Conformed Copy - L4016 - Coal Pilot Project - Amendment 1

Page 1 April 7, 1997 Mr. Igor Mitiukov Mr. Alexander Poshtuk Minister of Finance General Director, UDKR Ministry of Finance 7 Artioma Street 12/2 Hrushevsky Street Donetsk 340000 Kyiv-8 Ukraine Ukraine 252008 Mr. Sergei Polyakov Governor of Donetsk Oblast Administration 34 Pushkin Boulevard Donetsk 340105 Ukraine Re: Loan No. 4016 UA (Coal Pilot Project) Amendment of the Loan Agreement and Project Agreements Dear Sirs: We refer to (i) the Loan Agreement (Loan Number 4016 UA) for the above-mentioned Loan between Ukraine (the Borrower) and the International Bank for Reconstruction and Development (the Bank), dated July 11, 1996, (ii) Project Agreement between the Bank and Ukrainska Derzhavna Kompania z Restruckturizatsii Pidpriemstv Vuhilnoi Promislovennosti (UDKR), dated July 11, 1996, and (iii) Project Agreement between the Bank and Donetsk Oblast, dated July 11, 1996. We also refer to discussions between the Bank and Borrower during the February 1997 mission to Ukraine regarding the microcredit component of the Project (Part B.2). It was then confirmed that the microcredit component of the Project will be implemented by the Borrower, through the Ministry of Finance, with the assistance of a fiscal agent bank, and that a separate special account will be opened for this component of the Project. We are pleased to inform you that the Bank agrees to make the proposed amendments. Accordingly, the Loan Agreement and the Project Agreements are proposed to be amended as set forth below. The Loan Agreement In Recital (D), the reference to