Conformed Copy - C1795 - Economic and Public Enterprise Management Project - Amendment 1

Page 1 November 15, 1991 His Excellency Mr. Adrien Sibomana Prime Minister and Minister of Planning Prime Ministry and Ministry of Planning B.P. 224 Bujumbura Republic of Burundi Re: Credit No, 1795-BU (Economic and Public Enterprise Management Project) Amendment to the Development Credit Agreement Excellency, We refer to the Development Credit Agreement ("the Agreement") between the Republic of Burundi (the Borrower) and the International Development Association ("the Association") dated October 9, 1987. We are pleased to inform you that the Association agrees with the Borrower's request dated August 3l, 1991, to amend the Agreement, consequently the, Association hereby agrees to the following amendment to the Agreement: 1. Section 1.02 is amended: a) by inserting after paragraph (e) the following two new paragraphs: (f) "MTSS" means Ministere du Travail et de la Securite Sociate, the Borrower's Ministry of Labor and Social Security. (g) "SPAS" means Secretariat du Programme d'Ajustement Structurel. b) Consequently, the paragraphs (f), (g) and (h) become respectively the paragraphs (h), (i) and (j). 2. Schedule I of the Agreement is replaced by the attached amended Schedule I (attachment 1). 3. Schedule 2 of the Agreement is replaced by the attached amended Schedule 2 (attachment 2). Please indicate your agreement with the foregoing by countersigning and dating the form of confirmation on the two original copies of this letter provided and returning one original, as countersigned, to us. This amendment shall become effective as of the date of receipt by the Association of this letter duly countersigned by you. Sincerely yours, By /s/ Francisco Aguirre-Sacasa South-Central and Indian Ocean Department Africa Region CONFIRMED: REPUBLIC OF BURUNDI By /s/ Authorized Representative Page 2 Attachments Attachment I SCHEDULE 1 (Amended) Withdrawal of the Proceeds of the Credit 1. The table below acts forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent to be Financed (1) Vehicles, 100% of foreign equipment and expenditures and supplies 80% of local expenditures (a) under Part A 103,643 of the Project (b) under Part C 12,270 of the Project (c) under Part D 98,215 of the Project (2) Operating Costs 434,550 100% in year one, for SCEP 85% in year two, and 70% in year three (3) Consultants 100% service (a) under Parts A.1, 2,773,500 of the Project (b) under Parts B.1, 568,860 B.2, and C of the Project (c) under Part D 28,750 of the Project (4) Fellowships 100% of foreign expenditures (a) under Part A 127,500 of the Project (b) under Part B 150,000 of the Project (c) under Part C 35,715 of the Project (d) under Part D 30,360 of the Project (5) Consultants' 1,212,515 100% offoreign Page 3 services expenditures under Part B.3 of and 80% of local the Project expenditures (6) Refunding of 343,434 Amount due pursuant Preparation Advance to Section 2.02 (c) of this Agreement (7) Unallocated 80,688 TOTAL 6,999,000 ========== 2. If the amount allocated to Category (6) above is in excess of the amount due, the excess will be reallocated to Category (7). 3. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplies from the territory of the Borrower; (c) the term "year one" in the column setting forth the percentages of expenditures to be financed out of the Credit for Category (2) means the first year covered by SCEP's Annual Work Program; (d) the term "year two" in the column setting forth the percentages of expenditures to be financed out of the Credit for Category (2) means the third year covered by SCEP's Annual Work Program; (e) the term "year three" in the column setting forth the percentages of expenditures to be financed out of the Credit for Category (2) means the third year covered by SCEP's Annual Work Program; 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures made for expenditures prior to the date of this Agreement. Attachment 2 SCHEDULE 2 (Amended) Description of the Project The objectives of the Project are to assist the Borrower in: (i) improving the management of its Public Enterprise sector; (ii) strengthening the rationalization functions for budgetary choices at the level of MPCP, MF and other Ministries; and (iii) strengthening the public expenditure programming process at MF, MPCP and MTSS. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Public Enterprises 1. Carrying out of studies on the policies followed by the Borrower vis a vis Public Enterprises and definition of criteria for the Borrower's involvement in the Public Enterprise sector. Page 4 2. Establishing a system to assess and monitor the performance of the PE Sector. 3. Strengthening the institutional framework for PEs by: (a) the carrying out of a study to define the institutional relationships between the Borrower, the PEs' boards of directors and the Borrower's having supervisory authority over such PEs; (b) designing a system of performance incentives for their staff; and (c) designing a system of monitorable objectives to assess the performance of the PEs. 4. Carrying out economic evaluations of rehabilitation plans for PEs. 5. Designing a training program for the staff of SCEP, SPAS and PEs. 6. Provision of training in accounting, financing, management and strategic planning of SCEP's, SPAS's and PE's staff and their management. 7. Provision to SCEP of office equipment and four vehicles. Part B: Strengthening the Borrower's Planning Capacity 1. Strengthening MPCP by: (a) strengthening project appraisal activities in the Planning Directorate; (b) strengthening the public investment programming process; (c) providing training in financial and economic methodologies for the evaluation of projects to MPCP's staff; and (d) strengthening the capacities of SPAS to monitor the execution of the adjustment program. 2. Strengthening the sectoral planning capacity in various Ministries of the Borrower by: (a) strengthening the project preparation and appraisal capacities in the sectoral planning units of the Borrower's Ministries of Agriculture, Education and Health; (b) strengthening the departments responsible for the execution of sectoral studies in some of the Borrower's Ministries; and (c) designing an inter-sectoral, sub-sectoral, prefeasibility, feasibility and engineering studies. 4. Provision of office equipment and vehicles to MTSS and MPCP. Part C. Strengthening MF 1. Designing and implementing a unified public expenditure program. 2. Provision of training in public expenditure planning to MF's staff. Part D. Strengthening MTSS by 1. designing a system of data base collection of labor statistics for economic planning; and 2. providing training in collection and analysis of economic and social data to MTSS staff. * * * Page 5 The Project is expected to be completed by June 30, 1992