THE WORLD BANK Bank Of,i IBRD * IDA I WORWBANKGROUP O FFICIAL World Bank Office, Beijing DOCUMENTS L" soI-c December 26, 2017 Mr. Chen Shixin Director-General International Economic and Financial Cooperation Department Ministry of Finance People's Republic of China RE: CHINA: Bayannaoer Water and Environment Comprehensive Management Project (Loan No. 8047-CN) Second Amendment to the Loan A2reement and Extension of Closing Date Dear Mr. Chen: We refer to the Loan Agreement (the Loan Agreement) dated July 29, 2011, as amended on June 1, 2015, between the People's Republic of China (the Borrower) and the International Bank for Reconstruction and Development (IBRD or the Bank) and the Project Agreement (the Project Agreement) of the same date between the Bank and Inner Mongolia Autonomous Region, both for the above-referenced project (the Project). We also refer to the communication from the Ministry of Finance, dated October 19, 2017, notifying the Bank of the Borrower's decision to cancel a portion of the loan for the Project in the amount of USD 7,920,000 pursuant to Section 7.01 of the IBRD General Conditions for Loans dated July 31, 2010 and requesting a restructuring of the Project, which requires certain amendments to the Loan Agreement. We acknowledge the cancellation of the portion of loan. Further, we are pleased to inform you that the Bank concurs with your request to restructure the project and accordingly: (A) proposes to amend the Loan Agreement as follows: 1. The project development objective as stated in Schedule 1 is amended to read as follows: "The objective of the Project is to support Bayannaoer: (a) to better utilize water resources without compromising the water use for irrigation; and (b) to improve the water environment of Wuliangsuhai Lake by reducing water pollution entering such lake." 2. Part 2 of Schedule 1 is amended to read as follows (emphasis added): "Part 2. Wastewater Management. Construction of three wastewater treatment plants - in the Wulateqianqi, Ganqimaodu and Wulatehouqi Industrial Estates - and secondary and tertiary treatment (including a low flow wastewater treatment system comprising reverse osmosis and mechanical vapor recompression technologies at the Wulateqianqi 16th Floor, China World Tower 2, No.1 Jianguomenwai Avenue, Beijing 100004, China 'P WA b**P n 1k*11 -Wf I a 2 A 16 & (100004) Tel. *,i: (86-10) 5861-7600; Fax. 4 : (86-10) 5861-7800 Mr. Chen Shixin Page 2 December 26, 2017 Wastewater Treatment Plant), as well as distribution networks for recycled water in Ganqimaodu and Wulatehouqi Industrial Estates. 3. The table in Section IV.A.2 of Schedule 2 is amended to read as set forth in the Attachment to this amendment letter. (B) has established December 31, 2018 as the later date for purposes of Section IV.B.2 of Schedule 2 to the Loan Agreement; and Except as specifically amended in this letter, all other terms and conditions of the Loan Agreement shall remain in full force and effect. Please confirm your agreement to the foregoing on behalf of the Borrower by countersigning and dating the form of confirmation set forth below, and returning one fully countersigned original of this amendment letter to us and retaining one original for your records. Upon receipt by the Bank of the countersigned original of this amendment letter, this amendment letter shall become effective as of the date of the countersignature (except for the provision related to the extension of the Closing Date under paragraph (B) above, which becomes effective upon dispatch of this amendment letter). Yours sincerely, Bert H man Country Director, China CONFIRMED: PEOPLE'S REPUBLIC OF CHINA By: Authorized Representative Name: 2 Title: AAAv AffARKG7?A Date: 20/1- g cc: Ms. Bu Xiaolin, Chairman Inner Mongolia Autonomous Region No.19, Chilechuan Street Huhhot City Inner Mongolia People's Republic of China Mr. Chen Shixin Page 3 December 26, 2017 ATTACHMENT Revised Withdrawal Schedule Following Cancellation of a Portion of the Loan and Reallocation of Loan Proceeds Amount of the Loan Percentage of Expenditures Category Allocated to be financed (expressed in Dollars) (inclusive of Taxes) (1) Works 56,230,000 100% (2) Goods 14,000,000 100% (3) Consultant services 1,300,000 100% (4) Training, Workshops and Study Tours 350,000 100% (5) Front-end Fee 200,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07(b) of the General Conditions SUB-TOTAL AMOUNT 72,080,000 Cancelled as of October 19, 2017 7,920,000 Original Loan Amount 80,000,000 Mr. Chen Shixin Page 4 December 26, 2017 Copy to: Ms. Ye Jiandi, Director Mr. Zhang Lei, Deputy Director IFI Div. I, International Economic and Financial Cooperation Department Ministry of Finance Email: veduanluo(i@sina.com; zhangleimof(&sina.cn Mr. Li Junyuan, Director Mr. Feng Baoshan, Director Foreign Loans Division, Foreign Fund Utilization Department National Development and Reform Commission Email: liiv@ ndrc.gov.cn; fengbsh(,126.com Mr. Yi De'er, Division Director Mr. Na Risong Finance Bureau Inner Mongolia Email: yideer2004@163.com; rz na(@,sohu.com Mr. Yan Yizhong, Head of Department Foreign Affairs of Bayannaoer Finance Bureau Bayannaoer, Inner Mongolia Email: bmczj@l63.com Mr. Jia Wenchun Chairman of Board of Directors Bayannaoer Water Affairs Group Co. Ltd. Bayannaoer, Inner Mongolia Email: bwag2011@163.com