Conformed Copy - C1889 - Small Enterprise/APEX Project - Amendment 1

Page 1 May 9, 1991 Mr. Isaac Budabuda Governor Banque de la Repubique du Burundi B.P. 705 Bujumbura (Burundi) Re: BURUNDI - Credit No. 1889-BU (Small Enterprise/APEX Project) Amendments to Project Agreement Dear Sir, We refer to the Project Agreement between the International Development Association (the Association) and the Banque de la Republique du Burundi (BRB) dated June 8, 1988, in respect of the above-mentioned project. Further to your telex dated February 19, 1991, we are pleased to inform you that the Association hereby agrees to your request to amend the said Project Agreement in order to modify the criteria and limits for eligibility of sub-projects and to denominate such limits in Special Drawing Rights (SDRs). Consequently, the Association proposes the following amendments to the Project Agreement: A. TO SCHEDULE I TO THE PROJECT AGREEMENT Paragraph 3 of the Part entitled "Functions" is hereby amended by the deletion therefrom of the amount of "$80,000" both times that it appears and the substitution each time therefor of the amount. B. TO SCHEDULE 2 TO THE PROJECT AGREEMENT 1. Paragraph 3 is hereby amended: (a) by the addition of the expression "Unless the Association and BRB shall otherwise agree" and deletion therefrom of the expression "total net assets" and the substitution therefor of the expression "total net fixed assets excluding land"; (b) by the deletion therefrom of the amount "$300,000" and the substitution therefor of the amount "SDR 350,000"; and (c) by the addition at the end thereto of the following sentence: "Investment Projects eligible for Sub-loans for free-standing working capital financing unrelated to equipment financing shall be only those Investment Projects, the cost of which is estimated not to exceed the equivalent of SDR 210,000 and which shall be carried out only by existing Investment Enterprises in productive sectors". 2. Paragraph 4 is hereby amended by the deletion therefrom of the amount "$240,000" and the substitution therefor of the amount "SDR 280,000"; and 3. Paragraph 5 is hereby amended by (a) the deletion therefrom of the amount "$210,000" and the substitution therefor of the amount "SDR 245.000", and (b) by the addition of the words: "and Sub-loans for investment in free-standing working capital financing may not exceed a total equivalent of SDR 168,000". 4. Paragraph 8 is hereby amended by the deletion therefrom of the word "five" and the substitution therefor of the word "three". 5. A new Paragraph 11 is added reading as follows: Investment Projects estimated to cost the equivalent of SDR 75,000.00 or more shall be eligible for Sub-loans only if the investment will generate an expected internal financial rate of return of at least 10.0 percent in real term; Investment Projects estimated to cost the equivalent of SDR 215,000.00 or more shall be eligible for Sub-loans only if the investment will Page 2 generate an internal economic rate of return of at least 10.0 percent in real terms. Please indicate your agreement to the foregoing amendments by signing and dating the form of confirmation below on one of the duplicate originals of this letter and returning it to us for our records. The amendments shall come into force on the date of countersignature by you. Yours truly, By /s/ Francisco Aguirre-Sacasa Director South-Central and Indian Ocean Department Africa Region CONFIRMED: BANQUE DE LA REPUBIQUE DU BURUNDI By /s/ Isaac Budabuda, Governor Authorized Representative