(OFFICIAL The World Bank c Phone: +911141479301/+911149247601 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPM 1 Mailing Address: P.0 Box 416 INTERNATIONAL DEVELOPMENT ASSOCIATION New Delhi - 110,03 May 23, 2014 Mr. Nilaya Mitash Joint Secretary (MI) Department of Economic Affairs Ministry of Finance Government of India Room No. 40B, North Block New Delhi 110001 Mr. R.N. Nayak Chairman & Managing Director Power Grid Corporation of India Ltd. B-9, Qutab Institutional Area Katwaria Sarai New Delhi 110016 Dear Sirs: Re: "Fourth Power System Development Project" (Loan No.4890-IN) Letter of Amendment to the Loan Agreement I refer to the Loan Agreement dated March 28, 2008 (the "Loan Agreement") between the International Bank for Reconstruction and Development (the "Bank") and the Power Grid Corporation of India Limited ("PowerGrid") for the "Fourth Power System Development Project" (the "Project"); as well as the Guarantee Agreement of the same date, between India (the "Guarantor") and the Bank, guaranteeing the PowerGrid's repayment of the proceeds of the loan and its performance under the Loan Agreement (the "Guarantee Agreement"). I also refer to the letters from Mr. Rajani Ranjan and Ms. Ipsita Mitra, Under Secretaries of the Department of Economic Affairs, Ministry of Finance (Government of India), dated April 20, 2012 and March 19, 2014, respectively, conveying PowerGrid's request for the restructuring of the captioned Project to: (a) incorporate a new scheme for financing; (b) add civil works required under the financed schemes as eligible expenditure for financing under the Loan; and (c) revise the Project's performance monitoring indicators. I further refer to our recent discussions during the tri-partite portfolio review held on January 30, 2014 confirming the Guarantor's concurrence with the above referred restructuring. I am pleased to inform you that, after due consideration, the Bank concurs with the afore- mentioned requests. Accordingly, the Bank proposes that, in order to reflect the foregoing agreements, the Loan Agreement be hereby amended as follows: I. The Project's description contained in Schedule 1 to the Loan Agreement is hereby amended to add a new paragraph 6 that reads: HeadquarterLJ Washington DC L USA Mr. Mitash and Mr. Nayak -2- May 23, 2014 "6. [Partial/Completion of] [C]construction of the Southern Region System Strengthening Scheme -XIII for transferring of power from a number of new generation projects within the beneficiary states of Southern Region." 2. The indicators agreed between the Bank and PowerGrid for purposes of paragraph I of Section II.A of Schedule 2 to the Loan Agreement are hereby revised to read as set forth in the Attachment I hereto. 3. The Table set forth in Section IV.A.2 of Schedule 2 to the Loan Agreement is revised to read: Amount of the Loan Percentage of Category Allocated (Expressed Expenditures in Dollars) to be Financed (1) Goods, consultants' services and 600,000,000 100% works, installation and erection TOTAL AMOUNT 600,000,000 Please confirm the agreement of the PowerGrid to the amendments and revisions set forth above by countersigning and dating the corresponding form of confirmation set forth below, and returning one fully signed original of this amendment letter to us. Except as specifically amended hereby, all other provisions of the Loan Agreement remain in full force and effect. The above amendments to the Loan Agreement shall be deemed effective retroactively as of January 1, 2012, upon the Bank's receipt of an original copy of this letter fully countersigned by the duly authorized representative of PowerGrid and the Guarantor. Yours sincerely, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Onno Ruhl Country Director, India South Asia Region Attachments- Attachment I. Revised Performance Monitoring Indicators Mr. Mitash and Mr. Nayak -3- May 23, 2014 SIGNED and AGREED on behalf of the: POWER GRID CORPORATION OF INDIA LTD. VOV By: Name: g Nafa Title: chainwo &_VAR$**_WOW Date: -Z'UIV- /+ AIILI 1, Joint Secretary of the Department of Economic Affairs of the Ministry of Finance, Government of India, hereby express my concurrence and consent, on behalf of the Guarantor, to the foregoing restructuring of the "Fourth Power System Development Project" in the terms proposed in this letter of amendment to the Loan Agreement (Loan No.4890-IN). Accordingly, I acknowledge that: (i) the above transaction does not constitute a novation of the Loan Agreement; and (ii) the repayment and performance guarantee extended by the Guarantor in favor of the Bank pursuant to the Guarantee Agreement, remains in full force and effect. SIGNED and CONCURRED on behalf of INDIA khi~ [at-A By: Name:________________ Title: _ _PAM Date: Mr. Mitash and Mr. Nayak -4- May 23, 2014 Copy to: Mr. Mukesh Nandan Prasad, Executive Director (India), World Bank Mr. Manoj Pant, Senior Advisor to Executive Director (India), World Bank Mr. Brijesh Pandey, Deputy Secretary, DEA, Ministry of Finance Mr. S. G. Dastidar, Controller of Aid Accounts & Audit, DEA, Ministry of Finance Mr. Satish Kumar, Joint Secretary (IC), Ministry of Power Ms. Jyoti Arora, Joint Secretary (Transmission), Ministry of Power Mr. Pranay Kumar, Director (IC), Ministry of Power Mr. B. Mishra, Executive Director (Corporate Planning), PowerGrid r REVISED PERFORMANCE MONITORING INDICATORS (FOR THE "FOURTH POWER SYSTEM DEVELOPMENT PROJECT') Pro ject Development Objective (PDO): To strengthen the transmission system in order to increase reliable power exchanges between regions and states of India. Revised Proiect Development Objective: Not Applicable D=Dropped Cumulative Target Values I C=Continue Unit of Baseline Freque Data Source/ Responsibilit Indicators N= New Measure (FY2007) FY2012 FY2013 FY2014 ncy Methodology for Data U R=eieIesr F20)F212 Y03F21 c ehdlg Collection Revised Outcome Indicator: Not Applicable Revised Intermediate Result One: Not Applicable Revised Intermediate Result Two: Not Applicable Outcome Indicator: C Millio 37,750 54,000 56,000 68,000 Yearly Reports from POWERGRI Growth in Power R Units (Actual: 58,999 MU) (Actual: 66,000 MU) (Actual: POWERGRID, D Exchange between 0 (MU) 64,581 MU implementation and across regions till Jan '14) support missions Intermediate Result C Circui 59,400 85,000 90,000 107,000 Yearly Reports from POWERGRI indicator One: R t (PAD target: 88,000 (PAD target: 91,000 (Actual: POWERGRID, D Growth in E] Kilom ckm; ckm; Actual: 100,107 105,344 ckm implementation Transmission eters Actual: 92,950 ckm) ckm) till Feb '14) support Capacity (ckm) _ missions Intermediate Result C MVA 59,400 88,000 90,000 185,000 indicator Two: R (Actual: 124,525 MVA) (Actual: 164,763 (Actual: Transformation [0 MVA) 197,648 Capacity MVA till Feb_'14) Actual are as on March 31, 2012 2 Actual are as on March 31, 2013