OFFICIAK DOCUMENTS Supplemental Letter No. 3.2 UTILITY COMPANY "KHARKIVVODOKANAL" Date Wo&r", 2014 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No. 8391-UA Second Urban Infrastructure Project (Urban Infrastructure Project - 2) Performance Monitoring Indicators Dear Sirs and Mesdames: This refers to Section II.A of the Schedule to the Project Agreement of even date herewith between the International Bank for Reconstruction and Development (the Bank) and the Utility Company "Kharkivvodokanal" (the Project Implementing Entity). The Project Implementing Entity hereby confirms to the Bank that the indicators set out in the attachment to this letter shall serve as a basis for the Project Implementing Entity to monitor and evaluate the progress of the Project and the achievement of the objectives Very truly yours, UTILITY COMPANY "KHARKIVVODOKANAL" By C o - Authorized Representative Attachment Attachment to the Supplemental Letter No. 3.2 Loan No. 8391-UA Second Urban Infrastructure Project (Urban Infrastructure Project - 2) Performance Monitoring Indicators Project Development Objective PDO Statement The project development objective (PDO) is to improve the quality and efficiency of water, wastewater, and solid waste services in selected cities in Ukraine. These results are at the: Project Level Project Development Objective Indicators Cumulative Target Values Data Source/ Responsibili Unit of Frequency Methodolo ty for Data Comments Indicator Name Core Unituof Baseline YRI YR2 YR3 YR4 YR5 YR6 Collection Measure Volume (mass) of BOD / Quality of pollution loads removed by Tons/Year 18,485 Annual Semi-annual RPMUs & the treatment plant supported 15,285 18,000 18,285 reports CPMU water under the project V Quality of Industrial or municipal solid Tons / year 0 Tons/ 20,000 yar 20000 28,000 28,00 30,000 40,000 4,00 An Semi-annual Anualservices- RPMU & Quity solid of waste recycled in Kharkiv reports CPMU waste Operating Cost Coverage Ratio 1. Kharkiv VK 0.76 0.76 0.78 0.80 0.82 0.84 0.86 Efficiency of 2. Kharkiv MC 1.18 1.18 1.18 1.20 1.20 1.20 1.20 Annual RPMUs & services - water, 3. Kirovograd Percentage 0.67 0.67 0.68 0.69 0.72 0.75 0.77 Annual Annual CPMU wastewater and 4. Kramatorsk 0.74 0.74 0.74 0.76 0.78 0.80 0.85 solid waste 5. Ternopil 0.92 0.92 0.92 0.92 0.95 0.95 0.97 6. Zhytomyr 0.78 0.78 0.80 0.82 0.85 0.90 0.95 Energy efficiency as kWh per m3 of TBC Annual RPMUs & Efficiency of measured by amount of water 0.6 Annual reports CPMU services - water energy used per m3 of water produced supply 2 produced or wastewater kWh per m3 of TBC treated in utilities waste water 0.9 Annual RPMUs & Efficiency participating in the project treated reports CPMU wastewat Tons of GHG emissions Tons/year 0 0 0 0 200,000 350,000 475,392 Annual Annual RPMUs & CTF lndicatoi reduced or avoided reports CPMU Intermediate Results Indicators Cumulative Target Values Responsibi Data Source! lity for Unit of Frequency Comment Indicator Name Core Baseline YRI YR2 YR3 Y1R4 VR5 YR6 Methodology Data Measure Collection Direct project beneficiaries / Number 0 0 0 3.14 4.0 4.3 4.3 Annual Annual RPMUs & (number) (million) Reports CPMU Direct project beneficiaries V Percentage 0 0 0 50% 50% 50% 50% Annual Annual RPMUs & who are female Reports CPMU Customers in Project areas Twice Customers in Proj reporting improved water (before Quality of areas reporting supply services, as measured Average TBD in Increase and after Customer RPMUs & water improved water sL through score cards (rating Rating first year of20% project Score Cards CPMU supply services, as measu 1-5) interventi services through score carc ons) (rating 1-5) Piped household water connections affected by Semi-annual Semi-annual RPMUs & rehabilitation works Number 0 0 0 450,650 453650 500,000 555,000 reports CPMU undertaken under the project Industrial and municipal Semi-annual RPMUs & waste disposal capacity Tons/year 0 0 0 200,000 300,000 350,000 400,000 Semi-annual Semiana RPMU created in Kharkiv reports CPMU Utility companies that the V Number 0 10 10 10 10 10 10 Semi-annual Semi-annual RPMUs & Component 2 indii project is supporting reports CPMU Number of utility companies Component 2 indii implementing recommendations of Utility Number 0 4 4 4 6 7 7 Semi-annual Semi-annual RPMUs & Performance Improvement reports CPMU Plan 3 Utility companies using Number 0 4 4 4 6 7 7 Semi-annual Semi-annual RPMUs & Component 2 indicator benchmarking systems reports CPMU Prepare new design Component 2 indicator standards for water supply Yes/ No No No No No No Yes Yes Semi-annual Semi-annual RPMUs & and wastewater Energy savings GWh/yr 0 0 0 235 353 470 Annual Semi-annual RPMUs& CTF Indicator reports CPMU CFIniao Electricity Generation GWh/yr TBC Annual Semi-annual RPMUs & CTF Indicator reports CPMU 4