ANDREI MIKHNEV
Country Manager and Resident Representative for Mongolia
The World Bank




                                                                                       January 21, 2021
                                                                                        Ref No.: 017/21


          H.E. Ch. Khurelbaatar
          Minister of Finance
          Ministry of Finance
          Government Building II
          S. Danzan Street 5/1 Building D
          Ulaanbaatar, 15160


          Dear Excellency:

                  Re: Amendment to Additional Instructions for Disbursement Arrangements

                   We refer to the legal agreements between Mongolia (the “Recipient”) and the
          International Development Association and/or the International Bank for
          Reconstruction Development (in their own capacity or as administrators/implementing
          agencies of various trust funds) (the “World Bank”) for the projects listed in Annex 1
          to this letter (the “Projects”).

                  We also refer to your letter dated November 3, 2020 proposing the transfer of
          the special and sub-accounts under the Projects from commercial banks to the Treasury
          Single Account (TSA).

                  We would like to inform you that the World Bank concurs with the proposed
          disbursement arrangements of using the functionalities of the Treasury System to
          manage all types of transactions under Projects through the TSA, including transactions
          in local currency and/or foreign currency.

                 Accordingly, the letters providing additional instructions for disbursement
          arrangements, and as applicable, specific financial reporting requirements for the
          Projects (the “Disbursement Letters”) are hereby amended to include the following
          additional instructions:

                    1.        A pooled Designated Account in USD (“DA”) will be opened at the
                              Bank of Mongolia for the Projects and will be managed through
                              Mongolia’s TSA Multi-Currency System which handles all foreign
                              currency transactions within the TSA.

                    2.        A segregated ledger account will be maintained for each of the Projects
                              to monitor receipts and uses of the funds under the DA.



                           5th Floor, MCS Plaza Building, 4 Seoul Street, 14250 Ulaanbaatar, Mongolia
                                                      Tel: +(976) 7007 8200
H.E. Ch. Khurelbaatar                      -2-                         January 21, 2021


       3.      A zero-balance account will be maintained separately for each of the
               Projects at a commercial bank acceptable to the World Bank and subject
               to an agreement between MOF and the commercial Bank, which will be
               used to initially draw funds from the World Bank. The funds received in
               the zero-balance account will be automatically transferred to the DA at
               TSA on the same day through overnight clearing and settlement process.
               Reconciliation statement attaching with the bank statement for both DA
               at TSA and zero balance account will be attached with the relevant
               withdrawal applications to ensure funds are transferred to the DAs at
               TSA immediately and fully available to finance for eligible expenditures
               under each of the Projects.

This letter forms part of the Disbursement Letters, as revised from time to time, and
constitutes the additional instructions that the World Bank specifies by notice to the
Recipient.

                                   Yours sincerely,
H.E. Ch. Khurelbaatar                     -3-                       January 22, 2021



                                    ANNEX 1

               List of Loans, Credits, and Grants by Project Name and Number

 Financier       Loan No       Project Name
                               MONGOLIA COVID-19 EMERGENCY RESPONSE
 IBRD            9082-MN       PROJECT
 IDA             5483- MN      SMART GOVERNMENT PROJECT
 IDA             5487- MN      THIRD SUSTAINABLE LIVELIHOODS PROJECT
 IDA             5488- MN      EDUCATION QUALITY REFORM PROJECT
 IDA             5489- MN      E-HEALTH PROJECT
 IDA             5879-0 MN     EXPORT DEVELOPMENT PROJECT
 IDA             5974- MN      MONGOLIA EMPLOYMENT SUPPORT PROJECT
                               STRENGTHENING FISCAL AND FINANCIAL
 IDA             6084- MN      STABILITY PROJECT
                               STRENGTHENING FISCAL AND FINANCIAL
 IDA             6085- MN      STABILITY PROJECT
 IDA             6102- MN      MONGOLIA SECOND ENERGY SECTOR PROJECT
 IDA             6493- MN      AF FOR ULAANBAATAR CLEAN AIR PROJECT
 IDA             6508- MN      LIVESTOCK COMMERCIALIZATION PROJECT
                               AF FOR THIRD SUSTAINABLE LIVELIHOODS
 IDA             6588- MN      PROJECT
                               ULAANBAATAR HEATING SECTOR
 IDA             6589- MN      IMPROVEMENT PROJECT
                               MONGOLIA COVID-19 EMERGENCY RESPONSE
 IDA             6594-MN       PROJECT
                               MONGOLIA EMERGENCY RELIEF AND
 IDA             6697- MN      EMPLOYMENT SUPPORT PROJECT
 TF              A0794-MN      THIRD SUSTAINABLE LIVELIHOODS PROJECT
 TF              A4506-MN      MONGOLIA SECOND ENERGY SECTOR PROJECT
                               EU TF STRENGTHENING GOVERNANCE IN
 TF              B0063-MN      MONGOLIA PROJECT
                               ENTREPRENEURSHIP-FOCUSED
                               SOCIOEMOTIONAL SKILLS FOR THE MOST
 TF              B0943-MN      VULNERABLE YOUTH IN RURAL MONGOLIA
 TF              B3794-MN      MONGOLIA PEF SUPPORT FOR COVID -19 PROJECT