I OFFICIAL The World Bank OF IL +eE i t e:(0)27-607 INTERNATIONAL BANK FOR RECONSTRUCTION AND D iche El Nil St Tel (202) 2574-1670/71 INTERNATIONAL DEVELOPMENT ASSOCIATION EDOG MEN oulak Fax: (202) 2574-1676 A. David Craig Cairo, Egot Email: acraig@worldbank.org Director, Egypt, Yemen and Djibouti Country Department Middle East and North Africa Region April 5, 2012 H.E. Dr. Mohammed Saeed Al-Saadi Minister of Planning and International Cooperation Ministry of Planning and International Cooperation P. 0. Box 175 Sana'a, Republic of Yemen Re: Republic of Yemen: Secondary Education Development and Girls Access Project (Credit No 4401 -YEM) Amendment to the Financing Agreement Excellency: We refer to the Financing Agreement for Secondary Education Development and Girls Access Project (Credit No 4401-YEM) between the Republic of Yemen ("Recipient"), on the one part, and the International Development Association ("the Association"), on the other part, dated June 16, 2008, as amended. We also refer to our recent discussion regarding amendment of the Project, as indicated in our Aide Memoire, dated December 23, 2011. Accordingly, the Financing Agreement is hereby amended as follows: 1. The Project Description at Schedule 1 of the Financing Agreement is deleted and is hereby amended to read as follows: "Part A: Uparading and Furnishing School Facilities in Selected Districts and School Community Grants. 1. Improvement of school facilities including classrooms, science and computer laboratories and multi-purpose rooms through: (a) the carrying out of works for the extension, rehabilitation and upgrading of existing school facilities and provision of school furniture; and (b) the provision of learning equipment and learning materials to upgrade such school facilities. 2. (a) Developing the Operations Manual, conducting awareness campaigns and building capacity at the Governorate, district and community levels to manage supervise and monitor the use of the School Community Grants, through the provision of consultants' services and training; and (b) Provision of School Community Grants to finance targeted incentives which include: (i) subsidies to arrange transportation to school; (ii) financing eligible contractual female staff in co-educational schools; and (iii) conditional cash transfers to girls in grades 4-12 and to boys in grades 10-12 in selected districts within the Project Area. Part B: Enhancinz the Ouality of Service Delivery 1 . Provision of learning equipment and materials to selected schools; and 2. Capacity building of teachers, principals and supervisors in selected schools to improve teaching and learning practices in the classroom. Part C: Project Management and Monitorin Supporting and strengthening the capacity of the PAU to carry out the fiduciary, monitoring and reporting duties required for the Project." 2. The table at para. 2 of Section IC of Schedule 2 to the Financing Agreement is amended as follows: Procurement Method (a) Quality Based Selection (b) Fixed Budget Selection (c) Least Cost Selection (d) Selection Based on the Consultants' Qualifications (e) Single-source Selection (f) Individual Consultants 3. The table at para 2. of Section IV. A. of Schedule 2 to the Financing Agreement is amended as follows: Percentage of Amount of the Credit Expenditures to be Category Allocated (expressed in Financed SDR) (inclusive of Taxes) (1) Goods under: (a) Part A.1(a) of the 676,500 Such percentage as the (a) c Association shall determine from time to (b) Other Parts of 1,729,300 time the Project (2) Works under Part 6,539,200 Such percentage as the (2 W(or under PAssociation shall Poth determine from time to Project tm time 2 Percentage of Amount of the Credit Expenditures to be Category Allocated (expressed in Financed SDR) (inclusive of Taxes) (3) Consultants' services under: (a) Part A.1(a) of the 191,400 Such percentage as the Project Association shall determine from time to (b) Other Parts of 383,440 time the Project Such percentage as the (4) Training 1,410,000 Association shall determine from time to time (5) Incremental Such percentage as the Operating Costs Association shall incurred by: determine from time to time (a) PAU 331,760 (b) PMU 216,300 Such percentage as the Association shall determine from time to time Such percentage as the (6) School 1,282,100 Association shall Community Grants determine from time to time (7) Unallocated 0 TOTAL AMOUNT 12,760,000 4. Paragraph 1 of Section IVB of Schedule 2 to the Financing Agreement is amended as follows: "1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) for payments made prior to the date of this Agreement; or (b) for payments made for expenditures under Categories (1)(a), (2), (3)(a), and (5)(b), unless and until the Recipient shall have submitted to the Association, evidence satisfactory to the Association that MOPIC, and MOE, have entered into contractual arrangements satisfactory to the Association to cause the PMU to carry out Part A. 1(a) of the Project; or 3 (c) for payments made for expenditures under Categories (1), (2), (3), (4), (5) and (6) unless the Recipient has submitted to the Association an Annual Work Plan and Budget, satisfactory to the Association. Except for the first such Annual Work Plan and Budget, which shall be submitted to the Association not later than March 15, 2012, each subsequent Annual Work Plan and Budget shall be submitted to the Association for approval no later than December 31 of the preceding calendar year." 5. A new paragraph 1 is added to the Appendix to the Financing Agreement as follows and all other paragraphs are consequently renumbered: "1. Annual Work Plan and Budget" means the annual work plan and budget prepared by the Recipient, and agreed with the Association and Co-financiers, showing activities to be financed in the following year, together with projected annual expenditures under the Project, and the agreed percentages of financing for such expenditures." 6. Paragraphs 5 and 6 of the Appendix (previously paragraphs 4 and 5) are amended to read as follows: "5. "Co-financier(s)" means: (a) Germany's Gesellschaft fur Technische Zusammenarbeit (GIZ); (b) the German Credit Institute for Reconstruction (KfW); and (c) the Netherlands Ministry of Foreign Affairs/Ministry of Development Cooperation, referred to in paragraph 10 of the Appendix to the General Conditions." "6."Co-financing" means: (a) a proposed in-kind grant equivalent to three million United States Dollars ($3,000,000) from Germany's GIZ; (b) a proposed grant in an amount of eight million Euros (E7,000,000) from KfW; and (c) a proposed grant in an amount of seven million United States Dollars ($6,615,000) from the Netherlands Ministry of Foreign Affairs/Ministry of Development Cooperation, to be provided by the Co-financier(s) to assist in financing the Project" 7. Paragraphs 12 and 13 of the Appendix (previously paragraphs 10 and 11) are amended to read as follows: "12"Incremental Operating Costs incurred by the PAU" means the reasonable cost of expenditures incurred by the PAU and by the Recipient on account of Project implementation, management and monitoring for Parts A.2, B and C of the Project, including office rent, supplies, communication and translation services, audit costs, travel costs (including transport, fuel and per diem), vehicle maintenance, advertising, mailing and shipping costs."; and 13" Incremental Operating Costs incurred by the PMU" means the reasonable cost of expenditures incurred by the PMU on account of Project implementation, management and monitoring for Part A.1(a), (b) and (c) of the Project, including office rent, supplies, communication and translation services, travel costs (including transport, fuel and per diem), vehicle maintenance advertising, mailing and shipping costs, and salaries of PMU staff but excluding the salaries of officials of the Recipient's civil service. 4 8. The Project Monitoring Indicators in Supplemental Letter No. 2 to the Financing Agreement are amended per Attachment 1. All the terms and conditions of the Financing Agreement that have not been amended hereby shall remain unchanged and in full force and effect. Please confirm your agreement with the foregoing by signing and dating the confirmation on the enclosed copy of this Letter Amendment to the Financing Agreement and returning it to the Association. Upon receipt by the Association of this countersigned copy of this amendment letter, the amendment shall become effective as of the date of countersignature. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION By Poonam Gupta Acting Country Director Yemen, Egypt and Djibouti Middle East and North Africa Region AGREED AND CONFIRMED: REPUBLIC OF YEMEN Datej2012 - 5 Attachment 1 Annex 1: Results Framework and Monitoring YEMEN SECONDARY EDUCATION AND GIRLS ACCESS PROJECT Project Development Objective (PDO): The objective of the project is to support the Government of Yemen's program for improving gender equity, quality, and efficiency of secondary education in selected districts with a particular focus on girls in rural areas. Revised Project Development Objective: No change Cumulative Target Values** PDO Level Results E D=Dropped Unit of Data Source/ Responsibility 0 C=Continue Baseline Frequency Indicators* Q N= New Measure YR 1 YR 2 YR3 YR4 YR5 YR6 Methodology for Data R=Revised Collection Indicator One: Gender parity index of C 0.42 secondary education access CEI 050 0.53 0.56 0.62 0.64 0.66 Annual MOE AES MOE TO rates in the project districts increased from 0.42 to 0.66. Indicator Two: G10 to G12 male retention rate E C 806 80.9 81.2 81.5 82.8 84.1 85.4 Annual MOE AES MOE TO in project districts improved from 80.6 to 85.4 (%) Indicator Three: Gl0 to G12 female retention E] C 84.2 84.5 84.8 85.1 86.5 87.8 89.1 Annual MOE AES MOE TO rate in project districts improved from 84.2 to 89.1(%) Indicator Four: GIZ GIZ in Average score in Mathematics R 19.3% 27.6% 40% Independent collaboration GIZ Independent and Science Test for a sample Study with MOE Study of Gl I students' Standard test conducted through GIZ survey on a sample of 24 schools in 3 governorates: Ibb, Lahej and Taiz