22-Jun-2021 _______________ Mr. Noor Ahmed Secretary Ministry of Economic Affairs Government of Pakistan Islamabad Mr. Muhammad Abdullah Khan Sumbal Chairman Planning and Development Board Government of Punjab Lahore Dear Mr. Ahmed and Mr. Sumbal: Re: Pakistan: Third Punjab Education Sector Project (Loan No.8620-PK) Amendment to the Loan Agreement and Indicators/Results Framework We refer to the Loan Agreement (the “Loan Agreement”) between the Islamic Republic of Pakistan (the “Borrower”) and the International Bank for Reconstruction and Development (the “Bank”), dated August 31, 2016, as amended to date, and the Project Agreement of the same date between the Province of Punjab (the “Project Implementing Entity”) and the Bank (the “Project Agreement”), for the above-referenced Project (the “Project”). We also refer to the letter from the Economic Affairs Division dated April 27, 2021, requesting restructuring of the Project as well as to discussions between the Borrower and the Bank relating to said restructuring, including a discussion of the Project Steering Committee held on June 10, 2021, which require certain amendments to the Loan Agreement. We are pleased to inform you that the Bank concurs with your request, and accordingly proposes hereby to amend the Loan Agreement as set forth below in this letter of amendment (the “Letter of Amendment”). Capitalized terms used but not defined in this Letter of Amendment have the meanings given to them in the Loan Agreement and the General Conditions. I. The Disbursement Linked Indicators (DLI) No. 4, 5 7 and 8, as set out in the table in Schedule 4 of the Loan Agreement, which sets out the Disbursement Linked Indicators, Disbursement- Linked Results and their Respective Prices, are hereby amended to read in full as set forth in Attachment 1 to this Letter of Amendment. These Disbursement Linked Indicators may also be referred to as ‘Performance-Based Conditions’ or PBCs. Except as specifically amended by this Letter of Amendment, all other terms and conditions of the Loan Agreement remain in full force and effect. Please confirm your agreement to the foregoing on behalf of the Borrower and the Project Implementing Entity by countersigning and dating the form of confirmation set forth below and returning one fully countersigned original of this Letter of Amendment to us and retaining one original for your records. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan/Phone: (92-51) 9090000 /Fax: (92-51) 2279648 -2- Upon receipt by the Bank of the original Letter of Amendment duly countersigned by the Borrower and the Project Implementing Entity, this Letter of Amendment shall become effective as of the date of the last signature. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ______________________ Najy Benhassine Country Director, Pakistan South Asia Region AGREED: ISLAMIC REPUBLIC OF PAKISTAN By: __________________________________ Noor Ahmed Name: ________________________________ Secretary Title: _________________________________ 23-Jun-2021 Date: _________________________________ PROVINCE OF PUNJAB By: __________________________________ Ghulam Farid Name: ________________________________ Secretary School Education Department Title: _________________________________ 23-Jun-2021 Date: _________________________________ 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -3- Attachment 1 SCHEDULE 4 Disbursement-Linked Indicators. Disbursement-Linked Results and Respective Prices DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) DLI 1: Private school Revised EVS system in 10,000 Eligible 130,000 Eligible Children 90,000 Eligible Children 150,000 Eligible vouchers: place; and PEF initiates Children received received vouchers to attend received vouchers to attend Children received Strengthening pilot for EVS vouchers to attend private schools. private schools. vouchers to attend program design to private schools; and private schools. expand coverage of PEF’s Board of tuition-replacement Directors approved the vouchers to children Revised System for from disadvantaged EVS households Price $8,590,000 Price $8,590,000 Price $8,590,000 Price $3,220,000 Price $3,220,000 DLI 2. Public-private 180,000 children are 360,000 children are 540,000 children are 720,000 children are 900,000 children are partnerships in enrolled through enrolled through enrolled through Public- enrolled through Public enrolled through Public education: Public-Private Public-Private Private Partnerships under Private Partnerships under Private Partnerships Leveraging the Partnerships under PEF Partnerships under PEF PEF approved programs that PEF approved programs under PEF approved 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -4- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) private sector to approved programs that approved programs that have a Strengthened Quality that have a Strengthened programs that have a support schools to have a Strengthened have a Strengthened Assurance System. Quality Assurance System. Strengthened Quality increase enrollment Quality Assurance Quality Assurance Assurance System. System. System. Price $8,590,000 Price $8,590,000 Price $8,590,000 Price $3,220,000 Price $3,220,000 SED has strengthened SED has: (i) adopted a SED has: (i) registered its original program strategy to simplify and new students through and is implementing it strengthen the school-based enrolments in 16 Districts. implementation of the and issuance of payment DLI 3. Stipends for stipend program; cards; (ii) disbursed secondary school (ii) disbursed stipends to stipends to continuously girls: Stipends for SED has strengthened continuously registered registered students in secondary school its original program and students in 16 districts; additional 16 districts; girls to increase is implementing it in 16 and. (iii) disbursed stipends and (iii) disbursed secondary school Districts. to newly registered stipends to newly participation/retention students in 16 districts. registered students in 16 districts, with 80% of first payments occurring within 1 month of registration. 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -5- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) Price $8,590,000 Price $8,590,000 Price $3,000,000 for (i), Price $2,430,000 for 1,600,000 for (ii), (i), 3,200,000 for with $100,000 to be (ii), with 200,000 disbursed for each to be disbursed district having met for each district the condition until having met the the total number of condition until such districts the total number reaches 16; and of such districts 1,600,000 for (iii), reaches 16; and with $100,000 to be 3,200,000 for disbursed for each (iii), with district having met 200,000 to be the condition until disbursed for the total number of each district such districts having met the reaches 16; condition until the total number of such districts reaches 16; DLI 4 - Early SED has approved the 1,000 schools have 2,500 schools have 3,800 schools have (i) 7,000 schools have childhood ECE Policy classrooms that meet classrooms that meet the classrooms that meet the classrooms that meet the education: Framework, which the Quality Standards Quality Standards prescribed Quality Standards Quality Standards 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -6- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) Improving quality includes Quality prescribed by the ECE by the ECE Policy prescribed by the ECE prescribed by the ECE and expanding access Standards for ECE Policy Framework. Framework; and 50 schools Policy Framework. Policy Framework (ii) to early childhood classrooms. have started implementation SED has updated the education of District health/ nutrition Quality Standards based officers pilot. on lessons learned from previous years. (iii) Using a remote learning platform, SED has carried out trainings for MEAs, caregivers and teachers. Price $8,590,000 Price $8,590,000 Price $8,590,000 Price $3,220,000 Price $6,220,000 in total with $1,000,000 for every 1,000 schools meeting the quality standards above 3,000 up to a maximum of $4,000,000 (i); 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -7- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) $1,000,000 for (ii); and $1,220,000 for (iii) SED has started SED continues to SED continues to implement - - implementation of its implement its its recruitment policy for DLI 5 - Teachers recruitment policy for recruitment policy for Merit-Based Recruitment of Recruitment: Merit-Based Merit-Based new teachers and Human Resources Recruitment of new Recruitment of new reallocation of posts. Management: teachers and teachers and Strengthening HR reallocation of posts. reallocation of posts. processes through Third-party validation continuous merit- of the SED’s based recruitment and recruitment policy for rationalization of Merit Based teaching posts Recruitment of new teachers and reallocation of posts completed. Price $8,590,000 Price $8,590,000 Price $8,590,000 - - 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -8- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) Innovative support package Training of primary school Training of primary is designed; and teachers (as per revamped school teachers (as per AEOs task description is CPD design) conducted in revamped CPD design) DLI 6: Quality in revised and AEOs start 06 Districts; conducted in 12 the Primary conducting classroom Innovative support package Districts; and Classroom observations through is developed, validated and QAED has incorporated Strengthening field android app. pilot initiated in 100 successful elements of based CPD for schools; and innovative support improved teacher QAED has trained AEOs package into the regular performance (or equivalent) on CPD program. classroom observation and feedback provision. Price $8,590,000 Price $11,810,000 Price $11,810,000 PEC has: (i) developed an PEC has (i) implemented DLI 7. Student Institutional Strengthening 2 rounds of School Assessment: Plan; (ii) has piloted a Based Assessments in at PEC and its sample-based assessment least 18 districts of the instruments instrument in Grade 5 province, (ii) Adopted a strengthened within a classrooms, (iii) developed Formative Assessment revised policy an assessment framework Strategy, (iii) initiated framework that can be used to develop hiring of positions under future assessments. the Human Resource Plan (iv) has conducted a 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -9- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) Large Scale Assessment, (v) has established a benchmark and a baseline reading proficiency in the province for the early grades. Price $5,000,000 in Price $15,210,000 in total with total with $2,000,000 for (i); $1,000,000 $2,500,000 for for (ii) and each round under $2,000,000 for (i); $3,000,000 (iii). for (ii); $2,210,000 for(iii); $3,000,000 for (iv) and $2,000,000 for (v). 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -10- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) DLI 8. School SED has prepared SED has prepared SED has prepared School- SED has prepared School- (i) SED has prepared specific NSB Setting School-Specific Non- School-Specific Non- Specific Non-Salary Specific Non-Salary School-Specific Non- and executing school Salary Budgets for Salary Budgets for Budgets for FY2018/19 in Budgets for FY2019/20 in Salary Budgets for budgets in line with FY2016/17 in FY2017/18 in accordance with agreed accordance with agreed FY2020/21 in school resource needs accordance with agreed accordance with agreed funding formula, and funding formula, and accordance with agreed funding formula, and funding formula, and submitted for inclusion in submitted for inclusion in funding formula, and submitted for inclusion submitted for inclusion FY2019/20 District budgets FY2020/21 District budgets submitted for inclusion in FY2017/18 District in FY2018/19 District in 36 Districts for all in 36 District for all in FY2020/21 District budgets in 36 Districts budgets in 36 Districts schools, including high/high schools, including budgets in 36 Districts for all schools, for all schools, secondary; and Punjab’s high/high secondary; and for all schools, including including high/high including high/high Finance Department has Punjab’s Finance high/high secondary; and secondary; and secondary; and dispersed School-Specific Department has dispersed Punjab’s Finance Punjab’s Finance Punjab’s Finance Non-Salary Budgets bi- School-Specific Non- Department has Department has Department has annually to schools with Salary Budgets to schools dispersed School- dispersed School dispersed School establishment of Necessary with establishment of Specific Non-Salary Specific Non-Salary Specific Non-Salary Support Structure for Necessary Support Budgets to schools with Budgets bi-annually to Budgets bi-annually to execution; and TPV of Year Structure for execution. establishment of schools with schools with 1 and Year 2 of this DLI Necessary Support establishment of establishment of completed. Structure for execution. Necessary Support Necessary Support (ii) SED has adopted a Structure for execution; Structure for execution. revised formula for the and SCs reconstituted School-Specific Non- in required Salary Budget. (iii) SED 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -11- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) elementary/primary has disbursed at least one schools and constituted quarter of the School- in all high schools Specific Non-Salary Budget in 36 Districts for all schools using the revised funding formula. Price $8,590,000 Price $8,590,000 Price $8,590,000 Price $3,220,000 Price $6,660,000 in total with $3,220,000 for (i), $1,000,000 for (ii), $ 2,440,000 for (iii) DLI 9. Data SED has conducted a PMIU has integrated PMIU has integrated PMIU has integrated PMIU has integrated strengthening and private school census; Education sector data Education sector data (from Education sector data (from Education sector data performance and PMIU has prepared (from PEC, PMIU, PEC, PMIU, DSD, and PEC, PMIU, DSD, and (from PEC, PMIU, management: and delivered on a DSD and PEF); and PEF); and PMIU has PEF); and PMIU has DSD, and PEF); and Strengthening semi-annual basis PMIU provided access provided access and provided access and PMIU has provided management capacity District performance and orientation to the orientation to the integrated orientationto the integrated access and orientation to and evidence-based report cards for Year 1 integrated database to database to education database to education the integrated database to decision-making following agreed education departments departments and District departments and District education departments format and contents, to and District education education officials in 12 education officials in 36 and District education 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648 -12- DISBURSEMENT LINKED INDICATORS DISBURSEMENT LINKED- RESULTS (may alternatively be referred to as ‘Performance-Based Conditions’ or PBCs) RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE RESULTS TO BE ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN ACHIEVED IN FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 (YEAR 1) (YEAR 2) (YEAR 3) (YEAR 4) (YEAR 5) District Education officials in 3 Districts; Districts; PMIU has Districts; PMIU has officials in 36 Districts; Administrations. PMIU has prepared and prepared and delivered on a prepared and delivered on a PMIU has prepared and delivered on a semi-annual basis District semi-annual basis District delivered on a semiannual basis performance report cards for performance report cards semiannual basis District District performance Year 3 following agreed for Year 4 following agreed performance report cards report cards for Year 2 format and contents, to format and contents,to for Year 5 following following agreed District Education District Education agreed format and format and contents, to Administrations. Administrations contents, to District District Education Education Administrations Administrations Price $8,590,000 Price $8,590,000 Price $8,590,000 Price $3,220,000 Price $3,220,000 20-A, Shahrah-e-Jamhuriat, G-5/1, Islamabad, Pakistan / Phone: (92-51) 9090000 / Fax: (92-51) 2279648