,-THE WORLD BANK Ghana Office INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Independence Avonie Tel: +233-302 214100, 22083! INTERNATIONAL DEVELOPMENT ASSOCIATION King Hassan #3, Fax +233-302 227887 Accra, Ghana June 27, 2022 Honourable Ken Ofori-Atta Minister Ministry of Finance Accra, Ghana Honourable Minister: Republic of Ghana - Credit No. 6303-GH Ghana Energy Sector Transformation Initiative Project First Amendment to the Financing Agreement We refer to the Financing Agreement between the International Development Association (the "Association") and the Republic of Ghana (the "Recipient") for the above-referenced Project dated December 12, 2018 (the "Agreement"). We also refer to your letter dated May 20, 2022, requesting specific amendments to the Project. Please note that the capitalized terms used in this letter ("Amendment Letter") and not defined herein have the meanings ascribed to them in the Agreement. We are pleased to inform you that the Association concurs to your request and proposes to amend the Agreement in respect of the provisions below: 1. Schedule 1 of the Agreement is hereby amended to read as set out in the Annex to this Amendment Letter. 2. A new Section I.D is hereby added to Schedule 2 to the Agreement to read as follows: "D. Safeguard Instruments 1. The Recipient shall, no later than December 1, 2022, and in any event prior to the carrying out of any works under Parts A(d) and E(e) of the Project (a) prepare the safeguard instruments and furnish said instruments to the Association for its review and approval ("Safeguard Instruments"); (b) thereafter disclose the Safeguard Instruments locally; and (c) implement Parts A(d) and E(e) of the Project in accordance with the Safeguard Instruments. 2. Without limitation to its other reporting obligations under this agreement and under Section 4.08 of the General Conditions, the Recipient shall include in the Project Reports referred to in Section II of this Schedule, adequate information on the implementation of the Safeguard Instruments, giving details of: (a) measures taken in furtherance of the Safeguard Instruments; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguard Instruments; and (c) remedial measures taken or required to be taken to address such conditions and to ensure the continued efficient and effective implementation of the Safeguard Instruments. 3. The Recipient shall maintain, throughout Project implementation, and publicize the availability of a Project-level grievance and redress mechanism, in a form and substance satisfactory to the Association, to hear and detennine fairly and in good faith all complaints raised in relation to the Project and take all measures necessary to implement the determinations made by said grievance feedback and redress mechanism in a manner satisfactory to the Association. 3. Section IILB.2 of Schedule 2 to the Agreement is hereby amended to read as follows: "2. The Closing Date is December 31, 2023." 4. The following definitions are hereby added in alphabetical order to the Definitions Section of the Appendix to the Agreement to read as follows, and the rest of the definitions are renumbered to maintain alphabetical order: ""COMAH" means control of major accident hazards." "".CRM" or "Cylinder Recirculation Model" means a liquified petroleum gas marketing model involving filling liquified petroleum gas cylinders at large refilling plants and then supplying the filled cylinders to consumers at specialized retail outlets called exchange points." ""Environmental and Social Management Plan" and "ESMP" means the plan prepared and adopted by the Recipient providing appropriate mitigation, monitoring and institutional measures designed to mitigate potential adverse enviromnental and social impacts under Parts A(c), B,2 and C(e) of the Project, offset them, reduce them to acceptable levels or enhance positive impacts, as the same may be amended from time to time with the agreement of the Association." ""ESRP" means Energy Sector Recovery Program, adopted by the Cabinet of Ghana on May 9, 2019, as Government of Ghana's roadmap to restore and sustain governance and the financial viability of the energy sector." ."KNUST-TCC" means the technology consultancy centre of the college of engineering at Kwame Nkrumah University of Science and Technology located in the Recipient's territory," ""Safeguard Instruments" means collectively, all documents required in order to meet the safeguards requirements of the Project, including the ESMP, the grievance redress mechanism and/or any other plan prepared or to be prepared during the implementation of said Pals of the Project, as the case may be." ""SCADA" means supervisory control and data acquisition." All the other provisions of the Agreement that have not been amended, shall remain unchanged and in fill force and effect. [remainder of page intentionally left blank] Please confirm the Recipient's agreement with the foregoing Amendment letter by signing, dating and returning to us the enclosed copy of this Amendment letter. Upon receipt by the Association of the countersigned copy of this Amendment letter, this Amendment letter will become effective as of the date of the countersignature. Sincerely, Pierre Laporte Country Director for Ghana, Liberia and Sierra Leone Africa Western and Central Region AGREED: REP C OF GHA By: 7 Name: L Title: Date: M ~ : Annex "SCHEDULE 1 Project Description The objectives of the Project are to strengthen the capacity of the energy sector to implement sector reforms, and improve energy sector planning and coordination in the Recipient's territory. The Project consists of the following parts: Part A: Management of Energy Sector Financial Flows Carry out activities to address the financial viability of the energy sector, by improving revenue management at sector level, improving revenue collection at the utilities' level, and strengthening the Power Companies' operational and financial management functions including: (a) (i) finalizing the structure of the Cash Waterfall Mechanism and its implementation arrangements, supporting its implementation and providing training to key stakeholders in financial modeling and financial management; and (ii) carrying out: (A) an annual audit and review of legacy debt to validate the debt/payable matrix and advise the Recipient on liabilities contention and a transaction structure to settle intra sector payables; (B) a technical audit of the power plants to confirm the performance of the plants and verify bills received for payments; and (C) a diagnostic study of the streetlighting to develop an assessment tool to periodically estimate the cost of energy consumption attributable to streetlighting. (b) reviewing the electronic billing/electronic payment approaches adopted by NEDCo for management of the revenue cycle and customers prepayment in all other segments of the market and defining an action plan to improve metering, billing and collection as well as prepayment operations; (c) analyzing technological options available for the Electricity Company of Ghana's implementation of the revenue protection project supported by advance metering infrastructure (AMI), and recommending the most adequate approach to achieve sustainable recovery and protection of revenues, and preparation of the technical and functional specifications for bid preparation for the supply and installation, and commissioning of all components; and (d) improving the operational functions of some sector agencies through (i) upgrading the GRIDCO's SCADA networking system; (ii) supporting the completion of supply and installation of the outage management system and the enterprise resource planning; and (iii) preparing a performance improvement plan to enhance the capacities of the regulators in the electricity supply sector. Part B: Sector Planning and Coordination I. Reviewing the existing price build-up used by the NPA to determine the prices of petroleum products in the Recipient's territory and develop financial models to determine the optimum margins of marketers, dealers and cylinder investment margins. 2. Developing a CRM monitoring and evaluation framework, and baseline study to successfully measure the impact of the implementation of the liquefied petroleum gas promotion policy. 3. Developing a liquefied petroleum gas behavioral change and public awareness strategy to support the NPA addressing some of the barriers associated with the liquefied petroleum gas under the implementation of the CRM. 4. Carrying out a value of lost and load study for electricity in the Recipient's territory to help PURC ascertain the socio-economic impact of electricity supply interruptions and enable PURC to assess the cost-benefit analyses for policy and infrastructure development, the design regulatory incentives and compensation mechanisms, and procurement of services. 5. Developing a comprehensive COMAH regulation for electricity and natural gas industries in the Recipient's territory to prevent any hazards from producing accidents and to mitigate the consequence of any accident that could possibly occur, Part C: Energy Access 1. Conducting feasibility and investment planning studies for grid extension and off-grid electrification, geospatial mapping, fibre optic broadband infrastructure and providing relevant training. 2. Preparing a strategy for increasing access to safe clean cooking including the regulatory and incentive structures to enable the Recipient to support increased access to clean cooking. 3. Conducting studies to upgrade NEDCo's sub-transmission, distribution and operational systems and develop plans to improve its operational efficiency and provide relevant equipment and training to NEDCo staff. 4. Conducting NEDCo network protection and coordination study to assess its protection and coordination requirements to achieve least-cost power system development, ensure adequate power distribution protection of equipment and personnel and improve the reliability of power supply. 5. Reviewing the existing energy and peak demand forecast methodology and developing a software model for performing the forecast based on available data and systems. 6. Developing a manual for the implementation of the national liquefied petroleum gas promotion programme. 7. Carrying out a needs assessment of the KNUST-TCC cook stove testing laboratory expertise center to equip it to facilitate the regulation of the cook stoves and fuels market by the Energy Commission. Part D: Natural Gas 1. Carrying out studies for supporting a modern, commercial gas sector, including: (a) studies on gas supply and demand balance, a strategy for aggregating and allocating natural gas flows, including models for gas pricing and pipeline capacity nomination, and allocation of gas to power plants; (b) a review of West African Gas Pipeline treaties, agreements and its operation; and (c) a study to develop a natural gas distribution franchise for Tema. Part E: Project Management and ESRP Implementation Support 1. Establishing and strengthening MoEn's project management capacity to: (a) carry out fiduciary management, monitoring, reporting and coordination activities; (b) develop and implement a communications strategy for the energy sector; (c) carry out training, consultations and coordination workshops; and (d) finance its Operating Costs; and (e) procure and install a prefabricated office to ensure adequate office space for the Project. 2, Providing training and capacity building activities to staff of the energy sector entities and procuring software and small equipment for business operations in support to Project implementation."