The World B3ank 1818 H Street N.W. (202) 473-1000 INTERNATIONAL 3ANK FOR RECONSTRUCTION AND DEV EL I M p.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL ]EVELOPMENT ASSOCIATION U.S.A Cable Address: INDEVAS I )O UMuK S ~January 23, 2013 H.E. Slvko Linic Minis - of Finance Katanc:eva 5 10000 2Zagreb Croatia Dear N . Minister: Re: Strengthening 4ccouniability and Fiduciary Environment (SAFE) Grant for Public Expenditure and Financial kccountability Study for Local Governments in Croatia We refe.r to the grant proposed to be etenled out of the SAFE Trust Fund to assist in the financing of the above-r,-ferenced project for the benefit oF the Republic of Croatia. The objectives of the project are to have an independent assessmenl of th- public financial management performance in four local govemi-ient units (Crikvenica, Sisak, La)in, Koprivnica) using the Public Expenditure and Financial Accountability standardized criteria. The assessment will identify key reform initiatives and provide policy -dvice to the local govemnrents in iow to revise their public financial management strategy based on the 1indings of the assessment. We wi h to inform you that the Int.rmaional Bank for Reconstruction and Development (the World Bank) intends to provide the grart d rect y to the Association of Cities of the Republic of Croatia (the Recipiimt) under the terms and ccndition, of the grant agreement to be entered into between the World Bank aid the Recipient. We respectfully request your confrn itior that you do not object to the Bank providing the grant directly to the Recipient as indicated abovc. We further request your support to take all action necessary to enable the Recipient to carry out the projccl nd to perform its obligations under the grant agreement. Please acknowledge your confirnation of the foregoing by countersigning this letter in the space indicat-:d below. Upon receipt cf this countersigned letter, the World Bank will enter into the grant agreennt with the Recipient for the )urposes of the implementation of the project. The grant agreement will b(come effective upon its cointcr-signature by the Recipient, following which the World Bank may commence immediate disbursement of the grant to the Recipient. We lok forward to our continue. ccoperation toward the attainment of objectives of the project for the benefil ef the Republic of Croatia. Very truly yours, Kyle Pe rs Acting Country Director Ceniral Europe and the Baltic Countries Europe and Central Asia CONFIRMED: By: 4 uthorize R entative Name: Slavko Lini Title: Minister Fi b e Date: FCU-l A/ 2-Y cc: Mr. Rudolf Jan Treffers, IExecutiv Director, World Bank hone (202) 458-9855 Fax (202) 522-2566