CONFORMED ICOPYTBAFRAD
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1 Public Disclosure Authorized 1818 H Street N.W. (202) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.C able RDRAFD The World Bank INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CONFORMED ICOPYTBAFRAD WORLD BANK OFFICE JAKARTA JSEB Tower 2, Jl. Jend. Sudirman Kav , Jakarta Telephone: (62-21) Facsimile: (62-21) Letter No. 331/COREMAP/VI/2010 June 30, 2010 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Mr. Rahmat Waluyanto Director General of Debt Management Jalan Lapangan Banteng Timur 2-4 Jakarta Dear Mr. Waluyanto: Re: Coral Reef Rehabilitation and Management Project (COREMAP II) Extension of Closing Date; Cancellation of Proceeds and Reallocation of Proceeds of the Loan; and Amendment for Loan No IND and Credit No IND and GEF Grant No. TF I am pleased to refer to: (i) the Loan Agreement (Loan No IND) (the Loan Agreement), between the Republic of Indonesia (the Borrower) and the International Bank for Reconstruction and Development (the Bank) (the Loan Agreement), the Development Credit Agreement (Credit No IND) (the Development Credit Agreement) between the Borrower and the International Development Association (the Association) and the GEF Grant Agreement (GEF Grant No TF053350) (the Grant Agreement) between the Republic of Indonesia (the Recipient) and the Bank, acting as an implementing agency for the Global Environment Facility (GEF), each dated June 30, 2004; and (ii) to your letters, dated July 7, 2009 (with respect to the Loan Agreement) and September 28, 2009 (with respect to the Development Credit Agreement), and to the minutes of restructuring discussions, dated April 8, 2010, requesting extension of the Closing Date of the Loan Agreement, Development Credit Agreement and Grant Agreement, cancellation of Proceeds of the Loan, re-allocation of the Proceeds of the Loan and the Credit, and amendment of certain implementation arrangements. Capitalized terms used but not defined in this letter agreement (Amendment) have the meanings given to them in the Development Credit Agreement. I am pleased to inform you that, after due consideration, the Bank and the Association concur with your request and accordingly have agreed to amend the Development Credit Agreement, the Loan Agreement and the Grant Agreement as follows. A. Extension of Closing Date of the Development Credit Agreement, the Loan Agreement and the Grant Agreement 1. The Association has established December 31, 2011 as the later date for the purposes of Section 2.03 of the Development Credit Agreement. 2. The Bank has established December 31, 2011 as the later date for the purposes of Section 2.03 of the Loan Agreement.
2 Mr. Rahmat Waluyanto 2 of 9 June 30, The Bank has established December 31, 2011 as the later date for the purposes of Section 2.03 of the Grant Agreement. B. Partial Loan Cancellation. 1. Pursuant to your request, dated July 7, 2009 and received by the Bank on July 9, 2009, and pursuant to Section 6.01 of the General Condition, the Bank hereby cancels, as of July 9, 2009, the amount of three million two thousand three hundred and seventy four United States Dollars (US$3,002,374) and the commitment charge has ceased to accrue on such amount. The Schedule to the Loan Agreement (Amortization Schedule), is being revised by the Bank as a result of the cancellation, and the revised figures will be sent to you shortly. C. Reallocation of Loan Proceeds. 1. The Table in paragraph 1 of Section A of Schedule 1 to the Development Credit Agreement, which is incorporated by reference in the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended as set out below to reflect the partial cancellation of the Loan and the reallocation of proceeds of the Loan pursuant to your request, dated July 7, 2009 (with respect to the Loan Agreement) and September 28, 2009 (with respect to the Development Credit Agreement). With respect to the reallocation of the Development Credit Agreement, the reallocations below factored in actual amounts disbursed as of the date of this Amendment. Category (1) Goods (a) under Part B.1(e) and (f), B.2(g), B.4(b) of the Project Amount of the Credit Allocated (expressed in SDR) 292,200 Amount of the Loan Allocated (expressed in USD) 500,100 Percentage of Expenditures to be Financed 80% of foreign expenditures, 80% of local expenditures (ex-factory cost), and 60% of local expenditures for other items procured locally (b) under other Parts of the Project (except Part B.5) 640, , % of foreign expenditures, 100% of local expenditures (exfactory cost), and 80% of local expenditures for other items procured locally (2) Community Support Services 1,806,960 3,326,712 80%
3 Mr. Rahmat Waluyanto 3 of 9 June 30, 2010 (3) Workshops and Training: (a) under Part B.1 (a), (b) and (c) of the Project 48,430 1,900,000 80% (b) under other Parts of the Project (except Part B.5) 2,424,100 3,559, % (4) Consultants services: (a) under part B.4(b) of the Project 672,650 1,750,200 80% (b) under other Parts of the Project (except Part B.5) 2,649,279 2,271, % (5) Studies and Surveys (except Part B.5 of the Project) (6) Incremental Operating Costs (except Part B.5 of the Project) 1,643,142 4,026, % 1,080,555 1,613, % in FY2004, FY2005 and Fy2006, 80% in FY2007 and FY 2008, and 60% thereafter (7) Fellowships and Scholarships 560,335 1,310, % (8) Awareness and Educational Services 1,157, % (9) District and Village Grants 2,684,424 5,176, % of Grant amount disbursed (10) Front-end Fee - 166,000 Amount due under Section 2.04 of the Loan Agreement (11) Unallocated - 561,154 Amount cancelled from the front-end fee as of June 30, 2004 (166,000) Amount cancelled as of July 9, (3,002,374) TOTAL 15,660,000 30,197,626 D. Other Amendments to the Development Credit Agreement and the Loan Agreement. 1. Section 1.02 (Definitions) of the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended as follows:
4 Mr. Rahmat Waluyanto 4 of 9 June 30, 2010 (a) Paragraph (aa) is amended to add a seventh Participating District resulting from a split in an existing Districts: (aa) Participating Districts means the following districts of the Borrower: Sikka in the Province of Nusa Tenggara Timur; Biak in the province of Papua and Raja Ampat in the Province of Papua Barat; Pangkajene Kepulauan and Selayar in the Province of Sulawesi Selatan; Buton and Wakatobi in the Province of Sulawesi Tenggara. (b) Paragraph (bb) is amended to add a fourth Participating Province resulting from a split in an existing Province: (bb) Participating Provinces means the following provinces of the Borrower: Nusa Tenggara Timur, Papua, Papua Barat, Sulawesi Selatan and Sulawesi Tenggara. 2. Schedule 2 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended to restate the Project Development Objective to match the original project appraisal document as follows: The objective of the Project is to establish viable reef management systems in at least six priority districts, through a financially sustainable program that is nationally coordinated but decentralized in implementation, in order to empower and to support coastal communities to sustainably co-manage the use of coral reefs and associated ecosystem resources, which will revive damaged or preserve intact coral reef ecosystems and in turn, enhance the welfare of these communities in Indonesia. 3. Part A.1 of Schedule 2 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended by adding a new sub-activity (e) as follows: (e) closing out the Project in an orderly fashion, including planning and undertaking end of Project review, assessment and reporting based on terms of reference agreed between the Borrower and the Association. 4. Part B. 2 of Schedule 2 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended by adding a new sub-activity (i) as follows: (i) Documenting, popularizing and distributing community best practices and lessons learned in coral reef management. 5. Part B. 3 of Schedule 2 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended to remove support for financial intermediaries at the Participating District level by restating Part B.3(b) of the Project as follows: (b) Supporting the establishment and strengthening of village-level credit and savings facilities in Participating Village through provision of technical assistance. 6. Part B.3 of Schedule 2 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended by: (a) deleting Part B.3(d) of the Project (partial credit guarantee program), Part B.3 (g) of the Project (pilot program of visits by employment agent to evaluate work opportunity for fishers and reef gleaners outside the participating village) and Part B.3(h) of the project (district block grant program), and (b) by re-numbering Part B.3(e) as Part B.3(d), and Part B.3(f) as Part B.3(e).
5 Mr. Rahmat Waluyanto 5 of 9 June 30, Part B.4 of Schedule 2 to the Development of Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, is amended by restating Part B.4(c) of the Project as follows: (c) Development of a District marine resources strategic plan in each Participating District as guide to Participating Villages in the selection of marine conservation areas and build towards a network of community-based/district marine conservation areas, in participating Districts except Wakatobi. 8. Schedule 4. Paragraph 2 of Schedule 4 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement is amended by re-numbering the existing paragraph 2 as paragraph 2(a) and adding a new paragraph 2(b) as follows: The Borrower shall establish and maintain until completion of the Project the Regional Coordinating Unit in each Participating Province responsible for advocating support from provincial level decision makers for implementation to address District issues, increasing public awareness and liaising between Province-level agencies for monitoring, control and surveillance, and ensure that such RCUs are provided at all times with adequate funds and other resources and staffed by qualified and experienced personnel in adequate numbers as shall be necessary to accomplish their objectives. 9. Paragraph 12 (b) of Schedule 4 the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement is amended to remove the relevant Participating Village and replace such reference with the relevant PMU by restating such Paragraph 12(b) as follows: ensure that a Village Lending Agreement acceptable to the Association, is entered into between the relevant PMU and an established village financial institution for the provision of a Village Loan to such a financial institution; such Village Lending Agreement to include terms and condition of the Village Loan, terms and condition of Sub-loans and criteria for Sub-project eligibility, all in accordance with the provisions of this agreement and of the Village Grant Guidelines. 10. Paragraph 13(a) of Schedule 4 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement is amended by the limit on Grants to Participating Villages not to exceed Rp.100,000, Paragraph 17 of Schedule 4 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement, and which sets out the implementation arrangements for a partial credit guarantee arrangement is deleted, and the subsequent sections re-numbered accordingly. 12. Paragraph 18 of Schedule 4 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement is amended by deleting paragraphs (b), (c) and (d) and adding a new paragraph (b) as follows: ; and (b) not later than December 31, in each calendar year of Project implementation, furnishing to the Association, a report acceptable to the Association, on studies carried out during such year and an action plan for studies to be carried out during the upcoming year. 13. Schedule 5 to the Development Credit Agreement, which is incorporated by reference into the Loan Agreement pursuant to Section 3.01 of the Loan Agreement is amended as set out in the Attachment to this Amendment.
6 Mr. Rahmat Waluyanto 6 of 9 June 30, 2010 E. Other Amendments to the Grant Agreement 1. Section 1.02 (Definitions) of the Grant Agreement is amended as follows: (a) Paragraph (w) is amended to add a seventh Participating District resulting from a split in an existing Districts: (w) Participating Districts means the following districts of the Borrower: Sikka in the Province of Nusa Tenggara Timur; Biak in the province of Papua and Raja Ampat in the Province of Papua Barat; Pangkajene Kepulauan and Selayar in the Province of Sulawesi Selatan; Buton and Wakatobi in the Province of Sulawesi Tenggara. (b) Paragraph (x) is amended to add a fourth Participating Province resulting from a split in an existing Province: (x) Participating Provinces means the following provinces of the Recipient: Nusa Tenggara Timur, Papua, Papua Barat, Sulawesi Selatan and Sulawesi Tenggara. 2. Schedule 2 to the Grant Agreement is amended to restate the Project Development Objective as follows: The objective of the Project is to establish viable reef management systems in at least six priority districts, through a financially sustainable program that is nationally coordinated but decentralized in implementation, in order to empower and to support coastal communities to sustainably co-manage the use of coral reefs and associated ecosystem resources, which will revive damaged or preserve intact coral reef ecosystems and in turn, enhance the welfare of these communities in Indonesia. 3. Part A.1 of Schedule 2 to the Grant Agreement is amended by adding a new sub-activity (e) as follows: (e) closing out the Project in an orderly fashion, including planning and undertaking end of Project review, assessment and reporting based on terms of reference agreed between the Borrower and the Association. 4. Part B. 2 of Schedule 2 to the Grant Agreement is amended by adding a new sub-activity (i) as follows: (i) Documenting, popularizing and distributing community best practices and lessons learned in coral reef management. 5. Part B. 3 of Schedule 2 to the Grant Agreement is amended to remove support for financial intermediaries at the Participating District level by restating Part B.3(b) of the Project as follows: (b) Supporting the establishment and strengthening of village-level credit and savings facilities in Participating Village through provision of technical assistance. 6. Part B.4 of Schedule 2 to the Grant Agreement is amended by restating Part B.4(c) of the Project as follows: (c) Development of a District marine resources strategic plan in each Participating District as guide to Participating Villages in the selection of marine conservation areas and build towards a network of community-based/district marine conservation areas in participating Districts except Wakatobi. 7. Part B.3 of Schedule 2 to Grant Agreement, is amended by: (a) deleting Part B.3(d) of the Project (partial credit guarantee program), Part B.3 (g) of the Project (pilot program of visits by employment agent to evaluate work opportunity for fishers and reef gleaners outside the participating village) and Part B.3(h) of the project (district block grant program), and (b) by re-numbering Part B.3(e) as Part B.3(d), Part B.3(f) as Part B.3(e).
7 Mr. Rahmat Waluyanto 7 of 9 June 30, Schedule 4. Paragraph 2 of Schedule 4 to Grant Agreement is amended by re-numbering the existing paragraph 2 as paragraph 2(a) and adding a new paragraph 2(b) as follows: The Borrower shall establish and maintain until completion of the Project the Regional Coordinating Unit in each Participating Province responsible for advocating support from provincial level decision makers for implementation to address District issues, increasing public awareness and liaising between Province-level agencies for monitoring, control and surveillance, and ensure that such RCUs are provided at all times with adequate funds and other resources and staffed by qualified and experienced personnel in adequate numbers as shall be necessary to accomplish their objectives. 9. Schedule 5 to the Grant Agreement is amended as set out in the Attachment to this Amendment. Except as specifically amended by the provisions of this letter of Amendment, all terms and conditions of the Development Credit Agreement, Loan Agreement and Grant Agreement otherwise remain in full force and effect. Please confirm your agreement to the foregoing by signing and dating the enclosed copy of this Amendment in the space provided and returning one copy with your original signature to us. The above amendments shall enter into effect on the date of the Borrower s countersignature of this Amendment. Sincerely yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT/INTERNATIONAL DEVELOPMENT ASSOCIATION AGREED: REPUBLIC OF INDONESIA /s/ Chris Hoban Acting Country Director, Indonesia By: /s/ Rahmat Waluyanto Authorized Representative Name: Rahmat Waluyanto Date: July 13, 2010
8 Mr. Rahmat Waluyanto 8 of 9 June 30, 2010 ATTACHMENT Performance Indicators for the Credit, Loan and Grant Key Performance Indicator New Proposed Indicator Management & Empowerment 1. Collaboratively managed marine conservation areas cover 10 % of program district reefs by EOP % of operating costs of program activities fully integrated into target district Government Programs and funded independent of COREMAP II by EOP 3. Awareness about the importance of coral reefs increases to or is maintained at 70 % in all participating districts Collaboratively managed fully-protected notake zones, covering 10%, on average, of reefs in all project managed areas by EOP. Retained Retained Biophysical 4. Live coral cover in program districts increases 5 % annually until levels are reached and maintained comparable to those of similar to reefs in well-managed or pristine areas 5 Average catch- per- unit- effort for early breeding indicator species harvested by each of the main sustainable fishing techniques in program districts increases 35 % by EOP, while average CPUE for medium-size indicator species harvested by each of the main sustainable fishing techniques in program districts increases by 10 % by EOP. Significant improvements in live coral cover in project managed areas relative to nonproject areas, in 80 % of samples sites Reef fish population improved based on CPUE of fishers using traditional reef fishing gear and/or visual census in selected project sites at EOP in 80 % sample sites, compared to expected decline in control areas (outside project areas) Socio economic and poverty 6 Total income received from, and the total number of people receiving their income from, sustainable reef-based and reef-substitution activities in program districts increases by 10 % by EOP 7 At least 70 % of fishers/beneficiaries in coastal communities in program districts perceive the program has had a positive impact on their welfare and economic status by EOP Total income of project beneficiary group members increased by 10 % by EOP At least 70% of fishers/beneficiaries in coastal communities in program managed areas perceive the project has had a positive impact on their welfare
9 Mr. Rahmat Waluyanto 9 of 9 June 30, 2010
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