OFFICIAL DOCUMENTS THE WORLD BANK IBRD IDA I WORLD BANKGROUP December 1, 2017 Hon. Maatia Toafa Deputy Prime Minister and Minister of Finance and Economic Development Ministry of Finance and Economic Development Vaiaku Funafuti Tuvalu Dear Honourable Minister, TUVALU. IDA Grant No. D241-TV Additional Financing for the Pacific Aviation Investment Program - Tuvalu Aviation Investment Project Additional Instructions: Disbursement and Financial Information Letter (DFIL) I refer to the Financing Agreement ("Agreement") between TUVALU (the "Recipient") and the International Development Association (the "Association") for the above-referenced project, dated OccrmbL, Oi )! . The General Conditions, as defined in the Financing Agreement, provide that the Association may issue additional instructions regarding the withdrawal of the proceeds of IDA Grant No. D241-TV ("Financing"), and specify certain financial management reporting and audit requirements. This letter ("Disbursement and Financial Information Letter" or "DFIL"), as revised from time to time, constitutes such additional instructions. The Disbursement Guidelines for Investment Project Financing dated February 2017, ("Disbursement Guidelines") are available in the Association's public website at https://www.worldbank.org and its secure website "Client Connection" at https://clientconnection.worldbank.org. The Disbursement Guidelines are an integral part of this Disbursement and Financial Reporting Letter, and the manner in which the provisions in the guidelines apply to the Financing is specified below. I. Disbursement Arrangements, Withdrawal and Reporting of Financing Proceeds (i) Disbursement Arrangements: * Instructions (Schedule 1). The table provides the disbursement methods, information on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account. * Minimum Value of Applications (subsection 3.5). The Minimum Value of Applications for Reimbursement, Direct Payment and Special Commitment is AUD150,000. * Disbursement Deadline Date, DDD (subsection 3.7). The DDD is four (4) months after the Closing Date specified in the Financing Agreement. Any changes to this date will be notified by the Association. 1818 H Street NW - Washington, DC 20433 USA (ii) Electronic Delivery. Refer to section 11.01 (c) of the General Conditions: * The Association may permit the Recipient to electronically deliver applications (with supporting documents) through the Association's web-based portal (https://clientconnection.worldbank.org) "Client Connection". This option may be effected if: (a) the Recipient has designated in writing, its officials who are authorized to sign and deliver Applications and to receive Secure Identification Credentials ("SIDC") from the Association for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Recipient have registered as users of "Client Connection". The designated officials may deliver Applications electronically by completing the Form 2380, which is accessible through "Client Connection". The Recipient may continue to exercise the option of preparing and delivering Applications in paper form. The Association reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Recipient. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Recipient confirms through the authorized signatory letter its agreement to: (a) abide by the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation, available in the Association's public website at https://worldbank.org and "Client Connection"; and (b) to cause such official to abide by those terms and conditions. II. Financial Reports and Audits (i) Financial Reports. The Recipient shall prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar quarter interim unaudited financial reports (IFR) for the Project covering the quarter. (ii) Audits. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the Association not later than six (6) months after the end of such period. III. Other Important Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Association's public website and "Client Connection". The Association recommends that you register as a user of "Client Connection". From this website you will be able to prepare and deliver Applications, monitor the near real-time status of the Financing, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements, please contact the Association by email at clientconnection(dworldbank.or. If you have any queries in relation to the above, please contact WFALN ManilaAworldbank.org using the above reference. Yours sincerely, Michel Kerf Country Director Papua New Guinea & Pacific Islands East Asia and Pacific Region Page 2 of 10 Attachments 1. Sample Form of Payments Against Contracts Subject to the Association's Prior Review 2. Sample Form of Statement of Expenditures 3. Sample Form of Designated Account Reconciliation Statement 4. Form of Authorized Signatory Letter Cc with copies: Hon. Monise Lafai, Minister of Communications and Transport Ministry of Communications and Transport mlaafai(@vahoo.com; mlaafai(&gov.tv Mr. Falalese Tupau, Secretary for Communications and Transport Ministry of Communications and Transport ftupau(dgov.ty Ms. Limasene Teatu, Secretary to Government Ministry of Finance and Economic Development lteatu(&gov.ty Mr. Vavau Fatuuga, Acting Secretary Ministry of Finance and Economic Development LIulai(agov.ty Mr. Vitoli losefa, TvAIP Project Manager faaogaAgmail.com; viosefa(&gov.tv Mr. Darin Cusack, PAIP Program Director dcusackApaiptfsu.com Ms. Lasale Cocker, PAIP Program Manager Icocker(&paiptfsu.com Page 3 of 11 Schedule 1 Disbursement Arrangements Country TUVALU Recipient TUVALU IDA Grant Number Name of the Project Additional Financing for the Pacific Aviation Investment Program - Tuvalu Aviation Investment Proect Disbursement Methods Methods Available Supporting Documentation Section 2 (**) Subsections 4.3 and 4.4 (**) Direct Payment Yes Copy of Records. Reimbursement Yes (i) Payments Against Contracts Subject to the Association's Prior Review in the form attached (Attachment 1); and (ii) Statement of Expenditures in the form attached (Attachment 2) for all other contracts and expenditures. Advance: Yes (i) Payments Against Contracts Subject to the Association's Prior Review in the form attached (Attachment 1); (ii) Statement of Expenditures in the form attached (Attachment 2) for all other contracts and expenditures; and (iii) Designated Account Reconciliation Statement in the form attached (Attachment 3). Special Commitments Yes Copy of Letter of Credit No separate designated account will be established for this Fixed additional financing; the existing designated account already Ceiling established under IDA H896-TV will be used for receiving funds from this additional financing. Financial Institution - National Bank of Tuvalu Australian Dollar (AUD) Name urrency Frequency of Reporting, Quarterly or more often if needed Amount AUD700,000 Subsection 6.3 (**) Amount Page 4 of 10 An authorized signatory letter in the Form attached (Attachment 4) should be furnished to the Association at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank Level 19, 14 Martin Place CML Building Sydney NSW 2000, Australia Attention: Country Director Please provide completed and signed (a) applications for withdrawal, together with supporting documents, and (b) applications for special commitments, together with a copy of the commercial bank letter of credit, to the address indicated below: The World Bank 26th Floor, One Global Place 5th Avenue corner 25t Street, Bonifacio Global City Taguig City, Philippines Attention: Loan Department i) The ceiling of advance of AUD700,000 indicated above is for designated account established under IDA H896-TV. ii) Separate ledger account codes should be maintained for the designated account established under IDA H896-TV so that receipts and uses of funds of this additional financing can be properly segregated, recorded and accounted for. ** Sections and subsections indicated relate to the Disbursement Guidelines for Investment Project Financing dated February 2017 Page 5 of 10 Attachment 1 Payments Made during Reporting Period Against Contracts Subject to the Association's Prior Review Date of Asociation's Aotat" ooa AMohIPaid to Shad of NuAer S Non Supplier during AsQuht Paid to Objection to Period Suppilrduring ConaCt Period Page 6 of 10 Attachment 2 Statement of Expenditures (SOE) Payments made during the period from -to Date: Application No.: IDA Grant No.: D- Category No.: SOE No.: 1 2 3 4 5 6 7 8 9 10 11 0 V Amount Paid Total amount Invoice E 6 Contract or Purchase Brief Description of i cvr From Z Name and Address o invoices covered .DAmountted order No. & Date (or Goods, Works or Designated 9 of Suppliers o rv 0 by application Eligible for ( 0 Sother ref.) Services - Account (if = (net of retention) Financing a U o any) TOTALS Supporting documents for this SOE retained at: _ (insert location) Page 7 of 10 Attachment 3 DESIGNATED ACCOUNT RECONCILIATION STATEMENT IDA Grant NUMBER XXXX-TV ACCOUNT NUMBER WITH (BANK) 1. TOTAL ADVANCED BY WORLD BANK (OR COFINANCIER) $ 2 LESS: TOTAL AMOUNT RECOVERED BY WORLD BANK - $ 3. EQUALS PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED ACCOUNT (NUMBER 1 LESS NUMBER 2) $ 4. BALANCE OF DESIGNATED ACCOUNT PER ATTACHED BANK STATEMENT AS OF DATE $ 5. PLUS: TOTAL AMOUNT CLAIMED IN THIS APPLICATION NO. + $ * 6. PLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET CLAIMED REASON: + $ * 7. PLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT YET CREDITED AT DATE OF BANK STATEMENTS APPLICATION NO. AMOUNT * SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED + $ 8. MINUS: INTEREST EARNED - $ * 9. TOTAL ADVANCE ACCOUNTED FOR (NO. 4 THROUGH NO. 9) = $ 10. EXPLANATION OF ANY DIFFERENCE BETWEEN THE TOTALS APPEARING ON LINES 3 AND 9: 11. DATE: SIGNATURE: TITLE: * ALL ITEMS SHOULD BE INDICATED ON THE BANK STATEMENT Page 8 of 10 Attachment 4 Form of Authorized Signatory Letter [Letterhead] Ministry of Finance and Economic Development [Street address] [City] [Country] [DATE] The World Bank Level 19, 14 Martin Place CML Building Sydney NSW 2000, Australia Attention: Country Director Re: TUVALU: IDA Grant No. XXXX-TV Additional Financing For the Pacific Aviation Investment Program - Tuvalu Aviation Investment Project I refer to the Financing Agreement ("Agreement") between TUVALU (the "Recipient") and the International Development Association (the "Association"), dated , providing the above Financing. For the purposes of Section 2.03 of the General Conditions as defined in the Agreement, any '[one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Recipient to sign applications for withdrawal and applications for a special commitment under this Financing. For the purpose of delivering Applications to the Association, 2[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Recipient, acting 3[individually] 4[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the Association. 5[This confirms that the Recipient is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to 1 Instruction to the Recipient: Stipulate if more than one person needs to sign Applications, and how many or which positions, and if any thresholds apply. Please delete this footnote in final letter that is sent to the Association. 2 Instruction to the Recipient: Stipulate if more than one person needs to jointly sign Applications, if so, please indicate the actual number. Please delete this footnote in final letter that is sent to the Association. 3 Instruction to the Recipient: Use this bracket if any one of the authorized persons may sign; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. 4 Instruction to the Recipient: Use this bracket only if several individuals must jointly sign each Application; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Association. Page 9 of 10 the Association by electronic means. In full recognition that the Association shall rely upon such representations and warranties, including without limitation, the representations and warranties contained in the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of SIDC"), the Recipient represents and warrants to the Association that it will cause such persons to abide by those terms and conditions.] This Authorization replaces and supersedes any Authorization currently in the Association records with respect to this Agreement. [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: Yours truly, / signed / [Position] 5 Instruction to the Recipient: Add this paragraph if the Recipient wishes to authorize the listed persons to accept Secure Identification Credentials and to deliver Applications by electronic means; if this is not applicable, please delete the paragraph. Please delete this footnote in final letter that is sent to the Association. Page 10 of 10 FOR INTERNAL DISTRIBUTION ONLY Prepared by: Tony Shen (WFALN) Cleared with and bcc: Duangrat Laohapakakul / Loren Atkins (LEGES) Nora Weisskopf (GTIO2) Cc: Stephen Paul Hartung (GGO2) Page 11 of 10