OFFICIAL The World Bank RSTS z (380-44) 490-6671 INTERNATIONAL BANK FOR RECONSTRUCTION AND F 0 INTERNATIONAL DEVELOPMENT ASSOCIATION Ukraine REGIONAL OFFICE UKRAINE, BELARUS AND MOLDOVA June 8, 2017 H. E. Oleksandr Danyliuk Minister Ministry of Finance of Ukraine 12/2 Hrushevsky St. Kyiv, 01008 Ukraine Re: Ukraine District Heating Energy Efficiency Project Loan No. 8387-UA Second Amendment to the Loan Agreement and Partial Cancellation Excellency, We refer to: (a) the Loan Agreement dated May 26, 2014 ("Loan Agreement"), as amended to- date, between Ukraine ("Borrower") and the International Bank for Reconstruction and Development ("Bank"); (b) the Project Agreement dated August 18, 2014, between the Bank and Public Utility of Vinnytsia City Council "VINNYTSIAMISKTEPLOENERHO", both for the above mentioned Project; and (c) to letter number 19030-12/7-15/12397, dated May 5, 2017, from Yuri Butsa, Deputy Minister of Finance in Charge of European Integration Issues requesting cancellation of US$43,449,000 from Loan No. 8387; and removal of Public Utility of Vinnytsia City Council "VINNYTSIAMISKTEPLOENERHO as Participating District Heating (DH) Company/Project Implementing Entity. I am pleased to inform you that the Bank has acceded to the request. Accordingly, the Loan Agreement is hereby amended as follows: I. Paragraph 2 of Section IV.A of Schedule 2 is amended to read as follows: "The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan ("Category"), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: FAX (380-44) 490-6670 Category Amount of the Percentage of Loan Expenditures to be Allocated financed (expressed in USD) (inclusive of Taxes) (1) Goods, works, non-consulting services, consultants' 100% services and EEI Implementation Costs for Part 1 (a) of the Project: i. Limited Liability Company Firm "TEHNOVA" 30,150,000 (Chemihivska Teploelektrotcentral) ii. Public Utility "Dniproteploenerho" of 17,410,000 Dnipropetrovsk Oblast' Council iii. Public Commercial Utility 0 "Donetskmiskteplomerezha" [Deleted] iv. State Municipal Utility "Ivano- 0 Frankivskteplokomunenerho" [Deleted] v. Public Utility "Kharkivski Teplovi Merezhi" 96,545,000 vi. Municipal Public Utility "Khersonteploenerho" 19,955,000 vii. Subsidiary Enterprise "Kirovohradteplo" of 0 Limited Liability Company "Center ofScientific and Technical Innovations of Ukrainian Oil and Gas Academy" [Deleted] viii. Public Utility "Miskteplovodenerhia" of 13,330,000 Kamianets-Podilskyi City Council ix. Oblast' Public Utility "Mykolaivoblteploenerho" 19,340,000 x. Public Utility of Vinnytsia City Council 0 "Vinnytsiamiskteploenerho" [Deleted] xi. Municipal utility heating networks company "Temopilmiskteplokomunenergo" of Ternopil City Council (2) Goods, non-consulting services, consultants' 5,500,000 100% services, Training, audits and Incremental Operating Costs for Part 2 of the Project (3) Front-end Fee 830,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions (4) Interest Rate Cap or Interest Rate Collar premium 0 Amount due pursuant to Section 2.07(c) of this ______________________________________Agreement -3- Category Amount of the Percentage of Loan Expenditures to be Allocated financed (expressed in USD) (inclusive of Taxes) (5) Unallocated 2,500,000 Cancelled as of December 3, 2015 66,500,000 Cancelled pursuant to Section 7.01 of the General Conditions Cancelled as of May 11, 2017 43,449,000 Cancelled pursuant to Section 7.01 of the General Conditions TOTAL AMOUNT 332,000,000 2. Paragraph 15 of the Appendix is amended by deleting Public Utility of Vinnytsia City Council "VINNYTSIAMISKTEPLOENERHO; and re-alphabetizing the sub-paragraphs as a result of said deletion. Accordingly, the amended definition of "Participating DH Company" in paragraph 15 of the Appendix reads as follows: "15. "Participating DH Company" means each of the following district heating companies (a) Limited Liability Company Firm "TEHNOVA" (Chemihivska Teploelektrotcentral operating pursuant to the Limited Liability Company Firm "TEHNOVA" Legislation; (b) Public Utility "Dniproteploenerho", of Dnipropetrovsk Oblast Council, established and operating pursuant to the Dniproteploenerho Legislation; (c) Public Utility "Kharkivski Teplovi Merezhi", established and operating pursuant to the Kharkiv Teplovi Merezhi Legislation; (d) Municipal Public Utility Khersonteploenerho, established and operating pursuant to the Khersonteploenerho Legislation; (e) Public Utility "Miskteplovodenerhia" of Kamianets-Podilskyi City Council, established and operating pursuant to the Miskteplovodenerhia Legislation, (f) Oblast Public Utility "Mykolaivoblteploenerho", established and operating pursuant to the Mykolaivoblteploenerho Legislation; and (g) Municipal utility heating networks company "Temopilmiskteplokomunenergo" of Ternopil City Council, established and operating pursuant to the Temopilmiskteplokomunenergo Legislation." 3. Paragraph 22 of the Appendix is amended also to make the deletion and re-alphabetizing described in paragraph 2 above. Accordingly, the amended definition of "Project Implementing Entity's Legislation" in paragraph 22 of the Appendix reads as follows: "22. "Project Implementing Entity's Legislation" means each of the following: -4- (a) Charter of the Limited Liability Company Firm "TEHNOVA" approved by the Protocol of General Shareholders' meeting of September 26, 2013 and registered by the regulator on October 14, 2013 pursuant to which Limited Liability Company Firm "TEHNOVA" was established and operating (Limited Liability Company Firm "TEHNOVA" Legislation); (b) Decision of Dnipropetrovsk Oblast Council No. 661-22/y, dated December 18, 2009, pursuant to which Public Utility "Dniproteploenerho" of Dnipropetrovsk Oblast' Council was established and is operating (Dniproteploenerho Legislation); (c) Charter approved by Decision of Kharkiv City Council No. 952, dated September 30, 2003, pursuant to which Public Utility "Kharkivski Teplovi Merezhi" was established and is operating (Kharkiv Teplovi Merezhi Legislation); (d) Charter approved by Decision of Kherson City Council No. 506 dated December 28, 2011, pursuant to which Municipal Public Utility "Khersonteploenerho" was established and is operating (Khersonteploenerho Legislation); (e) Charter approved by Decision of Kamyanets-Podilskyi City Council executive committee No. 613, dated May 16, 2013, pursuant to which Public Utility "Miskteplovodenerhia" of Kamianets-Podilskyi City Council was established and is operating (Miskteplovodenerhia Legislation), (f) Charter approved by Head of Mykolaiv Regional Administration, dated November 03, 2006, pursuant to which Oblast' Public Utility "Mykolaivoblteploenerho" was established and is operating (Mykolaivoblteploenerho Legislation); and (g) Charter of the Municipal Utility "Temopilmiskteplokomunenergo" approved by Ternopil City Council meeting of April 26, 2013, pursuant to which Municipal Utility "Temopilmiskteplokomunenergo" of City Council was established and is operating (Municipal Utility "Temopilmiskteplokomunenergo" Legislation)." Except as specifically amended in this letter, all other provisions of the Loan Agreement remain in full force and effect. Please confirm the agreement of the Borrower to the amendments set out in paragraphs 1 through 3 above by countersigning and dating the confirmation set forth below, and returning one fully signed original of this letter of amendment to us. One fully signed original should be retained by the Borrower. Upon receipt by the Bank of: (a) the copy of this letter of amendment duly countersigned by the authorized representative of the Borrower; (b) the termination of its respective Project Agreement relating to Loan Agreement (Loan No. 8387-UA) duly signed by the authorized representative of Public Utility of Vinnytsia City Council VINNYTSIAMISKTEPLOENERHO; (c) the copy of the letter for the Second Amendment to the Clean Technology Fund Loan Agreement (CTF Loan No. TF016327) duly countersigned by the authorized representative of the Borrower; and (d) the termination of its respective Project Agreement relating to Clean Technology Fund Loan Agreement (CTF Loan No. TF016327) duly signed by the authorized representative of Public Utility of Vinnytsia City Council "VINNYTSIAMISKTEPLOENERHO"; the above amendments shall become effective on the date of countersignature of this letter. -5- Finally, pursuant to Section 7.01 of the General Conditions for Loans, the Bank hereby cancels as of May 11, 2017, the amount of forty-three million four hundred and forty-nine thousand United States Dollars (US$ 43,449,000) from the Loan Account and the commitment charges on such amount cease to accrue from May 11, 2017. Schedule 3, the Amortization Schedule, is being revised by the Bank as a result of the cancellation, and the revised figures will be sent to you shortly. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTIO EVELOPMENT Satu Kdhk6nen Country Director Belarus, Moldova and Ukraine Europe and Central Asia CONFIRMED AND AGREED: UKRAINE By: _ _ Autho epresentativ Name ster_of_Finance TitOoaMister of Finance 0 Date: 4- 'C"_4t? "/y (J -6- Copied to: Mr. Yurii Butsa, Deputy Minister for European Integration, Ministry of Finance of Ukraine Mr. Maksym Nefiodov, First Deputy Minister, Ministry of Economic Development and Trade of Ukraine Mr. Eduard Krugliak, Deputy Minister, Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine Mr. Dmytro Vovk, Chairman of NECSRC Ms. Tamara Andriiva, Director, Department of International Legal Expertise, Ministry of Justice of Ukraine Ms. Viktoria Kolosova, Director of the Department of Cooperation and International Financial Institutions, Ministry of Finance of Ukraine Mr. Mykhailo Vydoinyk, Director, International Cooperation and Protocol Department, Secretariat of the Cabinet of Ministers of Ukraine Ms. Hanna Bielokolos, Deputy Director of the Department - Head of the Division, Department for International Programs Coordination, Ministry of Economic Development and Trade of Ukraine Mr. Frank Heemskerk, Executive Director, World Bank Mr. Roman Kachur, Senior Advisor to Executive Director, World Bank