06-Oct-2024 ______________, 2024 H.E. Dr. Wael Zakout Minister Ministry of Planning and International Cooperation Palestinian Authority West Bank and Gaza: Advancing Sustainability in Performance, Infrastructure, and Reliability of Energy Sector in the West Bank and Gaza Project – Multiphase Programmatic Approach (Phase 1) (ASPIRE-Phase 1)) TFGWB Grant No. TF0B3036 and PID-MDTF Grant No. TF0B3015 Extension of Closing Date - Amendment to TFGWB Grant Agreement and PID-MDTF Grant Agreement - Revision to the Results Framework Excellency: We refer to: (i) the Trust Fund Grant Agreement between the Palestine Liberation Organization (for the benefit of the Palestinian Authority) (the “Recipient”) and the International Development Association (“Bank”), acting as administrator of the Trust Fund for Gaza and the West Bank , dated June 30, 2020 (the “TFGWB Grant Agreement”); and (ii) the Letter Agreement between the Recipient and the Bank, acting as administrator of the Partnership in Infrastructure Development Multi-Donor Trust Fund also dated June 30, 2020 (“PID-MDTF Grant Agreement”), both for the Advancing Sustainability in Performance, Infrastructure, and Reliability of Energy Sector in the West Bank and Gaza Project – Multiphase Programmatic Approach (Phase 1) (ASPIRE-Phase 1) (the “Project”). The TFGWB Grant Agreement and the PID-MDTF Grant Agreement hereinafter collectively referred to as the “Agreements”. The capitalized terms used in this amendment letter (“Amendment Letter”) and not defined herein have the meaning ascribed to them in the Agreements, as applicable. We also refer to your letter dated February 4, 2024, requesting to extend the closing date provided for under the Agreements and for a restructuring of the Project, which requires certain amendments to the Agreements, and adjustment of the Project’s Results Framework. On the basis of the foregoing, we are pleased to inform you that the Bank: (A) CLOSING DATE EXTENSION has established December 31, 2025, as the later date for purposes of Section III.B.2 of Schedule 2 of the TFGWB Grant Agreement and Section 3.03 of Annex 1 to the PID-MDTF Grant Agreement. (B) AMENDMENTS proposes to amend the Agreements as follows: (i) A new Part 5 is included in Schedule 1 to the TFGWB Grant Agreement and in Section 2.01 of Annex 1 to the PID-MDTF Grant Agreement, to read as follows: “Part 5: Contingent Emergency Response Provision of immediate response to an Eligible Crisis or Emergency, as needed.” (ii) A new sub-section G is included in Section I of Schedule 2 to the TFGWB Grant Agreement and in Section 2.03 of Annex 1 to the PID-MDTF Grant Agreement, to read as follows: “G. Contingent Emergency Response 1. In order to ensure the proper implementation of contingent emergency response activities under Part 5 of the Project (“Contingent Emergency Response Part”), the Recipient shall ensure that: (a) a manual (“CERC Manual”) is prepared and adopted in form and substance acceptable to the Bank, which shall set forth detailed implementation arrangements for the Contingent Emergency Response Part, including: (i) any structures or institutional arrangements for coordinating and implementing the Contingent Emergency Response Part; (ii) specific activities which may be included in the Contingent Emergency Response Part, Eligible Expenditures required therefor (“Emergency Expenditures”), and any procedures for such inclusion; (iii) financial management arrangements for the Contingent Emergency Response Part; (iv) procurement methods and procedures for the Contingent Emergency Response Part; (v) documentation required for withdrawals of Financing amounts to finance Emergency Expenditures; (vi) a description of the environmental and social assessment and management arrangements for the Contingent Emergency Response Part; and (vii) a template Emergency Action Plan; (b) the Emergency Action Plan is prepared and adopted in form and substance acceptable to the Bank; (c) the Emergency Response Part is carried out in accordance with the CERC Manual and the Emergency Action Plan; provided, however, that in the event of any inconsistency between the provisions of the CERC Manual or the Emergency Action Plan and this Agreement, the provisions of this Agreement shall prevail; and (d) neither the CERC Manual or the Emergency Action Plan is amended, suspended, abrogated, repealed or waived without the prior written approval by the Bank. 2. The Recipient shall ensure that the structures and arrangements referred to in the CERC Manual are maintained throughout the implementation of the Contingent Emergency Response Part, with adequate staff and resources satisfactory to Bank. 3. The Recipient shall ensure that: (a) the environmental and social instruments required for the Contingent Emergency Response Part are prepared, disclosed and adopted in accordance with the CERC Manual and the ESCP, and in form and substance acceptable to the Bank; and -2- (b) the Contingent Emergency Response Part is carried out in accordance with the environmental and social instruments in a manner acceptable to the Bank. 4. Activities under the Contingency Emergency Response Part shall be undertaken only after an Eligible Crisis or Emergency has occurred.” (iii) The relevant section/article with the withdrawal table in the Agreements is hereby amended and the revised Section III of Schedule 2 to the TFGWB Grant Agreement is attached to this Amendment Letter as Attachment 1, and the revised Article III of Annex 1 to the PID-MDTF Grant Agreement is attached to this Amendment Letter as Attachment 2. (iv) The following new terms are added in Section I (Definitions) of the Appendix to the TFGWB Grant Agreement, to read as follows, and the remaining paragraphs are re- numbered accordingly: “CERC Manual” means the manual referred to in Section I.G.1(a) of Schedule 2 to this Agreement, as such manual may be updated from time to time with the agreement of the Bank, and which is an integral part of the Operational Manual. “Contingent Emergency Response Part” means any activity or activities to be carried out under Part 5 of the Project to respond to an Eligible Crisis or Emergency. “Eligible Crisis or Emergency” means an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact to the Recipient, associated with a natural or man-made crisis or disaster. “Emergency Action Plan” means the plan referred to in Section I.G.1(b) of Schedule 2, detailing the activities, budget, implementation plan, and monitoring and evaluation arrangements, to respond to the Eligible Crisis or Emergency. “Emergency Expenditures” means any of the eligible expenditures set forth in the CERC Manual referred to in Section I.G of Schedule 2 to this Agreement and required for the Contingent Emergency Response Part. (v) The following new terms are added to Section 1.02 of the PID-MDTF Grant Agreement, to read as follows, and the remaining paragraphs are re-numbered accordingly: “CERC Manual” means the manual referred to in Section 2.03.G.1(a) of Annex 1 to this Agreement, as such manual may be updated from time to time with the agreement of the Bank, and which is an integral part of the Operational Manual. “Contingent Emergency Response Part” means any activity or activities to be carried out under Part 5 of the Project to respond to an Eligible Crisis or Emergency. “Eligible Crisis or Emergency” means an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact to the Recipient, associated with a natural or man-made crisis or disaster. “Emergency Action Plan” means the plan referred to in Section 2.03.G.1(b) of Annex 1, detailing the activities, budget, implementation plan, and monitoring and evaluation arrangements, to respond to the Eligible Crisis or Emergency. -3- “Emergency Expenditures” means any of the eligible expenditures set forth in the CERC Manual referred to in Section 2.03.G of Annex 1 to this Agreement and required for the Contingent Emergency Response Part. Except as specifically amended in this Amendment Letter, all other terms and conditions of the Agreements shall remain in full force and effect. (C) ADJUSTMENT TO RESULTS FRAMEWORK The indicators and targets of the Project, referred to in Section 2.06(a) of the Standard Conditions applicable to the Agreements (“Results Framework”) are consequently revised to read as set forth in Attachment 3 to this Amendment Letter. Please confirm your agreement to the foregoing amendments on behalf of the Recipient by signing and dating the form of confirmation set forth below and returning one countersigned original of this Amendment Letter to us and retaining one original for your records. This Amendment Letter shall become effective as of the date of the countersignature of this Amendment Letter, upon receipt by the Bank of the countersigned original of this Amendment Letter, except for the extension of the Closing Date, which shall become effective upon dispatch of this Amendment Letter to the Recipient. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION (acting as administrator of the Trust Fund for Gaza and the West Bank, and of the Partnership in Infrastructure Development Multi-Donor Trust Fund) By: _______________________________ Stefan W. Emblad Country Director CONFIRMED AND AGREED: PALESTINE LIBERATION ORGANIZATION (for the benefit of the Palestinian Authority) By: _________________________ Name: _________________________ mINISTER OF pLANNING AND INTERNATIONAL COOPERATION Title: _________________________ 09-Oct-2024 Date: _________________________ -4- Attachment 1 REVISED SECTION III OF SCHEDULE 2 TO THE TFGWB GRANT AGREEMENT (TFGWB GRANT NO. TF0B3036) “Section III. Withdrawal of Grant Proceeds A. General 1. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) Article III of the Standard Conditions; (b) Disbursement and Financial Information Letter; and (c) this Section; to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Grant Percentage of Expenditures Allocated to be Financed (expressed in USD) (inclusive of Taxes) * (1) Goods, works, non-consulting 14,000,000 100% services, consultant services, Sub- Financings, Training and Operating Costs under the Project (except for expenditures under Parts 3(c)) (2) Emergency Expenditures 0 100% TOTAL AMOUNT 14,000,000 *percentages of disbursements will be allocated following the specifications included in the Work Plans B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section no withdrawal shall be made for: (a) payments made prior to the Signature Date, except withdrawals up to an aggregate amount not to exceed $2,000,000 may be made for payments made twelve months prior to the date of this Agreement, for Eligible Expenditures under Category (1) of the Project; and (b) Emergency Expenditures under Category (2), unless and until all of the following conditions have been met in respect of said expenditures: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Bank a request to withdraw Grant amounts under Category (2); and (B) the Bank has agreed with such determination, accepted said request and notified the Recipient thereof; and (ii) the Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Bank. 2. The Closing Date is December 31, 2025.” -5- Attachment 2 REVISED ARTICLE III OF ANNEX 1 TO THE PID-MDTF GRANT AGREEMENT (PID-MDTF Grant No.TF0B3015) “Article III Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) Article III of the Standard Conditions; and (b) this Section; to finance Eligible Expenditures in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table. Category Amount of the Percentage of Expenditures Grant Allocated to be Financed (expressed in USD) (inclusive of Taxes) * (1) Goods, works, non-consulting services, 29,000,000 100% consultant services, Sub-Financings, Training and Operating Costs under the Project (2) Capitalization of the Liquidity Support 20,000,000 100% Account under Part 3(c) of the Project (3) Emergency Expenditures 0 100% TOTAL AMOUNT 49,000,000 *percentages of disbursements will be allocated following the specifications included in the Work Plans 3.02. Withdrawal Conditions. Notwithstanding the provisions of Part A of this Section no withdrawal shall be made for: (a) payments made prior to the date of this Agreement; (b) under Category (2) unless the Recipient and PENRA have submitted evidence satisfactory to the Bank that: (i) the LSAPS Operations Manual has been prepared in a manner satisfactory to the Bank and adopted by the Recipient; and (ii) the dedicated account for the Liquidity Support Account referred to in Section C.3(b) of Article 2.03 of Annex 1 to this Agreement has been opened in a manner acceptable to the Bank; and (c) Emergency Expenditures under Category (3), unless and until all of the following conditions have been met in respect of said expenditures: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Bank a request to withdraw Grant amounts under Category (3); and (B) the Bank has agreed with such determination, accepted said request and notified the Recipient thereof; and (ii) the Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Bank. 3.03. Withdrawal Period. The Closing Date is December 31, 2025.” -6- ATTACHMENT 3 Advancing Sustainability in Performance, Infrastructure, and Reliability of Energy Sector in the West Bank and Gaza Project – Multiphase Programmatic Approach (Phase 1) (ASPIRE-Phase 1) TFGWB Grant No. TF0B3036 and PID-MDTF Grant No. TF0B3015 Revised Results Framework PDO Indicators by PDO Outcomes PrDO1 and Phase1-PDO1: Improve operational performance of electricity sector institutions Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise 11.00 Sep/2019 9.00 13-May-2024 10 05-Aug-2024 8 Dec/2025 Non-technical losses West Bank (Percentage) Comments on achieving targets Average based on non-technical losses recorded for each distribution company in West Bank Revise 20.00 Sep/2019 18.00 13-May-2024 18.00 05-Aug-2024 15.00 Dec/2025 Non-technical losses Comments on achieving targets Non-technical losses as per Gaza Distribution Company (GEDCO) During this restructuring (ongoing conflict Gaza (Percentage) period) the values are not applicable. The target values will be updated when situation allows PrDO2 and Phase1-PDO2: Improve financial performance of electricity sector institutions Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise 30.00 Sep/2019 25.00 13-May-2024 30 05-Aug-2024 28 Dec/2025 Share of electricity sector net- lending in West Bank utilities (Percentage) PrDO3 and Phase1-PDO3: Diversification of energy sources Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise 36.00 Sep/2019 80.00 13-May-2024 80 05-Aug-2024 80.00 Dec/2025 Electricity supply from imports (Megawatt) Comments on achieving targets This indicator refers only to import from Jordan during Phase 1. Revise 0.00 Sep/2019 25.00 13-May-2024 25.00 05-Aug-2024 55 Dec/2025 Installed capacity from new IPPs in West Bank and Gaza (Megawatt) Comments on achieving targets Installed capacity (MW) from new IPPs Intermediate Results Indicators by Components Component 1: Improving Infrastructure for Regional Electricity Interconnections in the West Bank and Gaza Revised Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise 600,000 Sep/2019 40.00 13-May-2024 600,000 13-Aug-2024 750,000 Dec/2025 Upgrade capacity of PETL substation (Kilovolt-Amphere(KVA)) Revise 0.00 Sep/2019 24.00 13-May-2024 15 13-Aug-2024 55 Dec/2025 Length of MV lines upgraded and constructed (Kilometers) Comments on achieving targets MV lines in Nablus, Jenin, Hebron, Gaza Revise No Sep/2019 Yes 13-May-2024 Yes 13-Aug-2024 Yes Dec/2025 Substation operationalized (Text) Comments on achieving targets This pertains to Tarqumiya substation in southern part of West Bank. Supply material for reconstruction of 0 Sep/2019 0 13-Aug-2024 50 Dec/2025 MV lines (Kilometers) Component 2: Improving Sustainability of Service Delivery in West Bank and Gaza DISCOs Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Number of smart meters installed 0.00 Sep/2019 0.00 13-May-2024 0.00 05-Aug-2024 15,000.00 Dec/2025 under RPP-2 in West Bank (Number) 7.00 Sep/2019 19.00 13-May-2024 19.00 05-Aug-2024 19 Dec/2025 Share of female engineers employed in the energy sector (Percentage) Comments on achieving targets Number of women formally employed in govt. and private energy institutions Lessons learned reports (LSAPS and 0.00 Sep/2019 1.00 13-May-2024 1.00 05-Aug-2024 2.00 Dec/2025 Ramallah - Jericho line) (Number) Component 3: Enabling Private Sector Engagement in Renewable Energy Revised Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise 0 Sep/2019 0 05-Aug-2024 9 Dec/2025 Solar PV systems with Large Scale Battery Energy Storage Systems (BESS) in health sector (Number) -8- New 0 Sep/2019 0 05-Aug-2024 500 Dec/2025 Supply of leveraging Mobile PV Kits to Support Energy Access to in the refugee centers, rural areas, and other facilities (Number) New 0 Sep/2019 0 05-Aug-2024 6 Dec/2025 Solar Systems installed for Health Sector in West Bank (Number) Revise 0.00 Sep/2019 0.00 13-May-2024 0.00 05-Aug-2024 3,000 Dec/2025 Citizens served by newly installed solar PV systems (Number) 0.00 Sep/2019 0.00 13-May-2024 0.00 05-Aug-2024 20,000,000.00 Dec/2025 Private capital mobilized (Amount(USD)) Comments on achieving targets Investment in the solar IPPs by private sector developers, enabled by the PETL liquidity support account. 4.50 Sep/2019 12.50 13-May-2024 12.50 05-Aug-2024 15 Dec/2025 Revise Share of RE capacity in West Comments on achieving targets The proportion of RE in the total energy mix including all imports and domestic Bank (Percentage) generation. Baseline is calculated as 50 divided by 1100. Revise 0.00 Sep/2019 15.00 13-May-2024 15.00 05-Aug-2024 25.00 Dec/2025 Beneficiary women-owned businesses reporting stable incomes Comments on achieving targets This refers to women owned SMEs that benefit from the financing mechanism for solar PV systems due to improved electricity services (Percentage) Component 4: Technical Assistance, Capacity Building and Project Management Revised Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise 0.00 Sep/2019 1.00 13-May-2024 1.00 05-Aug-2024 2.00 Dec/2025 Preparation of feasibility studies completed (Number) Comments on achieving targets Feasibility studies for priority infrastructure projects for financing in Phase 2 Revise 0.00 Sep/2019 1.00 13-May-2024 1.00 05-Aug-2024 2.00 Dec/2025 PENRA publishes on its website results of citizen engagement survey Comments on achieving targets citizen engagement indicator (Number) Revise 0.00 Sep/2019 100.00 13-May-2024 100.00 05-Aug-2024 90.00 Dec/2025 Grievances registered related to delivery of project benefits that are Comments on achieving targets Related to grievance redressal mechanism actually addressed (Percentage) -9-