16-Sep-2024 Date: _________ H.E Adriano Afonso Maleiane Minister of Economy and Finance Ministry of Economy and Finance Av. 10 de Novembro, No. 929, 1o Andar Maputo, Mozambique Excellency: Republic of Mozambique: Improving Learning and Empowering Girls in Mozambique IDA Grant No. D793-MZ Amendment to the Financing Agreement We refer to the Financing Agreement between Republic of Mozambique (the “Recipient”) and the International Development Association (the “Association”), dated June 7, 2021, as amended (“Financing Agreement”) for the above referenced Project. We also refer to your letter No. 43/GM/MEF/DNGDP/2024 dated February 23, 2024, requesting certain changes be made to the Financing Agreement. We are pleased to inform you the Association proposes to amend the Financing Agreement as follows: 1. Part 1.1.(c) of Schedule 1 to the Financing Agreement is hereby deleted and replaced with the following: “(c) Expanding service provision through the construction of 50 new ECD centers in rural areas.” 2. Part 2.1.(a) of Schedule 1 to the Financing Agreement is hereby deleted and replaced with the following: “(a) expansion of about 150 schools currently offering primary education (1st-7th grades) and improvement of school infrastructure to allow teaching up to 9th grade (lower secondary) and help retain girls, including, through inter alia: (i) conducting a detailed assessment of Selected Primary Education Schools to identify infrastructure and personnel needs; (ii) preparing an upgrading plan for each of the Selected Primary Education Schools including detailed budget needs; and (iii) improving and expanding infrastructure conditions including inclusive and gender friendly water and sanitation facilities and constructing houses for teachers in upgraded schools in remote areas, as needed.” Avenida Kenneth Kaunda, 1224; Caixa Postal 4053; Maputo, Moçambique Tel: (258-21) 482300; Fax: (258-21) 482385 3. A new section (iii) is added to Part 3.2 (a) of Schedule 1 to the Financing Agreement: “(iii) Carrying out an annual program of activities to strengthen local governance and school-based management throughout the Recipient’s territory: (1) ensuring the timely provision of Direct Support to Schools (ADE) and supporting activities aiming to strengthen the oversight of school councils in its efficient and transparent use of ADE; (2) strengthening the technical, institutional and management capacities of district education services within the Ministry of Education and Human Development (MINEDH) by providing operating expenses and training opportunities to carry out regular supervision to schools; ” 4. Section I.B of Schedule 2 (“Project Manuals”) is hereby deleted and replaced with the following: “B. Project Manuals Project Implementation Manual 1. The Recipient shall, not later than two (2) months after the Effective Date, prepare and adopt a PIM in form and substance acceptable to the Association, which shall set forth rules, methods, guidelines, standard documents and procedures for carrying out the Project, including, inter alia: (a) coordination, monitoring and evaluation, environmental and social safeguards, corruption and fraud mitigation measures; (b) a grievance redress mechanism; (c) budget preparation and execution; (d) accounting and reporting; (e) Personal Data collection and processing in accordance with good international practice, including to ensure legitimate, appropriate, and proportionate treatment of such data (f) the Verification Protocol and related arrangements for Parts 1.2(b), 2.1(c) and 3.2(c) of the Project; (g) eligibility criteria and selection procedures for Selected Primary Education Schools, Selected Upgraded Schools, Selected Pedagogical Directors, Selected Districts, Eligible Primary School Teachers, Eligible Adolescent Girls, Eligible Schools, selected ECD and distance learning center; (h) methodologies for calculation of School Grants; (i) the level of delegation to provinces and the procurement arrangements at provincial level; (j) roles and responsibilities for Project implementation; (k) financial management and disbursement procedures; and (l) such other arrangements and procedures as shall be required for the effective implementation of the Project (“Project Implementation Manual”). Grants Annex 2. The Recipient shall develop and adopt an annex to the existing ADE Manual for the purpose of carrying out Part 3.2(a)(i) and (iii) of the Project (Performance-Based School Grants and Direct Support to Schools), in form and substance acceptable to the Association, containing, inter alia, detailed arrangements and procedures for selecting Eligible Schools, extending the Performance-Based School and Direct Support to Schools Grants, payment mechanism and modalities, and appraising, monitoring and evaluating activities financed by said School Grants. 3. The Recipient shall ensure that the Project is carried out in accordance with the PIM and the Grants Annex. 2 4. The Recipient shall ensure that the PIM and/or the Grants Annex are not amended, suspended, repealed, or abrogated without the prior written approval of the Association. 5. In case of any conflict between the terms of the PIM and/or the Grants Annex and those of this Agreement, the terms of this Agreement shall prevail.” 5. The table in Part III.A of Schedule 2 to the Financing Agreement is hereby deleted and replaced with the following table: Percentage of Amount of the Grant Expenditures to be Allocated Financed “Category (expressed in SDR) (inclusive of Taxes) (1) Eligible Expenditures 48,650,000 under Part 3.2(a) (i), (ii) 100% of the Project – Performance-Based School Grants and Performance-Based District Incentives; and Part 3.2(a) (iii) of the Project. (2) Goods, works, non- The Association, on a consulting services, and 58,670,000 quarterly basis, shall consulting services, determine the Training Costs and percentage of Operating Costs under expenditures to be Parts 1.2(a), 2.1 (a) and financed under this (b), 2.2, 2.3, and 3.2(b) Category and shall of the Project promptly notify, by notice to the Recipient, of the applicable percentage. (3) Refund of Preparation 3,880,000 Amount payable Advance pursuant to Section 2.07(a) of the General Conditions (4) Emergency 0 100% Expenditures under Part 5 of the Project TOTAL AMOUNT 111,200,000 3 1. The following new condition (d) is added to Section III.B.1 (“Withdrawal Conditions; Withdrawal Period”) to Schedule 2 to the Financing Agreement: “(d) In respect to Category 1 above, until and unless the Grants Annex referred to in Section I.B of Schedule 2 has been updated and adopted by the Recipient, in a manner acceptable to the Bank.” Except as specifically amended by this amendment letter, all other provisions of the Financing Agreement shall remain in full force and effect. Upon receipt by the Association of a copy of this amendment letter duly countersigned by the authorized representative of the Recipient, the above amendments to the Financing Agreement shall become effective as of the date of countersignature. Please confirm the agreement of the Recipient to the amendments set forth above by signing, dating, and returning to us the enclosed copy of this amendment letter. Sincerely, Idah Z. Pswarayi-Riddihough Country Director Mozambique, Comoros, Madagascar, Mauritius, and Seychelles Eastern and Southern Africa Region AGREED: REPUBLIC OF MOZAMBIQUE By: _____________________ Authorized Representative Adriano Afonso Maleiane Name:_____________________ Minister of Economy & Finance Title:______________________ 03-Oct-2024 Date:______________________ 4