World Bank (202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVEL P c 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION Cable Address: INDEVAS Aa ,2013 H. E. Issa Ali Taher Minister of Plan, Economy and International Cooperation Ministry of Plan, Economy and International Cooperation N'Djamena Republic of Chad REPUBLIC OF CHAD: Public Financial Management Capacity Building Project (Grant Number 11292-CD) Amendment to the Financing Agreement Excellency: We refer to the Financing Agreement (the "Agreement") dated December 22, 2007 between the Republic of Chad ("Recipient") and the International Development Association ("Association") and to your requests dated August 5, 2011 and November 30, 2012, requesting specific amendments to the Agreement. Please note that capitalized terms used in this letter ("Amendment Letter") and not defined herein have the meaning ascribed to them in the Agreement. We are pleased to inform you that the Association accedes to your requests and proposes to amend the Agreement as follows: 1. Schedule I is deleted in its entirety and replaced with the following: "Project Description The objective of the Project is to help the Recipient to improve accountability in the use of resources managed through the PFM system. The Project consists of the following parts: Part 1: Public Finance and Financial Accountability A. Improve budget preparation by providing support in the: (i) elaboration of the macro- fiscal projections and the preparation of annual budgets from 2008 to 2012; and (ii) establishment of a system to manage public investment projects. B. Improve budget execution by streamlining and simplifying expenditures processes at the level of all entities involved as well as the reorganization and strengthening of several departments at the MoF including the Controle Financier, Direction des Engagements at the DGB, Direction de l'Ordonnancement, Direction des Affaires Administratives, des Finances et du Matiriel and Diretion Gdnirale du Trisor. C. Enhance institutional reforms and restructuring for improved accountability by: (i) Updating and harmonizing the financial legal framework to reflect the new CEMAC Directives namely the Organic Budget Law, the Rglement Giniral de la Comptabiliti Publique, the Plan Comptable de l'Etat, the Chart of Accounts, the Government Operation Fiscal Table; (ii) upgrading the accounting system at the Direction Ginirale du Trisor; (iii) Updating the public accounting system and aligning it with the new functional budget nomenclature; (iv) providing technical assistance to support the implementation of the Loi de riglement; and (v) conducting an assessment of the information technology system to comply with the requirements of the Loi de rdglement. D. Enhance control over the use of public resources by clarifying the roles and responsibilities of the audit and oversight institutions (IGF, Finance Commission of Parliament and Ministry in charge of transparency and good governance and developing and implementing a capacity-building program for each of these institutions. All through the provision of consultant services, Training and Workshops. Part 2: Integrated Financial Management Information System Improve effectiveness and efficiency of MoF's budget management by: (a) establishing ICT advisory and strategic expertise at MoF; (b) assessing MoF's existing ICT environment; (c) developing a comprehensive ICT multiyear strategy and implementation plan; and (d) supporting its implementation and extension to selected additional institutions, through the provision of technical assistance, equipment and training. Part 3: Coordination, Monitoring and Evaluation of the PAMFIP Provide support to MoF's managerial and leadership capacity to implement the PAMFIP by: (a) strengthening the PAMFIP Steering Committee and Technical Secretariat; (b) reinforcing consensus at the cabinet level; (c) developing an operational M&E system for public financial management; (d) implementing training plans for the MoF staff with the support of Local Training Institutes; and (e) elaborating a communication plan." 2. Section II.A.1(a) of Schedule 2 is amended to read as follows: "The Recipient (through the Technical Secretariat) shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of indicators agreed with the Association. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the Association not later than two months after the end of the period covered by such report." 2 3. Section II.A.1(b) of Schedule 2 is deleted in its entirety. 4. The table set forth under Section IV.A.2 of Schedule 2 to the Agreement is deleted in its entirety and replaced with the table as shown in the Attachment to this Amendment Letter. 5. Section V.C of Schedule 2 to the Agreement is deleted in its entirety and replaced with the following: "C. The Recipient shall employ and thereafter maintain at all times during Project implementation, an internal auditor with qualifications, experience and terms of reference acceptable to the Association." 6. The following definitions are added to the Appendix to the Agreement and the existing paragraphs of said Appendix being renumbered accordingly: "4. "CEMAC Directives" means the new set of common PFM and budget legal framework that members of the Communautj Economique et Montaire de l'Afrique Centrale (CEMAC) have prepared and shall adopt and implement in their respective countries. 8. "Computerized Information System" or "Circuit Integrg des Dipenses " (CID) means the system used by the Recipient to track, control and manage its public expenditures. 18. "Local Training Institutes" means the local training institutes supported under the current Project including (i) the State School of Public Administration (l'Ecole Nationale d'Administration et de Magistrature (ENAM)), (ii) the University of N'Djamena (l'UniversitJ de N'Djamena), (iii) the Research and Study Center for Organizations' Dynamics (le Centre d'Etudes et de Recherche pour la Dynamique des Organisations (CERDO)), (iv) the Institute for Professional and High Level Training (l'Institut de Formation Professionnelle et d'Enseignement Supirieur (IFPE)), (v) Chad Business School (l'Ecole des Hautes Etudes Commerciales (HEC-Chad)) and (vi) the Chamber of Commerce Professional Training Center (le Centre de Formation Professionnelle de la Chambre de Commerce (CFPP))." 7. Paragraph 23 of the Appendix to the Agreement is amended to read as follows: "23. "PAMFIP Decree" means the Decree No. 784 PR/PM/MF/06 - portant creation, organisation et attributions des organes chargis de la mise en oeuvre du PAMFIP, dated August 23, 2006, as updated in accordance with Section I.A.(e) of Schedule 2 to this Agreement." Please confirm your agreement with the foregoing amendments by signing and dating this Amendment Letter in the spaces provided below. Henceforward, all other provisions of the Agreement, except as amended through this Amendment Letter shall remain in full force and effect. This mendment Letter shall be executed in two counterparts each of which shall be an original. 3 Upon confirmation, please return one fully executed original to us. The provisions set forth in this Amendment Letter shall become effective as of the date of countersignature upon receipt by the World Bank of the countersigned original of this Amendment Letter. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION 6dane 'a Coutry ' r for Chad frica Region CONFIRMED: REPUBLIC CHAD By: Date: ___ Name: T5\ Title: 4 % 4 Attachment Category Amount of the Grant Percentage of Allocated (expressed in Expenditures to be SDR) Financed (1) Goods for the Project (Per memoria) 401,000 100 (2) Consultants' services (Per memoria) 1,715,000 100 (3) Training (Per memoria) 181,000 100 (4) Operating Costs 763,000 100 (5) Refund of Project Preparation 234,000 Amount payable Advance pursuant to Section 2.07 of the General Conditions (6) Unallocated 0 100 (7) Goods, Training and consultant 3,406,000 100 services under Component 1, 2 and 3, excluding Operating Costs TOTAL AMOUNT 6,700,000 5