THE WORLD BANK I BANK DUNIA OFFICtAL Sharing Development Solutions for an Emerging CUMEN4

Letter No. CD-177/Waspola/IV/2013 April 22, 2013 Public Disclosure Authorized Mr. Robert Pakpahan Expert Staff of Minister of Finance on State Revenue With Full Mandate as Director General of Debt Management Ministry of Finance Gedung Frans Seda JI. Dr. Wahidin No. 1 10710

Dear Mr. Pakpahan:

Public Disclosure Authorized Re: Grant No. TFO95502, Water and Sanitation Policy and Action Planning Facility Project (WASPOLA) - Amendment No. I to the Grant Agreement

I refer to the Grant Agreement, dated August 12, 2010 (the "Grant Agreement"), between the Republic of Indonesia (the "Recipient") and the International Bank for Reconstruction and Development (the "World Bank"), acting as administrator of grant funds provided by the Government of , acting through the Australian Agency for International Development under the Water and Sanitation Policy and Action Planning Facility Trust Fund regarding the above- mentioned project (the "Project").

I refer also to your letters, dated October 16, 2012 and February 19, 2013, requesting an

Public Disclosure Authorized extension of the Closing Date and reallocation of grant proceeds.

The World Bank is pleased to inform you that, after due consideration, it has agreed to the request for extension and reallocation of grant proceeds and to the amendment set out below.

1. The World Bank hereby reallocates the proceeds of the Grant allocated in the Table in Section 3.01 of the Annex to the Grant Agreement as set out below:

Category Amount of the Grant Percentage of Allocated Expenditures to be (expressed in USD) Financed (Inclusive of Taxes) (1) Goods 152,873 100% (2) Consultants' Services 663,988 100% Public Disclosure Authorized (3) Incremental operating costs* 652,831 100% (4) Training, workshop and media costs* 855,798 100% TOTAL AMOUNT 2,325,490

ISEB Tower 2, 12 th Floor, JI. Jend. Sudirman Kay. 52-53, Jakarta 12190 X+6221 5299 3000 6+6221 52993111 Ojwww.worldbank.org/id TF095502 2 of 2 April 22, 2013

2. Additionally, the definition of "incremental operating costs" in Section 3.01 of the Annex to the Grant Agreement is amended to allow office equipment and supplies be procured under the category of Goods as set out below:

"*For the purposes of this Section: (i) the term "incremental operating costs" means the incremental costs of reasonable expenditures directly attributable to the Project and incurred by the Recipient on account of office space, telecommunications, insurance, printing, photocopying, utilities, travel and other travel-related expenditures, vehicle and operation costs, supplies and materials, in each case which would not have been incurred but for the Project; and ... "

3. The World Bank has established December 31, 2014 as the later date for purposes of Section 3.03 of the Annex to the Grant Agreement.

Except as specifically amended by the provisions of this letter, all terms and conditions of the Grant Agreement otherwise remain in full force and effect.

The World Bank will disclose this letter agreement and related information on this Project in accordance with the World Bank Policy on Access to Information. By entering into this agreement, the Recipient consents to disclosure of this agreement and related information on this Project.

Please confirm your agreement to the foregoing by signing and dating both enclosed copies of this letter in the space provided and returning one signed copy to us. The above amendment will become effective as of the date of the Recipient's countersignature of this letter.

Sincerely,

Yogana Prasta Acting Country Director, Indonesia

AGREED:

REPUBLIC OF INDONESIA

By:

Name: Robert Pakpahan Expert Staff of Minister of Finance on State Revenue Title: With Full Mandate as Director General of Debt Management

Date: May 15, 2013

ISEB Tower 2, 1 2 th Floor, JL Jend. Sudirman Kay. 52-53, Jakarta 12190 X+6221 5299 3000 *+6221 5299 3111 Owww.worldbank.org/id