16-Sep-2024 Date: _________ H.E Adriano Afonso Maleiane Minister 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 GPE Grant No. TF0B5326-MZ Amendment to the Grant Agreement We refer to the Grant Agreement between Republic of Mozambique (the “Recipient”) and the International Development Bank (the “Bank”), dated June 7, 2021 (“Grant 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 Grant Agreement. We are pleased to inform you the Bank proposes to amend the Grant Agreement as follows: 1. Part 1.1.(c) of Schedule 1 to the Grant 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 Grant 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 Grant 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 Bank, 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 Bank, 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 the Performance-Based School Grants. 3. The Recipient shall ensure that the Project is carried out in accordance with the PIM and the Performance-Based School Grants Annex. 2 4. The Recipient shall ensure that the PIM and/or the Performance-Based School Grants Annex are not amended, suspended, repealed or abrogated without the prior written approval of the Bank. 5. In case of any conflict between the terms of the PIM and/or the Performance-Based School Grants Annex and those of this Agreement, the terms of this Agreement shall prevail.” 5. The following new condition (d) is added to Section III.B.1 (“Withdrawal Conditions; Withdrawal Period”) to Schedule 2 to the Grant Agreement: “(d) In respect to Category 5 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.” 6. Schedule 3 is hereby deleted and replaced with the Schedule 3 in the Annex. Except as specifically amended by this amendment letter, all other provisions of the Grant Agreement shall remain in full force and effect. Upon receipt by the Bank of a copy of this amendment letter duly countersigned by the authorized representative of the Recipient, the above amendments to the Grant 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:______________________ 3 ANNEX “SCHEDULE 3 Performance-Based Conditions and Allocated Amounts Performance Results Based Year 1 Year 2 Year 3 Year 4 Year 5 Conditions (“PBC”) PBC 1: PBC 1.1: PBC 1.2: PBC 1.3: PBC 1.4: N/A Increased MINEDH’s MINEDH has At least 80% At least 90% proportion of Advisory implemented of all primary of all primary Grades 1 to 3 Council has the Textbook schools schools students with approved a Distribution, nationally nationally individual Textbook Tracking, have achieved have achieved textbooks Distribution, Management a 1:1 textbook a 1:1 textbook nationally Tracking, and Inventory to student ratio to student ratio Management and System in all for grades 1 to for grades 1 to Inventory primary 3 3 System schools (“TDTMIS”) Allocated US$1,000,000 US$3,000,000 US$3,000,000 US$3,000,000 N/A Amount or or or or US$ 500,000 if US$1,500,000 US$1,500,000 US$1,500,000 TDTMIS is if the if at least 75% if at least 85% designed TDTMIS is of primary of primary implemented schools have schools have in at least 50% achieved a 1:1 achieved a 1:1 of primary textbook to textbook to schools and by student ratio student ratio a pro-rated for grades 1 to for grades 1 to amount for 3 3 any additional schools implementing the TDTMIS 4 PBC 2: PBC 2.4: PBC 2.5: Increased girls’ N/A N/A N/A Increased Increased girls’ enrolment in the girls’ enrollment in first grade of enrollment in grade 7 in secondary grade 7 in target districts education (grade target districts 7) in the districts where the upgraded schools by project are located. Allocated 0 0 0 US$9,000,000 US$14,000,000 Amount if 5 percent if 10 percent annual growth growth in girls’ in girls’ enrolment in enrolment in target districts target districts or the or the equivalent equivalent amount on a amount on a prorated basis prorated basis with a floor of with a floor of 2 percent 1 percent growth growth PBC 3: PBC 3.1: PBC 3.2: PBC 3.3: Reduced teachers’ MINEDH has MINEDH has Teachers’ absenteeism in designed a implemented absenteeism in primary schools at teachers' at national primary national level absenteeism level a schools annual teachers’ nationally has monitoring absenteeism reduced by at mechanism. annual least 10 monitoring percentage mechanism points as against the 5 and defined a baseline baseline. defined in PBC 3.2 Allocated US$500,000 0 0 N/A N/A Amount PBC 4 N/A N/A N/A PBC 4.4 PBC 4.5 Coverage and Second First timely school Installment of installment of grants (ADE) ADE is ADE is financing for disbursed disbursed Primary and Basic timely timely Schools in 2024 and 2025 Allocated N/A N/A N/A US$3,500,000 US$5,000,000 Amount if the target is if the target is achieved; achieved; US$2,500,000 US$3,500,000 if at least 75 if at least 75 percent; percent of US$2,000,000 Primary and if at least 70 Basic schools percent; receive the US$1,500,000 ADE fund by if at least 60 February 28, percent; 2025. US$1,000,000 if at least 50 percent of Primary and Basic schools receive the 2nd ADE installment by August 31, 2024. 6