THE WORLD BANK OFI7CJAL IBRD * IDA I WORLD BANKGROUP DOCUMENTS December 11, 2018 Mr. Calib Cassim Finance Director ESKOM Holdings SOC Limited Megawatt Park Maxwell Drive Sunninghill, Sandton Johannesburg 2000 REPUBLIC OF SOUTH AFRICA Mr. Phakamani Hadebe Group Chief Executive Eskom Holdings SOC Limited P0 Box 6814 Johannesburg, 2000 REPUBLIC OF SOUTH AFRICA Re: SOUTH AFRICA ESKOM Investment Support Project (Loan Number 7862-ZA) - Amendment No. 6 to the Loan Agreement Dear Mr. Cassim and Mr Hadebe, We refer to the Loan Agreement between the International Bank for Reconstruction and Development (the Bank) and ESKOM Holdings SOC Limited (the Borrower) dated April 16, 2010 (Agreement), as amended. We also refer to your letter dated November 30, 2018, requesting the Bank to amend the Agreement. The Bank accedes to you request. Accordingly, the Agreement is amended as set forth in this letter (the Amendment). A. Amendment to Schedule 1 to the Agreement: 1. Schedule 1 to the Agreement shall be amended by deleting Part B.2 and inserting the following: "2." "(a) Supporting the design, procurement, supply and installation, commissioning and storage capacity of 200 MW of grid-connected electrochemical batteries (Battery Storage Program) within the existing and fully owned substations of the Borrower, including: (i) 100MW Sere Wind Power farm; and (ii)) forty-two (42) substations, comprising of battery storage and 60 MW (cumulative) solar photo voltage (PV)." -2- "(b) Provision of technical advisory services, inter alia, to: (i) support the final design, procurement and supervision of energy storage infrastructure under the Battery Storage Program; (ii) strengthen the Borrower's technical capacity in sustainable operation and maintenance of large scale batteries; and (iii) prepare the enabling environment for further private investment in variable renewable energy capacity using storage." B. Amendment to Schedule 2 to the Agreement: 1. Section I.A. 1 of Schedule 1 to the Agreement shall be amended as follows: "l." "The Borrower shall carry out the Project with due diligence and in conformity with the appropriate administrative, financial, technical, engineering, environmental and social standards and practices, and in accordance with the Procurement Plan, the Environmental Legislation, the Social Legislation, the RPF, Indigenous People Plan (IPP), and any environmental and social assessments to be prepared for Battery Storage Program, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project." 2. Sections I.C. 1 and I.C.3 of Schedule 2 to the Agreement shall be amended as follows: "1." "The Borrower shall implement the Project in accordance with the provisions of the Environmental Legislation, the Social Legislation, the RODS, the EIA, the EMP, the RPF, the RAPS, if any RAPs are required in accordance with the RPF, the Terms of Reference the IPP, any environmental and social assessments to be prepared for the Battery Storage Program, and the provisions of this Agreement. Without limiting the generality of the foregoing, the Borrower shall exercise regular monitoring to ensure that the emissions from the Medupi Power Plant remain in compliance with the provisions of applicable Environmental Legislation and all the terms of the ROD referred to in paragraph 206 of the SDR." "3." "(a)" "The Borrower shall refrain from carrying out any Project activity that would result in involuntary resettlement of any person or group of persons residing in selected site of each of the Borrower's Battery Storage program substations, Sere Wind Power and Majuba Rail and Transmission projects (all described under Parts B and C of the Project); provided, however, that if such involuntary resettlement would be unavoidable, then the Borrower shall implement such Project activities in accordance with the provisions of the RPF, including the preparation, adoption and implementation of one or more RAPs as appropriate, all in accordance with the provisions of the Social Legislation as described in the SDR, including without 1818 H Street NW - Washington, DC 20433 USA -3- limitation, consultation with potentially Displaced Persons and disclosure of the RAPs." "(b)" "The Borrower shall refrain from carrying out any Battery Storage Program installation activity in a site, which may be subject of an existing or outstanding land claim; provided, however, that if any existing site is within a location which is subject of an existing or outstanding land claim, the Borrower shall not use the proceeds of the Loan or any portion of the Loan to finance any activity in such site. 3. Section I.C.7 shall be inserted under Schedule 2 to the Agreement as follows: "7." "The Borrower shall prepare, submit and disclose, in form and substance satisfactory to the Bank, the IPP and any environmental and social assessment referred to in Section IV.B. 1(d) of Schedule 2 to the Agreement, in accordance with the Terms of Reference satisfactory to the Bank. To this end, for each activity under the Battery Storage Program for which the IPP is required, the Borrower shall: (a) prior to the carrying out of any said activity, prepare and/or cause to be prepared and furnish to the Bank, an Indigenous Peoples Plan and an environmental and social assessment in accordance with the Terms of Reference; and (b) thereafter, adopt and implement ,and/or cause to be adopted and implemented, said IPP and environmental and social assessment in accordance with its terms and in a manner satisfactory to the Bank." 4. Section I.C.8 shall be inserted under Schedule 2 to the Agreement as follows "7." "The Borrower shall: (a) not later than March 31, 2019, decide and confirm measures, acceptable to the Bank, that will mitigate daily Sulphur dioxide (SO2) emissions above 3500 milligrams per normal meter cubed; (b) not later than March 31, 2019, complete the drilling and analyses of the coal at the Excess Coal Stockyard to determine if there exists coal with a lower Sulphur content than the coal being currently supplied by the coal mine to avoid Sulphur dioxide ((SO2) spikes above 3500 milligrams per normal cubic meter. (c) (i) ensure a continuous engagement with the coal suppliers, and request said coal suppliers to supply lower Sulphur coal; and (ii) prepare and furnish to the Bank quarterly reports on the Sulphur dioxide ((SO2) spikes covering the period of one calendar quarter. Each such report shall be submitted to the 1818 H Street NW - Washington, DC 20433 USA -4- Bank not later than thirty (30) days after the end of each calendar quarter." 5. Section II.A.1 of Schedule 2 to the Agreement shall be amended as follows: "1." "The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of the indicators acceptable to the Bank. Each Project Report shall cover the period of one calendar semester and shall be furnished to the Bank not later than one months after the end of the period covered by such report. 6. Section IV.B. of Schedule 2 to the Agreement shall be amended as follows: (a) by inserting a sub-paragraph 1(d) as follows: "1." "Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for: (d) for payments under Category (4) unless the Borrower has prepared, adopted and disclosed the IPP and environmental and social assessment for the Battery Storage Program, in form and substance satisfactory to the Bank." (b) by modifying paragraph 3 as follows: "3." "The Closing Date is December 31, 2019. It is understood that upon achievement of such Closing Date, the Closing Date of the Part B.2 of the Project shall be December 31, 2020 or such later date as the Bank may establish following consultations with the Borrower." C. Amendment to Section I of the Appendix to the Agreement: 1. Section I (Definitions) of the Appendix to the Agreement shall be amended as follows: (a) deleting paragraph 40 (as renumbered under Amendment No.5 to the Agreement) "Upington Concentrating Solar Power" and "UCSP". (b) deleting references to UCSP and UCSP project, respectively, under paragraphs 12 and 15. (c) (i) renumbering paragraphs 41 and 42, respectively, as paragraphs 40 and 41; and (ii) inserting paragraphs paragraph 42 through 46, as follows: "42." Battery Storage Program" means the Borrower's project to install and store grid-connected electrochemical batteries 1818 H Street NW Washington. DC 20433 USA -5- within its existing stations, as described under Part B.2 of the Project." "43." "Excess Coal Stockyard" means the surplus of coal resource accumulated in the area allocated to accommodate the coal prior to utilization in the power plant; surplus is estimated in comparison with the anticipated volume of coal, estimated at project design phase. "44." "Indigenous Peoples Plan" or "IPP" means the plan or plans to be prepared by the Borrower on the basis of the Terms of Reference, defining specific measures to be implemented for indigenous minorities in order to protect them and to ensure that members of said minorities be granted equal legal, financial and organizational opportunities under the Project, as the said plan or plans may be amended and/or supplemented from time to time with the prior written consent of the World Bank and such term includes any schedules to such document." "45." "Renewable Energy Independent Power Producer" means an independent private power producer established, operating and licensed under the laws of the Guarantor." "46." "Terms of Reference" means terms of reference dated November 27, 2012, and acceptable to the Bank, for the IPP and social assessment under the Battery Storage Program." 1818 H Street NW - Washington, DC 20433 USA -6- Please indicate your agreement with the foregoing amendments to the Agreement on behalf of the Borrower by countersigning and dating the two original copies of this letter and returning one countersigned original to us. This Amendment shall become effective as of the date of countersignature of this letter. Sincerely, Paul Noumba Um Country Director for South Africa Africa Region CONFIRMED: ESKOM S SOC LIMITED By: Auth6izWepresentative Name:HSrtN_WsntnD203U Title: CNoVV f- jc2 " i Q -c Date: P)ilt2zoc/ 1818 H Street NW -Washington. DC 20433 USA