18-Dec-2023 Date: ___________________ H.E. Ahmed Shide Minister Ministry of Finance P.O. Box 1037 or 1905 Addis Ababa Federal Republic of Ethiopia Re: Ethiopia: IDA Credit 5816-ET (Transport Systems Improvement Project) Second Amendment to the Financing Agreement Excellency, We refer to the Financing Agreement dated June 15, 2016, between the Federal Republic of Ethiopia (“Recipient”) and International Development Association (“Association”) Credit Number 5816- ET (“Financing Agreement”) (as amended to date). We further refer to the request received from the Minister of Finance dated November 30, 2023, requesting the Association to restructure the Project and make certain changes to the Financing Agreement. We are pleased to inform you that the Association agrees to your request. Accordingly, the Association proposes to amend this Agreement as set forth in the Annex to this letter. All other provisions of this Agreement, except as herein amended, shall remain in full force and effect. Please confirm your agreement with this proposed amendment, on behalf of the Recipient, by countersigning and dating the two original copies of this amendment letter. Upon receipt by the Association of the countersigned and dated original copy, this amendment shall become effective as of the date of countersignature. The Association will disclose this Amendment Letter and related information in accordance with the World Bank’s Policy on Access to Information. By entering into this Amendment Letter, the Recipient consents to disclosure of this Amendment Letter and related information. Yours sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION ______________________________ Ousmane Dione Country Director for Ethiopia, Eritrea, Sudan and South Sudan Africa East Region -2- AGREED: FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA By: ___________________________ Authorized Representative H.E. Semereta Sewasew Name: _________________________ State Minister of Finance Title: __________________________ 21-Dec-2023 Date: __________________________ -3- Annex Second Amendment to the Financing Agreement 1. Schedule 1 (Project Description) to the Financing Agreement (“FA”) is deleted in its entirety and replaced with the following description: “SCHEDULE 1 Project Description The objective of the Project is to improve urban mobility and traffic management in Addis Ababa, Ethiopia. The Project consists of the following parts: Part A: Traffic Management and Road Safety in the City of Addis Ababa 1. Improving the traffic and safety management practices in the City of Addis Ababa, through: (a) Development and implementation of an intelligent transport system (ITS) for the City of Addis Ababa, including expansion of existing traffic signal and control systems; improvement of traffic operations centers; enforcement of traffic lights and associated penalty management system; improvement of associated civil works at intersections for selected streets in order to improve traffic flow and pedestrian safety; expansion of the enforcement cameras at existing as well as new intersections. (b) Developing a city-wide parking strategy and implementing a targeted paid on- street and off-street parking program to better manage current parking conditions. (c) Undertaking traffic management studies in order to improve traffic conditions. (d) Strengthening the capacity of TMA to carry out its assigned responsibilities, including, inter alia, designing and implementing appropriate traffic management measures and related training. (e) Improving traffic enforcement and traffic safety measures through the provision of appropriate equipment and traffic enforcement training for Addis Ababa traffic police. 2. Improving road and pedestrians’ safety interventions of selected corridors at identified locations and strengthening the capacity of Addis Ababa City Roads Authority (AACRA), through: (a) Implementing comprehensive improvements to selected streets in order to enhance traffic conditions and pedestrian amenities and safety, including, inter-alia: improving pavement and drainage; developing traffic management measures; providing or upgrading sidewalks; providing street lighting, bus stops and bus bays; and developing parking management measures within right of way. -4- (b) Developing and implementing pedestrian safety and community connectivity plans at selected locations. (c) Developing a citywide drainage master plan. (d) Strengthening institutional capacity of AACRA for, inter alia: (i) implementing improved asset management and pavement management systems; (ii) developing an improved maintenance and funding strategy; (iii) supporting the restructuring of AACRA and providing related capacity building activities; (iv) developing an improved road design manual and a road maintenance manual; and (v) improving contract management. 3. Improving traffic oversight, public transport services and systems and strengthening the capacity of PFTA and the Anbessa City Bus Enterprise (ACBE), through: (a) Strengthening the capacity of PFTA for undertaking tasks related to public transport planning, regulation, management, and service contracting. (b) Assisting in planning and establishing an integrated public transport system, including, inter alia: implementing related regulatory reforms to rationalize the provision of public transport services and strengthen the management of public transport operations. (c) Assisting in modernizing bus operations of ACBE to improve management, business and operational information systems, including, inter alia: designing and implementing an ITS and management systems for electronic fare collection, automatic vehicle location, depot, crew and bus scheduling, inventory and spares and bus network systems; and installation of on-board equipment for public transit buses. (d) Supporting the rehabilitation and improvement of ACBE’s operational conditions, including, inter alia, financing of a new fleet of buses, procurement of spare parts for buses as well as additional machinery and equipment for bus repair and maintenance, improvement of its vehicle maintenance workshops and depots. (e) Strengthening the capacity of ACBE to enable it to deliver its mandates and services effectively. 4. Supporting AACATB and the Transport Programs Management Office (TPMO) to improve their business planning and implementation, through: (a) Strengthening the capacity of AACATB and TPMO in planning and overseeing the implementation of urban transport reforms in the City of Addis Ababa. (b) Strengthening the capacity of TPMO staff to carry out their responsibilities, including monitoring and evaluation of the Project, and preparing future development initiatives. (c) Strengthening the capacity of TPMO in Project management. -5- Part B: Improvement of Integrated Urban Planning and Transport System 1. Supporting the Addis Ababa Land Development and Management Bureau (AALDMB) to develop land use and transport plans for the City of Addis Ababa. 2. Carrying out studies on transit-oriented developments and preparing plans and strategies to implement strategic transit-oriented developments initiatives, and the provision of advisory and technical assistance to enhance the capacity of AALDMB in these activities and in light-rail master planning. 3. Strengthening the capacity of AALDMB in carrying out its business functions. 4. Provision of technical assistance to improve the urban transport system in Addis Ababa, including designing solutions to address the challenges facing the Addis Ababa light rail system. Part C: Road Safety Interventions and Institutional Strengthening of Selected Federal Transport Institutions 1. Improving compliance with road transport rules and regulations nationally, through improved driver training, developing an integrated driver licensing and vehicle registration system, and strengthening MoTL’s capacity. 2. Improving federal traffic enforcement capability and strengthening the capacity of federal traffic police through provision of training, capacity building and institutional strengthening. 3. Strengthening the oversight capacity of MoTL and MoUI, through provision of: (i) training, capacity building and institutional strengthening for MoTL in urban transport management; and (ii) supporting MoUI in developing regulations and procedures for managing construction sites and enhancing its oversight responsibilities through training and capacity building.” 2. All references to “Federal Transport Authority” or “FTA”, respectively, in the Financing Agreement are hereby deleted and replaced with “Ministry of Transport Logistics” or “MoTL”, respectively. 3. Paragraph 2 of Section IV.A of Schedule 2 to the FA is amended to read as follows: “2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing (“Category”), the allocations of the amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: -6- Percentage of Amount of the Expenditures to be Financing Allocated Financed Category (expressed in SDR) (inclusive of Taxes) (1) Goods, works, non-consulting 202,533,400 100% services, consultants’ services, Training and Operating Costs under AACATB’s Respective Parts of the Project (2) Goods, works, non-consulting 10,000,000 100% services, consultants’ services, Training and Operating Costs under MoTL’s Respective Part of the Project (3) Refund of Preparation Advance 466,600 Amount payable pursuant to Section 2.07 of the General Conditions TOTAL AMOUNT 213,000,000 ” 3. Paragraph 2 of Section IV.B of Schedule 2 to the FA is amended to read as follows: “4. The Closing Date is December 31, 2025.” 4. The definitions in the Appendix are amended as follows: Paragraph 18 of the Appendix is amended to read as follows: “MoTL” means the Recipient’s Ministry of Transport Logistics or any successor thereto. A new paragraph 19 is inserted to read as follows and subsequent paragraphs renumbered accordingly. “MoUI” means the Recipient’s Ministry of Urban and Infrastructure or any successor thereto.