OFFICIAL ,b ,LC DOCUMENTS STATUTORY COMMITEE REPORT TO: The President, International Bank for Reconstruction and Development Report of the Committee under Section 4 (iii) of Article III of the Articles of Agreement on the proposed Loan (Social Protection System Modernization Project) to the Republic of Croatia The undersigned Committee constituted under Section 7 of Article V of the Articles of Agreement of the International Bank for Reconstruction and Development (the Bank) hereby submits its report pursuant to Section 4 (iii) of Article III of said Articles in respect of the proposal that the Bank grant to the Republic of Croatia (the Borrower) a loan in an amount of seventy million Euro (C70,000,000). The purpose of said loan is to improve the efficiency and effectiveness of the Borrower's social protection system. 1. The Committee has carefully studied the merits of the proposal to grant such a loan, and of the purpose to which the proceeds of the loan are to be applied. 2. The Committee is of the opinion that the Project toward the financing of which the proceeds of such loan are to be applied comes within the purposes of the Bank as set forth in Article I of said Articles of Agreement, and that said Project is designed to promote the development of the productive facilities and resources of the Borrower and is in the interest of the Borrower and of the members of the Bank as a whole. REPUBLIC OF CROATIA - 2 - (Social Protection System Modernization Project) 3. Accordingly, the Committee finds that said project merits financial assistance from the Bank, and hereby recommends said Project for such assistance. COMMITTEE Senior Vice President and Group General Counsel Expert elActed by Governor for the Republic of Croatia Regional Vice President Europe and Central Asia Dated at Washington, D.C.