Conformed Copy - L7213 - Second Export Finance Intermediation Loan - Supplemental Letter 1

CONFORMED COPY Supplemental Letter No. 2 TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. February 20, 2004 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No. 7213 TU (Second Export Finance Intermediation Loan) Performance Monitoring Indicators Dear Sirs and Mesdames: This refers to the provisions of paragraph 2 (a) of Schedule 4 to the Loan Agreement (Second Export Finance Intermediation Loan) of even date herewith between the International Bank for Reconstruction and Development (the Bank) and TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. (the Borrower). The Borrower hereby confirms to the Bank that the performance indicators set forth in the attachment to this letter shall serve as the basis for the Borrower to monitor and evaluate the progress of the Project and the achievement of the objectives thereof. Very truly yours, TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. By /s/ Halil Eroglu Authorized Representative /s/ Orhan Beşkők Authorized Representative Attachment  Attachment SECOND EXPORT FINANCE INTERMEDIATION PROJECT PERFORMANCE INDICATORS Results Framework and Monitoring Narrative Summary Key Performance Indicators Monitoring and Critical Assumptions Evaluation Sector-related CAS (Goal to World Bank Goal: Mission) Help meet private sector Increased aggregate exports Trade Statistics Continued financing needs, to improvement in enhance private sector macro-economic and competitiveness political stability. Project Development (Objective to Goal) Objective: To provide medium and Export Multiplier: Progress reports Continuation of the long-term working capital prepared by current floating and investment finance to Incremental average TSKB’s PIU exchange rate regime private exporting aggregate annual exports enterprises, to continue generated (measured over 3 Supervision assisting the Turkish years for all sub- missions exporting sector hurt by borrowers)/total credit line the recent global disbursed downturn and domestic financial crises To improve the depth and Range of Financial breadth of financial Intermediaries Absence of a major intermediation as participation: public debt / financial measured by the number sector crisis of additional PFIs (banks Number of additional PFIs and leasing companies) participating in EFIL II that participate in EFIL II different from those in the as compared to first EFIL first EFIL To improve credit Sub-loan Performance management practices in Indicators: financial intermediation based on sub-borrower Amount of non-performing creditworthiness criteria sub-loans and leases; Interest and/or principal defaults/total amount of sub-loans and leases disbursed Outputs: (Outputs to Objective) Provide effective Credit line Utilization Progress reports prepared Good capital sustained medium/long Indicator: by TSKB’s PIU adequacy of term finance to exporters TSKB, and on a timely basis Amount of credit line Supervision missions effective project actually management by disbursed/projected credit TSKB line disbursement on a straight line basis Project Inputs: (budget for each (Components to Components/Sub- component) Outputs) components: US$300,000,000 Progress reports prepared Timely Credit Line by TSKB’s PIU disbursement TSKB to set up and run the PIU, using part of the Supervision missions onlending margin to finance the PIU's operating costs Emilie S. Santos M:\BACKUP\TURKEY\Suppltr\ExpFinII-suppltr2-con.doc February 12, 2004 4:56 PM