The World Bank 1,IDni rovskiy Uzviz (380-44) 490-6671 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVEL PMENT 01010 (380-44) 490-6672 INTERNATIONAL DEVELOPMENT ASSOCIATION 0 n) (380-44) 490-6673 REGIONAL OFFICE O UKRAINE, BELARUS AND MOLDOVA October 28, 2014 H. E. Oleksandr Shlapak Minister Ministry of Finance of Ukraine 12/2 Hrushevsky St. Kiev, 01008 Ukraine Public Finance Modernization Project (Loan 4882-UA) Amendment to the Loan Agreement and Partial Cancellation of Loan Proceeds Your Excellency, We refer to the Loan Agreement for the above-referenced Project between Ukraine and the International Bank of Reconstruction and Development ("Bank"), dated March 25, 2008, as amended ("Loan Agreement"). We also refer to your letter dated October 3, 2014 requesting the Bank to cancel USD 46,056,830 from the above-captioned Loan (based on subsequent clarifications discussed between our respective representatives, the cancellation is to be made upon receipt of your letter, October 3, 2014), to bring forward the Closing Date to December 31, 2014, and to close the Project because further Project implementation is not possible. I am pleased to inform you that the Bank agrees with your request to cancel a portion of the Loan and to advance the Project Closing Date to December 31, 2014. Accordingly: 1. Pursuant to Section 7.01 of the General Conditions for Loans, the Bank hereby cancels, as of October 3, 2014, the amount of USD 46,056,830 from Category (1) Goods, services and training for Part 2(c) for USD 44,025,000 and from Category (2) Goods, services and training for all Parts of the Project, other than Part 2(c); incremental operating costs and audit for USD 2,031,830. The commitment charges on the amount cancelled cease to accrue from October 3, 2014. The revised table set forth in paragraph 2 of Section IV.A of Schedule 2 to the Loan Agreement is indicated in the Annex attached to this letter. This Schedule reflects the requested cancellation of USD 46,056,830 from the Loan Account. Schedule 3, the Amortization Schedule, is being revised by the Bank as a result of this cancellation, and the revised figures will be sent to you shortly. 2. Further, the Loan Agreement is amended as follows: (a) Part 2 ((a) and (c)) of Schedule 1 are deleted. (b) Section I.C of Schedule 2 (including paragraphs 1 through 3) is deleted in its entirety (c) Paragraph 2 of Section IV B of Schedule 2 is amended to read as follows: "The Closing Date is December 31, 2014" H. E. Oleksandr Shlapak -2- October 28, 2014 Except as specifically amended herein, all other provisions of the Loan Agreement remain in full force and effect. Finally, in accordance with the Bank's current practice, further disbursements from the Loan will be made for Withdrawal Applications received at the World Bank's office in Zagreb, Croatia by close of business on April 30, 2015 in respect of eligible expenditures made before the Closing Date (i.e. payments made or payments due for goods, works and services that have been provided prior to the Closing Date). Proceeds of the Loan remaining unwithdrawn after disbursements have been made in respect of these Withdrawal Applications will be canceled. Please confirm your agreement with the amendments set out in paragraph 2 above, on behalf of the Borrower by signing, dating and returning to us, the enclosed copy of this letter. Upon receipt by the Bank of a countersigned letter, the amendment will become effective as of the date of the countersignature. Sincerely, Tamara Sulukhia Acting Country Director Belarus, Moldova and Ukraine Europe and Central Asia CONFIRMED AND AGREED: UKRAINE By _ Authorized Representative Name: Lt5/2( SAo4 Date:- O~&4 A~~ H. E. Oleksandr Shlapak -3- October 28, 2014 Copied to: Mr. Vitalii Lisovenko, Deputy Minister, Ministry of Finance of Ukraine Ms. Tetiana Sliuz, Head, State Treasury Service of Ukraine Mr. Mykola Hordiienko, Head, State Financial Inspection of Ukraine Ms. Halyna Pakhachuk, Director, Debt and International Financial Policy Department, Ministry of Finance of Ukraine Ms. Viktoriia Kolosova, Deputy Director of Debt and International Financial Policy Department - Head of Division for Cooperation with International Organizations and Coordination of International Technical Assistance, Ministry of Finance of Ukraine Mr. Frank Heemskerk, Executive Director, World Bank Mr. Roman Zhukovskyi, Alternate Executive Director, World Bank H. E. Oleksandr Shlapak -4- October 28, 2014 Cleared with and bcc: Margaret Png, Legal Counsel (LEGLE); Ma Dessirie Kalinski (CTRLA) Distribution: Messrs./Mmes. Fan, Moorty, Cedeno, Golokoz (ECCU2); Fozzard, Kagawa, Beazley, Shcherbyna, Dener, Shmeliova, La Cascia, Babich, Yates (GGODR); Bibileishvili, Vukic (CTRLA); Siryachenko, Kovalchuk (ECCUA) WBDocs H. E. Oleksandr Shlapak -5- October 28, 2014 Attachment "Schedule 2 Section IV. Withdrawal of Loan Proceeds Category Amount of the Percentage of Financing Allocated Expenditures to be (expressed in USD) financed (inclusive of taxes) (1) Goods, services and training 0 100% for Part 2(c) of the Project (2) Goods, services and training 3,818,170 100% for all Parts of the Project, other than Part 2(c); incremental operating costs and audit (3) Front-end Fee 125,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07(b) of the General Conditions Sub-total 3,943,170 Amount of the Loan cancelled as 46,056,830 of October 3, 2014 TOTAL AMOUNT 50,OOOM