OFFICIAL G, g00 8 DOCUMENTS THE WORLD BANK Bouchard 547, 29th floor Tel.: (54-11) 4316-9700 /44 IBRD*- IDA I wCALDAoup C1 106ABG Fax: (54-11) 4313-1233 Ciudad Aut6noma de Buenos Aires Ladnl Anwksa & " Cftwan Argentine Republic Opportonrses ke AY August 13, 2015 His Excellency Mr. Luis Beder Herrera Governor of the Province of La Rioja 25 de Mayo, Esq. San Nicolds de Bari La Rioja, Argentina Re: Loan No.8008-AR (Public Sector Strengthening Program-APL I) Second Amendment to the Loan Agreement Dear Mr. Beder Herrera: Please refer to the Loan Agreement entered into between the Province of La Rioja (the "Borrower") and the International Bank for Reconstruction and Development (the "Bank"), dated May 30, 2011, as amended on August 9, 2012, with respect to the above- captioned Project (the "Loan Agreement"). Capitalized terms used in this amendment letter ("Amendment Letter") and not defined herein have the meaning ascribed to them in the Loan Agreement. Pursuant to your letter F.E.P. No. 005, dated May 15, 2015, requesting the Bank to: (i) extend the Project's Closing Date; (ii) adjust the codes of the Eligible Expenditure Programs to reflect the institutional changes introduced pursuant to the Provincial Decree No. 373/14 with regard to the General Directorate of the Cadaster; (iii) revise the Project Performance and Monitoring Indicators; and (vi) adjust Disbursement Linked Indicators as a result of the proposed revised Project Performance and Monitoring Indicators, we are pleased to inform you that the Bank agrees to amend the Loan Agreement as follows: 1. Section I.A.4 of Schedule 2 to the Loan Agreement is hereby amended and replaced in its entirety to read as follows: "The Borrower shall, every six months, after the Effective Date, prepare (in accordance with the provisions of the Operational Manual and the additional instructions referred to in Section IV.A.1 of this Schedule) and furnish to the Bank, regular reports (the IFRs on EEP Reports)." 2. Section IV.B.5 of Schedule 2 to the Loan Agreement is hereby amended and replaced in its entirety to read as follows: "The Closing Date is December 31, 2017". -2- 3. Section IV.B.2(a) of Schedule 2 to the Loan Agreement is hereby amended and replaced in its entirety to read as follows: "2. If the Bank has: (a) received only partial evidence of compliance of the Disbursement-Linked Indicators referred to in Schedule 5 to this Agreement in with respect to the first to twelfth disbursements under Category (1) (as referred to in the Operational Manual and the additional instructions referred to in Section IV.A. 1 of this Schedule), the Bank may: (i) disburse the amount of the corresponding withdrawal attributable to each Disbursement-Linked Indicator (pursuant to the terms of the Operational Manual and the additional instructions referred to in Section IV.A.1 of this Schedule), in proportion to the respective degree of execution of each DLI; and/or (ii) authorize that the unwithdrawn portion of the Loan resulting from this lack of evidence be carried forward to the subsequent withdrawals; and" 4. Section IV.B.3 of Schedule 2 to the Loan Agreement is hereby amended and replaced in its entirety to read as follows: "3. In the event that the Bank has not approved a full withdrawal by the Borrower of the Loan proceeds under Category (1) the Bank may, by notice to the Borrower and the Guarantor, cancel the corresponding amount of the Loan at the time of the twelfth (12th) disbursement (as referred to in the Operational Manual and the additional instructions referred to in Section IV.A. 1 of this Schedule); and" 5. The Table in Schedule 4 to the Loan Agreement ("Eligible Expenditure Programs") is hereby amended and replaced in its entirety to read as set forth in Attachment 1 to this Amendment Letter. 6. The Table in Schedule 5 to the Loan Agreement ("Disbursement-Linked Indicators") is hereby amended and replaced in its entirety to read as set forth in Attachment 2 to this Amendment Letter. All other provisions of the Loan Agreement, except as amended herein, shall remain in full force and effect. Please confirm your agreement with the foregoing amendment by signing and dating this Amendment Letter in the spaces provided below. This Amendment Letter shall -3- be executed in two counterparts, each of which shall be an original and one of which shall be return to us. The provisions set forth in this Amendment Letter will become effective as of the date of the countersignature, upon receipt by the Bank of one fully executed original of this Amendment letter. Please also note that the restructuring paper dated August 2015, a copy of which is enclosed herewith, will be disclosed on the Bank's external website as per the Bank's policy on Access to Information. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By fftrJesko S. Hentschel Director Argentina, Paraguay and Uruguay Latin America and the Caribbean Region AGREED PROVI CE OF LA RIOJA By: Authorized presentativ Name: Dr. Lua Deder Hrrera Title: GOBERNADOR Date: 2 2 SEP 2015 Attachment 1 Schedule 4 Eligible Expenditure Programs Borrower's Amount (in million US$) to be spent by the Borrower Budget Line Project Sector Budget Item Numbers Expenditure 2011- 2011- 2012- 2012- 2013- 2013- 2014- 2014- 2015- 2015- 2016- 2016- 2017- (as set forth in the Type Semester Semester Semester Semester Semester Semester Semester Semester Semester Semester Semester Semester Semester Borrower's 1 2 1 2 1 2 1 2 1 21 21 Budget Law) Modernization of TaxthTa Administration the Tax 300.20.04 0.725 0.725 0.725 0.725 0.725 0.725 0.725 0.725 0.725 0.725 0.725 0.725 0.725 Improement Administration Improvement System Tax Update of the Administration Provincial 640.30.00 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 0.2625 Improvement Cadastre Strengthening Coordination of and the sectorial Improvement activities of the 300.20.01 0.017 0.017 0.017 0.017 0.017 0.017 0.017 0.017 0.017 0.017 0.017 0.017 0.017 of Quality of Eenures ty 0 reform process Expenditures Strengthening of Strengthening the resource and administration Improvement system in all 00.00.02 4.825 4.825 4.825 4.825 4.825 4.825 4.825 4.825 4.825 4.825 4.825 4.825 4.825 of Quality of Directorate of Goods and Expenditures Financial Operating Administration Costs Strengthening and Strengthening of Improvement tength en of 300.20.02 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 of Quality of Expenditures Strengthening and Reform of the Improvement procurement 300.20.03 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 0.1375 of Quality of system Expenditures Rural Water Management and Resources Coordination of 703.01.01 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 Management IPALAR Rural Water Maintenance and Resources operation of the 703.18.00 0.867 0.867 0.867 0.867 0.867 0.867 0.867 0.867 0.867 0.867 0.867 0.867 0.867 hydraulic Management infrastructure Attachment 2 Schedule 5 Disbursement Linked Indicators June Dec. June Dec. June Dec. Dec. June Dec. June Dec. June Disbursement-linked Indicators: 30, 31, 30, 31, 30, 31, 31, 30, 31, 30, 31, 30, 2011 2011 2012 2012 2013 2013 2014 2015 2015 2016 2016 2017 Tax Number of land parcels updated and integrated in the Administration 1 urban cadastre have reached the following non- Improvement cumulative values: The Borrower has budgeted the Public Sector Reform Yes/ 2 Program and adequate related budget programs have No been designed for this purpose by June 30, 2011 The share of budgeted projects drawn from the IPDP, 3 as a percentage of capital expenditure, has increased 20% 40% 50% 60% by: I_I_I Number of staff trained in strategic planning and 10 10 10 5 10 10 20 10 4 program budgeting has reached the following non- cumulative values: SrnteigNumber of Secretariats with strategic and operative 2 2 2 2 2 Strengthening 5 plans updated (all acceptable to the Bank) has and reached the following non-cumulative values: Improvement of Quality of A programmatic structure and effective physical and Expenditures financial indicators (all acceptable to the Bank) have Yes! 6 been introduced into the Borrower's budgetary No process by, at the latest, the end of calendar year 2016 Satisfactory procurement audits have been carried out by the Borrower by end 2015 and 2016 to verify 7 compliance with its new Public Procurement Law and its regulations. The audits shall cover the 25% 50% specified percentage of the provincial central administration cumulated expenditure by: 8 Number of procurement staff trained and accredited has reached the following non-cumulative targets: 6 5 5 10 Rural Water Number of additional WUAs that have increased Resources 9 their number of fee paying users by at least 20% 1 2 5 5 5 5 Management reached the following non-cumulative targets: I 2 Cc: Diego Menendez, Director, National Director for International Programs and Credits, Ministry of Economy and Public Finance of the Argentine Republic Gabriel Filc, Director, Directorate of Projects with the World Bank, Ministry of Economy and Public Finance of the Argentine Republic Federico Bekerman, Sub-Secretary, Sub-Secretariat of Evaluation of Projects with External Financing, Chief of Cabinet's Office Daniel Enrique Kostzer, Alternate Executive Director, World Bank Nora Serrani de Ferrario, Project Coordinator, UCP Eugenia Benedetti, Office of the Cabinet of Ministers