OFFICIAL DOCUMENTS The World Bank 1, Dniprovskiy Uzviz (380-44) 490-6671 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Kyiv 01010 INTERNATIONAL DEVELOPMENT ASSOCIATION Ukraine REGIONAL OFFICE UKRAINE, BELARUS AND MOLDOVA Date: H.E. Oksana Markarova Acting Minister Ministry of Finance of Ukraine Kyiv, Ukraine Re: Ukraine District Heating Energy Efficiency Project IBRD Loan No. 8387-UA Third Amendment to the IBRD Loan Agreement Excellency: We refer to the following agreements signed by the following parties in relation to the above-referenced Project: (a) the IBRD Loan Agreement dated May 26, 2014 ("IBRD Loan Agreement"), as amended to-date, between the Borrower and the Bank; (b) the CTF Loan Agreement dated May 26, 2014 ("CTF Loan Agreement"), as amended to-date, between Ukraine ("Borrower") and the International Bank for Reconstruction and Development, acting not in its individual capacity but solely in its capacity as an implementing entity of the Clean Technology Fund ("World Bank" or "Bank"); (c) the IBRD Project Agreement dated August 21, 2014 between the Bank and Public Power-Generating Utility "Chernihivska Teploelektrotcentral" of Limited Liability Company Firm "TEHNOVA"; (d) the CTF Project Agreement dated August 21, 2014 between the Bank and Public Power-Generating Utility "Chernihivska Teploelektrotcentral" of Limited Liability Company Firm "TEHNOVA". We also refer to letter number 12060-03-15/9910 dated April 11, 2018, from Yuri Butsa, Deputy Minister of Finance of Ukraine in Charge of European Integration Issues, requesting: (i) removal of Public Power-Generating Utility "Chernihivska Teploelektrotcentral" of Limited Liability Company Firm "TEHNOVA" as a Participating District Heating (DH) Company/Project Implementing Entity; (ii) cancellation of US$42,051,000 from IBRD Loan Agreement (Loan No.83 87-UA); and (iii) reallocation of Loan proceeds. FAX (380-44) 490-6670 -2- We are pleased to inform you that the Bank hereby agrees to your request. Accordingly, the IBRD Loan Agreement is hereby amended as follows: 1 . Part 1 of Schedule 1 is amended to read as follows: "Part 1: Energy Efficiency Investments Implementation of Energy Efficiency Investments specified in a Participating DH Company's Investment Program, through the following interventions: (a) Rehabilitation of boiler houses, closing of redundant boiler houses, installation of small CHPs, replacement of network pipes with pre-insulated pipes and installation of SCADA management systems, and related EEI Implementation Costs. (b) Installation of: (i) IHSs in residential buildings; (ii) building-level heat meters; and (iii) automated distribution control systems for heat supply (including, inter alia, supply and installation of remote control shut-off valves, control chambers, remote control of IHSs, remote reading of heat meters, associated software and information technology equipment)." 2. 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. Percentage of Amount of the Expenditures to Loan be financed Category Allocated (inclusive of (expressed in USD) Taxes) (1) Goods, works, non-consulting services, 100% consultants' services and EEI Implementation Costs for Part 1 (a) of the Project: i. Limited Liability Company Firm 0 "TEHNOVA " (Chernihivska Teploelektrotcentral) [Deleted] 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] -3- Percentage of Amount of the Expenditures to Loan be financed Category Allocated (inclusive of (expressed in USD) Taxes) v. Public Utility "Kharkivski Teplovi 76,545,000 Merezhi" vi. Municipal Public Utility 19,955,000 "Khersonteploenerho" vii. Subsidiary Enterprise "Kirovohradteplo" 0 ofLimited Liability Company "Center of Scientific and Technical Innovations of Ukrainian Oil and Gas Academy" [Deleted] viii. Public Utility "Miskteplovodenerhia" of 15,830,000 Kamianets-Podilskyi City Council ix. Oblast' Public Utility 19,340,000 "Mykolaivoblteploenerho" x. Public Utility of Vinnytsia City Council 0 "Vinnytsiamiskteploenerho" [Deleted] xi. Municipal utility heating networks 16,491,000 company "Ternopilmiskteplokomunenergo" 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 0 Amount due premium pursuant to Section 2.07(c) of this Agreement (5) Unallocated 8,099,000 -4- Percentage of Amount of the Expenditures to Loan be financed Category Allocated (inclusive of (expressed in USD) Taxes) 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 Cancelled as of April 17, 2018 42,051,000 Cancelled pursuant to Section 7.01 of the General Conditions TOTAL AMOUNT 332,000,000 3. Paragraph 15 of the Appendix is amended by deleting Public Power-Generating Utility "CHERNIHIVSKA TEPLOELEKTROTCENTRAL" of Limited Liability Company Firm "TEHNOVA"; and re-numbering the sub-paragraphs as a result of said deletion. Accordingly, the emended 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) 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; (g) Municipal utility heating networks company "Ternopilmiskteplokomunenergo" of Ternopil City Council, established and operating pursuant to the Ternopilmiskteplokomunenergo Legislation." -5- 4. Paragraph 22 of the Appendix is amended to make the correction and re-numbering described in paragraph 3 above. Accordingly, the amended definition of "Project Implementing Entity's Legislation" in paragraph 22 of the Appendix reads follows: "22. "Project Implementing Entity's Legislation" means each of the following: (a) 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 "Ternopilmiskteplokomunenergo" approved by Ternopil City Council meeting of April 26, 2013, pursuant to which Municipal Utility "Ternopilmiskteplokomunenergo" of City Council was established and is operating (Municipal Utility "Ternopilmiskteplokomunenergo" Legislation)." Except as specifically amended in this letter, all other provisions of the IBRD Loan Agreement remain in full force and effect. Please confirm the agreement of the Borrower to the amendments set out in paragraphs 1 through 4 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. -6- 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 said Loan Agreement (Loan No. 8387-UA) duly signed by the authorized representative of Public Power-Generating Utility "CHERNIHIVSKA TEPLOELEKTROTCENTRAL" of Limited Liability Company Firm "TEHNOVA"; (b) the termination of its respective Project Agreement relating to CTF Loan Agreement (CTF Loan No. TF016327) duly signed by the authorized representative of Public Power-Generating Utility "CHERNIHIVSKA TEPLOELEKTROTCENTRAL" of Limited Liability Company Firm "TEHNOVA"; and (d) the copy of the letter for the Third Amendment to the CTF Loan Agreement (TF016327) duly countersigned by the authorized representative of the Borrower; the above amendments shall become effective on the date of countersignature of this letter. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, Satu Iihk6nen Country Director Belarus, Moldova, and Ukraine Europe and Central Asia CONFIRMED AND AGREED: UKRAINE By:Authorizd_Repreentativ Authorized Representative Name:_________ Title: 14~ z~1/~ Date: -CC. V,26 2 CYS