DOCUMEWTS REPUBLIC OF AZERBAIJAN Date: . Ms. Mercy Tembon Country Director, South Caucasus International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No. 7435 AZ - Real Estate Registration Project Amendment to the Annex to Supplemental Letter No. 2: Performance Monitoring Indicators Dear Sirs and Mesdames: Referring to the provisions of Part A of Section II of Schedule 2 to the Loan Agreement between the Republic of Azerbaijan (the Borrower) and the International Bank for Reconstruction and Development (the Bank) for the above-captioned Project, dated July 27, 2007, as amended to date (Loan Agreement), the Borrower hereby confirms to the Bank that the attachment to the Supplemental Letter No. 2 to the Loan Agreement, dated July 27, 2007, as amended to date, is hereby replaced in its entirety by the attachment to this letter, containing the indicators that shall serve as a basis for the Borrower to monitor and evaluate the progress of the Project and the achievement of the objectives thereof. Very truly yours, REPUBLIC OF AZERBAIJAN By Authorized Rep Isentive Attachment cc: Mr. Samir Sharifov, Minister of Finance Mr. Shahin Mustafayev, Minister of Economy and Industry Mr. Elman Rustamov, Chairman of the Central Bank and Governor to the World Bank Mr. Nail Fataliyev, Head of International Credits and Aid Department, Cabinet of Ministers Mr. Karam Hasanov, Chairman of the State Committee on Property Issues Mr. Rafiq Jalilov, Deputy Chairman, State Committee on Property Issues, Director of Real Estate Registration Project Mr. Rustam Shahbazov, Deputy Chairman, State Committee on Property Issues Mr. Ilgar Mammadov, Head of Notary and Registration Department, Ministry of Justice Mr. Jorge Frieden, Executive Director for Azerbaijan, The World Bank Mr. Sanan Mirzayev, Advisor to the Executive Director for Azerbaijan, The World Bank Ms. Larisa Leshchenko, Country Manager for Azerbaijan Cleared w/ and bcc: J. Garrote (Loan No. 7435-AZ) Attachment Amendment to the Annex to Supplemental Letter No. 2 REPUBLIC OF AZERBAIJAN Loan No. 7435 AZ - Real Estate Registration Project Performance Monitoring Indicators Arrangements for results monitoring Cumulative Target Values Data Collection and Reporting Baseline 2012 2013 2014 2015 Frequency Data Responsibility PDO Level Results Indicators* Unit of (2005) Collection For Data Collection Measure Instruments Percentage of customers very % 50% 50% Bi-annually Project SCPI/SSRRE satisfied/ satisfied with the speed (2007 (2007 75% monitoring of service of official and standard data) data) reports information supplied. Automated systems developed n/a Stand- Stand- System System Systems in Quarterly Project SCPl/SSRRE and used by professional users. alone alone under under use, 100 monitoring systems systems develop- development online usei reports ment Average Speed of transaction Days 30 18 11 10 3 Quarterly Project SCPl/SSRRE following registration request to Monitoring SSRRE Report Number of transactions registered Number 87,461 169,821 170,000 180,000 200,000 Quarterly SSRRE SCPI/SSRRE at the SSRRE reports Numbers of mortgages issued Number 11,515 20,997 25,000 35,000 40,000 Quarterly SSRRE SCPI/SSRRE reports Numbers of information requests Number 90,000 Quarterly SSRRE SCPI/SSRRE received by SSRRE I reports Strategy agreed for coping with Yes/No No Strategy Annually Project SSRRE informal settlement issues strategy agreed monitoring reports Results Indicators for each subcomponent Component A - Real Estate Registration All regional offices and their Number 0 14 16 17 18 Quarterly Project SSRRE branches renovated and operating Monitoring under improved conditions. Reports IT Center established and Center 0 0 Construc Established Quarterly Project SSRRE operational tion and Monitoring equipped Reports -3- (Loan No. 7435-AZ) Information system running in all - 0 WAN System System System Quarterly Project SCPI/SSRRE regional offices and linked establis under under in use Monitoring through a Wide Area Network hed develop development Reports and the Internet. ment Over 100 Notaries connected on- Number 0 0 100 Quarterly Project SCPI/SSRRE line to the registration system. Monitoring Reports No of hectares of digital cadastre Hectares 0 0 193,000 1.5 Quarterly Project SCPI/SSRRE maps created. million Monitoring Reports Complete property records % 0 Strateg Quarterly Project SCPI/SSRRE developed in two pilot sites and y Monitoring strategies agreed on coping with agreed Reports informal developments. No of private sector surveyors No 0 50 75 100 120 Annually Project SCPI/SSRRE available to amend or check REC Monitoring records Reports Quality control checks completed days 20 20 15 10 5 Quarterly Project SSRRE by the SSRRE completed within 5 Monitoring days of receiving the applications. Reports No of properties valued in Baku Number/ 0/No 0/No 0/No 60,00OYes 100,000/ s SCPIUSSRRE and results posted online Yes/No Yes Surveys show that 80% of % No data No data 80%, 80%, 90% 80%, Quarterly Project SSRRE respondents have heard of the 90% 90% Monitoring SSRRE and 90% agree that Reports registration is very important. Service standards and a business Yes/No 0 0 First Agreed and Annually Project SSRRE plan agreed and implemented. draft implemente Monitoring Reports Component B _ SCPI/SSRRE State Property Management and Register New automated system installed Yes/No 0 WAN System System New SCPI/SSRRE nationwide and connected via a installed under under system WAN in 26 offices and the and develop development in use Headquarters. operation ment al Number of records converted into Number 0 0 0 0 150000 Quarterly Project SCPl/SSRRE the new system. Monitoring Reports Average time taken to process Days 90 57 57 50 45 Quarterly Project SCPI/SSRRE and register an application Monitoring reduced. Reports Number of enterprises registering % 0 0 0 0 20% Quarterly Project SCPI/SSRRE in the new system online Monitoring Reports -4- (Loan No. 7435-AZ) ADCIS development within SCPI Yes/No 0 Implem Annually Project SCPI/SSRRE and subordinated bodies. ented Monitoring Reports Human Resources strategy Yes/No 0 Implem Annually Project SCPI/SSRRE developed and implemented. ented monitoring reports Component C - Base mapping SCPIUSSRRE and Land Cadastre 30 to 40 CORS stations installed. Number 0 37 37 37 37 Quarterly Project SCPI/SSRRE Monitoring Reports 20 Customers for the CORS Number 0 0 0 20 20 Quarterly Project SCPI/SSRRE system registered. Monitoring Reports 15,000 sq km orthophotomap at Number 0 15,000 Quarterly Project SCP/SSRRE 1:10,000 scale based on satellite Monitoring imagery. Reports 8,200 sq km orthophotomap at Number 0 8,200 Quarterly Project SCPl/SSRRE 1:10,000 scale. Monitoring Reports 37,000 sq km orthophotomap at Number 0 37,000 Quarterly Project SCPI/SSRRE 1:5,000 scale. Monitoring Reports 3,000 sq km orthophotomap at Number 0 3,000 Quarterly Project SCPI/SSRRE 1:2,000 scale. Monitoring Reports 5,000 sq km orthophotomap at Number 0 5,000 Quarterly Project SCPI/SSRRE 1:1,000 scale. Monitoring Reports Service standards and a business Yes/No 0 0 First Agreed and Quarterly Project SCPI/SSRRE plan agreed and implemented draft implemented Monitoring Reports Component D- Training, Policy Development and Project Management Training center equipped and Yes/No 0 In use 6 months Project SSRRE providing courses. _ monitoring Real Estate Law Center Yes/No 0 In use 6 months Project SSRRE established and operational. monitoring 10,000 person days of training Number 0 7,500 8,000 9,500 10,000 Quarterly Project SSRRE courses completed. monitoring Average quality rating of training Percenta 0 91% 90% 90% 90% Quarterly Project SSRRE delivered ge monitoring IT strategy adopted by two - None Draft Updated Adopted 6 months Project SSRRE implementing agencies. draft monitoring -5- (Loan No. 7435-AZ) Conception for the development - None Concept nott Concept Quarterly Project SSRRE of National Spatial Data on strategy note Monitoring Infrastructure (NSDI) prepared. drafted adopted Reports Legal reviews of relevant laws - - Continue Continue Continue Continue Annually Project SSRRE completed and modifications Monitoring recommended. Reports Project management assessed as Rating - MU S S S Annually Project SSRRE and Auditor successful by Bank supervision Management missions. and Audit reports Quarterly monitoring reports Number - 4 4 4 4 Quarterly Project SSRRE assessed as satisfactory by Bank Monitoring Task Team. Reports -6-