Emergency Cash Transfer COVIO-19 Response Project Amman-jordan Financial Statements and Independent Auditor's Report For the Period from October 26, 2020 to December 311", 2020 Emergency Cash Transfer COVID-19 Response Project Amman- jordan Contents independent Auditor's Repoit Statement of Cash Receipts and Payments (A) Reconciliation Statement for The Balance of The Project's (B) Designated Account Statement of Payments Made Using SOE Basis (C) Page Notes to The Financial Statements 1-16 ( ,, " d I 11lk I I IA I' A I A Independent Auditor's Report To Messrs. Ministry of Plaring and International Cooperation (MoPIC) Attn: The Project Management Unit ("PMU") Amman -jordan Opinion We have audited the financial statements of Emergency Cash Transfer COVID-19 Response Project (the "Project") which comprise the Statement of Cash Receipts and Payments Incurred on The Project, Reconciliation Statement for The Balance of The Project's Designated Account,and Statement of Payments Made Using SOE Basis for the Period from October 26,h, 2020 to December 3 1", 2020, and notes to the financial statements, including a surmary of significant accounting policies. In our opiniorn, the acconpanying financial statements present fairly, in all material respects in accordance with Cash Basis- Internationa Public Sector Accounting Standards (IPSAS). BaisforOpinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilit'es onder those standards are further described in the Auditor's Responisibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance witli the International Ethics Standards Board forAccountants' Code of Ethics for Professional Accountants (IESHA Code), and we have fulfilled our other ethical responsibilities in accordance with the iESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provde a basis for our opinion. Empliasis of Matter We draw attention to Note number (10) of the financial statements, which describes an additional financing agreement signed bemween The Hashemite Kingdom of Jordan and International Bank for Reconstruction and Development for the purpose of providing additional financing for the Original Emergency Cash Transfer COVID-19 Response Project. Our opinion is riot modified in respect of this matter. Other Matter This report has been prepared solely for the use of the Project parties, and it should not be distributed to or used by any other parties. Responsibilities of Project Managemrent for the Financial Statemrenits Project matnagement is responsible for the preparation and fair presentation of the financial statements in accordance with Cash Basis - IPSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatemert, whether due to fraud or error. In preparing tire financial statements, Project management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using tire going concern basis of accounting unless Project managerent either intends to liCluidate the Project or to cease operations, or has no realistic alternative but to do so. Project Management is responsible for overseeing the Project's financial reporting process. 1 Cl: % 90 1 0 I 1 106. I : ( l N. I , ),Iox: ! 9 9 F) A 11nion Il 1%0, Inm(dill Auditor's Responsibilities for the Audit of the Financial Statements Our ob)ectives are to obtain reasonable assurance about whertlre financial statements as a whole are free from material misstatement, whether dUe to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, bUt is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise fron fraud or error and are considered material if, indvidually or in the aggregate, they could reasonably be expected to influence the econonic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit, We also: - Identify and assess the risks of material rnisstaternent of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not deteciinga nmaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional oniissions, misrepresentations, or the override of iriernal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appr opriate in the cirrurrm)stances, but not for the purpose of expressingan opinion an the effectiveness of the Project's internal control. - Evaluate the appropriateress of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Proect managerment. - Conclude on the appropriateness of Project ranagenments use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material urocertainty exists related to events or conditions that may cast significant doubt on the Project's ability to contiue as a going concern. If We conclude that a material uncertainty exists, we are required to draw attention in Our auditor's report to the related disclosures in) the financial staternents or, if such disclosures are inadequate, to niodify our opinion. Our conclusions are based on the audit evidence obtained urp to the date of our auditor's report. I lowever, furture events or conditions may cause the Project to cease to continue as a going concern. - Evaluate the overall Preseitation, structure and content of the financial statenents, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We comm11u1nicate XVid Pro1ect Managenent,amorng other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that xxe identify during our audit. The Standard for Auditing Ilakan Al Qaren License No,Bl7 it s NAmminan, ot February 10,% 2022 IT ( 1 W t 6 rr91 1). 1ax: 96 0 (I18. I, 1 )M(ix: ')03 9. A1non II 190 n(1 linh1I I maihrl:norrmal.jo Emergency Cash Transfer COVID-19 Response Project Amman- ordan Statement of Cash Receipts and Payments Incurred on The Project For The Period from October 261h, 2020 to December 31", 2020 (A) For The Period frorn Accumulative from Notes October 26', 2020 to October 26,h, 2020 to December31", 2020 December31", 2020 U50 USD Receipts [3RD - Luan 6.1 42,380,000 42,380,000 MDTF - Grant 6.2 24,163,903 24,163,903 Total Receipts 66,543,903 66,543,903 Payments Expenditures Project Expenditures 7 11,204,194 11,204,194 Bank Charges 15 15 Total Expenditures 11,204,209 11,204,209 Transfers to the State Treasury Retroactive Finatwing B 37,000,000 37,000,000 Total Transfers to the State Treasury 37,000,000 37,000,000 Total Payments 48,204,209 48,204,209 Cash and Cash Equivalents, Beginning of Period Net Change in Cash and Cash EqJuivalents 18,339,694 18,339,694 Cash and Cash Eqtiivalents, End of 3 18,339,694 18,339,694 Period 'The Accompanyirig Notes from 1 to10 ConStitute an ntegral Part of These Financial Statemerits" Energency Cash Transfer COVID-19 Response Project Amman- Jordan Reconciliation Statement for The Balance of The Project's Designated Account (13) For The Period: From October 26th, 2020 to December 31", 2020 Bank Name: Central Bank of Jordan ("CBJ") Account Name: NAF- Emergency Cash Transfer COVID-19 Response Project Account Account Number: 1 / 3660 / 3269 For The Period from Notes October 26h, 2020 to December 31", 2020 USD Bank Balance, Beginning of Period Add: Funds Receipts 9 18,339,709 Deduct: Bank Charges (15) Bank Balance, End of Period 3 18,339,694 "The Accompanying Notes from 1 to 10 Constitute an Integral Part of These Financial Statements" Emergency Cash Transfer COVID-19 Response Project Amman- lordan Statement of Payments Made Using SOE Basis For The Period from October 261% 2020 to December 31", 2020 (C) For The Period Accumulative from October 261, from October 26, 2020 to December 2020 to December 31", 2020 31", 2020 USD USD Payments Expenditures Ptoject Expenditures 7 3 11,204,194 11,204,194 Bank Charges 15 15 Total Expenditures 11,204,209 11,204,209 Transfers to the State Treasury Retroacive Financing 8 2 37,000,000 37,000,000 Total Transfers to the State Treasury 37,000,000 37,000,000 Total Payments 48,204,209 48,204,209 "The Accompanying Notes from 1 to 10 Constitute an Integral Part of These Financial Statements Emergency Cash Transfer COVID-19 Response Project Amman- jordan Notes to The Financial Statements 1. General The objective of the Emergency Cash Transfer COVID-19 Response Project is to provide cash support to poor and vulnerable households affected by the COVID-1 9 pandenic in The Hashemite Kingdom of Jordan. The project will support the Government of Jordan ("GOJ's") COVID-19 response cash support program as well as the regular Takaful CT program. The Program will provide cash support to about (293,000) poor and vulnerable households affected by COVID-1 9 pandemic and includes two parts: (i) Temporary (six month) CTs to (200,000) additional vulnerable households; and (ii) Temporary (six month) benefit top-ups for (93,000) the National Aid Fund ("NAF") beneficiaries. The overall Program will cost around (US$277 million) equivalent. The project will finance around (US242,295 million) of this overall amount to support about (190,000) households out of the total (200,000) households under part (i) of the Program, and to provide top-up benefits for Takaful beneficiaries under part (ii), The remaining amount of the Program will be financed by other donors (the United States Agency for International Development ("USAID") and the UK Department for International Development ("DFID") among others) through a Joint Financing Arrangement ("JFA"), which will cover (10,000) households under part (i) and top-up benefits to beneficiaries of NAF monthly CT programs under part (ii). The project will also finance regular Takaful CTs for a total amount of (US$128 million) for all beneficiaries in 2020 (55,000) and 25,000 (out of 85,000) beneficiaries in 2021. The project will support a total of (270,000) beneficiary households. The project will be financed by an International Bank for Reconstruction and Development ("IBRD") loan (US$350 million) with co-financing from a Department for International Development ("DFID") grant for a total of approximately (US$24.17 million) equivalent out of the Jordan Inclusive Growth and Economic Opportunities Multi-Donor Trust Fund ("MDTF") (TF073270). The lending instrument for the project will be an Investment Project Financing ("IPF") with Performance-Based Conditions ("PBCs"), -1- 1.1, Project Components The Project Consists of The Following Three Componens (Parts): 1. Cash Support to Poor and Vulnerable Households Affected By COVID-19 1.1. Temporary Cash Transfers to Vulnerable Households Provision of unconditional Cash Transfers to Beneficiaries not otherwise benefiting from the National Aid Fund ("NAF") Programs, to provide time-limited livelihood support to vulnerable households. 1.2. Takaful Cash Transfer Program Provision of unconditional Cash Transfers to Takaful Beneficiaries to provide complementary livelihood support to vulnerable households on a quarterly basis. 1.3. Temporary Benefit Top-Up for Takaful Beneficiaries Provision of unconditional Top-Up Cash Transfers to Takaful Beneficiaries to provide additional, time-limited livelihood support to vulnerable households. 2. Project Management, Monitoring and Evaluation Provision of support for the Project Management Unit ("PMU") in managing and overseeing Project activities, including: (a) staffing; (b) data collection and verification, aggregation and periodic reporting on the Project's implementation progress; (c) software and hardware requirements for NAF and relevant institutions necessary for the expansion of the data exchange platform of the National Unified Registry ("NUR'); (d) monitoring of the Project's key performance indicators and periodical evaluation; (e) communication and outreach; (f) digitization of payments; (g) recertification of Beneficiaries of the monthly and Takaful cash transfer programs; (h) costs associated with maintenance of the Grievance Redress Mechanism ("GRM'9; and (i) overall Project Operating Costs, audit costs, including independent verification of the Cash Transfers, monitoring and compliance with the Environmental and Social Commitment Plan (ESCP"). 3. Contingent Emergency Response Component Provision of immediate response to an Eligible Crisis or Health Emergency. -2- 12. Project's Compoients Financing Comiponent IBRD MDIF Total USD USD USD (In Millions) (in Millions) (in Millions) (1) Casi Suppon to Poor and Vulnerable Hlouseholds Affected By COVID-19 (1.1) Temporasiy CTs to Vulnerable Subcornponenrit 192.945 21.35 214.295 Ilouseholds Stjbrolipo lleri (1.2) Takaful Cash Transfer Program 128 - 128 (PBCs) (1.3) Temporary Benefit Top-Up for Takaful Beneficiaries 346.275 24.02 370.295 (2) Project Management, Monitoring and Evaluation 2.85 0.15 3 (3) Contingent Ernergency Response Component - *Front-End Fec 0.875 - 0.875 Total 350 21.17 374.17 The Front-End Fee is payable by the Borruower pursuant to Section 2.03 of The Loan Agreemen equals one-quarter of one percent (0.25%) of the IBRD loan aniount (US$350 million). -3- 1.3. Project Financing Agreements 1.3.1. Ilie Loan Agreemient The Loan Agrecmeint of Ernergency Cash Transfer COVID-19 Response Project vas signed on October 26", 2020 betweeni The Hashemite Kingdom of Jordan ("Borrower") and The International Bank for Reconstruction and Developnient ('Bank') in the anmount of Three Hundred and Fifty Milliion United States Dollars (USD 350,000,000) to assist in financing the project. Tiie Loan Amortization Schedule The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ('Installment Share"). Installnient Share Principal Paynent Date On each Febrtiary 15' and August 151 .64% Beginning February 151", 2025 through August 151', 2054 On February iSh, 2055 1.60% The Eligible Expenditures Under the Loan Agreement The following [able specifies the categories of Eligible Expendilures that may be financed out of the proceedsof the Loan ("Category"), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Amount of the Percentage of Expenditures to be financed C atego ry Loan Allocated (Inclusive of Taxes) USD % (1) Goods, works, non-consulting services, consulting services, 2,85000 Such percentage as agreed to by the Bank under Training and Operating Costs under the Annual Work Plan the Project 100 Oof each PBC Aniount that set out in the (2) Cash Transfers under Part 1.11 of following Schedule (or such lesser percentage as the Project -1 28,0n,000* represents the total Eligible Expenditures paid by the Borrower under the Eligible Expenditure Program as of the date of withdrawal) (3) Safety Net Transfers Under Paris 218,275,000 Such percentage as agreed to by the Bank under I. and 1.111 of the Project the Annual Work Plan (4) Emergency Expenditures Amount payable pursuant to Section 2.03 of The (5) Fiont-eid Fee 875,00D Loan Agieement in accordance w,th Section 2.07(b) of the General Conditions Total Amount 350,000,000 -5- *Performance-Based Conditions Under the Project The following table specifies the Performance-Based Conditions (PBCs) and the allocation of the amounts of the Loan to each PBC under Category 2: Amount Of Disbursement Results Area Description of achievement the Loan Calculation Formula Allocated USD PBC 1.1: from the baseline PBC#11 55,000 eligible households are of 0, $8,000,000 for each enrolled in Takaful Cash Transfer Program 40,000,000 11,000 households by PBC#1: and paid in 2020 December 31, 2020, up to Takaful $40,000,000 Beneficiaries PBC 1.2: from the baseline enrolled and paid PBC#1.2 85,000 eligible households are of 55,000, $6,000,000 for enrolled in Takaful Cash Transfer Program 18,000,000 each 10,000 households by and paid in 2021 the December 31, 2021, up to $18,000,000 PBC # 2.1: NAF develops a revised Takaful targeting methodology based on the 10,000,000 PUC # 2.1: $10,000,000 by PBC#2: findings from the Takaful evaluation study December 31, 2021 Improvements in and approves it by its Board of Directors Takaful PBC # 2.2 NAF develops and adopts a plan PUG # 2.2: $20,000,000 by for the recertification of Takaful 20,000,000 December 31, 2020 beneficiaries PBC #3.1: From the baseline PBC #3.1: NAF digitizes payments to of 0, $5,000,000 for every Beneficiaries under Regular Monthly Cash 20,000,000 14,000 Beneficiaries whose Transfer Program payments are digitized, up to $20,000,000 PBC#3: Migration of PBC #3.2: NAF recertifies Beneficiaries of Beneficiaries into Regular Monthly Cash Transfer Program Takaful Cash using Takaful's targeting methodology, Transfer Program involving: collection of data from PBC # 3.2: $20,000,000 by Beneficiaries, determination of eligibility for 20,000,000 December 31, 2021. Takaful Cash Transfer Program, and development of a plan to enroll eligible households and to gradually exit non- eligible households Total 128,000,000 -6- 1.3.2. The Grant Agreement Ti]e Grant Agreement of Emergency Cash Transfer COVID-19 Response Project was signed on October 26", 2020 between Hashemite Kingdom of Jordan ("Recipient"); and International Bank for Reconstruction and Development and International Development Association ("World Bank"), acting asadministrator of the Jordan Inclusive Growth and Economic Opportunities Multi-Donor Trust Fund in an amount riot to exceed Twenty Four Million One Hundred Seventy Thousand United States Dollars (524,170,000) to assist in financing the Project. The Eligible Expenditures Under the Grant Agreement The following tabfe specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant ("Category"), the allocation of the amounts of the Grant to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Anouint of the Grant Percentage of Expenditures to be Category Allocated financed (Inclusive of Taxes) USD % (1) Goods, works, non-consulting services, consulting services, Such percentage as agreed to by the '150,000 Training and Operating Costs under Bank under the Annual Work Plan the Project (2) Cash Transfers mnder Part 1.11 of the Project (3) Safety Net Transfers under Paits 24,020,000 Such percentage as agreed to by the II and 1111 of the Project Bank under the Annual Work Plan Total Amount 24,170,000 -7- 2. Accounting Policies 2.1 Basis of Preparation - The financial statements have been prepared in accordance with Cash Basis - International Public Sector Accounting Standards (IPSAS) issued by the International Public Sector Accounting Standards Board (IPSASB). - The figures shown in the financial statements have been rounded to the nearest US Dollars. - The financial statements are presented in US Dollars (USD) which is the functional currency of the Project. 2.2 Cash Basis of Accounting The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid by the Project. Financial statements prepared under the cash basis provide information about the sources of cash raised during the period, the purposes for which cash was used and the cash balances at the reporting date. The measurement focus in the financial statements is balances of cash and changes therein. Notes to the financial statements may provide additional information about liabilities, such as payables and borrowings, and some non-cash assets, such as receivables, investments and property, plant and equipment. 2.3 Cash Receipts and Payments Cash receipts are cash inflows, cash payments are cash outflows. 2.4 Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand and cash at bank, deposits on call, and highly liquid investments with an original maturity of3 months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Demand deposits and cash equivalents consist of balances with banks and investments in short-term money market instruments. Bank borrowings are generally considered to give rise to cash inflows. However, in some circumstances, bank overdrafts that are repayable on demand form an integral part of the Project cash management. In these circumstances, bank overdrafts are included as a component of cash. A characteristic Of such banking arrangements is that the bank balance often fluctuates from being positive to overdrawn. Cash is mainly held in the Central Bank of Jordan which approved by the Project parties. 3. Cash on Hand and at Bank 2020 USO Central Bank of Jordan - NAF/ Emergency Cash Transfer COVID-19 Response 18,339,694 Project Account Total 18,339,694 4. Loan Balance Disbursed Loan During the Period Undisbursed Financing Loan from October Loan Balance Source Amount 26 , 2020 to As of December December 31", 31", 2020 2020 USD USD USD IBRD 91390-JO 1 2,850,000 - 2,850,000 2 128,000,000 37,000,000 91,000,000 3 218,275,000 5,380,000 212,895,000 5 875,000 875,000 Total Loan Balance 350,000,000 43,255,000 306,745,000 5. Grant Balance Disbursed Grant Undisbursed During the Period Financing Grant Grant Balance Grant No# Category from October 261h, Source Amount As of December 2020 to December 31", 2020 31', 2020 USD USD USD MDTF TF0B3363 1 150,000 150,000 - 3 24,020,000 24,013,903 6,097 Total Grant Balance 24,170,000 24,163,903 6,097 -9- 6. Receipts For The Period from Component Category October 261h, 2020 to December 31, 2020 USD 6.1 IBRD December 9Ih, 2020 1.1&1.3 3 3,329,709 December 141, 2020 1.2 2 37,000,000 December 181h, 2020 1.1 3 2,050,291 Total IBRD 42,380,000 6.2 MDTF December 14 %, 2020 2 1 150,000 December 15,h, 2020 1.1&1.3 3 14,860,000 December 181", 2020 1.1 3 9,153,903 Total MDTF 24,163,903 Total Funds Receipts 66,543,903 7. Project Expenditures For The Period from October 26th, 2020 to Total Component Category December 31, 2020 IBRD MOTF Loan Grant USD USD USD Daily Wages Workers 1.1 3 2,050,291 9,153,903 11,204,194 Support - Takaful (2) Total Project Expenditures 2,050,291 9,153,903 11,204,194 -10- 8. Retroactive Financing For The Period from October Results 2611, 2020 to December 31", Component Category Area 2020 IBRD MDTF _Loan Gratit USD USD CashTransfer-lakafuJ (1)1 1.2 2 PBC#1.1 32,000,000 - Cash Transfer -TikafuIl (1)2 1.2 2 PBC# 3.1 5,000,000 - Total Retroactive Financing 37,000,000 'According to Audit Bureau's Verification Repon dated Decernber1", 2020 lie IBC# -1.1 has been partially acihieved by NAF enrollngand paying to (49,099) householids dring the period from September 1" t Novemiber 2 2020. 2 According to the NAF repori daled December 6, 2020 the PRC# 3.1 bas been pantially achieved by fhe dighizaion of (17,765) payrnents. 9, Furids Receipis 9.1 CBJ - NAF- Eren ecy Cash Transfer COVID-19 Response Project Accolu For The Period from Date Financing Source October 26"', 2020 to December 31", 2020 USD December 9h, 2020 lBRD 3,329,709 December «14, 2020 MDTF 150,000 December 16, 2020 M)TF 14,860,000 Total Funds Reecipts 18,339,709 -11- 10. Subsequent Events Subsequent to the date of the financial statements and as a result of the request of The Government of Jordan for additional financing ("Ar") in the amount of (US$290 million) and a restructuring of the Original Project to support the Government's COVID-19 response programs, an additional financing agreement was signed on July 13th, 2021 between The Hashemite Kingdom of Jordan ("Borrower") and International Bank for Reconstruction and Development ("Bank") for the purpose of providing additional financing for the Original Emergency Cash Transfer COVID-19 Response Project. The Additional Loan Amortization Schedule The following table sets forth the Principal Payment Dates of the Additional Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). Installment Share Principal Payment Date _____________________________(%) On each April]5' and October 15,h 1.64% Beginning April 15', 2026 through October 151, 2055 On April 15, 2056 1.60% The proposed AF and restructuring of the parent project will entail the following changes: (i) revision of the Project Development Objective ("PDO") to include "workers"; (ii) revision to project components, including the cancelation of subcomponent 1.3 (Temporary benefit top-up for Takaful-1 beneficiaries); (iii) addition ofa new component (Component 4) "Support to workers in firms affected by COVID-19"; (iv) addition of Ministry of Planning & International Cooperation ("MOPIC") as a new implementing agency, with Social Security Corporation ("SSC") as implementing partner, to implement Component 4; (v) reallocation of loan proceeds across categories and components; and (vi) extension of the original loan closing date by 18 months (from june 30, 2022 to December 311t, 2023) to align it with that of the AF. -12- 10.1. Project Components Under the Additional Loan Agreeiient The Original Project Components (Paris) wYill be amended to be as follows: 1. Cash Support to Poor and Vulnerable Households Affected By COVID-19 11. Temporary Cash Transfers to Vulnerable I louseholds Provision of unconditional Cash Transfers to Beneficiaries not otherwise benefiting from the National Aid Foud ("NAF") Programs, to provide time-linited livelihood support to vulnerable households. 1.2. TakafL -1 Cash Transfer Proprarn Provision of unconditional Cash Transfers to Takaful-1 Beneficiaries to provide complementary livelihood support to vulnerable households on a quarterly basis. 2. Project Management, Monitoring and Evaluation Provision of support for the Project Management Unit ("PMU") in managing and overseeing Project activities, including: (a) staffing; (b) data collection and verification, aggregation and periodic reporting on the Project's implementation progress; (c) software and hardware requirements for NAF and relevant irnstitUtions necessary for the expansion of the data exchange platforrm of the National Unified Registry ("NUR"); (d) monitoring of the Project's key performance indicators and periodical evaluation; (e) commUnication and outreach; (f) digitization of payments; (g) recertification of Beneficiaries of the ronthily and Takaful cash transfer programs; (h) costs associated witlh maintenance of the Grievance Redress Mechanism ("GRM"); and (i) overall Project Operating Costs, audit costs, including independent verification of the Cash Transfers, monitoring and compliance with the Environmental arid Social Comnitnient Plan ("ESCP"). 3. Contingent Emergency Response Component Provision of immediate response to an Eligible Crisis or Health Emergency. 4. Support To Workers in Firms Affected By COVID-19 Provision of a tvimporaty wage subsidy and social security contribuCtons through the Istidana Program for eligible emiployces of eligible private sector firms. -13- 10.2. The Eligible Expenditures Under the Additional Loa Agreirnt The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan ("Category"), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Amount of the Loan Percentage of Expenditures to be Category Allocated financed (Inclusive of Taxes) USD % (1) Goods, works, non-consulting servces, consultiOng services, Training and Operating Costs under the Project 100% of each PBC AMount that set out in the following Schedule (orsuch lesser percentage (2) Cash Transfers under Part 1.2 224,275,000* as represents the total Eligible Expenditures of the Project (Takaful-1) paid by the Borrower under the Eligible Expeiditure Program as of the date of withdrawal) (3) Safety Net Transfers under Part 1.1 of the Prolect (Takaful 2 and 3) (4) Emergency Expenditures Amount payable pursuant to Section 2.03 of (5) Front-end Fee 725,S The Loan Agreement in accordance with Section 2.07(b) of the General Conditions (6) Istidama Benefits under Part 4 65(000,000 100% of the Project Total Amouit 290,000,000 -14- Performance-Based Condidons Under the Project The following table specifies the Performance-Based Conditions (PiCs) and the aHlocation of the amounts of the Additional Loan to each P8C tinder Category 2: Amount of the Disbursemntt CalCLa,tiOni Results Area Description of achievement Additional Db rm ula Formuliia Loan Allocated USD P8C 1.3: from the baseline of TakifL-1 liC#1.3 85,000 eligible hooseholds 0, 52,500,000 for each 10,625 are enrolled in the Takaful-1 Cash 80,000,000 households received their Beneficiaries enolled and paid Transfer Program and paid in 2022 payments in each qoarter of 2022, up to $80,000,000 PBC # 2.2: NAF imiplements the P8C 2.2 NA inilenenisthePBC # 2.2: $50,000,000 by revised Takaful-1 Taigeting 50,000,000 PBc 3 20, 0 PBC#2: methodology. Improvements in TakafLl-1 PBC 4 2.4: NAF implements the PBC #t 2.3: 19,275,500 by recei tification of Takaful-1 19,275,500 December 3], 2022 Beneficiaries PBC # 3.3: Front the baseline PBC #3.3: NAF enrolls in the Takaful- of 0, $7,500,000 for each 10% 1 Cash Transfer Program beneficaries of qualifying (for Fakaflud1 PBC#3: of the regular monthly cash transfer Cash Transfer Program)] Migration of program that qualify for the Takaful-1 h1ouseholcds of the regular Beneficiaries into Cash Transfer Program (based on the 75,000,000 monthly cash transfer Takaftil-1 Cash recetification of beneficiaries of the progran enrolled in the Transfer Program Regular Monthly Cash Transfer TakaftIl- 1 Cash Transfer Program, using Takaful-1 largeting Program starting january 1, form ula) 2021, tip to the Maxinunm of $75,000,000 Total 224,275,500 -I5- 10.3. Budget Reallocation of Parent Project and Additional Financing Parent Project Reallocation of Parent Additional Parent Component (Original Allocation) Project Financing Project + AF IBRD + IBRD MOTF IBRD MDTF IBRDonly MDTF Component 1 * Subcomponent 1.1 192,945,000 21,350,000 82,945,000 24,020,000 - 106,965,000 * Subcomponent 1.2 128,000,000 - 163,330,000 - 224,275,000 387,605,000 * Subcomponent 1.3 25,330,000 2,670,000 - - - - 346,275,000 24,020,000 246,275,000 24,020,000 224,275,000 494,570,000 Component 2 2,850,000 150,000 2,850,000 150,000 - 3,000,000 Component3 - - - Component4 - 100,000,000 65,000,000 165,000,000 Front-End Fee (0.25%) 875,000 - 875,000 - 725,000 1,600,000 Total 350,000,000 24,170,000 350,000,000 24,170,000 290,000,000 664,170,000 ~16 -