THE WORLD BANK 18RD * tDA I WORLD BANKGROUP Date: &cf 2 Mr. Gustavo B61iz Secretary of Strategic Affairs Secretariat of Strategic Affairs of the Presidency Balcarce 50 C1064AAB Buenos Aires, Argentina Re: IBRD Loan 8508-AR: Protecting Vulnerable People Against NonCommunicable Diseases Project Additional Instructions: Amended Disbursement Letter Dear Secretary B61iz: I refer to the Loan Agreement between the Argentine Republic (the "Borrower") and the International Bank for Reconstruction and Development (the "Bank") for the above-referenced project ("Project"), dated October 9, 2015, as amended ("Loan Agreement"). The Loan Agreement provides that the Bank may issue additional instructions regarding the withdrawal of the proceeds of Loan 8508-AR ("Loan"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. This letter is the Second Amendment to the Disbursement Letter dated October 9, 2015 and amended on July 10, 2019 for the above referenced Project. This letter reinstates Section IV as a result of the Second Amendment to the Loan Agreement. In case of any inconsistency between this letter and the Loan Agreement, the provisions of the Loan Agreement shall prevail. Unless otherwise defined in this letter or in the Disbursement Guidelines, the capitalized terms used have the meanings ascribed to them in the Loan Agreement. The World Bank Disbursement Guidelines for Investment Project Financing, dated February 2017 ("Disbursement Guidelines"), are an integral part of the Disbursement Letter. The manner in which the provisions in the Disbursement Guidelines apply to the Loan is specified below. Sections and subsections in parentheses below refer to the relevant sections and subsections in the Disbursement Guidelines and, unless otherwise defined in this letter, the capitalized terms used have the meanings ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangements (i) Disbursement Methods (section 2). The following Disbursement Methods may be used under the Loan: Reimbursement Advance, and Direct Payment, (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is four months after the Closing Date specified in the Schedule 2 (Section IV. B. 7) to the Loan Agreement. Any changes to this date will be notified by the Bank. (iii) Disbursement Conditions (subsection 3.8). Please refer to the Disbursement Conditions in Schedule 2 (Section IV. B) to the Loan Agreement. II. Withdrawal of Loan Proceeds (i) Authorized Signatures (subsection 3.1). An authorized signatory letter should be furnished to the Bank at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank Bouchard 547, 29th floor C1 106ABG Buenos Aires, Argentina Attention: Jordan Schwartz, Director Argentina, Paraguay and Uruguay. (ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed (a) applications for withdrawal, together with supporting documents, to the address indicated below: Banco Mundial SCN Quadra 02, Lote A Ed. Corporate Financial Center, 70 andar 70712-900 Brasilia, D.F. Brazil Attention: Loan Operations (iii) Electronic Delivery (subsection 3.4). The Bank may pennit the Borrower to electronically deliver to the Bank Applications (with supporting documents) through the Bank's Client Connection, web-based portal. The option to deliver Applications to the Bank by electronic means may be effected if: (a) the Borrower has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its officials who are authorized to sign and deliver Applications and to receive Secure Identification Credentials ("SIDC") from the Bank for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Borrower have registered as users of Client Connection. If the Bank agrees, the Bank will provide the Borrower with SIDC for the designated officials. Following which, the designated officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection (https://clientconnection.worldbank.org). The Borrower may continue to exercise the option of preparing and delivering Applications in paper form. The Bank reserves the 2 right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Borrower. (iv) Terms and Conditions of Use of SIDC to Process Applications. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Borrower 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 ("Terms and Conditions of Use of Secure Identification Credentials"); and (b) to cause such official to abide by those terms and conditions. (v) Minimum Value of Applications (subsection 3.5). The Minimum Value of Applications for direct payments and reimbursements is USD 10,000,000. (vi) Advances (sections 5 and 6). * Type ofDesignated Account (subsection 5.3): Segregated * Currency ofDesignated Account (subsection 5.4): United States Dollars (USD) * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5): Banco de la Nacion Argentina * Ceiling (subsection 6.1): Forecast for two quarters as provided in the quarterly Interim Unaudited Financial Reports (IUFRs) up to USD 70,000,000, and to be requested as indicated in section IV. 1.(a). below. III. Reporting on Use of Loan Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each application for withdrawal as set out below: * For reporting eligible expenditures paid from the Designated Account and for Reimbursement: o Interim Unaudited Financial Reports (IUFRs), referred to in Section II.B.2 of Schedule 2 to the Loan Agreement and prepared in accordance with the provisions of the Operational Manual; and o Designated Account Activity Statement with a copy of the Designated Account Bank Statement, applicable when reporting on the use of Loan proceeds from the Designated Account. * For requests for direct payment: o Records evidencing eligible expenditures, e.g., copies of receipts, suppliers/contractors' invoices. (ii) Frequency of Reporting Eligible Expenditures Paid from the Designated Account (subsection 6.3): Minimum frequency: Quarterly. 3 IV. Withdrawal Application Schedule 1 . The withdrawal applications' for Category (1) "EEPs under Part 1.1 and 2 of the Project" shall be presented as follows: (a) Advances - Funds may be requested as advances at any time during Project implementation (from the date of the Loan Agreement to the date indicated in Section IV.B.7 of Schedule 2 to the Loan Agreement), for Eligible Expenditures under the EEPs to be paid for in a given semiannual period. The Ministerio de Salud (MSN) shall furnish to the Bank the pertinent IUFR forecasting the Eligible Expenditures (including an indication of the percentage of Eligible Expenditures to be financed under the Loan in respect of the EEPs) for the period mentioned herein. (b) Reporting Eligible Expenditures under the EEPs - The MSN shall furnish to the Bank as support documentation: (i) the pertinent IUFR documenting the Eligible Expenditures under the EEPs for the corresponding period; and (ii) evidence, acceptable to the Bank, on the compliance of the corresponding Transfer-Linked Indicators (TLIs stated in Schedule 4 to the Loan Agreement). All information must be prepared in accordance with the provisions of the Loan Agreement, this Letter and the Operational Manual (including the corresponding audit report). (c) Withdrawals can be made after Effectiveness for payments made for Eligible Expenditures under EEPs during the twelve-month period prior to the date of the Loan Agreement ("Retroactive Financing"), in an amount not exceeding USD 52,400,000. The MSN shall furnish to the Bank: (if the pertinent IUFR, documenting the Eligible Expenditures under the EEPs for the period mentioned herein; and ii) evidence of accomplishment of the following two actions: * Baseline information on the PHC facilities to be supported by Component I of the Project, providing information on infrastructure and personnel (with a weight of 50%, which is USD 26,200,000); and * An analysis on the reporting of PMOHs budgetary information (with a weight of 50%, which is USD 26,200,000). (d) The subsequent withdrawal applications shall be submitted to the Bank upon achievement of the Transfer-Linked Indicator (TLI) target as provided in Schedule 4 to the Loan Agreement. The TLIs will be measured annually within the expected year of compliance. Effect of Partial Compliance with TLIs and noncompliance of the 70% Rule 2. If the Bank has received evidence of noncompliance of the 70% rule, the corresponding province will not be reimbursed, then the maximum amount of the combined withdrawal shall be 1 The pertinent Interim Unaudited Financial Report (IUFR) shall document the eligible expenditures under the EEPs for the pertinent period and include an indication of the percentage of eligible expenditures financed under the Loan in respect of the EEPs (Withdrawal Application < 10%). 4 reduced by an amount equal to the corresponding maximum amount allocated to that province in the reported period. 3. The Borrower must submit the report issued by the independent auditor, as referred to in Section I.D.2 of Schedule 2 to the Loan Agreement, in form and substance acceptable to the Bank, certifying that each Participating Province has executed at least 70% of the amount allocated to its EEPs for the corresponding calendar year. 4. If the Bank has received evidence of compliance with the 70% rule, but partial compliance of the TLIs indicated in Schedule 4 to the Loan Agreement the maximum amount of the corresponding province (and of the combined withdrawal) shall be reduced in proportion to the percentage of noncompliance of the corresponding TLIs. Rollover of amounts not disbursed 5. For purposes of disbursing Loan amounts under Category (1), if: (a) (i) one or more of the TLIs for any Participating Province have not been achieved by their due dates, as agreed with the Bank; or (ii) the Bank has received evidence of partial compliance of any TLI, then the Bank may, in agreement with the Borrower, though MSN, reduce the maximum amount of the corresponding withdrawal in proportion to the percentage of non-compliance of said TLI, as further specified in the Verification Protocols. The part of the allocated amount not disbursed due to non-compliance or partial achievement of any TLI target, except for the TLIs corresponding to Year 7 as set forth in Schedule 4 to the Loan Agreement, may be: (A) disbursed during the following year, if the Bank is satisfied that the respective TLI has been fully achieved; or (B) at the end of any calendar year (except 2022), by notice to the Borrower, through MSN, reallocated to other TLIs and Participating Provinces following the formula and percentages set forth in Table A included in Attachment 1 of this Letter ; or (C) if requested by the Borrower, at the end of the seventh year of Project implementation, reallocated to Categories (2), (3), or (4). (b) one or more of the TLIs have been fully achieved by any Participating Province before their due dates, the Bank may, in agreement with the Borrower, through MSN: (i) reallocate said amounts to other TLIs in the same Participating Province; or (ii) at the end of the seventh year of Project implementation, reallocate said amounts to categories (2), (3), or (4). Definition of Eligible Expenditures and weighted share of the EEPs 6. Eligible Expenditures under Part 1.1 and 2 of the Project are those set forth in Attachment I below and as stated in the Loan Agreement. As mentioned in paragraph 1 of Section IV above, the pertinent IUFR shall document the eligible expenditures under the EEPs for the corresponding period and include an indication of the percentage of eligible expenditures financed under the Loan in respect of the EEPs (< 10% to be verified by the Borrower in each Withdrawal Application submitted to the Bank, and its confirmation to be included in an acceptable audit). 5 Proportional distribution (formula) 7. Amount allocated by Province and formula to distribute proceeds of the Loan (Category 1) as per indicated in Attachment 1. DLIs, Allocation and Targets 8. The Table provided in Schedule 4 to the Loan Agreement specifies the Disbursement- Linked Indicators, the amount allocated and the expected calendar year of completion. 9. The withdrawal applications for Category (7) "NEEPs under Part 1.2 of the Project" shall be made every calendar semester, after the Bank has received reports, in form and substance acceptable to the Bank, certifying as to the extent to which: (i) MSN has executed the amount allocated to the NEEPs with respect to the relevant DLI for the corresponding calendar semester; (ii) the Additional Instructions and Verification Protocols have been adhered to by the Borrower; and (iii) the Bank has determined, on the basis of the IUFRs furnished by the Borrower, and its own verification, that the DLI targets for the preceding calendar semester have been satisfactorily met and the expenditures incurred by the Borrower are consistent with the NEEPs. Partial achievement of DLIs 10. (a) In case (i) one or more of the DLIs have not been achieved by their due dates, as agreed with the Bank; or (ii) the Bank has received evidence of partial compliance of any DLI, the Bank may at any time, in agreement with the Borrower, reduce the maximum amount of the corresponding withdrawal in proportion to the percentage of non-compliance of said DLI in accordance with the Verification Protocols, in which case the Borrower shall prepare and furnish to the Bank a satisfactory time- bound plan to meet such DLI or DLIs. The portion of the allocated amount not disbursed due to non-compliance or partial achievement of any DLI, may be disbursed if the Bank is satisfied that said action plan has been implemented and the respective DLI has been fully achieved, all in form and substance satisfactory to the Bank. (c) In the event that the Bank has not approved a full withdrawal by the Borrower of the Loan proceeds under Category (7) (as referred to above), the Bank may, by notice to the Borrower: (a) if so requested by the Borrower, reallocate the corresponding amount of the Loan to other DLIs or to Categories (1), (2), (3) or (4); or (b) cancel the corresponding amount of the Loan at the time of the Closing Date, as further elaborated in the Operational Manual. 6 V. Other Important Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the World Bank's website (http://www.worldbank.org/) and "Client Connection". The World Bank 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 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 World Bank by email at AskLoans@WorldBank.or using the above reference. Sincerely, Jordan Schwartz Director Argentina, Paraguay and Uruguay Latin America and the Caribbean Region Attachments . Table A: Maximum Amount Allocated to each Participating Province 7 Attachment I Table A: Maximum Amount Allocated to each Participating Province To be disbursed based on the compliance of the TLIs as provided in Schedule 4 to the Loan Agreement Provinces Total Amount Buenos Aires 40,391,584 Catamarca 6,050,878 Chaco 8,287,520 Chubut 6,576,083 Ciudad de Buenos Aires 6,329,713 C6rdoba 15,133,288 Corrientes 8,405,163 Entre Rios 9,646,660 Formosa 2,299,576 Jujuy 7,765,463 LaPampa 6,085,274 La Rioja 6,823,178 Mendoza 9,983,125 Misiones 9,135,221 Neuqu6n 5,053,350 Rio Negro 5,713,130 Salta 8,600,628 San Juan 7,392,119 San Luis 3,278,706 Santa Cruz 5,599,196 Santa Fe 10,885,271 Santiago del Estero 10,804,830 Tierra del Fuego 4,269,177 Tucumdn 10,373,980 Total 214,883,113 Funds will be allocated to each province based on the following formula, therefore, it will apply to calculate disbursements and in case of partial compliance of TLIs Box 1: Formula to distribute resources for Components 1 and 2 across the 24 provinces Provincial weight= 0.2*1/24 + 0.3*(Population with unsatisfied needs in the province i/total population with unsatisfied needs) + 0.3*[0.33*(quartile value of province i in relation to the % of provincial population with hypertension/Equartile value of each province in relation of the %,/ of population with hypertension) + 0.33 *(quartile value of province i in relation to the % of provincial population with diabetes/Equartile value of each province in relation of the %N of population with diabetes) + 0.33**(quartile value of province i in relation to the % of provincial population with high cholesterolquartile value of each province in relation of the % of population with high cholesterol)] + 0.2*(public PHC facilities in province i/public PHC facilities in the entire country). 8