OFFICIAL DOCUMEN World Bank Office, Dhaka . q f,aon.Shw@fngI.Nagsr, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Tot (880-2)815-9001, (880)96-04404000 INTERNATIONAL DEVELOPMENT ASSOCIATION FacMW2) 81-90, Telex. 42302 IDA Bj Mr. Iqbal Mahmood Senior Secretary Economic Relations Division (ERD) Ministry of Finance Block 8, Room 3 Sher-e-Bangla Nagar Dhaka Dear Mr. Mahmood: Re: Additional Fin ancing for Investment Promotion and Financing Facility Project (Credit No.4693-BD) -Amendment to the Financing Agreement and Performance Indicators We refer to: (i) the Financing Agreement between the People's Republic of Bangladesh (the Recipient) and the International Development Association (the Association) for the Additional Financing for Investment Promotion and Financing Facility Project (the Project), dated June 7, 2010 (the Agreement); and (ii) the Supplemental Letter No. 2 of same date as regards the Performance Indicators for the Project. We also refer to the letter dated May 23, 2012 of Nikhil Kumar Das, Economic Relations Division, Ministry of Finance, requesting amendments to the Agreement and to the Performance Indicators for the Project. We are pleased to inform you that, after due consideration, the Association: 1. has established December 31, 2015 as the later date for purposes of paragraph 2 of Section IV.B of Schedule 2 to the Agreement; 2. proposes to amend the Agreement as follows: a. A new paragraph is added to Section I.B of Schedule 2 to the Agreement reading as follows: "4. The Recipient shall take all measures required on its part to ensure and cause the Bangladesh Bank to ensure that the aggregate amount of Facility Loans made to PFIs for Investment Projects in any one sector shall not exceed fifty percent (50%) of the total aggregate amount of Facility Loans. b. Section I.E of Schedule 2 to the Agreement shall be amended to read as follows: "The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines and those of the GAAP." c. The table in paragraph 2 of Section IV.A of Schedule 2 to the Agreement is amended to read as set forth in Attachment I to this letter. Mr. lqbal Mahmood - 2 - October 8, 2012 c. The table in paragraph 2 of Section IV.A of Schedule 2 to the Agreement is amended to read as set forth in Attachment I to this letter. d. Paragraph 21 of Section I of the Appendix to the Agreement shall be amended to read as follows: "21. "Investment Project" means a specific Investment Project in the infrastructure sector and specific infrastructure projects in the following sectors: (i) economic development, including industrial estates and parks development; (ii) social sectors, including infrastructure in health, education; and (iii) information technology, to be carried out by an Investment Enterprise utilizing the proceeds of an Investment Loan." e. A new paragraph is added to Section I of the Appendix to the Agreement reading as follows: "39. "GAAP" means the Recipient's Governance and Accountability Action Plan, acceptable to the Association, which identifies key governance issues under the Project and sets forth mitigating actions to address said issues, as said plan may be modified from time to time with the prior written agreement of the Association." 3. proposes to amend the Performance Indicators for the Project to read as set forth in Attachment 2 to this letter. Except as specifically amended by this letter of amendment, all other provisions of the Agreement shall remain unchanged and in full force and effect. Please confirm your agreement to the foregoing on behalf of the Recipient by countersigning and dating the corresponding form of confirmation set forth below, and returning one fully signed original of this letter to us. Upon receipt by the Association of the copy of this letter of amendment duly countersigned by the authorized representative of the Recipient, the above amendment to the Agreement and to the Performance Indicators for the Project shall become effective as of the date of countersignature. Sincerely yours, INTERNATIONAL DEVELOPMENT ASSOCIATION Ellen Goldstein Country Director Mr. Iqbal Mahmood - 3 - October 8, 2012 AGREED: PEOPLE'S REPUBLIC OF BANGLADESH By: Authorized Representative Name: IWA SToo kA/\3) Title: Date: l011A- Attachment 1 People's Republic of Bangladesh Credit No. 4693-BD Revised Withdrawal Schedule Percentage of Amount of the Expenditures to be Credit Allocated Financed Category (expressed in SDR) (inclusive of Taxes) (1) Investment Loans 161,150,000 60% (2) Others (goods, consultants' 6,550,000 100% services, training, and Operating Costs) TOTAL AMOUNT 167,700,000 Attachment 2 People's Republic of Bangladesh Credit No. 4693-BD Revised Performance Indicators Project Development Objective (PDO): To accelerate private sector-led growth through providing term finance for infrastructure development and promoting domestic infrastructure finance capacity. Unit of Measure Target Values/ Actual* Data Source! Responsibility Frequency Methodology for Data Cumulative ______ Mtoooy Collection PDO Level Results Indicators* C U FY07to FYI I FY FY FY FY 12 13 14 15 Total investments in infrastructure increase (as measured by the fan USD Value of PPPs $120 Million $213/123 $125 $208 $490 Semi- Bangladesh IIFC ofequity and debt financing Million Million Million Million Annual Bank and IIFC from IPFF, GOB and the financial institutions) INTERMEDIATE RESULTS Intermediate Result (Component One): Increase of private investment for infrastructure in the form of commercial equity and debt financing Long term debt financing for$5.3 75 12Sei- Bnlds infrastructure increases (as E USD Values $50 Million Milon Mill S294.5 S al Ban ade C HFC measured by cumulative debt $0Mlinilon ilon ilon Million Ana akadIF F financing from IPFF) 2. At least 10 domestic financial institutions use the IPFF. Number 6 10/8 9 10 10 Semi - Bangladesh IIFC Annual Bank and IIFC IE 3. PFIs maintain eligibility Percentage 1000/ 100% 100% 100% 100% Semi Bangladesh Bangladesh criteria g I I Annual Bank Reports Bank Intermediate Result (Component Two): 5. Feasibility/transaction support rovided to GoB or PPP Office, is measured by cumulative El PPP Per year 0 2 4 5 Yearly IIFC Reports IIFC iumber of projects supported by (FF. 7. Environmental assessments Percentage 1000/0 100% 100% 1000/0 100% Quarterly IIFC Quarterly IIFC are undertaken for all Percentage 100%_100% 100% reports IIFC Mr. Iqbal Mahmood - 6 - October 8, 2012 infrastructure projects financed under the facility in coordination with the DOE. 8. Effective guidance provided to Bangladesh Bank regarding investment project eligibility, as Percentage 100% 100% 100/ 100% 100% Yearly IIFC Quarterly IlFC neasured by percentage of reports projects reviewed. 9. The capacity of financial institutions participating in IPFF *o undertake financial analysis of Discussions Bangladesh nfrastructure projects is Number 70 90/94 110 130 160 Yearly with financial strengthened, as measured by the institutions Pumulative number of staff Krained.