Official Documents- Amendment to the Financing Agreement for Credit 4278-KE

OFFICIAL DOCUMENTS The World E nk INTERNATIONAL E /l K FOR RECONSTRUCTION AND DEW&0**C*-r -"lWplper Hill Road Tel: (254-20) 3226000 INTERNATIONAL I E ELOPMENT ASSOCIATION P.O. Box 30577 Fax: (254-20) 3226380 / 381 Nairobi, Kenya July 17, 2012 Honorable Njeru Githae Minister of Finance Ministry of Finance Treasury Building Nairobi, Kenya Dear Hon. Githae, Republic of Kenya: Western Kenya Communitv Driven Development and Flood Mitigation Project Credit No: 4278-KE Amendment to the Financing Agreement We refer to the Financing Agreement (Agreement) for the above-mentioned P-oject dated May 7, 2007 (as amended) between the Republic of Kenya (the Recipient) and the International Development Association (Association). We also refer to your letter dated June 18, 2012 requestin a amendments to the Agreement to promote a more effective implementation of the Pro ect. I am pleased to notify you that the Association concurs with your request and amer ds the Agreement as follows: 1. Schedule I (Project Description) is hereby amended as follows: (i) Part I (a) (v) is amended by deleting the letter "a" between "up" and "self- sustaining" and substituting the word "Community Foundations" with "Community Foundation". (ii) Part (2) (a) is amended by deleting the words "and Yala" and deleting the letter "s" in the word "Basins." (iii) Part 3 (d) is amended by deleting the word "and" between the words "system" and "an". 2. Schedule 2 (Project Execution) is amended as follows: (i) Section LA (2) is airended by deleting the word "establish District Steering Group" with maintains a Sub-County Steering Group" and substituting the word "district" with "Sub-county level". (ii) Section LA (3) is air ended by substituting the word "District Coordinating Unit (DCU)" with Sib-county Coordinating Unit" and "District Project Coordinator" with "Sub-county Project Coordinator". H c. Njeru Githae -2- July 17, 2012 (iii) Section L.A (4) the word "Community Development Committees" is substituted with the word "Community Driven Development Committees (CDDC)". (iv) Section B.2 is amended by substituting the word "Indigenous Peoples Planning Framework" with "Vulnerable and Marginalized Group Framework". (v) Section LC (2) is amended by deleting the letter "a" between "up" and "community" and the word "Foundations" is substituted with the word "Foundation". 3. Section II.A (2) is deleted in its entirety and the former paragraphs 3 and 4 are re numbered as paragraph 2 and 3 and a new paragraph Section II.A (3) (d) is added and reads as follows: "Not later than January 30, 2013 recruit an integrated fiduciary review agent to carry out fiduciary oversight of the project under terms of reference satisfactory to the Association". 4. Section III (Procurement) is amended as follows: The table in Section III. B is amended by adding an asterisk "*" after the word "National Competitive Bidding" and adding two asterisk "**" after the word shopping. The following is added at the bottom of the table: "(*) National Competitive Bidding shall be undertaken in accordance with the Recipient's Public Procurement and Disposal Act, 2005 (no. 3 of 2005) (herein referred to as the "PPDA"), and its Public Procurement Disposal Regulations, 2006 (herein referred to as the "Regulations"), as may be amended from time to time, subject, however, to the following qualifications: (i) The tender submission date shall be set so as to allow a period of at least thirty (30) days from the later of (A) the date of advertisement, and (B) the date of availability of the tender documents. (ii) Recipient-owned enterprises shall be allowed to participate in the tendering only if they can establish that they are legally and financially autonomous, operate under commercial law and are independent agencies of the Recipient's government. (iii) The Recipient shall use, or cause to be used, bidding documents and tender documents containing, inter alia, draft contracts and conditions of contracts, including provisions on fraud and corruption, audit and publication of award n form and substance satisfactory to the Association. ho i. Njeru Githae -3- July 17, 2012 (iv) Extension of tender validity shall be allowed once only, and for not more than thirty (30) days, unless otherwise previously agreed in writing by the Association. (v) Evaluation tender shall be based on quantifiable criteria expressed in monetary terms as defined in the tender documents, and not on a merit points system. (vi) No domestic preference shall be used in the evaluation of tenders. Accordingly, contracts shall be awarded to qualified tenderers having submitted the lowest evaluated substantially responsive tender". (vii) Notification of contract award shall constitute the formation of the contract. No price negotiations shall be allowed prior to contract award except where the bid price is substantially above the market or budget levels and, only then, if negotiations are carried out with a view to reach a satisfactory contract through reduction in scope and/or reallocation of risk and responsibility which can be reflected in a reduction in contract price. (**) Shopping procedure will apply for each low value contract in lieu of Direct Procurement except as otherwise previously agreed in writing by the Association. 5. The table in Section IV.A (2) of Schedule 2 is amended as set forth in the Annex and Section IV.B.2 is amended by substituting the word "Foundation" with "Foundations". 6. Section Ill.D of Schedule 2 is deleted in its entirety and substituted with the following: "Review by the Association of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Association's Prior Review. All other contracts shall be subject to Post Review by the Association". 7. The Appendix to the Agreement is amended as follows: (i) New Paragraph 2 is added to read as follows: "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated Octob-r 15, 2006 and revised in January 2011. (ii) Paragraphs 1-10 are renumbered as paragraphs 2-11. (iii) Paragraph 12 is deleted in its entirety and paragraphs 13-30 are now renumbered paragraphs 12-30. H Lo Njeru Githae -4- July 17, 2012 (iv) Paragraph 22 on "Project Area' is amended by deleting the words "and Yala" River Basin and "s" and substituting them with the words "excluding gazetted and protected areas". (v) A new paragraph 3 1 is now added and reads as follows: "Vulnerable and Marginalized Group Framework" (previously known as the "Indigenous Peoples Planning Framework" or "IPPF") means the instrument entitled Indigenous Peoples Policy Framework, prepared and adopted by the Recipient on December 22, 2006, which provides guidelines and procedures for identification of VMG, and the preparation, adoption and implementation of a plan or plans for the consultation with and informed participation in the Project of Vulnerable and Marginal ized Groups affected by the Project" All the terms and conditions of the Agreement, as amended hereby, shall remain in full force and effect. Please confirm your agreement to the foregoing amendment by signing, dating and returning to us the attached copy of this letter. This amendment will become eflective as of date of countersignature upon receipt by the Association of the countersigned copy of this letter. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION Rajashree Paralkar Acting Country Director for Kenya Africa Region AGREED: REPUBLIC OF KENYA uthorized Representative Tie: AVIhA/fTS I T"4-IC Dale:26~ 72 4ZC/ Fo i. Njeru Githae -5- July 17, 2012 APPENDIX Amount of the Percentage of Category credit allocated Expenditures to be (expressed in SDR) Financed 1. Civil Works 6,000,000 80% 2. Goods and Equipment 5,700,000 100% of foreign expenditures, 90% of local expenditures 3. (a) Grants for Micro-projects 100% (i) CDD Micro-projects 7,100,000 100% of the Recipient's Contribution (ii) Community Foundation 200,000 100% of the Recipient's Contribution (iii) Youth Micro-projects 500,000 100% of the Recipient's Contribution (iv) Malaria Micro-projects 1,200,000 100% of the Recipient's Contribution (b) Catchment Management 9,200,000 100% of the Recipient's Contribution Micro-projects 4. Consultants' Services and Audit 7,300,000 100% 5. Training and Workshops 6,000,000 100% 6. Incremental Operating Costs: (a) Vehicle operations 1,500,000 90% maintenance and insurance (b) Other operations and 7,100,000 90% for expenditures incurred before June maintenance 30, 2009, 80% for expenditures made before June 30, 2011, 70% for expenditures made before June 30, 2013 and thereafter. 7. Refund of Project Preparation 330,000 Advance 8. Unallocated 5,670,000 TOTAL AMOUNT 57,800,000 Mr Njeru Githae -6- July 17, 2012 Cc: Mr. Joseph Kinyua Permanent Secretary Ministry of Finance Treasury Building Harambee Avenue Nairobi Mr. Andrew Mondoh Permanent Secretary Ministry of State for Specia Programmes Comcraft House, Haile Selassie Avenue Nairobi Mr. Jackson Kinyanjui Director, External Resources Department Ministry of Finance Treasury Building Harambee Avenue Nairobi Mr. Moses Kanagi Head, World Bank Desk External Resources Department Ministry of Finance Treasury Building Harambee Avenue Nairobi Mr. Evans Asena National Project Coordinator Ministry of State for Specia Programmes Comcraft House Haile Selassie Avenue Nairobi The World Bank INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Hill Park, Upper Hill Road Tel: (254-20) 3226000 INTERNATIONAL DEVELOPMENT ASSOCIATION P.O. Box 30577 Fax: (254-20) 3226380/ 381 Nairobi, Kenya August 6, 2012 Mr. Jackson Kinyanjui Director External Resources Department Ministry of Finance Treasury Building Harambee Avenue Nairobi Dear Mr. Kinyanjui Republic of Kenya: Kenya Western Community Driven Development and Flood Mitgaion (WKCDD FM Project) Credit No: 4278 KE Correction Please refer to the Amendment to the Financing Agreement dated July 17, 2012 in connection with the above referenced project. This is to inform you that incorrect Appendix containing information on the disbursement table was attached to the Amendment. We have attached the correct agreed Appendix as indicated in the Restructuring Paper for the same project. Please use this Appendix for all future references in connection with this Amendment. Sincerely, Nyambur Githagui Task Team Leader Mr. Jackson Kinyanjui -2- August 6, 2012 APPENDIX Category Amount of the Credit Percentage of Expenditure to be Allocated (expressed in Financed SDR) 1. Civil Works 13,750,000 100% 2. Goods and Equipment 5,730,000 100% 3. (a) Grants for Micro projects (i) CDD Micro-Projects 7,140,000 100% (ii) Community Foundation 200,000 100% (iii) Youth Micro-projects 500,000 1000/ (iv) Malaria Micro-Projects 1,210,000 1 000/% (b) Catchment 4,700,000 1000/ Management Micro- Projects 4. Consultants' Services 7,340,000 100% and Audit 5. Training & 6,040,000 100% Workshops 6. Incremental Operating Costs: (a) Vehicle operations maintenance and insurance 1,510,000 100% (b) Other Operations & Maintenance 9,679,450 100% 7. Refund of Project 550 Preparation Advance 8. Unallocated 0 Total Funds 57,800,000 Mr. Jackson Kinyanjui -3- August 6, 2012 Cc: Mr. Joseph Kinyua Permanent Secretary Ministry of Finance Treasury Building Harambee Avenue Nairobi Mr. Andrew Mondoh Permanent Secretary Ministry of State for Special Programmes Comcraft House, Haile Selassie Avenue Nairobi Mr. Moses Kanagi Head, World Bank Desk External Resources Department Ministry of Finance Treasury Building Harambee Avenue Nairobi Mr. Evans Asena National Project Coordinator Ministry of State for Special Programmes Comcraft House Haile Selassie Avenue Nairobi