23-Dec-2021 ____________ Mr. Mian Asad Hayaud Din Secretary Ministry of Economic Affairs Government of Pakistan Islamabad Dear Mr. Hayaud Din: Re: Pakistan: Punjab Job and Competitiveness Program Loan Agreement (Loan Number:8600-PK) Amendments to the Loan Agreement 1. We refer to: (a) the Loan Agreement dated June 17, 2016 (“Agreement”) between the Islamic Republic of Pakistan (“Borrower”) and the International Bank for Reconstruction and Development (“Bank”); and (b) the Program Agreement of the same date between the International Bank for Reconstruction and Development (“Bank”) and the Province of Punjab (“Program Implementing Entity”) (“Program Agreement”), for the above-mentioned Program (“Program”). We also refer to your letter dated June 08, 2021, requesting amendments to the Loan and Program Agreements. 2. We are pleased to inform you that the Bank agrees to your request and consequently the Loan Agreement is amended as set forth below: 3. The table under Section IV.A.2 of Schedule 2 to the Agreement is amended and attached as Annex-1 to the Amendment Letter. 4. Schedule 4 to the Agreement is amended and attached as Annex-2 to the Amendment Letter. 5. Except as specifically amended in this amendment letter, all other terms and conditions of the Loan Agreement shall remain in full force and effect. 6. The World Bank will disclose this amendment letter and related information on this Loan Agreement in accordance with the World Bank’s Policy on Access to Information. By entering into this amendment letter, the Recipient consents to disclosure of this amendment letter and related information. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -2- 7. Please confirm your agreement to the foregoing on behalf of the Recipient by countersigning and dating the form of confirmation set forth below and returning one fully countersigned original of this amendment letter to us and retaining one original for your records. Upon receipt by the Bank of the countersigned original of this amendment letter, this amendment letter shall become effective as of the date of the countersignature of this amendment letter. Yours sincerely, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ________________________ Najy Benhassine Country Director, Pakistan CONFIRMED AND AGREED: ISLAMIC REPUBLIC OF PAKISTAN By: ____________________________________ Mian Asad Hayaud Din Name: ____________________________________ Secretary Ministry of Economic Affairs Title: ____________________________________ 30-Dec-2021 Date: ____________________________________ Cc: Government of Pakistan: Mr. Zulfiqar Haidar, Additional Secretary, Ministry of Economic Affairs Ms. Samar Ihsan, Senior Joint Secretary, Ministry of Economic Affairs Mr. Azam Khan, Deputy Secretary, Ministry of Economic Affairs Government of Punjab: Mr. Muhammad Abdullah Khan Sumbal, Chairman, Planning and Development Board Mr. Mujahid Sherdil, Secretary, Planning and Development Board Mr. Ali Jalal, Program Director, Program Implementation Unit The World Bank: Mr. Abdelhak Bedjaoui, Executive Director, Pakistan Mr. Kamran Naveed Baloch, Alternate Executive Director, Pakistan 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -3- Annex-1 Amount of the Category Loan Disbursement Linked Result (as (including Disbursement Allocated applicable) Linked Indicator as applicable) (expressed in USD) (1) DLI #1: Steps taken to (i) 70% of business registrations 0 improve business entry and in Punjab are completed dispute resolution in Punjab. online and commercial courts established in five districts of the province. (ii) Over the successive Periods: 1,430,000 per point of improved performance rounded to closest point, with a maximum aggregate amount of 21,000,000 for the Category (iii) The Program Implementing 2,000,000 Entity has approved Pakistan Regulatory Modernization Initiative (PRMI) Framework. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -4- Amount of the Category Loan Disbursement Linked Result (as (including Disbursement Allocated applicable) Linked Indicator as applicable) (expressed in USD) (2) DLI #2: Steps taken by the (i) (a) The Borrower has carried out 2,000,000 Program Implementing Entity to an analysis of the gaps between the improve its contribution to the Program Implementing Entity’s labor Borrower’s compliance with the laws and the GSP+ Labor Conventions. GSP+ Labor Conventions. (i)(b) The Program Implementing 2,000,000 Entity has improved its labor inspection regime through the introduction of portable device-based inspection. (ii) The draft of the new labor laws 3,000,000 has been finalized and would ensure, if enacted, the Program Implementing Entity’s compliance with the GSP+ Labor Conventions. (iii) The draft laws referred to in (ii) 3,000,000 immediately above have been submitted to stakeholders for consultation, their recommendations have been incorporated in the draft laws; the revised draft of the new labor laws would continue to ensure, if enacted, the Program Implementing Entity’s compliance with the GSP+ Labor Conventions. (iv) The new labor laws ensuring 3,000,000 the Program Implementing Entity’s compliance with the GSP+ Labor Conventions have been submitted to the Provincial Tripartite Consultative Committee (PTTC). (3) DLI # 3: Steps towards the (i) (a) Approval of the PBIT Strategy 3,000,000 improvement of investment by the PBIT Board; promotion. (b) PBIT Investor Database has been developed; and (c) PBIT has carried out at least one Investor Engagement Mission. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -5- Amount of the Category Loan Disbursement Linked Result (as (including Disbursement Allocated applicable) Linked Indicator as applicable) (expressed in USD) (ii) Number of Investment 1,000,000 (in Announcements by Foreign Investors. case of partial 5. achievement, 200,000 per Investment Announcement) (iii) Investment Announcements by 200,000 for Foreign Investors on or after July 2021 crossing every but before the closing date of the Loan. 5,000,000 of investment milestone (single/ multiple) with maximum aggregate amount 8,000,000 for the category (4) DLI # 4: Steps towards (i) The Program Implementing Entity 6,000,000 developing and implementing a follows the recommendations of the spatial strategy for the Program prefeasibility study for the possible Implementing Entity, to prioritize development of a new city, which have and coordinate public been validated by the Panel of Experts. investments. (ii) The draft spatial strategy for the 6,000,000 Program Implementing Entity has been developed in close collaboration with EPA to ensure compliance with the Program Implementing Entity’s environmental laws and regulations and the recommendations of Section 7 (Recommendations and Proposed Actions) of the ESSA, validated by the Panel of Experts, and finally approved by the Cabinet (after completion of this procedure, the “Spatial Strategy”). (iii) Development of MIS for Covid- 6,000,000 19 related interventions covering mainly infection control planning, healthcare planning, infrastructure utilization planning and industrial operationalization planning. (iv) 60 % of the total value of all 6,000,000 Infrastructure as well as all Industrial Estates projects approved in FY 2019- 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -6- Amount of the Category Loan Disbursement Linked Result (as (including Disbursement Allocated applicable) Linked Indicator as applicable) (expressed in USD) 20 are consistent with the Program Implementing Entity’s Spatial Strategy. (v) 60 % of the total value of all 6,000,000 Infrastructure as well as all Industrial Estates projects approved in FY 2020- 21 are consistent with the Program Implementing Entity’s Spatial Strategy. (5) DLI # 5: Steps towards the (i) (a) The Program Implementing 1,000,000 effective development of Entity has completed a feasibility study industrial infrastructure through for the development of one Existing or public private partnerships. New Industrial Estate, and has been presented it to the PPP Steering Committee following Quality Control by the PPP Cell between the date of this Agreement and June 30, 2017. (i) (b) The Program Implementing 1,000,000 Entity has completed a feasibility study for the establishment of one new CETP in an Existing Industrial Estate, and has been presented it to the PPP Steering Committee following Quality Control by the PPP Cell during FY2017-2018. (ii) One project for the development of 2,000,000 an Existing or New Industrial Estate has been presented to the PPP Steering Committee, following Quality Control by the PPP Cell during FY2018-2019. (iii) One project for the establishment 2,000,000 of a CETP in an Existing Industrial Estate has been presented to the PPP Steering Committee, following Quality Control by the PPP Cell on or after July 1, 2019. (iv) Two projects, for the development 2,000,000 (in of an Existing or New Industrial Estate case of partial or the establishment of a CETP in an achievement, Existing Industrial Estate, have been 2,000,000 per presented to the PPP Steering project presented to the 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -7- Amount of the Category Loan Disbursement Linked Result (as (including Disbursement Allocated applicable) Linked Indicator as applicable) (expressed in USD) Committee, following Quality Control PPP Steering by the PPP Cell on or after July 1, 2020. Committee following quality control by the PPP Cell) (v) (a) One project, for the development 2,000,000 of an Existing or New Industrial Estate or the establishment of a CETP in an Existing Industrial Estate, have been presented to the PPP Steering Committee, following Quality Control by the PPP Cell on or after July 1, 2021 but before the closing date of the loan. (v) (b) One CETP project in an Existing 0 Industrial Estate previously presented to the PPP Steering Committee is operational. (6) DLI # 6: Steps towards (i) (a) The Program Implementing (i)(a)1,000,000 designing and implementing a new Entity has designed, and the relevant institutional framework to support authorities have approved, a new Industrial Estates and clusters. Policy Framework to Support Industrial Estates; (b) The Program Implementing (b) 1,000,000 Entity has designed, and the relevant authorities have approved, the Restructuring Plan for PSIC; and (c) The Cluster Development (c) 1,750,000 Initiative has started its activities, with the kick-off workshop with beneficiaries for one project to be supported and the recruitment of the technical assistance providers in accordance with the Cluster Development Initiative key principles and criteria. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -8- Amount of the Category Loan Disbursement Linked Result (as (including Disbursement Allocated applicable) Linked Indicator as applicable) (expressed in USD) (ii) (a) The Policy Framework to (ii)(a) 1,000,000 Support Industrial Estates has been implemented in accordance with its milestones; (b) Kick off workshop with (ii)(b) 2,000,000 beneficiaries for each of the two projects to be supported by the Cluster Development Initiative during the Period. (iii) Kick off workshop with 3,000,000 beneficiaries for each of the two projects to be supported by the Cluster Development Initiative during the Period. (7) Front-end Fee to be paid Not applicable 250,000 pursuant to Section 2.03 of this Agreement in accordance with Section 2.07(b) of the General Conditions (8) Interest Rate Cap or Interest Not applicable 0 Rate Collar premium to be paid pursuant to Section 2.08(c) of this Agreement in accordance with Section 4.05 of the General Conditions TOTAL AMOUNT 100,000,000 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -9- Annex-2 SCHEDULE 4 PROGRAM ACTION PLAN The Program Action Plan includes institutional strengthening actions to ensure that the coordinating and implementing entities are well equipped to deliver activities and achieve results under the program. Responsible Completion Action Description DLI Due Date Party Measurement Reinforcement of PIU, starting with January ALL PIU Notification. designation of project heads. 29, 2016 Program Steering Committee set up to First Minutes of review progress on a quarterly basis. meeting: meetings and ALL P&D (PIU) Sept 1, supporting 2016 documents. Development of Program Manual for February Operational activities related to PforR, including ALL P&D (PIU) 12, 2016 manual. verification protocols. Internal and audit function in PIU December ALL P&D (PIU) Hiring of staff. established. 31, 2016 Reinforcement of labor department to Issuance of May 31, Labor undertake labor reforms. 2 contract for 2016 Department study. Reform and reinforcement of PBIT. Investor December 3 DoI targeting system 31, 2016 in place. Establishment of the expert panel for Terms of the Punjab Spatial Strategy. reference, February notification, 4 P&D 12, 2016 first review of terms of reference. Public disclosure of assessment of the Expression of panel of experts assessing the economic interest, terms viability of proposed new sites for new of reference, city based on the pre-feasibility study. request for proposals, Jan 1, 4 P&D contract award, 2017 assessment of panel and decision taken by P&D, published. Development of operating procedures Framework for and regulatory framework for Jan 1, the 4 P&D enforcement of the spatial strategy. 2018 implementation of PSS notified. Updates to the Medium Term Jun 30, Updated 4 P&D Development Framework based on 2018 Medium Term 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 - 10 - outcomes of the Punjab Spatial Development Strategy. Framework. Capacity building for line departments Approvals in to submit sectoral plans for the Annual Annual Development Plan consistent with the Jun 30, Development 4 P&D (UU) Punjab Spatial strategy. 2019 Plan as per Punjab Spatial Strategy. Reinforcement of capacity of Strategic Policy DoI/PIEDMC/FIEDMC to build PPP Unit in pipeline and ensure compliance with Industries December higher labor and environmental 5 DoI Department. 31, 2016 standards. One window operations at IE. Key Staff hired. Creation of Steering Committee to lead the institutional reforms to improve May 31, 6 DoI Notification. public support to industrial estates and 2016 clusters. PIU, PIEDMC, FIEDMC, PSIC to fill January 1, Staffing plan vacant positions. 5 P&D 2017 review PIU to hire an FMS, two procurement and one contract management Existing vacant specialist, whereas PIEDMC and positions as FIEDMC to fill their vacant positions of well as Manager Finance and Tax and Assistant identified new Manager in the FM departments. positions filled. PIU, PIEDMC, PSIC to hire professional accountants January 1, PSIC staff ALL FIEDMC, and to rationalize existing staff in the 2017 rationalized and PSIC finance department. professional accountants The entities shall appoint and train the hired. fiduciary management staff as identified above, with qualifications and New staff hired on terms and conditions satisfactory to trained. the Bank. PSIC to clear its audit backlog since Audit 2010–11 by outsourcing it to a completed and chartered accounts firm under multiyear June 30, audit reports 6 PSIC audit engagement letter. 2017 presented to the Performance Audit Cell. Establish an effective internal audit Plan to establish function at PIU. Internal Audit Function agreed Internal audit to carry out financial with the Bank. management, procurements, fixed January 1, ALL PIU, P&D assets and performance audit at the 2017 Staff hiring Program level and reports to the completed and Program Steering Committee on a IA function quarterly basis. established. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 - 11 - Program-level internal audit carried out and reports submitted to Program SC. Complaint Management System is Implementation consistently implemented. January 1, of Complaint ALL PIU 2017 Management System. Establishment of Social Units in January 1, Notification 2 IE companies PIEDMC/FIEDMC. 2017 Capacity building and establishment of Notification Environmental Monitoring center and January 1, 5 EPA management information system for 2017 EPA. Implementation of the EPA, Labor Environmental Recommendations of Section 7 and Women and Social 2 and June 30, (Recommendations and Proposed Development Reporting and 5 2019 Actions) of ESSA. Departments, supervisions’ IE companies reports. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648