OFFICAL Banque Mondiale wo Trade Center, T61.: (20-2) 574-1670/1671 , I 1 Comiche El-Nil, 156m. Etage Fax: (20-2) 574-1676 Le Caire, Egypte Email: hschafer@worldbank.org March 20, 2014 H. E. Ilyas Moussa Dawaleh Minister of Economy and Finance Ministry of Economy and Finance B. P. 13 Djibouti City Republic of Djibouti Re: Republic of Djibouti: Power Access and Diversification Project (IDA Credit 4120; IDA Grant H574 and IDA Grant H783) Amendment Letter Excellency: We refer to: (i) the Development Credit Agreement (the "Credit Agreement") for the above- mentioned Project dated November 28, 2005, as amended; (ii) the Financing Agreement (the "Additional Financing Agreement") dated July 27, 2010 for the above-referenced Project, as amended; and (iii) the Financing Agreement (the "2nd Additional Financing Agreement") dated August 21, 2012, as amended, all between the Republic of Djibouti (the Recipient) and the International Development Association (the Association) (collectively referred to as "Legal Agreements"). We also refer to your letter dated February 25, 2014 requesting certain amendments to the Legal Agreements. We hereby propose to amend of the above mentioned Legal Agreements as follows: I. Section 2.03 in the Credit Agreement (Credit No. 4120-DJI) is to be amended as follows (modifications are shown in italics): "The Closing Date shall be December 31, 2014 or such later date as the Association shall established. The Association shall promptly notify the Borrower of such later date." II. Section IV.B.2 in Schedule 2 in the Additional Financing Agreement (Grant No. 574-DJ) is to be amended as follows (modifications are shown in italics): "2. The Closing Date is December 31, 2014." III. The 2nd Additional Financing Agreement (Grant No. 7830-DJ) is to be amended as follows: 1. In Article IV - Remedies of the Association, two new Sections 4.03 and 4.04 are added to read as follows: "Section 4.03. In the event of failure by the Recipient to implement any of the actions and measures set forth in the Annex to Schedule 2, the Association may, upon notice to the Recipient, cancel a corresponding portion of the Unwithdrawn Grant Balance with respect to the expenditures related to a specific action or measure. The amounts subject to cancellation shall be determined by the Association based on the estimates provided in the Annex to Schedule 2, and shall reflect the amounts of expenditures which will not be required for completion of Project activities due to the failure of the Recipient to implement a respective action in the Annex." 1 "Section 4.04. The provisions of Section 4.03 do not limit the Bank's right to exercise any of the remedies provided in Sections 6.02 (Suspension by the Association) and Section 6.03 (Cancellation by the Association) of the General Conditions". Annex to Schedule 2 is added as provided in Attachment to this letter. 2. The Table set forth in Section IV.A.2 in Schedule 2 is amended in order to operate the reallocations of the proceeds of the Loan, as follows: Category Amount of the Percentage of Expenditures Grant Allocated to be Financed (expressed in (inclusive of Taxes) SDR) (1) Goods under Part D of the Project 2,990,000.00 100% (2) Non-Consulting Services for Part D (ii) (rental 0.00 100% fees) (3) Consultants' Services under Part E of the project 410,000 100% TOTAL AMOUNT 3,400,000 3. Section IV.B.2 in Schedule 2 is amended as follows: "2. The Closing Date is December 31, 2014." All the terms and conditions of the Legal Agreements that have not been hereby amended shall remain in full force and effect. Please confirm your agreement with the foregoing amendment by signing and dating the confirmation on the enclosed copy of this Amendment Letter and returning it to us. Upon receipt by the Association of the copy of this Amendment Letter countersigned by you, this Amendment Letter shall become effective as of the date of your countersignature. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION Hartwig Scha er Director Djibouti, Egypt and Yemen Country Department ast and North Africa Region AGREED: 6a REPUBLIC OF By:, Authorized Repres e ' Title: AEw. Date: 3 ] MAR 2014 2 ATTACHEMENT Annex to SCHEDULE 2 to the Financing Agreement for the 2nd Additional Financing For Power Access and Diversification Project Table of Actions/Measures for Project Extension Estimated amounts' to be Measure/Action Timeline cancelled if these measures/actions are not met The draft regulation of the security stocks adopted through the Ministry of Energy' Decree no later than April 301h2014XDR 2,990,000 30th, 2014 (the Association will receive a copy of the official Decree) Contract for the delivery of petroleum products concluded/signed no later than May XDR 2,990,000 15th, 2014 (the Association will receive a copy of the signed contract in a week after signing) The amounts are estimated amounts at the date of this amendment letter and they may be subject of changes as agreed by the Recipient and the Association. 3