Of'FICIAL DOCUMEWTS The World Bank 1818 H Street N.W. (202) 477-1234 INTERNATIONAL BANK FOR RECC NSTRUCTION /,ND DEVELOPMENT Washington, D.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS December 20, 2012 H. E. Ali Mahmoud Abdel Rasool Minister of Finance and National Ecoiomv Khartoum, Republic of the Sudan M3TF - NS Grant No. TF057324 Second Amendment to Decentralized Health System Development Project Excellency, We refer to the Agreement dated October 29, 2006 (as amended) between the Republic of the Sudan (the Recipient) and the International Devclopmient Association (World Bank), acting as administrator of grant funds provided by various donors under the Multi-Donor Trust Fund for the Sudan (MDTF-NS). We also refer 10 your letter dated March 13, 20 12 requesting restructuring and provision of additional financing to the Project. We are pleased to inform you that the World Bank agrees to your request. Consequently, the Agreement is amended as follows: I. The first paragraph of the Letter A greement is amended to read as follows: In response to the request for financial assistance made on behalf of the Republic of the Sudan ("Recipient"), I am pleased to it forrr you that the International Development Association ("World Bank"), acting as administrator )f grant funds provided by various donors under the Multi-Donor Trust Fund for Sudan (MDTF-NS), proposes to extend to the Recipient ("Member Country"), a grant in an amount not to exceed fcurteen million United States Dollars (US$14,000,000) ("Grant") consisting of six million United States Dollars (USD 6,000, 000) in original grant, six million United States Dollars (USD 6,000,000) i i first additional grant and two million United States Dollars (USD 2,000,000) in second additions I grant on terms and conditions set forth or referred to in this agreement ("Agreement"), whict includes the attached Annex, to assist in the financing the project described in the Annex ("Project"). This Grant is funded out of the above mentioned trust fund for which the World Bz.nk receives periodic contributions. In accordance with Section 3.02 of the Standard Conditions (as defined in tEe Annex to this Agreement), the Recipient may withdraw the Crant proceeds subject to the ava lability of such funds. 2. The reference to Standard Conditi)ns in Section 1.01 of the Annex is revised as follows: .Standard Conditions. The Standard Conditions for Grants Made by the World Bank out of Various Funds dated February 15, 2)12 ("Standard Conditions") constitute an integral part of this Agreement." 3. P iragraph 1.02(k) is modified to road as follows: (k) "Target States" means the states of South Kordofan, North Kordofan, Blue Nile, Kassala and Red Sea in the Recipient's admin strat.ve system as established in its applicable legal framework. 4. Project description at Section 2.0] of the Annex is amended to read as follows: Part 1: Expandin Access to PrimaryHealth Care by Underserved Populations (a) Expanding coverage nd c uality of maternal and neonatal health services in rural areas of the Target States, through: (i) strengthening the existing network of midwifery training schools; (ii) provision of a package of inceutiveE for the trained village midwives (including basic medical materials and supplies, payment f)r services rendered, access to continuous training, and supervision); and (iii; carrying oit measures to increase the demand for and utilization of maternal health services at the community evel Part 2: Establishing the Basi; for Reform and Development of the Decentralized Health System (a) Capacity-building anJ technical assistance to support reforms in health sector including policy work related to decentralizati)n o responsibility for village midwives and provision Operating Costs related to maternal death reviews and s. (b) Management and ccordination of the Project activities at the federal and Target State levels. 5. S.ction 2.02 of the Annex is amended to read as follows: The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out the Project through the Federal Ministry of Health in accordance with the provisions of: (a) Article II of the Standard Condi ions; (b) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011 ("Anti-Corruption Guidelines"); and (c) this Article 11. 6. Section 2.06 (a) of the Annex to t[e Agreement is amended to read as follows: (i) Section I of the ""Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Procurement Guidelines"), in the case of goods and works; (ii) Sections I aid IV of "Guidelines: Procurement of Goods, Works and Non- consulting Services inde- IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated Ja muary 2011 ("Consultant Guidelines"), in the case of consultants' services; and (iii) the provisions of this Section, as the same shall be elaborated in the procurement plan prepared and updated from time to time by the Recipient for the Project in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines ("Procurement Plan")." 7. The disbursement table set forth in Section 3.01 of the Annex is deleted and replaced with the table se: forth in Attachment A to this Letter of Amendment. 2 8. A new paragraph is added to Section 3.02 of the Annex stating as follows: (d) for payments made prior tc the date of countersignature by the Recipient of the Letter of Amendment for second amendment to the Grant, except that withdrawals up to an aggregate amount not to exceed four hundred thousand United Stated Dollars (USD 400,000) equivalent may be made for payments made pior to this date but on or after July 1, 2012 for Eligible Expenditures under Category (7). 9. For purposes of Sectio1 3.03 of the Annex, the Closing Date shall read June 30, 2013. Please confirm your agreement w-th th. foregoing, on behalf of the Recipient, by signing, dating, and retumn g to us the enclosed copy of this Letter of Amendment. Upon receipt by the World Bank of the copy of this Letter of Amendment countersijned by you, this Letter of Amendment will become effective as of the date of countersignature. Very truly yours, INTERNATIONAL DEVELOPMENT ASSOCIATION By: 1,,____Laic __ YousifElfadil Acting Country Manager for the Sudan AGREED: REPL3LIC OF THE SUDAN Y ~ L Date:___ ___ H. E. Ali Mahmoud Abdel Rasool Minister of Finance and National Econ )my 3 ATTACHMENT A Categcy Arrount of the Amount of the Second % of Ori ginal md First Additional Grant Expenditures to be Financed Additional Grant Allocated Allocated (in US Dollars (in_JS D;rs) (1) Works (pro memoria) 0.0) 100% of foreign expenditures, 100% of local expenditures (ex- factory cost) and 90% of local expenditures for items procured locally (2) Goods (pro memoria) 1.,2 50,608.97 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 90% of local expenditures for items procured locally 100% of foreign expenditures (3) Consultants' Services, 360,922.75 and 90% of local expenditures including audits and Training (pro memoria) (4) Operating Costs (pro 28,568.28 100% memoria) (5) Unallocated 0.0) (6) Goods, Works, Operating Costs 10,350,800.00 100% (exclusive of taxes) and Consultant Services, inc.uding audits and Training (7) Goods, Works, Operating Costs 2,000,000.00 and Consultant Services, including audits and Training TOTAL 12,)00,000.00 For purposes of the above aragraph: (i) the term "foreign expenditt res" means expenditures in the currency of any country other than that of the Recipient for gooc s or serviccs str 'plied from the territory of any country other than that of the Recipient; (ii) the term 'local expenditures" means any expenditures that are not foreign expenditures, provided, however, that if the currenc./ of the Recipient is also that of another country from the territory of which goods or services ire supplied, expenditures in such currency for such goods or services shall be deemed to be foreign expenditures; and (iii) the term "operating costs" means the incremental expenses incurred on account of Project impletr entation and supervision, including for office support, office supplies, office rent, communication expenses, maintenance of vehicles, and transportation expenses, but excluding salaries of officials of the Recipient's civil service. 4