, THE WORLD BANK -A I WORDANKGROUP February 13, 2023 His Excellency Mr. Aboubakar Nacanabo Minister of Economy, Finance and Forecasting Ministry of Economy, Finance and Forecasting 03 BP 7008 Ouagadougou 03 Burkina Faso Re: Burkina Faso Transport Sector Modernization and Corridor Trade Facilitation Project Credit Number 5941-BF Second Amendment to the Financing Agreement Excellency: We refer to the Financing Agreement between Burkina Faso (the "Recipient") and the International Development Association (the "Association") dated March 3, 2017 (the "Financing Agreement"), as amended. We also refer to your letter dated November 30, 2022, requesting an amendment to the Financing Agreement. We are pleased to inform you that the Association concurs with your request. Consequently, the Financing Agreement is amended as set forth in this letter ("Amendment Letter"). 1. Part 2(a) and 2(h) of Schedule I are amended to read as follow: "(a) Provision of support and technical assistance to design an operational framework for the truck fleet operational program and a recovery mechanism; including: (i) a study on development of a sustainable mechanism for the truck fleet renewal program; (ii) a study on the Truck Scrapping scheme; (iii) strengthening audit and monitoring capabilities of road transport companies; (iv) provision of required equipment to improve DGTTM management capacity; and (v) provision of Matching Grants to eligible transport operators for the purchasing of trucks by transport operators eligible for the truck fleet renewal program. (b) "Provision of support for the establishment of a truck renewal scheme, through: (i) the provision of technical assistance needed to establish a line of credit aimed at providing financing to participating truck owners in Truck Scrapping to purchase Newer Trucks; (ii) establishing and capitalizing of a Credit Guarantee account within SOFIGIB to issue credit guarantees to truck owners to purchase Newer Trucks, including the financing of an endowment for a Partial Portfolio Credit Guarantee ("PPCG"); (iii) supporting the selection of an operator to be responsible for Truck Scrapping; (iv) support the design and establishment of the institutional and implementation arrangements for the key stakeholders that will be involved in the truck renewal scheme, as well as monitoring of banks-operated transactions; and (v) the provision of Scrapping Premiums" -2- 2. Section LA of Schedule 2 is amended to include the following paragraphs: 9L5. PPCG The Recipient shall establish and maintain at all times during Project implementation the PPCG technical committee ("PPCG Technical Committee"). (a) The PPCG Technical Committee shall be responsible for providing guidance on the operations of the PPCG and ensuring that it implements its terms of reference as defined in the SOFIGIB Agreement. (b) The PPCG Technical Committee shall meet quarterly,and shall have a composition satisfactory to the Association. 6. PPCG Fund To facilitate the carrying out of Part 2.(b)(ii) of the Project, the Recipient shall maintain a PPCG Fund, with purpose, method of operation, staffing and resources satisfactory to the Association for the purpose of, inter alia, issuing PPCG to Participating Financial Institutions ("PFIs") on the basis of eligibility criteria and terms and conditions satisfactory to the Association, all in accordance with the Recipient's laws and regulations, the PPCG Procedures Manual and the Anti-Corruption Guidelines applicable to recipient of the Financing proceeds other than the Recipient. 7, PPCG Areement Upon selection of a PF[ in accordance with the criteria and procedures established.in the PPCG Procedures Manual, the Recipient shall, through SOGIFID, enter into an agreement with each PFI under terms and conditions acceptable to the Association ("PPCG Agreement"), which shall include, inter alia: (a) PPCGs shall be provided exclusively to mitigate the credit risk on loans/credits to eligible transport operators, and that such loans will at all times be underwritten, priced, signed, documented, monitored and serviced in accordance with the relevant PFI's credit guidelines and using its standard documentation; (b) no PPCG shall be issued except in accordance with criteria, terms and conditions set forth in the PPCG Agreement including, inter alia, in strict compliance with the PPCG Manual; and (c) the obligation of the relevant PF1 to comply with the pertinent provisions of the PPCG Manual. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate, terminate, waive or fail to enforce, or permit to be assigned, amended, abrogated, terminated, waived or failed to be enforced, any PPCG Agreement, or any provisions included or referred to therein." -3- 3. Section IB of Schedule 2 is amended to read as follows: "B. Project Manuals I. Project Implementation Manual 1. The Recipient shall update, in accordance with terms of reference acceptable to the Association, the project implementation manual, containing detailed arrangements and procedures for: (a) institutional coordination and day-to-day execution of the Project as well as the roles and obligations of the Implementing Agencies; (b) monitoring, evaluation, reporting and communication; (c) eligibility criteria, detailed rules and procedures for identification, registration and selection of selected towns, (d) the selection criteria and procedures for the provision of Matching Grants including the template form of the Grant Agreement; (e) administration, financial management and accounting including the hiring of the procurement expert; and (f) such other administrative, technical and organizational arrangements and procedures as shall be required for purposes of implementation of the Project. 2. The Recipient shall afford the Association a reasonable opportunity to review the project implementation manual and shall thereafter adopt said manual as shall have been approved by the Association ("Project Implementation Manual" or "PIM"). 3. The Recipient shall carry out the Project in accordance with the PIM and shall not amend, abrogate, waive or permit to be amended, abrogated or waived, the said manuals, or any provision thereof, without the prior written consent of the Association. 4. In the event of any inconsistency between this Agreement and the PIM, the provisions of this Agreement shall prevail. iI. PPCG Procedures Manual 1 The Recipient shall prior to the provision of any PPCG under Part 2.(b)(ii) of the Project: (a) finalize and thereafter adopt a PPCG Procedures Manual ("PPCG Procedures Manual") under terms and conditions acceptable to the Association; (b) implement the PPCGs under Part 2.(b)(ii) of the Project in accordance with the PPCG Procedures Manual; and (c) not amend any not assign, abrogate or waive any provisions of the PPCG Procedures Manual without the prior approval by the Association. 2. The PPCG Procedures Manual shall include rules and procedures governing all aspects of the PPCG Fund, including, inter alia: (a) the PPCG criteria and process for guaranteeing eligible credits; (b) the PPCG endowment/capitalization; and (c) all implementation details, including selection and approval processes for selected Participation Financial Institutions, contractual arrangements for the PPCG, environmental and social screening, evaluation and supervision procedures and guidelines. -4- 3. In the event of a conflict between the provisions of the PPCG Procedures Manual and this Agreement, the provisions of this Agreement shall prevail. III. Matching Grants 1 . For purposes of Part 2. (a) (v) of the Project, the Recipient shall, through the PIU, make Matching Grants to eligible transport operators in accordance with eligibility criteria and procedures acceptable to the Association and set forth in the PIM. 2. The Recipient shall make Matching Grant under a Grant Agreement with the respective eligible transport operators on terms and conditions approved by the Association, which shall include the following: (a) the Recipient shall obtain rights adequate to protect its interests and those of the Association, including the right to: (i) suspend or terminate the right of the eligible transport operator to use the proceeds of the Matching Grant, or obtain a refund of all or any part of the amount of the Matching Grant then withdrawn, upon the eligible transport operator's failure to perform any of its obligations under the Grant Agreement; and (ii) require each eligible transport operator to: (A) provide, promptly as needed, the resources required for the purpose; (C) procure the goods and services to be financed out of the Matching Grant in accordance with the provisions of this Agreement; ( (E) (1) prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association, both in a manner adequate to reflect the operations, resources and expenditures related to the Matching Grant; and (2) at the Association's or the Recipient's request, have such financial statements audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association, and promptly fumish the statements as so audited to the Recipient and the Association; (F) enable the Recipient and the Association to inspect any relevant records and documents; and (G) prepare and furnish to the Recipient and the Association all such information as the Recipient or the Association shall reasonably request relating to the foregoing." 4 The table under Section IVA.2 ofSchedule 2 to the Financing Agreement Is revised as set forth in the Annex to this Amendment Letter. 5. Section V.B of Schedule 2 is amended to read as follows: B. Counterpart Funding -5- Without limitations to Section 5.03 of the General Conditions, the Recipient shall allocate and avail an amount equivalent to three million Dollars ($3,000,000) for the financing of Scrapping Premiums under Part 2. (b) (v) of the Project (the "Counterpart Funds")." 6. The following definidons are added and placed in alphabetical order under the Definidons Secdon of the Appendix to the Agreement to read as follows and the rest of the definitions are renumbered accordingly to maintain alphabetical order" ""Counterpart Funds" means the funds made available by the Recipient for the financing of the Scrapping Premiums." ""Matching Grants" means a grant to be made out of the proceeds of the Financing under Part 2. (a) (v) of Schedule 1." ""Newer Truck" means trucks manufactured within ten (10) years of purchase with a motor model with emissions standards aligned with Euro-5 or above." ""Partial Portfolio Credit Guarantee" or PPCG" means a partial portfolio credit guarantee issued by the PPCG Fund in accordance with Section J.A.6 of Schedule 2 to this Agreement." ""Participating Financial Institution" or ("PF") means, a financial institution established and operating pursuant to the laws of the Recipient, which has met the eligibility criteria specified in the PPCG Procedures Manual and as a result has entered into a PPCG Agreement with the Recipient through SOFIGIB; and "Participating Financial Institutions" means, collectively, more than one Participating Financial Institution." ""PPCG Agreement" means an agreement entered or to be entered into between the Recipient, through SOFIGIB, and a Participating Financial Institution for the provision of a Partial Portfolio Credit Guarantee in accordance with Section LA.7 of Schedule 2 to this Agreement; and "PPCG Agreements" means, collectively, more than one PPCG Agreement." ""PPCG Procedures Manual" means the manual in form and substance satisfactory to the Association and the Recipient containing, inter alia, all implementation details, selection and approval processes for eligible transport operators, contractual arrangements for the PPCG and follow-up activities related to the PPCG, as such manual may be amended from time to time with the prior written approval of the Association and the Recipient through SOFIGIB." '"'Scrapping Premium" means a payment to an eligible beneficiary, to be financed by the Counterpart Funds, under criteria established in the Guarantee Operational Manual; and "Scrapping Premiums" means the plural thereof." AU other provisions of the Financing Agreement, except as herein amended, shall remain in full force and effect. -6- Please confirm your agreement to the foregoing by signing and dating two originals, retaining one original for your records and returning the other original to the Association. Upon receipt by the Association of the original of this Amendment Letter countersigned by you, in a manner satisfactory to the Association, this Amendment Letter will become effective as of the date of its countersignature. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION Clara -de Sousa Country Director for Burkina Faso Western and Central Africa Region CONFIRMED: BURKINA FASO By:. Authorized Representative Ct at 27 EV 0 Namle:J\ Ls1 -L_ r4f\CAi.NklZ i C Date: 2 7 FEV 2023 -7- ANNEX Category Amount of the Percentage of Financing Allocated Expenditures to be (expressed in Euros) Financed (inclusive of Taxes) (1) Goods, non-consulting services, 9,915,304.05 100% consultants' services, Training, and Operating Costs for the Project except Part 2(b-ii) and Matching Grants under Part 2. (a) (v) (2) Goods, non-consulting services, 8,384,695.95 69% consultants' services, Training, Matching Grants under part 2. (a)(v), and Operating Costs for Part 2(b-ii) under the Project TOTAL AMOUNT 18,300,000.00