The World Bank 818A(202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ashintnD . Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION .0 UM ENTS Cable Address. INDEVAS November 11, 2013 Dr. Augusto Barrera Alcalde del Distrito Metropolitano de Quito Quito, Ecuador Re: Ecuador: IBRD Loan 8285-EC (Quito Metro Line One Project) Additional Instructions: Disbursement Letter Excellency, I refer to the Loan Agreement between the International Bank for Reconstruction and Development (the "World Bank") and Municipality of the Metropolitan District of Quito (the "Borrower") for the above-referenced Project, dated November 11, 2013. The Agreement provides that the Bank may issue additional instructions regarding the withdrawal of the proceeds of Loan 8285-EC ("Loan"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. Copies of this letter together with the attachments should be sent to all staff involved in the process of preparing withdrawal applications for this Project The attached World Bank Disbursement Guidelines for Projects, dated May 1, 2006, ("Disbursement Guidelines") are an integral part of the Disbursement Letter. The manner in which the provisions in the Disbursement Guidelines apply to the Loan is specified below. Sections and subsections in parentheses below refer to the relevant sections and subsections in the Disbursement Guidelines and, unless otherwise defined in this letter, the capitalized terms used have the meanings ascribed to them in the Disbursement Guidelines. I. Disbursement Arrangements (i) Disbursement Methods (section 2). The following Disbursement Methods may be used under the Financing: * Reimbursement * Advances * Direct Payments (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is four (4) months after the Closing Date specified in the Loan Agreement. Any changes to this date will be notified by the World Bank. (iii) Disbursement Conditions (subsection 3.7). Please refer to the Disbursement Condition(s) in Schedule 2, Section IV.B of the Loan Agreement. Page 2 of 5 II. Withdrawal of Financing Proceeds (i) Authorized Signatures (subsection 3.1). A letter in the Form attached (Attachment 2) should be furnished to the World Bank at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank 1818 H Street, NW Washington D.C., 20433, USA Attention: Susan G. Goldmark, Country Director (ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed applications for withdrawal together with supporting documents required, to the address indicated below: Banco Mundial Setor Comercial Norte Quadra 02, Lote A Edificio Corporate Finance Center 70 andar 70712-900 Brasilia, D.F. Brazil Attention: Loan Department (iii) Electronic Delivery (subsection 3.4). The Bank may permit the Borrower to electronically deliver to the Bank Applications (with supporting documents) through the Bank's Client Connection, web-based portal. The option to deliver Applications to the Bank by electronic means may be effected if: (a) the Borrower has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its officials who are authorized to sign and deliver Applications and to receive secure identification credentials ("SIDC") from the Bank for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Borrower have registered as users of Client Connection. If the Bank agrees, the Bank will provide the Borrower with SIDC for the designated officials. Following which, the designated officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection (https://clientconnection.worldbank.or). The Borrower may continue to exercise the option of preparing and delivering Applications in paper form. The Bank reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Borrower. (iv) Terms and Conditions of Use of SIDC to Process Applications. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Borrower 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 ("Terms and Conditions of Use of Secure Identification Credentials") provided in Attachment 3; and (b) to cause such official to abide by those terms and conditions. Page 3 of 5 (v) Minimum Value of Applications (subsection 3.5). The Minimum Value of Applications for Reimbursement is US$500,000. (vi) Advances (sections 5 and 6) to the Municipality of the Metropolitan District of Quito (Alcalde del Distrito Metropolitano de Quito). * Type of Designated Account (subsection 5.3).' Segregated. * Currency of Designated Account (subsection 5.4): US Dollars. * Financial Institution at which the Designated Account Will Be Opened (subsection 5.5): Banco Central. * Ceiling (subsection 6.1).: Semesterly forecast based on twelve month projection of expenditures. III. Reporting on Use of Financing Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each application for withdrawal as set out below: * For requests for Reimbursement. o Custom Disbursement Report, in the form attached (Attachment 4); and o List of payments, in the form attached (Attachment 5), against contracts that are subject to the World Bank's prior review. * For reporting eligible expenditures paid from the Designated Account: o Custom Disbursement Report, in the form attached (Attachment 4); and o List of payments, in the form attached (Attachment 5), against contracts that are subject to the World Bank's prior review. * For requests for Direct Payment: records evidencing eligible expenditures, e.g., copies of receipts, supplier invoices. (ii) Frequency of Reporting Eligible Expenditures Paid from the Designated Account (subsection 6.3).' Semesterly or more often if needed. IV. Other Disbursement Instructions Retroactive Financing. Retroactive financing is available for up to USD 41,000,000, equivalent to 40% of the Loan amount, for Eligible Expenditures paid or incurred as of August 30, 2013, but in no case more than one year prior to the date of the Loan Agreement. Page 4 of 5 V. Other Important Information For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on the World Bank's public website at http://www.worldbank.org and its secure website "Client Connection" at http://clientconnection.worldbank.org. Print copies are available upon request. If you have not already done so, the World Bank recommends that you register as a user of the Client Connection website (http://clientconnection.worldbank.org). From this website you will be able to download Applications, monitor the near real-time status of the Financing, and retrieve related policy, financial, and procurement information. If you have any queries in relation to the above, please contact the World Bank Loan Department by sending a message to loa-lcr@worldbank.org and placing the project name and loan number in the subject line. Yours sincerely, ,1- C - ' Hasan Tuluy Vice President Latin America and the Caribbean Region Attachments /* o7 A 4f Lxf 1. World Bank Disbursement Guide ipsfor Projects, dated May 1, 2006 2. Form for Authorized Signature 3. Terms and Conditions ofU ofSecure Identification Credentials in connection with Use of Electronic Means to Pr ess Applications and Supporting Documentation, dated March 1, 2013 4. Custom Report 5. List of Pay ts for Contracts Subject to Prior Review Cc with copies: Mr. Fausto Eduardo Herrera Nicolalde, Minister, Ministry of Finance, Republic of Ecuador Mr. Rub6n Flores, General Manager (Administrador General), Administraci6n General del Municipio del Distrito Metropolitano de Quito Mr. Edgar Jdcome, General Manager (Gerente General), Empresa Piblica Metropolitana Metro de Quito