Periodic Payment due for transferred Contract ERs/Additiooal ERs to be rnad.e under this ,Agreement, the Trustee may (1) request prompt repayment of the outstanding Advance Payment amount from the Program Entity to the Trustee or (2) in its sole and .absolute discretion and following consultations with Tranche A Participants, waive its right to recover any such outstanding·Advarice. Payment amount. · {J) Notwithstanding Section S.03(c) of the General Conditions, legql title to any Contract ERs and/or Additional ERs for which an .Advance Payment has peen made shell transfer to the Trustee upon completion ofthe.ER Transfer of such ERs to the Trustee. . Attachment 1 - Form of Authorized Signatory Letter [Letterhead] [Street address) [City] (Country] (DATE] The World Bank, 1818 H Street, N. W. Washington, D.C 20433 USA Attention: --- RE: Trust Fund No TF0B9277 ctions Program Mai-Ndombe Emission Redu. I refer to the Emission Reductions Payment Agr~ment ("ERP A") between the Democratic Republic of Congo (the "Recipient" or as referred to in the ERPA, ..Program Entity''), and the International Bank of Reconstruction and Development (the "World Bank acting as trustee of Forest Carbon Partnership Facility for the TF0B9277. For the purposes of Section 4.05 of the Tranche A ERP A (FCPF), any 1[one] of the persons whose authenticat:ed specimen signatures ,ippear below is authorized on behalf of the Recipient to sign applications for withdrawal under the aboveERPA. For the. purpose of delivering Applications to the World Bank, 2 [each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient1 acting 3(individually) 2[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the World Bank. ~ (This confirms that the Recipient is authorizing such persons to accept Secure Identification Credentials (SIDC) an.d to deliver the Applications and supporting documents to the 1 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 /ootir.ote in finai letter that is sent to ihe World Bank. 2 1nstruction 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 thalis sent to the World Bank. 3 Instruction to the Recipient: Use this bnicket if any one of the authorized persons may sigh; if !hi~ is not applkable, please delete. Please delete this footnote in fin a/Jetter that is sent to the World Bank 2 Jnstruction to the Recipient: Use this bracket only if sever.ii 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 World Bank. 1 Instructioµ to the Recipient: Add this paragraph if the Recipient wishes· tp 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 irifinal letter that is sent to the World Barik. Attachment 2 - Confirmation's Template THE WORLD BANK I WORU> QROUP [Date] [Name, title, address of representative of Recipient as specified in Emission Reductions Payment Agreement] Conf1rmation to Authorize Payment (payment reference) Dear [Madam/Sir] , We refer to the Emission Reductions Payment Agreement (" ERPA") between Democratic Republic of Congo ("Recipient") and the International Bank of Reconstruction and Development ("IBRD"), as Trustee of the Forest Carbon Partnership Facility (''Trustee"), dated [date] ("ERP A") [and as amended on [[date/s]] (([TF0B9277]) for the [Mai-Ndombe Emission Reductions Program] ("Project")). We are pleased to inform you that the Trustee confirms the tenns and conditions of the ERPA have.been met for [payment type] of [currency] [gross payment amount] [less [currency] [total deduction]] for a net payment of [currency] (net payment amount] [for reporting period [reporting period]] ([payment request ID]). Through Client Connection, please provide: (1) a signed withdrawal application (form 2380); (2) this confirmation letter; [and (3) a copy of the completed Transfer Form in Attachment 3, signed and on Recipient's letterhead] . Sincerely, [Name] Manager Climate Change Fund Management Unit cc. Project Implementing Agency(ies) cc. Task Team; Finance Officer, WF ACS Regional Team Lead; Country Lawyer/LEGE ; SCCFM EMG-Service desk; others as appropriate. ,. I • I Attachment 3- Transfer Form4 EMISSIONS REDUCTION TRANSFER FORl."1 Provided in Schedule J to the ERP A Mai-Ndombe Emission Reductions Program 4 This Form is not applicable to Advance Payments