REPUBLIC OF BULGARIA MINISTRY OF FINANCE (-If OFFICIAL , 793q MR. TONY THOMPSON DOCUMENTS COUNTRY MANAGER THE WORLD BANK BULGARIA COUNTRY OFFICE INTERPRED/WORLD TRADE CENTER 36, DRAGAN TSANKOV BLVD. 1057 SOFIA, BULGARIA DEAR MR. THOMPSON, Re: Bulgaria: Municipal Infrastructure Development Project (Loan No. 7834-BG) Amendments to the Loan Agreement and Supplemental Letter No 2 Please find enclosed the countersigned originals of the International Bank for Reconstruction and Development (the Bank) letters dated July 19, 2016 on the third amendment to the Loan Agreement (Municipal Infrastructure Development Project) between Republic of Bulgaria and the Bank dated February 1, 2010 as amended (Loan X 7834-BUL) and to Supplemental Letter No 2 to said Loan Agreement. Above amendment letters have been countersigned on our side by the Minister of Finance. Your assistance in conveying the countersigned originals to the relevant World Bank offices would be greatly appreciated. As stated in the letters the amendments would become effective upon the completion of the internal approval procedures under the laws of the Republic of Bulgaria of which the Bank would be duly notified. Sincerely yours, GERGANA BEREMSKA DIRECTOR INTERNATIONAL FINANCIAL INSTITUTIONS AND COOPERATION DIRECTORATE Enclosure Cc: Mr. Frank Heemskerk Executive Director The World Bank Ms. Lilyana Pavlova Minister of Regional Development and Public Works Ministry of Regional Development and Public Works 102, Rakovski St. switch board: (+359 2) 9859 I minfin@minfin.bg Sofia 1040, Bulgaria fax: (+359 2) 980 68 63 www.minfin.bg THE WORLD BANK IBRD * IDA I WORLD BANKGROUP ARUP BANERJI Regional Director for Operations European Union Countries Europe and Central Asia July 19, 2016 H. E. Vladislav Goranov Minister of Finance Ministry of Finance Sofia, Republic of Bulgaria Dear Mr. Minister: Bulgaria: Municipal Infrastructure Development Project (Loan No. 7834-BG) Third Amendment to the Loan Agreement We refer to the Loan Agreement between the Republic of Bulgaria (the Borrower) and the International Bank for Reconstruction and Development (the Bank) for the above- referenced Project, dated February 1, 2010 as amended (the Agreement) and to your letter dated July 8, 2016 requesting, inter alia, the extension to the Closing Date of the above mentioned Loan Agreement. We concur with your request and hereby agree to amend the Loan Agreement as follows (modifications are shown in italics): 1. The table set forth in Section IV.A.2 of Schedule 2 to the Agreement shall be amended as set forth in Attachment I hereto. 2. Part B.2 of Section IV of Schedule 2 to the Agreement is modified to read as follows: "2. The Closing Date is December 31, 2019." 3. All references throughout the Agreement to the term "Ministry of Regional Development" or "MRD" are hereby replaced by "Ministry of Regional Development and Public Works" and "MRDPW" respectively. All the other terms and conditions of the Loan Agreement, as amended hereby, shall remain in full force and effect. Avenue Marnix 17 * B-1000 Brussels * BELGIUM Tel: +32.2.504.0994 H.E. Vladislav Goranov -2- July 18, 2016 Please confirm your agreement with the foregoing, on behalf of the Republic of Bulgaria, by signing, dating and returning to us the enclosed copy of this letter. This amendment will become effective as of the date on which the Bank receives notice of completion of internal approval procedures under the laws of the Republic of Bulgaria. Arup Banerji Regional D* or Operations Euro an Union Countries CONFIRM REED: REPU C OF BL ARIA By: Title : y\N O QYce Date:/ to'A L'~ / H.E. Vladislav Goranov -3- July 18, 2016 Attachment 1 Amount of the Loan Percentage of Allocated Expenditures Category (Expressed in EUR) to be Financed (1) Consultants' services 8,397,500 80% for Part A of the Project (2) Preparation of Master 9,334,000 80% Plans under Part B of the Project (3) Works and goods for 52,066,000 80% Part C of the Project (4) Front-end Fee 202,500 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions SUB-TOTAL 70,000,000 Cancellation as of May 15, 11,000,000 2014 TOTAL AMOUNT 81,000,000 THE WORLD BANK IBRD * IDA I WORLD BANKGROUP ARUP BANERJI Regional Director for Operations European Union Countries Europe and Central Asia July 19, 2016 H. E. Vladislav Goranov Minister of Finance Sofia, Bulgaria Bulgaria: Municipal Infrastructure Development Project (Loan No. 7834-BG) Amendment to the Supplemental Letter No. 2 - Revised Performance and Monitoring Indicators Dear Mr. Minister: We refer to the Supplemental Letter No. 2 for the above-referenced Project dated February 1, 2010 as amended and to your letter dated July 8, 2016 requesting certain amendments to the above mentioned Loan Agreement and Supplemental Letter. As per the agreement reached between the Borrower and the International Bank for Reconstruction and Development (Bank), we hereby agree to revise the Performance and Monitoring Indicators provided as attachment to the Supplemental Letter No. 2 as shown in the attachment to this letter. Please confirm your agreement with the foregoing, on behalf of the Republic of Bulgaria, by signing, dating and returning to us the enclosed copy of this letter. This amendment will become effective as of the date on which the Bank receives notice of completion of internal approval procedures under the laws of Bulgaria. Sincerely, anerji Regional Direc or for Operations European Union Countries AGREED: REP LIC B LGARIA By AKt /d r tive Title 1' Ek O $(\CQ Date / (A , u 5us/6 Avenue Marnix 17 * B-1000 Brussels * BELGIUM Tel: +32.2.504.0994 ANNEX 1 Results Framework and Monitoring BULGARIA: MUNICIPAL INFRASTRUCTURE DEVELOPMENT PROJECT Project Development Objective: The project objectives are to: (a) improve bulk potable water provision in target areas, and (b) assist municipalities to improve investment-planning capacity. D=Dropp Cumulative Target Values ed Data PDO Level Results C=Conti Baselin Source/ Responsibil a Unit Frequency ity for Data Indicators* nue e YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YRIO Collection N= New ology R=Revised Indicator One: R Bi-annual Impleme MRDPW Volume of additional supervision; ntation potable water (number of annual progress cubic meters/year) project reports produced by the dams and m3/a progress WTPs, completed under report the project. Luda Yana Dam 0 0 0 0 0 0 0 0 0 0 6m Plovdivtsi Dam 0 0 0 0 0 0 0 0 0 0 2 m Studena Dam 0 0 0 0 0 0 0 0 0 0 0 Indicator Two: R Bi-annual Impleme MRDPW Percentage of samples from supervision; ntation the water produced by the annual progress dams and WTPs, project reports completed/rehabilitated progress under the project, meeting O % report national drinking water standards Luda Yana Dam 0 0 0 0 0 0 0 0 0 0 95% Plovdivtsi Dam 0 0 0 0 0 0 0 0 0 95% 95% Studena Dam 0 0 0 0 0 0 0 0 0 95% 95% Indicator Three: C Bi-annual Impleme MRDPW Number of Regional supervision; ntation Master Plans for water project progress supply and sewerage progress reports systems, of satisfactory l Num 0 0 0 0 0 51 - - - - - report quality for acceptance by Bulgaria and EC, to support investments in service delivery Avenue Marnix 17 * B-1000 Brussels * BELGIUM Tel: +32.2.504.0994 INTERMEDIATE RESULTS Intermediate Result C Bi-annual Impleme MRDPW indicator One: supervision; ntation Number of water utilities Num 0 0 0 0 0 51 51 51 51 51 51 project progress that the project is progress reports supporting report Intermediate Result C Bi-annual Impleme MRDPW indicator Two: supervision; ntation Diagnosis of the present project progress situation and investment 0 % 0 0 0 0 0 100% 100% 100% 100% 100% 100% progress reports needs completed, as part of report the Master Plan preparation, and submitted to the MRDPW and Water Associations Intermediate Result R Bi-annual Impleme MRDPW indicator Three: supervision; ntation Preparatory works for dams l % 0 0 0 0 0 80% 90% 100% 100% 100% 100% project progress and water treatment plants progress reports completed' (% progress). report Intermediate Result R Bi-annual Impleme MRDPW indicator Four: supervision; ntation Construction works for project progress water treatment plants progress reports completed and equipment l % 0 report installed (% progress) Luda Yana dam 0% 0% 0% 0% 0% 10% 55% 90% 100% Plovdivtsi dam 0% 0% 0% 0% 0% 10% 60% 100% 100% 100% Studena dam 0% 0% 0% 0% 0% 10% 45% 100% 100% WTP Pernik 0% (/% 0% 0% 0% 10% 30% 90% 100% Intermediate Result R Bi-annual Impleme MRDPW indicator Five: supervision; ntation Construction works for project progress dams completed (% E % 0 progress reports progress) report Luda Yana dam 0% 0% 0% 0% 0% 10% 55% 90% 100% Plovdivtsi dam 0% 0% 0% 0% 0% 10% 60% 100% 100% 100% Studena dam 0% 0% 0% 0% 0% 10% 45% 1 100% 100% Intermediate Result R Bi-annual Impleme MRDPW indicator Six: Num 0 0 0 0 0 0 0 0 0 40000 170000 supervision; ntation Direct project beneficiarieS2 project progress progress report reports Female beneficiaries R Bi-annual Impleme MRDPW 0 0 0 0 0 0 0 0 0 50% 50% supervision; ntation project progress progress report reports 'Completion of preparatory work includes: feasibility assessments, updated designs, EMPs updated if necessary, and bidding documents prepared. 2 persons residing in the areas serviced by the dams and WTP-s completed/rehabilitated under the project 3