OFMICIAL DOWUNUTS 03. Letter No. CD-146/ID-ISN/ May 15, Public Disclosure Authorized THE WORLD BANK I BANK DUNIA

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1 THE WORLD BANK I BANK DUNIA OFMICIAL ILA DOWUNUTS 03 Letter No. CD-146/ID-ISN/ May 15, 2012 Ms. Jacqui De Lacy Head of AusAID Indonesia Australian Agency for International Development JI. H.R. Rasuna Said No. 13 Blok X-5 Kuningan Timur Jakarta Republic of Indonesia Dear Ms. De Lacy: Subject: Amendment No. 3 to the Administration Agreement for the Indonesian Infrastructure Support Trust Fund (Trust Fund No. TFO 71039) (AusAID Agreement No ) 1. We are pleased to refer to the Administration Agreement, dated May 28, 2008 ("Original Administration Agreement"), between the Government of Australia ("Donor"), and the International Bank for Reconstruction and Development/International Development Association ("Bank") for the Indonesian Infrastructure Support Trust Fund (the "Trust Fund"), as amended through June 1, 2011, and to acknowledge that the Donor has agreed to (i) extend the end disbursement date of the Trust Fund from the current end disbursement date of December 31, 2012 for a further three years until December 31, 2015; (ii) provide an additional contribution of five million Australian Dollars (AUD5,000,000) to the above-mentioned Trust Fund; and (iii) provide for additional activities to be undertaken by the Trust Fund. Accordingly, the Donor and the Bank agree to amend the Administration Agreement as set out in this letter. 2. Capitalized terms used but not defined in this amendment ("Amendment No. 3") have the meanings given to them in the Administration Agreement. Unless the context otherwise requires, the Original Administration Agreement, together with all amendments including Amendment No. 3, is referred to as the "Administration Agreement". A. Additional Contribution 3. The first paragraph of the Administration Agreement is amended to increase the amount of the Contribution from five million Australian Dollars (AUD5,000,000) (the "Original Contribution") by the amount of five million Australian Dollars (AUD5,000,000) (the "First Additional Contribution") to a total of ten million Australian Dollars (AUD10,000,000): P. Box 1324/JKT, Jakarta * Telex: IBRDIA * Headquarters: The World Bank. Washington DC. USA

2 Ms. Jacqui De Lacy 2 May 15, 2012 Australian Agency for International Development Paragraph I of the Administration Agreement is amended by replacing the words "five million Australian Dollars (AUD5,000,000) (the "Grant" or the "Contribution")" with the words "ten million Australian Dollars (AUD1O,000,000) (the "Grant" or the "Contribution")". 4. The Donor shall deposit the First Additional Contribution into such bank account designated by the Bank in accordance with the procedures set out in the Administration Agreement, promptly following countersignature of this amendment by the Donor and submission of a payment request by the Bank. 5. When making such deposit, the Donor shall instruct its bank to include in its payment details information (remittance advice) field of its SWIFT payment message, information indicating: the amount paid, that the payment is made by the Donor for the Indonesian Infrastructure Support Trust Fund (Trust Fund No.TFO71039), and the date of the deposit. In addition the Donor shall provide a copy of the deposit instruction to the Bank's Accounting Trust Funds Division by sent to tfremitadvice@worldbank.org or by fax sent to (202) Immediately upon receipt of the First Additional Contribution funds, the Bank will convert such funds into United States Dollars. 7. The provision for costs in Section 6.01 of the Administration Agreement is amended as follows: "Section Notwithstanding Section 9.02 of Article IX in the Framework Agreement: In order to assist in the defrayment of the costs of administration and other expenses incurred by the Bank under this Agreement, the Bank may, following deposit of the Contribution by the Donor, deduct and retain for the Bank's own account an amount equal to 2.5% of the Original Contribution and thereafter with respect to any subsequent Contribution an amount equal to 2% of each such Contribution. In addition, the Bank may also charge actual costs of program management/administration up to a maximum of 8.6% of the total Contributions." B. Extension of End Disbursement Date 8. The Donor and the Bank have agreed to amend Section 3.01 of the Administration Agreement to extend the completion date and end disbursement date, respectively, as follows: "Section The Contribution funds may be used to finance expenditures for the Program from the date of the latest countersignature of this Agreement and ending on June 30, The Bank may make disbursements of the Contribution funds for up to six (6) months after such latter date for expenditures incurred on or before such date, in accordance with the Bank's applicable policies and procedures." C. Amendment to Description of the Trust Fund 9. The Donor and the Bank have agreed to amend the description of the Trust Fund to allow for additional activities and consequential changes. Accordingly, the Donor and the Bank agree that the Annex to the Administration Agreement is amended and restated as set out in the Annex to this letter of amendment. ISEB Tower 2, JI. Jend. Sudirman Kav , Jakarta * Telephone: (62-21) * Facsimile: (62-21) PO. Box 1324/JKT, Jakarta * Telex: IBRDIA * Headquarters: The World Bank. Washington DC, USA

3 Ms. Jacqui De Lacy 3 May 15, 2012 Australian Agency for International Development D. Closing Matters 10. Except as specifically provided in this amendment, all terms and condition of the Administration Agreement shall remain the same. 11. The Bank will disclose this Agreement and related information on this Trust Fund in accordance with the World Bank Policy on Access to Information. By entering into this Agreement, the Donor consents to disclosure of this Agreement and related information on this Trust Fund. 12. We propose that this letter shall constitute an amendment to the Administration Agreement between the Bank and the Donor. Please confirm your acceptance to the foregoing, on behalf of the Donor, by signing and dating the two originals, retaining one original for your records and returning the other original to the Bank. Upon receipt by the Bank of the original Amendment countersigned by you, this Amendment will become effective as of the date of the countersignature. Yours sincerely, INTERNATIONAL BANK FOR RECONSTRUCTION/INTERNATIONAL DEVELOPMENT ASSOCIATION Franz R. Drees-Gross Acting Country Director, Indonesia FOR THE GOVERNMENT OF AUSTRALIA AGREED By: Title: C ( OF Name: CV1-v^ rim 6a_ Date: 01 PO. Box 1324/JKT, Jakarta * Telex: IBRDIA * Headquarters: The World Bank, Washington DC. USA

4 4 ANNEX Description of the Trust Fund As Amended and Restated pursuant to Amendment No. 3 to the Administration Agreement for the Australian Trust Fund for Indonesia Infrastructure Support (Trust Fund No. TFO71039)(AusAID Agreement No ) (Italicized language shows adjustments made in this amendment and restatement) I. Project Objective and Activities A. Objective The objective of the Project is to improve the quantity and quality of Indonesia's infrastructure through support for activities designed to harmonize current and planned World Bank and Government of Australia (AusAID) infrastructure initiatives consistent with Indonesia's infrastructure development plan. B. Activities 1. Activities will be implemented under the following windows (each, a "Window'): Window 1. Urban and Metropolitan Area Development. Providing support for urban and metropolitan area development, including, but not limited to: project preparation; project supervision; analytical work; institutional strengthening; capacity building; and knowledge exchange activities. This Window incorporates the slum upgrading and low income housing activities under the Original Administration Agreement. Window 2. Water and Sanitation. Providing support for water and sanitation development, including, but not limited to: development of a national water and sanitation investment facility and a national urban solid waste management program; capacity building; project preparation; project supervision; analytical work; institutional strengthening; capacity building; and knowledge exchange activities. Window 3. Transport. Providing support for transport sector development, including, but not limited to, capacity building in areas such as national roads, sub-national roads and urban transport; project preparation; project supervision; analytical work; institutional strengthening; capacity building; and knowledge exchange activities. This Window incorporates the cooperation in the roads sector activities under the Original Administration Agreement. Window 4. Enery. Providing support for energy sector development, including, but not limited to: development of frameworks for pipeline investment projects, development of policy, regulatory frameworks and capacity building in renewable energy, energy efficiency and gas market; project preparation; project supervision; analytical work; institutional strengthening; building capacity of the government, the relevant agencies and others, including in introduction of smart grid technologies; and knowledge exchange activities. Window 5. Public Private Partnership. Providing support for public private partnership (PPP) development, including, but not limited to: assessment of pipeline of PPP transactions; support for P.O. Box 1324/JKT, Jakarta * Telex: IBRDIA * Headquarters: The World Bank, Washington DC, USA

5 5 project development and preparation; project supervision; analytical work; institutional strengthening; capacity building,; knowledge exchange activities; and assessment of and support for the reform of current models and operating procedures/practices. This Window incorporates the public-private partnership support activities under the Original Administration Agreement. Window 6. Jakarta. Providing support for infrastructure development in Jakarta, including, but not limited to: project preparation; project supervision; analytical work; institutional strengthening; capacity building; knowledge exchange activities; strengthening policy agencies; and incorporating climate change related issues in planning. Window 7. Just-in time Delivery. These activities would respond to demand from the government of the Republic of Indonesia to address issues related to the objective of this Trust Fund on an immediate and short-term basis. This Window incorporates the rapid response facility activities under the Original Administration Agreement. 2. Each Window may include both activities executed by the World Bank (Bank-Executed Activities) and activities executed by the Republic of Indonesia or any agency thereof or a nongovernment or civil society organization (each, a "Recipient" and such activities, "Recipient- Executed Activities"), in each case in accordance with the World Bank's policies in effect from time to time. 4. Recipient-Executed Activities will be the subject of Grant Agreements between the World Bank and each Recipient. The World Bank's policies and procedures in effect from time to time will govern the Grant Agreements. II. Expenditures A. World Bank-Executed Activities. The Grant will be used to finance the following categories of expenditure: associated overheads; consultant fees (individuals and firms); equipment purchase; leased office premises and equipment; extended term consultants; media and workshops, conferences and meetings; staff costs; temporary staff costs; travel expenses; and contractual services. B. Recipient-Executed Activities. The Grant will be used to finance the following categories of expenditure: goods, consultants' services, non-consultants' services; training and workshops; direct costs; indirect costs; block grants; management fee; and other categories set out in a Recipient-executed Grant Agreement. The foregoing categories of expenditures may include the financing of taxes. C. Restrictions. The Grant will not be used to finance the following categories of expenditures: purchase of vehicles and salaries for civil servants. III. Administrative Arrangements 1. The Donor, the World Bank and the Republic of Indonesia shall establish a Steering Committee, made up of one representative of the Donor, the Indonesia Country Director (or his designate) and the BAPPENAS Deputy for Infrastructure. The Steering Committee will, except as P.O. Box 1324/JKT, Jakarta * Telex: IBRDIA * Headquarters: The World Bank, Washington DC, USA

6 6 may be otherwise agreed, meet once every six months and will agree on the priorities of the Trust Fund for the upcoming six months. 2. The Steering Committee may from time to time adopt additional written arrangements for the management of the Trust Fund ("Management Arrangements'). The Management Arrangements may be adjusted from time to time by a decision of the Steering Committee. In the event of any conflict between the provisions of such Management Arrangements and the provisions of this Administration Agreement, the latter shall prevail. 4. The World Bank shall provide to the Donor Semi-Annual Reports in each year of trust fund implementation, and a Final Report within 3 months following the end disbursement date of the Trust Fund. Each such report shall be of a format that meets the requirements of the Donor to enable appropriate monitoring of Trust Fund activity outcomes. The reports shall demonstrate effective monitoring and evaluation to confirm outcomes. ISEB Tower 2, JI. Jend. Sudirman Kav , Jakarta * Telephone: (62-21) * Facsimile: (62-21) PO. Box 1324/JKT, Jakarta * Telex: IBRDIA * Headquarters: The World Bank, Washington DC, USA

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