Dear Deputy Minister Barkalaia,

dear Nino,

 

Thank you for the submission of the ToR.

We do not have any further comments to them in their version, as attached.

 

Concerning the disbursement flows, today we learned - with regret - that there is the consideration to not make use of the retroactive reimbursement portion (up to 30%).

As retroactive reimbursement is a rare exceptional case in German Financial Cooperation, we put a high level of effort into asking the German Federal Ministry (BMZ) for approval and to include the retroactive reimbursement portion into the grant and loan agreements.

We gladly did this to accommodate the suggestion expressed by the Government of Georgia in the preparation phase with the idea to support our partners in the best way possible in these times of crises.

 

Hence, we would highly appreciate it, if you still saw a possibility to make use of the retroactive reimbursement portion.

As we said, the portion can amount to up to 30% of the Grant amount - which would be EUR 1,743,612.74.

These additional (retroactive) grant funds could be of tremendous financial support for the TSA program, especially in this year of unprecedented challenges.

 

We, furthermore, learned that you intend to withdraw roughly EUR 2.3 million from the Grant for TSA expenditures that arose in November.

If it helps to reduce the administrative burden, we are very happy to receive one combined withdrawal application (retroactive financing + November expenditures).
We would need to receive the final, duly signed withdrawal application(s) as soon as convenient, ideally by December 1^st.

 

In case of questions we stand ready to assist.

 

 

All the best,

Salvatore

 

 

Salvatore Calanduccia
Portfolio Manager

Sustainable Economic Development and Education

Southeast Europe and Turkey

Eastern Europe, Caucasus, Central Asia

 

KfW Group

KfW Development Bank

Palmengartenstrasse 5-9
60325 Frankfurt
Germany

(  +49 69 7431 1157 /  +49 173 3260987 (mobile)
+ Salvatore.Calanduccia@kfw.de
8  www.kfw.de

 

 

 

 

 

Dear Salvatore,

 

Thank you very much for the detailed clarification  and the contract template.

 

In addition, please find the terms of references of the Project Coordinator and the Financial Manager (both clean and tracked for the comments). Please review and send back to us.

 

For tomorrow, we can share with you the exact amount of the retroactive financing, and since there has been no payment since 29^th of October yet, for the proactive, we will have exact amount of payments, by next week.

 

Best regards,

Nino Kvernadze

 

 

 

 

 

Dear Nino,

 

It was great to talk to you.

We are glad that we could clarify the misunderstanding regarding the term “retroactive financing”.
We re-confirm that retroactive financing simply means that the expenditure that KfW reimburses occurred before entry into force of the contract (which is the signing of the Grant Agreement or the ratification in Georgian Parliament plus a legal opinion from MinJustice for the Loan Agreement, respectively).

Furthermore, we confirm that the entire loan and grant amount will be transferred from KfW to Georgian Government via the reimbursement procedure (i.e. first Georgian Government transfers social security funds to SSA à then later KfW reimburses expenditures to Georgian Government). This procedure is very similar to the disbursement procedure of the World Bank portion.

As promised…

• … we are attaching the contract template for the consultancy contracts.

You can easily fill it out and send it to us together with information about the chosen candidate (name, CV and a quick justification) in one e-mail in which you request our “no-objection” to the Direct Award.
Please do not modify the General Conditions.

• … we checked with Disbursement Management about the possibility to combine the reimbursement of October expenditures (“retroactive financing”; max. 30%) with a reimbursement of November expenditures.
  Disbursement Management confirmed that this is feasible. However, it has to be made very clear in the Withdrawal Application which amount  is “retroactive” and which is for November in order for us to comply with documentary regulation by German Federal Ministry. And the documentation attached to the Withdrawal Application should – of course – also provide evidence to both portions.

 

Concerning the amount for the November portion, I will check with my management and inform you accordingly.

 

All the best,
Salvatore

 

 

Dear Deputy Minister Barkalaia,

Dear all,

 

We hope this e-mail finds you in good health.

 

As you know the Loan and the Grant Agreements have been signed on October 29, 2020.

To help prepare the operationalization of the Project, we discussed the next steps with the PIU nearly two weeks ago.

One of the upcoming steps was the submission of the Specimen Letter designating persons authorized to sign reimbursement applications to prepare the first reimbursement from KfW.

 

In the Grant Agreement (as well as in the Loan Agreement), we included the possibility for retroactive financing.

Retroactive financing means that KfW reimburses expenditures that were incurred by MoILHSA already up to 4 months before the entry into force of the respective agreements with KfW.

The maximum share admissible for retroactive financing as per the regulations of German Federal Ministry for Economic Cooperation and Development (BMZ) is 30%.

 

This means that the reimbursement application for retroactive financing may comprise up to 30% of the Grant amount, which would be EUR 1,743,612.74.

One of the conditions for eligibility of social expenditures under retroactive financing of the Grant is that the social expenditures must have been paid by MoILHSA to SSA between June 30 and October 29.

Other conditions for eligibility are outlined in the Separate Agreement (e.g. correct program measures, certification from SSA Director, confirmation that the expenditures have not yet been reimbursed by World Bank/AIIB, etc.).

 

A separate reimbursement application can - in addition to the 30% ceiling for retroactive financing - also comprise payments from MoILHSA to SSA that were made after the entry into force (=signing of the Grant Agreement).

 

We would be very delighted to have a call tomorrow (Nov. 17) at 14:30 Tbilisi time with PIU to discuss more details of disbursement/reimbursement.

For this call, we would suggest Skype as video-conferencing platform.

Would this suit your schedules?

 

As we are approaching the end of the Fiscal Year of BMZ, a quick reimbursement would be very much encouraged from our side.

We wish you and your families all the best in these troublesome times.

 

 

Best regards,

Salvatore Calanduccia

 

 

Salvatore Calanduccia
Portfolio Manager

Sustainable Economic Development and Education

Southeast Europe and Turkey

Eastern Europe, Caucasus, Central Asia

 

KfW Group

KfW Development Bank

Palmengartenstrasse 5-9
60325 Frankfurt
Germany

(  +49 69 7431 1157 /  +49 173 3260987 (mobile)
+ Salvatore.Calanduccia@kfw.de
8  www.kfw.de

 

 

 

 

Dear Salvatore,

 

Hello again. The meeting was very productive indeed and many thanks for the summery of our discussion.

 

We will follow up all activities/issues  and get back to you shortly.

 

Best regards,

Nino Kvernadze

 

ნინო კვერნაძე

პროექტის მენეჯერი,

მსოფლიო ბანკის COVID-19-ის წინააღმდეგ სწრაფი რეაგირების

პროექტის განმახორციელებელი ჯგუფი (PIU), 

საქართველოს ოკუპირებული ტერიტორიებიდან დევნილთა, შრომის, ჯანმრთელობისა და სოციალური დაცვის სამინისტრო 

www.moh.gov.ge  

 

Nino Kvernadze

Project Manager, PIU – World Bank

Emergency COVID-19 Response Project Implementation Unit

Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia

www.moh.gov.ge 

 

Email: ninokvernadze@moh.gov.ge

Cell: +995 599 18 46 44

 

 

 

 

 

 

 

 

Dear Nata and Nino,

 

Thank you for the productive and pleasant call today.

 

Please allow me to quickly sum up what we agreed upon today:

• PIU/MoILHSA will send the specimen signatures to KfW (see attachment A-1 of Annex 4 of the Separate Agreement) soon.
• PIU/MoILHSA will send the ToR of Financial Management Expert and Project Coordination Expert to KfW together with a proposal of individual experts for direct award.
  • Both experts shall have a consultancy service contract following KfW’s standard contract.
• Reimbursement procedure shall be applied for both small expert contracts, as the values are too small for KfW’s Direct Disbursement Procedure

 

• As promised we herewith re-confirm that due to the high financial volumes we would kindly require the mandatory assurance engagement (audit) to be conducted by a well reputed audit company, pertaining to an international network of audit firms (e.g. the so-called “Big 4”) – as stipulated in the Separate Agreement.
  To increase efficiency and decrease the administrative workload of busy PIU staff but subject to KfW-internal approval, a top-up contract to the audit firm selected under the World Bank Project might be acceptable to KfW considering the requirement above (international network of audit firms, high reputation). However, in this case still a separate contract would need to be concluded (no amendment/addendum).

 

• After internal consultation with the responsible Disbursement Manager I, unfortunately, learned that KfW is obliged by the procedures of the Federal Ministry of Germany to convert the requested amount at an exchange rate of the date of disbursement from KfW to the Project Partner. However, with a slightly depreciating Georgian Lari together with a quite short projected implementation period of less than 1 year, the actual currency exchange risk is not considered to be too high.

 

 

Thank you again for the pleasant call. In case of questions, feel free to contact us anytime.

 

 

Kind regards,
Salvatore

 

 

Salvatore Calanduccia
Portfolio Manager

Sustainable Economic Development and Education

Southeast Europe and Turkey

Eastern Europe, Caucasus, Central Asia

 

KfW Group

KfW Development Bank

Palmengartenstrasse 5-9
60325 Frankfurt
Germany

(  +49 69 7431 1157 /  +49 173 3260987 (mobile)
+ Salvatore.Calanduccia@kfw.de
8  www.kfw.de

 

 

 

 

 

 

 

--------------------------------------------
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Vorstand: Dr. Guenther Braeunig (Vorsitzender), Dr. Ingrid Hengster,
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Verwaltungsrat: Bundesminister Peter Altmaier (Vorsitzender)
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