The World Bank 1818 H Street FVM 477 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D ME e Address INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. _-Cable Address: INDEVAS May 23, 2013 H.E. Zoran Stavreski Vice Prime Minister and Minister of Finance Ministry of Finance Mito Hadzivasilev Jasmin 50 1000 Skopje Excellency: Re: Conditional Cash Transfers Project (Loan No. 7735-MK) Amendment to the Loan Agreement We refer to the Loan Agreement between the Borrower and the International Bank for Reconstruction and Development (the Bank) for the above-referenced Project, dated September 2, 2009, as amended (the Loan Agreement) and to your letter dated December 25, 2012 requesting amendments to the Loan Agreement. The Bank therefore proposes to amend the Loan Agreement as follows: Project Description 1. Part A. 2 of Schedule 1 to the Loan Agreement shall be amended to read as follows: "2. Identification, development and implementation of possible CCT program extensions in health, labor and/or other levels of education, including: (a) the provision of goods and technical assistance to: (i) undertake diagnostic studies on target population and possible relevant health, labor and/or education incentives; (ii) carry out an assessment of targeting and outreach mechanisms; (iii) develop different options for key CCT program parameters; and (iv) design the relevant CCT program and prepare the relevant operational manual; and (b) the provision of CCT program grants to pilot and test possible CCT extension programs, and to implement such CCT extension programs beyond the pilot and test phase provided such pilot and test phase has been successful and satisfactory to the Bank." 2. Part B. of Schedule I to the Loan Agreement shall be amended to read as follows: "Part B: Strengthening Safety Net Administration 1. Improvement of the Cash Benefits Information System through provision of Training, goods and technical assistance. 2. Assessments of targeting, eligibility and registry systems for cash benefit programs, through provision of Training, goods and technical assistance. 3. Development and application of oversight and control mechanisms to monitor the implementation of CCT programs and other social financial assistance benefits, through provision of Training, goods and technical assistance. RCA 248423. LJ WUI 64145 U FAX (202) 477-6391 H.E. Zoran Stavreski -2- 4. Carrying out a functional analysis of Social Work Centers, through provision of Training, goods and technical assistance. 5. Capacity building for CCT program management in MLSP and SWCs, through provision of Training, goods and technical assistance. 6. Refurbishment of facilities within existing SWCs' premises, through the provision of consultant services, goods and the carrying out of minor civil works." Project Execution 3. A new paragraph 5 shall be added to Section 1. A of Schedule 2 to the Loan Agreement to read as follows: "5. (a) The civil works under Part B. 6 of the Project shall be limited to non- structural refurbishment of existing SWC facilities and shall consist only of minor works such as painting, wiring, and replacement of doors and windows, and shall not involve any structural works such as additions to existing structures or rehabilitation works substantial enough to create a potential issue regarding disposal of construction waste, and shall not involve the potential handling of asbestos. (b) The Borrower shall carry out the minor civil works under Part B. 6 of the Project in accordance with environmental, social, public health and safety standards and practices satisfactory to the Bank, and to this end the contracts for such minor works shall include adequate provisions consistent with such standards, in form and substance satisfactory to the Bank." Closing Date 4. Paragraph 2 of Section IV. B of Schedule 2 to the Loan Agreement shall be amended to read as follows: -2. The Closing Date is December 31, 2015." Procurement 5. Paragraph 1. of Section III.A of Schedule 2 to the Loan Agreement shall be amended to read as follows: "1. Goods and works. All goods and works required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section." 6. Paragraphs 1. and 2. of Section III.B. of Schedule 2 to the Loan Agreement shall be amended to read as follows: H.E. Zoran Stavreski -3- "B. Particular Methods of Procurement of Goods and Works 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods and works shall be procured under contracts awarded on the basis of International Competitive Bidding procedures. 2. Other Methods of Procurement of Goods and works. The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used." Withdrawal of Loan Proceeds 7. The table set forth in Section IV.A.2 (Withdrawal of Loan Proceeds) of Schedule 2 to the Loan Agreement is amended to read as follows: Category Amount of the Percentage of Loan Expenditures Allocated to be financed (Expressed in Euro) (I) Grants under Part A of the 100% Project (a) Education grants under Part A.1 of the Project: (i) grants for school 1,476,765 year 2010/11 (ii) grants for school years starting 7,400,000 school year 2011/12 (b) CCT program grants under 3,000,000 Part A.2 ( b) of the Project (2) Goods, services and Training 5,304,985 100% for the Project (3) Operating Cost 70,000 100% (4) Front-end fee 48,250 Amount payable pursuant to Section 2.03 of this Agreement in accordance with section 2.07 (b) of the General Conditions (5) Works for Part B.6 of the 2,000,000 Project TOTAL 19,300,000 H.E. Zoran Stavreski -4- All the other terms and conditions of the Loan Agreement, as amended hereby, shall remain in full force and effect. Please confirm your agreement to the foregoing amendment by signing, dating and returning to us one of the original copies of this Amendment Letter. This Amendment Letter will come into force and effect as of the date of your countersignature upon receipt by the Bank of the said duly countersigned original Amendment Letter. Sincerely, Anthony A. Gaeta Acting Country Director for Southeast Europe Europe and Central Asia Region AGREED: BORROWER o er of inance U'G .1101^ H.E. Zoran Stavreski -5- Cc: Mr. Frank Heemskerk Executive Director World Bank