NAJY BENHASSINE Country Director, Pakistan South Asia Region 05-Jan-2023 _____________ Dr. Kazim Niaz, Secretary Ministry of Economic Affairs Islamic Republic of Pakistan Islamabad, Pakistan Re: IDA Credit No. 7237-PK (Sindh Integrated Health and Population Project) Additional Instructions: Disbursement and Financial Information Letter Dear Dr. Niaz: I refer to the Financing Agreement between Islamic Republic of Pakistan (“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 Financing amounts from the Financing Account in accordance with the Disbursement and Financial Information Letter (“DFIL”), 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 and may be revised from time to time. I. Disbursement Arrangements, Withdrawal of Financing Funds, and Reporting of Uses of Financing Funds The Disbursement Guidelines for Investment Project Financing, dated February 2017 (“Disbursement Guidelines”), are available on 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, information on registration of authorized signatories, processing of Withdrawal Applications (including the minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account. (ii) Withdrawal Applications (Electronic Delivery) The Recipient shall deliver Withdrawal Applications (with supporting documents, “Applications”) electronically through the Bank’s web-based portal “Client Connection” at https://clientconnection.worldbank.org. This option will be effective 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 shall deliver Applications electronically by completing Form 2380, which is accessible through “Client Connection.” By signing the Authorized Signatory Letter, which can be delivered manually or electronically, 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 Bank by these 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 Bank. By designating officials to use SIDC and 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 the Use of Electronic Means to Process Applications and Supporting Documentation, available in the Bank's public website at https://www.worldbank.org and “Client Connection” at https://clientconnection.worldbank.org; and (b) to cause such officials to abide by those terms and conditions. II. Financial Reports and Audits (i) Financial Reports The Recipient shall through DoH prepare and furnish to the Bank not later than forty-five (45) days after the end of each calendar semester interim unaudited financial reports (“IUFRs”) for the Project covering the semester. The Recipient shall, through DoH, cause the UN agency to provide Financial Reports as stipulated in the agreement between the Recipient and the UN agency in a timely manner. (ii) Audits Each audit of the Financial Statements shall cover the period of one (1) 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 shall be furnished to the Bank by the Recipient through DoH not later than six (6) months after the end of such period. The Recipient shall, through DoH, cause the UN agency to provide the project audit report as stipulated in the agreement between the Recipient and the UN agency in a timely manner. III. Other Important Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Bank’s public website at https://www.worldbank.org and “Client Connection” at https://clientconnection.worldbank.org, the Bank recommends that you register as a user of “Client Connection.” From this website, you will be able to prepare and deliver Authorized Signatory Letters and Withdrawal Applications, monitor the near real-time status of the Loan 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 Bank by email at askloans@worldbank.org using the loan name and number: Sindh Integrated Health and Population Project, 7237-PK. Yours sincerely, ______________________________ Najy Benhassine Country Director, Pakistan South Asia Region Attachments 1. Form of Authorized Signatory Letter 2. Interim unaudited Financial Report (IUFR) With copies: Planning and Development Board Government of Sindh Tughlaq House Karachi, Sindh Islamic Republic of Pakistan info@sindh.gov.pk Schedule 1: Disbursement Provisions Basic Information Country Islamic Republic of Pakistan Section III.B.2 of Schedule 2 to the IDA Closing Date Recipient Ministry of Economic Affairs Financing Agreement. Credit 7237-PK Sindh Integrated Health and Disbursement No. Name of the Project Four months after the closing date Population Project Deadline Date Disbursement Methods and Supporting Documentation Disbursement Methods Methods Supporting Documentation Direct Payment Yes Copy of records (e.g., invoices and receipts) Reimbursement Yes Interim unaudited Financial Report (IUFR) in the format provided in Attachment 2 of the DFIL Advance (into a Designated Yes Interim unaudited Financial Report (IUFR) in the format provided in Attachment 2 of the DFIL Account) Special Commitments No Designated Account Type Segregated – managed by the PMU in DoH Sindh Ceiling Variable Financial Institution - National Bank of Pakistan through State Bank of Pakistan Currency USD Name Based on forecasts for six months as Frequency of Reporting Same as the IUFRs, semi annual Amount provided in the semi-annual IUFRs Minimum Value of Applications (subsection 3.5) The minimum value of applications for, Reimbursement and Direct Payment is USD 10,000 equivalent. Authorized Signatures Withdrawal and Documentation Applications The form for Authorized Signatories Letter is provided in Attachment 1 of this letter The form for Authorized Signatory Letter is provided in Attachment 1 of this letter. The ASL and all Withdrawal Applications with their supporting documentation will be submitted electronically via the Association’s “Client Connection” system. Additional Information 1. Disbursement of Advance method: Designated Account (DA) established as per the procedure of Revolving Fund Assignment Account (RFAA) issued by Ministry of Finance, Federal Government for World Bank funding a. Initial advance to the DA will be based projected sources and application of funds for the project projections for the first six months period following the date of the request. 2. Subsequent advances to the DA will be based on settlement of previous advance through expenditure reports and withdrawal applications for recoupment of utilized funds.Disbursement of Emergency Expenditures under Category 2 : This Disbursement and Financial Information Letter (DFIL) may not be fully adapted to the disbursement of funds allocated from time to time to Category 2 of the disbursement table included in Section III. A of Schedule 2 to the Agreement. The DFIL will be revised, or a supplemental letter will be issued, if needed, when funds are allocated to Category 2. 3. Further, once the emergency under category 2 is activated and will be managed by PMU in DoH Sindh, the same existing DA will be used to advance the funds for the emergency. If not, a separate DA for the implementing agency managing the emergency will be used for disbursement of the emergency funds. 4. Disbursement of contracts with United Nation Agencies (if applied) : If UN agencies are contracted to provide goods, works and services, the UN agencies funds flow arrangement will be applied. Funds transferred to UN agencies are considered as advance. The copy of signed Agreement between the Recipient and UN agencies should be sent to the Loan Department for UN advance account set up once it is signed. The Implementing Agency will submit application for UN advance using Client Connection website. a. Supporting documents for the first UN advance: Request for payment from UN agencies b. Supporting documents for advance and documentation of prior advance: Interim Financial Reporting on the use of funds and the Payment Request for the next installment signed by an authorized UN staff in charge of execution of this Agreement. c. In case of a contract with a UN agency requiring a UN Commitment, an application for issuance of UN Commitment is to be submitted by the Recipient. Subsequent payments and documentation of expenditures under the contract must be made in accordance with the Commitment letter to be issued by the Association and the contract between the Recipient and the UN agency. 5. Direct Payment method will only be used for Foreign Currency (FCY) payments outside Pakistan; Direct Payments within the country are not allowed. The Designated Account shall be used for in-country FCY and local currency payments 6. Retroactive financing: Funds covering retroactive financing claims will be provided to the Government of Sindh’s Provincial Non -food Account No. 1 maintained at the State Bank of Pakistan. 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: Mr. Najy Benhassine, Country Director Dear Mr. Benhassine: Re: IDA Credit No. 7237-PK (Sindh Integrated Health and Population Project) I refer to the Financing Agreement (“Agreement”) between the International Development Association (“Association”) and the Islamic Republic of Pakistan (“Recipient”), providing the above Financing. 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 Financing. 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 the 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 the 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 it. Please delete this footnote in the 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 it. Please delete this footnote in the final letter that is sent to the Association. 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 / ______________ [Position]1 Attachment 2 - Interim unaudited Financial Statements