The World Bank 1818 H Street N.W. (202) 473-1000INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVE .OPMENT Washington, D.C. 20433 Cable Address: INT ! .F ADINTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: IND P'T

Honorable Mohamed Adan Ibrahi: nMinister of FinanceMinistry of Finance and PlanningVilla SomaliaMogadishu, Somalia

Dear Honorable Ibrahim:

Re: SPF Grant Number TF OAO( 46 (Somali Water for Agro-Pastoral Livelihoods Pilot PrIje: )Add tional Instructions: Disbursement

I refer to the Grant Agreement between the International Development Ass( c l. ion("Association "or " World Bank"', acting as administrator of the Multi-Donor Trust Fund f !ateand Peace Building ("SPF") and he Federal Republic of Somalia ("Recipient") for the ;i ve-referenced Project, of even date herewith. The Agreement provides that the Association m, y i! sueadditional instructions regarding :he withdrawal of the proceeds of Grant Number TF( k0 C46("Grant"). This letter ("Disbursoment Letter"), as revised from time to time, constitt i theadditional instructions.

The attached World BanA Disbursement Guidelines for Projects, dated May 1 2 06,("Disbursement Guidelines") (Atttchment 1), are an integral part of the Disbursement Lett,-. 'hemanner in which the provisions i i the Disbursement Guidelines apply to the Grant is sf e:: iedbelow. Sections and subsections in parentheses below refer to the relevant sectio i ndsubsections in the Disbursement Guidelines and, unless otherwise defined in this let e r. thecapitalized terms used have the moanings ascribed to them in the Disbursement Guideline:.

I. Disbursement Arrangements

(i) Disbursement Methods (sectioi 2). The following Disbursement Methods may be use . u derthe Grant:

* Reimbursement* Advance* Direct Payment* Special Commitment

(ii) Disbursement Deadline Date 'subsection 3.7). The Disbursement Deadline Date is 4 iL thsafter the Closing Date specified in the Grant Agreement. Any changes to this date will be i it ledby the World Bank.

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(iii) Disbursement Conditions (su 5section 3.8). Please refer to the Withdrawal Condition 5 1the Grant Agreement.

II. Withdrawal of Grant Proceet s

(i) Authorized Signatures (subsec, ion 3.1).A letter in the Form attached (Attai hment 2) should be furnished to the World Bank at the c]: -ssindicated below providing the nante(s) and specimen signature(s) of the official(s) author e tosign Applications:

The World I BankDelta Cente -Menengai RoadNairobi, K(nyaAttention: C ountry Director

(ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed (a) applicati )u: forwithdrawal, together with support ng documents, and (b) applications for special commi ii ic its,together with a copy of the commercial bank letter of credit, to the address indicated belov

The World Bank, Loan DepartmentDelta Cente ', 1 3th FloorMenengai RoadNairobi, Kt nyaTel: +254 20 2936 000Attention: Loan Department

(iii) Electronic Delivery (subsection 3.4) The World Bank may permit the Recip il toelectronically deliver to the World Bank Applications (with supporting documents) throl g+ theWorld Bank's Client Connection, web-based portal. The option to deliver Applicatiom c theWorld Bank by electronic means may be effected if: (a) the Recipient has designated in Na" ag,pursuant to the terms of subparagi aph (i) of this Section, its officials who are authorized :o gnand deliver Applications and to receive secure identification credentials ("SIDC") from the 'YV rldBank for the purpose of delivering 3uch Applications by electronic means; and (b) all such o I) alsdesignated by the Recipient have registered as users of Client Connection. If the Worl, I tnkagrees, the World Bank will provide the Recipient with SIDC for the designated ol c 11s.Following which, the designated c fficials may deliver Applications electronically by corn. t ingForm 2380, which is accessible through Client Con :ic ton(https://clientconnection.worldban <.org). The Recipient may continue to exercise the or 1.1'ol ofpreparing and delivering Applicati)ns in paper form. The World Bank reserves the right ar ii ay,in its sole discretion, temporarily or permanently disallow the electronic delivery of Appli.: it )nsby the Recipient.

(iv) Terms and Conditions of Use of SIDC to Process Applications. By designating offi, i, touse SDIC and by choosing to dcliver the Applications electronically, the Recipient cci1i nsthrough the authorized signatory It tter its agreement to: (a) abide by the Terms and Condil fr ofUse of Secure Identification Cred ntials in connection with Use of Electronic Means to I r' ?ssApplications and Supporting Doci, mentation ("Terms and Conditions of Use of SIDC") pr ) edin Attachment 3; and (b) to cause such official to abide by those terms and conditions.

(v) Minimum Value ofApplicatiozs (subsection 3.5). The Minimum Value of Applicatior s i20,000 USD

(vi) Advances (sections 5 and 6).

* Type of Designated Acc unt (subsection 5.3): Segregated

* Currency of Designated 4ccount (subsection 5.4): USD

* Financial Institution at which the Designated Account Will Be Opened (subsec vw i5.5): Central Bank of Somalia

* Ceiling (subsection 6.1): 100,000 USD

III. Reporting on Use of Grant 'roceeds

(i) Supporting Documentation (section 4). Supporting documentation should be provided heach application for withdrawal as set out below:

* For requests for Reimbursement:

o List of payments igainst contracts that are subject to the World Bank's pr c rreview, in the fon n attached (Attachment 5)

o Statement of Exp.nditure in the form attached (Attachment 4)

* For reporting eligible ex enditures paid from the Designated Account:

o List of payments igainst contracts that are subject to the World Bank's pr ( rreview, in the forn attached (Attachment 5)

o Statement of Exp:nditure in the form attached (Attachment 4)

o Designated Accoint reconciliation statement in the form attached (Attac ii i Lt

6)

* For requests for Direct Payment: records evidencing eligible expenditures, e.g., .:01 esof receipts, supplier invoices

(ii) Frequency of Reporting Eligib5le Expenditures Paid from the Designated Account(subsection 6.3): monthly

(ii) Other Supporting Documenta ion Instructions

Copies of the bank statement (f the Designated Account and a reconciliation sta mt(Attachment 6) for this Account st ould be submitted with each Application of replenishme .

IV. Other Important Informatio i

For additional information on disbursement arrangements, please refer to the Disbur (r ,ntHandbook available on the Work Bank's public website at https://www.worldbank.org L(; itssecure website "Client Connection" at https://clientconnection.worldbank.org. Print cop cs ireavailable upon request.

From the Client Connectio i website, you will be able to download Applications, r 1on torthe near real-time status of the C rant, and retrieve related policy, financial, and procu v -ntinformation.

If you have not already do ie so, the World Bank recommends that you register as . serof the Client Connection website (https://clientconnection.worldbank.org). From this webs t ouwill be able to download Applications, monitor the near real-time status of the Grant, and ir iverelated policy, financial, and proct rement information. All Recipient officials authorized .i gnand deliver Applications by electro iic means are required to register with Client Connection Le areelectronic delivery can be effected. For more information about the website and regi: a onarrangements, please contact the World Bank by email at <clientconnection@worldbank.o 1::

If you have any queries ii relation to the above, please contact Christiaan Nieu c dt,Finance Officer at cnieuwoudtaw:rldbank.org using the above reference.

Yours 'ncerely,

Bell irdCountry Di ctor for Somalia

Africa Region

Attachments1. World Bank Disbursement Guidelines for Projects, dated May 1, 20062. Form for Authorized Signature s3. Terms and Conditions of Use c fSecure Identification Credentials in connection with Ls- f

Electronic Means to Process A oplications and Supporting Documentation, dated Marc1 12013

4. Form for Statement of Expenditu es5. Form for Summary Sheet for Pay nents Against Contracts Subject to the Association's Prior R 'i. N6. Designated Account reconciliatio i

Attac ii [. it 2

Forr i of Authorized Signatory Letter[Letterhead]

Ministry of Finance[Street address][City] [Country]

[- E]

The World Bank1818 H Street, N.W.Washington, D.C. 20433United States of America

Attention: Bella Bird

Dear [Country Director]:

Re: SPF Grant No.TF0AO66 (Somali Water for Agro-Pastoral Livelihoods Pilot Pro, e

I refer to the Grant Agreen tent between the International Development Associatio 1("Association "or " World Bank") acting as administrator of the Multi-Donor Trust Fund crState and Peace Building ("SPF") a id the Federal Republic of Somalia ("Recipient"), datec

providing the above Grant. For the purposes of Section 3.04 (b) of the StandE :1Conditions, as defined in the Agn ement, any [lone] of the persons whose authenticatedspecimen signatures appear below is authorized on behalf of the Recipient to sign applicz c sfor withdrawal [and applications .or a special commitment] under this Grant.

For the purpose of delivering Applications to the World Bank, 2[each] of the perso nwhose authenticated specimen siF natures appears below is authorized on behalf of theRecipient, acting 3[individually] 4[ ointly], to deliver Applications, and evidence in suppo 't

thereof on the terms and conditioi is specified by the World Bank.

5[This confirms that the Re:ipient is authorizing such persons to accept SecureIdentification Credentials (SIDC) ind to deliver the Applications and supporting documc -i --othe World Bank by electronic mea ns. In full recognition that the World Bank shall rely ul ( r

I Instruction to the Recipient when sending th s letter to the World Bank: Stipulate if more than one person needs to sigrApplications, and how many or which positio is, and if any thresholds apply. Please delete this footnote in final letter th t is entto the World Bank.

2 Instruction to the Recipient: Stipulate if mot than one person needs to jointly sign Applications, if so, please indicate 1 it :ual

number. Please delete this footnote in final le ter that is sent to the World Bank.

Instruction to the Recipient: Use this bracke if any one of the authorized persons may sign; if this is not applicable, ple :

delete. Please delete this footnote in final leti ?r that is sent to the World Bank.

4 Instruction to the Recipient: Use this bracke only if several individuals must jointly sign each Application; if this is nc

applicable, please delete. Please delete thisfootnote in final letter that is sent to the World Bank.

I Instruction to the Recipient: Add this parag -aph if the Recipient wishes to authorize the listed persons to accept Secur

Identification Credentials and to deliver Appl cations by electronic means; if this is not applicable, please delete the par, ga 1.Please delete this footnote in final letter that s sent to the World Bank.

such representations and warranties, including without limitation, the representations an lwarranties contained in the Terms qnd Conditions of Use of Secure Identification Credentials it,connection with Use of Electronic Me qns to Process Applications and Supporting Documentation("Terms and Conditions of Use of SIDC"), the Recipient represents and warrants to the H.o rBank that it will cause such persoi,s to abide by those terms and conditions.]

This Authorization replaces and supersedes any Authorization currently in the W -: [Bank records with respect to this i igreement.

[Name], [position] E pecimen Signature:

[Name], [position] E pecimen Signature:

[Name], [position] E pecimen Signature:

Yours truly,

/ signed /

[Position]

Attacl i t 3

Terms and Conditii ins of Use of Secure Identification Credentialsin conne,-tion with Use of Electronic Means

to Process Applicationsan I Supporting Documentation

March 1, 2013

The World Bank (Bank)' will piovide secure identification credentials (SIDC) to pen t 'heBorrower 2 to deliver applications I or withdrawal and applications for special commitment: ii lerthe Agreement(s) and supporting d )cumentation (such applications and supporting docume i ax ontogether referred to in these Terms and Conditions of Use as Applications) to the F nkelectronically, on the terms and co iditions of use specified herein.

SIDC can be either: (a) hardware-based (Physical Token), or (b) software-based (Soft Toke. 'heBank reserves the right to determii.e which type of SIDC is most appropriate.

A. Identification of Users.

1. The Borrower will be required to identify in a completed Authorized Signatory Letter (N L)duly delivered to and recei ied by the Bank each person who will be authorized to .1 'erApplications. The Bank will provide SIDC to each person identified in th' ' SL(Signatory), as provided below. The Borrower shall also immediately notify the B, r '< faSignatory is no longer authDrized by the Borrower to act as a Signatory.

2. Each Signatory must register as a user on the Bank's Client Connection (CC) l ite(https://clientconnection.worldbank.org) prior to receipt of his/her SIDC. Registra ii onCC will require that the Signatory establish a CC password (CC Password). The Sij r1 a ryshall not reveal his/her CC Password to anyone or store or record the CC Passx 'or inwritten or other form. Up:)n registration as a CC user, the Signatory will be ass 2:1 1 aunique identifying account name.

B. Initialization of SIDC.

1. Prior to initialization of SIDC by a Signatory, the Signatory will acknowledge havir ir ad,understood and agreed to be bound by these Terms and Conditions of Use.

"Bank" includes IBRD and IDA.2 "Borrower" includes the borrower of an IBRD loan, IDA credit, or Project Preparation Facility advance an I h

recipient of a grant.

2. Where a Physical Token is to be used, promptly upon receipt of the Physical Tok:!i, heSignatory will access CC u, ing his/her account name and CC Password and register I s lerPhysical Token and set a f ersonal identification number (PIN) to be used in coni e cI onwith the use of his/her Phy;ical Token, after which the Physical Token will be init I edfor use by the Signatory exclusively for purposes of delivering Applications. Where :)ftToken is to be used, the Signatory will access CC using his/her account name a il I CPassword and set a personal identification number (PIN) to be used in connection v H heuse of his/her Soft Token, after which the Soft Token will be initialized for use | w heSignatory exclusively for I urposes of delivering Applications. Upon initialization of heSIDC, the Signatory will b a "SIDC User". The Bank will maintain in its database seraccount (Account) for eact SIDC User for purposes of managing the SIDC of the )CUser. Neither the Borrowe -nor the SIDC User will have any access to the Accoun

3. Prior to first use of the SIE C by the SIDC User, the Borrower shall ensure that the )CUser has received training materials provided by the Bank in use of the SIDC.

C. Use of SIDC.

1. Use of the SIDC is strictly imited to use in the delivery of Applications by the SID . I 3erin the manner prescribed by the Bank in the Agreement(s) and these Terms and Con( i.i. ns.Any other use of the SIDC is prohibited.

2. The Bank assumes no responsibility or liability whatsoever for any misuse of the S1 J( bythe SIDC User, other repre;entatives of the Borrower, or third parties.

3. The Borrower undertakes to ensure, and represents and warrants to the Banl< ichrepresentation and warranty being expressly relied upon by the Bank in granting : I C)that each SIDC User understands and will abide by, these Terms and Conditions, ]i se,including without limitatio i the following:

4. Security

4.1. The SIDC User shal not reveal his/her PIN to anyone or store or record the F ' inwritten or other form.

4.2. The SIDC User sha 1 not allow anyone else to utilize his/her SIDC to del %ei anApplication to the Bank.

4.3. The SIDC User shal always logout from CC when not using the system. Fa l.1 tologout properly can create i route into the system that is unprotected.

4.4. If the SIDC User believes a third party has learned his/her PIN or has lost hi aerPhysical Token he/she shall immediately notify clientconnectiongworldbank.org.

4.5. The Borrower shall i -tmediately notify the Bank atclientconnection@aworldba k,org of any lost, stolen or compromised SIDC, and tateother reasonable steps to er sure such SIDC are disabled immediately.

5. Reservation of Right to Di ,able SIDC

5.1. The Borrower shall res erve the right to revoke the authorization of a SIDC Usel 10 isea SIDC for any reason.

5.2. The Bank reserves the right, in its sole discretion, to temporarily or perm, riel tlydisable a SIDC, de-activate a SIDC User's Account or both.

6. Care of Physical Tokens

6.1. Physical Tokens will remain the property of the Bank.

6.2. The Bank will physi :ally deliver a Physical Token to each Signatory design L e- toreceive one in a manner to :e determined by and satisfactory to the Bank.

6.3. Physical Tokens cottain delicate and sophisticated instrumentation and th I reshould be handled with d je care, and should not be immersed in liquids, exp( s.:. toextreme temperatures, crushed or bent. Also, Physical Tokens should be kept mo 'tanfive (5) cm from devices t iat generate electromagnetic radiation (EMR), such as rc ilephones, phone-enabled PEAs, smart phones and other similar devices. Physical ' 'l: nsshould be carried and store d separate from any EMR device. At close range (less ti 1 5cm), these devices can ot tput high levels of EMR that can interfere with the r )eroperation of electronic equ pment, including the Physical Token.

6.4. Without derogating from these Terms and Conditions of Use, other te:1 i1 calinstructions on the proper use and care of Physical Tokens are avail 100 athttp://www.rsa.com.

7. Replacement

7.1. Lost, damaged, com)romised (in terms of 4.5, above) or destroyed Physical I' :nswill be replaced at the exp(nse of the Borrower.

7.2. The Bank reserves tI e right, in its sole discretion, not to replace any Physical :o enin the case of misuse, or nc t to reactivate a SIDC User's Account.

Project Name: Annex 4 - Disbursement LetterSTATEMENT OF EXPENDITURE (SOE)

Payments made during the period from To

Date:

Application No.:Grant No.:

SOE Sheet No.:

1 2 3 4 5 6 7 8 9 10 11 12 13

0 0 Total invoice p US$ Equivalent Ea Z E Currency and

Name of Supplier, Brief Description of Goods Total Amount of Contract g amount covered eligible amount paid fromRearksE 0 Contractor, or Consultant or Services (Include all currencies) 8 by this application - & paid (7)48) Designated

U LI (net of retention) E Account

Supporting documents for this SOE retamed at:

Attachment 5

Payments made during the period from to Date:

Applici t oNo.:

Summary Sheet For expenditures a ;ainst the contracts subject to the Bank Prior Loan/Review Financing

No.Ref. No.

1 2 3 4 5 6 7 8 9 10 1 2

Ite Cat Curr Name Re DE te of Invoic Curre Eligible % from Amo Currency xm ego ency of f. NO - from e No. ncy Schedule 1 of unt and ia

No. ry and Contr No World & and Financing Eligib Amount gNo. Total actor . E ank date Total Agreement le for Paid from& Amo of Amou Finan Designatec at

Des unt Co nt of cing Account (i hcrip of ntr Invoic (8 x Applicable, otion Cont ac e 9)(**) ract t Cover 1

ed by :viApplic eation I(Net yof ol

Retent_ _ __ _ _ __ ion) # _ _ _ _ _ _

TOTALS

Re Authorizedma Signatoryrks

Supporting documents for this Applicatic n retained at_ _(insert location)

(#) Exclude amount financed by otherdonors, if any

(*) A separate f >rm should be used for retroactive financing(**) Items shoulk be grouped by category; or alternatively, a separate form may be

used for eac i category

Designated Account Reconciliation StatementAttac i w it 6

Credit No.:

Bank and Account No.:

Part I1. Cumulative advances to end of current reporting period

2. Cumulative expenditures to end of last reporting period

3. Outstanding advances to be acco unted (1-2)

Part II

4. Opening DA balance at beginning of reporting period (per Bank statementattached, as of.

5. Add/Subtract: Cumulative adjustments, including interest earned and recoveriesby WB, (if any)

6. Advances received from the World Bank during current reporting period

7. Closing DA balance at end of cur -ent reporting (per Bank statement attached, asof ..8. Outstanding amount of advance ; to be accounted for (4+5+6-7)

9. Total Expenditures reported for :urrent reporting period, including thisApplication

Applic No. Amount

Total (9)

10. Difference (if any) 9-8

Remarks

Approved by: