MARYAM SALIM Country Manager Cambodia 14-Jun-2024 __________________ H.E. Dr. Aun Pornmoniroth Deputy Prime Minister Minister of Economy and Finance Ministry of Economy and Finance Street 92, Sangkat Wat Phnom Khan Daun Penh, Phnom Penh Kingdom of Cambodia Re: IDA Credit No. 75480-KH (Skills for Better Jobs Project) Additional Instructions: Disbursement and Financial Information Letter Excellency: I refer to the Financing Agreement between the Kingdom of Cambodia (“Recipient”) and the International Development Association (“Association”) for the above-referenced Project. The General Conditions, as defined in the Financing Agreement, provide that the Recipient may from time-to-time request withdrawals of Credit amounts from the Credit Accounts in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Association may specify from time to time by notice to the Recipient. The General Conditions also provide that the Disbursement and Financial Information Letter may set out Project specific financial reporting requirements. This letter constitutes such Disbursement and Financial Information Letter (“DFIL”) and may be revised from time to time. I. Disbursement Arrangements, Withdrawal of Credit Funds, and Reporting of Uses of Credit Funds The Disbursement Guidelines for Investment Project Financing, dated February 2017, (“Disbursement Guidelines”), are available in the Association’s public website at https://www.worldbank.org and its secure website “Client Connection” at https://clientconnection.worldbank.org. The Disbursement Guidelines are an integral part of the DFIL, and the manner in which the provisions in the Disbursement Guidelines apply to the Credit is specified below. (i) Disbursement Arrangements  General Provisions (Schedule 1). The table in Schedule 1 sets out the disbursement methods which may be used by the Recipient, [and conditions], information on registration of authorized signatories, processing of Withdrawal Applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account(s). 2 (ii) Withdrawal Applications (Electronic Delivery) The Recipient will deliver Withdrawal Applications (with supporting documents, “Applications”) electronically through the Association’s web-based portal “Client Connection” at https://clientconnection.worldbank.org. This option will be effected after the officials designated in writing by the Recipient who are authorized to sign and deliver Applications have registered as users of “Client Connection”. The designated officials will 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 supporting documents to the Association by electronic means. The Recipient may exercise the option of preparing and delivering Applications in paper form on exceptional cases (including those where the Recipient encounters legal limitations), and which were previously agreed with the Association. 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 Association's public website at https://www.worldbank.org and “Client Connection”; and (b) to cause such official s to abide by those terms and conditions. II. Financial Reports and Audits (i) Financial Reports. The Recipient shall through the Ministry of Labor and Vocational Skills Training (MLVT) and the Skills Development Fund (SDF), each prepare and furnish to the Association not later than forty-five (45) days after the end of each semester, separate Interim Unaudited Financial Reports (“IFRs”) for the Project covering the semester. (ii) Audits. Each audit of the Project Financial Statements (which shall include both the incentivized performance- based financing to the Technical Training Institutes and the Component 3 managed by the Skills Development Fund (SDF) must cover the period of one (1) fiscal year of the Recipient, commencing with the fiscal year in which the first withdrawal was made. The audit of the project shall be carried out by a private audit firm recruited by the Ministry of Economy and Finance (MEF) via bundle audit arrangements with a term of reference acceptable to the World Bank. The audited Financial Statements and Management Letter for each such period must be furnished to the Association through the Client Connection website by MLVT and SDF respectively not later than six (6) months after the end of such period. III. Other Important Information. For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Association’s public website and “Client Connection”. The Association 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 Credit, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements, or if you have any queries in relation to the above, please contact the Association by email at askloans@worldbank.org using the loan name and number: Skills for Better Jobs Project, IDA Credit No. 75480-KH, as applicable. 3 Yours sincerely, ______________________________ Maryam Salim Country Manager Cambodia Attachments 1. Form of Authorized Signatory Letter 2. Form of Statement of Expenditures (SOE) 3. Designated Account Reconciliation Statements 4. Two Quarters of Cash Forecast With copies: H. E. Pen Thirong Under Secretary of State Ministry of Economy and Finance (MEF) Street 92, Sangkat Wat Phnom Khan Daun Penh, Phnom Penh Kingdom of Cambodia Telephone: 855-23-724-664 Facsimile: 855-23-427-798 Email: thirong_pen@mef.gov.kh H.E. Hing Sideth Delegate of the Royal Government in Charge as Director General, Directorate General of Technical Vocational Education and Training and Project Director Ministry of Labour and Vocational Training (MLVT) Building No.3, Russian Federation Blvd., Sangkat Teuk Laak, Khan Toul Kork, Phnom Penh Kingdom of Cambodia Telephone: 012 658 546 Email: sidethhing@gmail.com Mr. Ky Sokkim Chief Executive Officer Skills Development Fund (SDF) 12110 OCIC Blvd, Phnom Penh Kingdom of Cambodia Telephone: +855 23 901 583 Email: sokkimky@gmail.com 4 Schedule 1: Disbursement Provisions A. Basic Information Country Kingdom of Cambodia Closing Date Section III A of Schedule 2 to the IDA Recipient’s Ministry of Economy and Finance Financing Agreement Credit Number 75480-KH Representative Name of the Project Skills for Better Jobs Project Disbursement Four (4) months after the Closing Deadline Date Date B. Disbursement Methods and Supporting Documentation Disbursement Methods Methods Supporting Documentation Direct Payment Yes Records (Supplier Invoices/Copy of Receipts) Reimbursement Yes Statement of Expenditure, in the format provided in Attachment 2 of the DFIL Advance (into a Designated Yes Statement of Expenditure, in the format provided in Attachment 2 of the DFIL Account) Designated Account Reconciliation Statement, in the format provided in Attachment 3 and related bank statement Special Commitments Yes Copy of Letter of Credit C. Designated Account(s) Segregated Accounts: Type and Management Unit DA-A - to be managed by MLVT. Ceiling Variable DA-B - to be managed by SDF. Financial Institution - Name National Bank of Cambodia Currency U.S. Dollars Quarterly Based on the two quarters of cash flow Frequency of Reporting1 Amount forecast D. Minimum Value of Applications The minimum value of applications for Direct Payment, Reimbursement, and Special Commitment is USD 100,000 equivalent. E. Authorized Signatures Withdrawal and Documentation Applications The form for Authorized Signatory Letter is provided in Attachment 1 of this letter. All Applications and its supporting documentation, and Authorized Signatory Letter will be electronically sent via the Bank’s system “Client Connection”. F. Additional Instructions  Reimbursement of pre-financed start-up procurement activities: To expedite project implementation, the Borrower through MLVT/PMU and the SDF shall be allowed to pre-finance costs of start-up procurement activities related to procurement transactions including, but not limited to, advertising expenses for Expression of Interest (EOI), Request for Proposals (RFPs), Invitation for Bid, etc., incurred between the date of signing the Financing Agreement and effectiveness. The Bank shall reimburse the borrower for such eligible start-up costs in an amount not exceeding eight thousand United States dollars (US$8,000), and payment shall be made into any bank account of borrower’s choice. 5  Disbursement conditions under Category 2 of the IDA Credit for the Industry Linkage Development Plan (ILDP) financing under Part 1.2(c) of the Project: The ILDP Implementation Manual (ILDPIM) will be submitted for the WB’s no objection and the disbursement effectiveness will be made from the date of the Bank’s no objection letter.  Disbursement conditions under Category 4 of the IDA Credit for the SDF Training Financing under Part 3.2 of the Project: The SDF Manual will be submitted for the WB’s no objection and the disbursement effectiveness will be made from the date of the Bank’s no objection letter. The funding mechanisms and disbursements arrangements will be detailed in the SDF Manual.  Category 5 of the IDA Credit for Emergency Expenditures under Part 5 of the Project: CERC is a “zero” component, and no withdrawal can be made under it until all required and agreed conditions as spelt out in the Financing Agreement are met. In that case, the DFIL will be revised, or a supplemental letter will be issued, if needed, when funds are allocated from time to time to Category 3 of the withdrawal of proceeds table in Section III A of Schedule 2 to the Financing Agreement. Other  Counterpart Fund accounts: MLVT and SDF shall each open a separate Designated Account (DA) (advance account in US dollars) at the National Bank of Cambodia to receive their share of counterpart funds from the National Treasury. The counterpart funds will be disbursed to the respective PMU and SDF- PIU to cover only staff costs for government personnel who are working on the project and annual audit fees. 6 Attachment 1 – Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [City] [Country] [DATE] International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Attention: Mariam J. Sherman, Country Director, East Asia and Pacific Region Dear Ms. Sherman: Re: IDA Credit No. 75480-KH Skills for Better Jobs Project I refer to the Financing Agreement (“Agreement”) between the International Development Association (“Association”) and the Kingdom of Cambodia (“Recipient”), providing the above Credit. For the purposes of Section 2.03 of the General Conditions as defined in the Agreement, any 1[one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Recipient to sign Withdrawal Applications (“Application”) [and applications for a special commitment] under this [Credit] [Grant]. For the purpose of delivering Applications to the Association, including by electronic means, 2 [each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient, acting 3[individually] 4[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the Association. This confirms that the Recipient is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Association by electronic means. In full recognition that the Association shall rely upon such representations and warranties, including without limitation, the representations and warranties contained in the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation (“Terms and Conditions of Use of SIDC”), the Recipient represents and warrants to the Association that it will cause such persons to abide by those terms and conditions. 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 footnote in final letter that is sent to the Association. 2 Instruction 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 that is sent to the Association. 3 Instruction to the Recipient: use this bracket if any one of the authorized persons may sign; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. 4 Instruction to the Recipient: use this bracket only if several 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 Association. 7 This Authorization replaces and supersedes any Authorization currently in the Association records with respect to this Agreement. [Name], [position] Specimen Signature: ____________________ [Name], [position] Specimen Signature: ____________________ [Name], [position] Specimen Signature: ____________________ Yours truly, / signed / ______________ 8 Attachment 2 – Statement of Expenditures 9 Attachment 3 – Designated Account Reconciliation Statement 10 Attachment 4 – Two Quarters of Cash Flow Forecast 11