OFFICKA DOCUMENTS Supplemental Letter No. 3 MUNICIPAL DEVELOPMENT FUND August 18, 2014 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No. 8380-GE (Second Regional and Municipal Infrastructure Development Project) Performance Monitoring Indicators Dear Sirs and Mesdames: This refers to the provisions of Section II.A of the Schedule to the Project Agreement of this date between the International Bank for Reconstruction and Development (Bank) and Municipal Development Fund (Project Implementing Entity) for the above-captioned Project. The Project Implementing Entity hereby confirms to the Bank that the indicators set forth in the attachment to this letter shall serve as a basis for the Project Implementing Entity to monitor and evaluate the progress of the Project and the achievement of the objectives thereof. Very truly yours, MUNICIPAL DEVELOPMENT FUND By Autoriz& 1resentative Attachment Attachment to Supplemental Letter No. 3 (Second Regional and Municipal Infrastructure Development Project) Performance Monitoring Indicators Project Development Objectives: To improve the efficiency and reliability of targeted municipal services and infrastructure. This will be achieved by investing in high-priority local infrastructure improvements, and by supporting LSGs in enhancing their capacity and systems for service delivery. These results are at Project Level Project Development Objective Indicators Cumulative Target Values Data Source! Responsibility for Unit ofMehdlgDaaClcto Indicator Name Core nitaofe Baseline YRI YR2 YR3 YR4 YR5 Frequency Methodology Data Collection Measure Energy consumption per cubic meter of Mid-term water or wastewaterOprtoa pumed h/ instewae Percentage 00 00 00 10 20 30 and end OperationalMDF pumped (KWh/m3) in poet Data/Survey selected project municipalities. Average number of hours per day of Mid-term piped water service in Hours 7.00 7.00 7.00 8.00 10.00 12.00 and end Operational MDF selected project municipalities'. Volume (mass) of BOD pollution loads Mid-term removed by the Tons/year 613 613 613 613 460 460 and end Operational MDF treatment plant project Data/Survey supported under the project. Percentage of LSGS with improved asset Mi-tr witim ved ast Percentage Baseline 00 20 30 50 60 and end Survey MDF management and accounting system project The M&E survey will also measure - Average hours of women's monthly work time freed from obtaining water for their households 2 Intermediate Results Indicators Cumulative Taraet Values Data Source/ Responsibility for Unit of' End Methodology Data Collection Indicator Name Core Measure Baseline YRI YR2 YR3 YR4 e Frequency Measure Target 00mber 10,000 4 0 8Mid-term Number of direct Number 00 10,000 40,000 80,000 120,000 150,000 and end Survey MDF project beneficiariesprjc project O/w female (%), disaggregated by x percent 00 50 50 50 50 50 MTR Survey MDF components2 Number of implemented Number 00 20 40 55 60 69 Annually pores MDF investments Amount of treated Progress m3 0.00 0.00 00 00 14,000 14,000 Annually MDF wastewater Reports Roads rehabilitated, Kilometers 0.00 0.00 4.00 15.00 20.00 25.00 Annually Progress MDF Non-rural Reports Roads rehabilitated, Progress ' Kilometers 0.00 0.00 5.00 18.00 25.00 30.00 Annually MDF rural Reports People with access to improved water Number 0.00 0.00 0.00 30,000 35,000 40,000 Annually Progress MDF soe wReports sources Percentage of LSGs with established PCM Progress ythemstanid Percentage 00 00 20 30 50 70 Annually rorts MDF Advisor systems and Reports procedures Percentage of LSGs Progress with staff that can Percentage 00 00 20 30 50 70 Annually Reports MDF adviser operate PCM systems Percentage of LSGs with functioning Percentage 00 00 20 30 50 70 Annually Progress MDF Adviser budgeting and Reports accounting systems 2 The M&E survey will also measure Percentage of women employees in LSG's who received training in asset management, PCM and accounting system. 3 Percentage of LSGs with staff that can Progress opersaftdti cand -- Percentage 00 00 20 30 50 70 Annually rorts MDF Adviser operate budgeting and Reports accounting systems Percentage of LSGs with established asset Percentage 00 00 20 30 50 70 Annually Progress MDF Adviser planning and Reports management systems Percentage of LSGs with staff that can Progress MDAdio plthan f t m an LPercentage 00 00 20 30 50 70 Annually rorMDF Advisor plan and manage LSG Report assets Establishment of pilot beneficiary feedback mechanisms to Number 00 00 1 2 3 4 Annually Progress MDF provide feedback on Reports municipal services Number of number 0 30 50 70 80 230 Annually Progress MDF beneficiary feedbacks (females (females (females (females (females Report reviewed and 40-50%) 40-50%) 40-50%) 40-50%) 40-50%) addressed (disaggregated by gender) 4