Conformed Copy - L2911 - Second Small and Medium Scale Industry Development Project - Amendment

Page 1 Mr. Mohamed Bouaouaja President-directeur general 1, rue de la Monnaie Tunis Republic of Tunis Re: Loan No. 2911 TUN (Second Small and Medium Scale Industry Development Project) Amendment to Loan and Project Agreement Dear Sir: We refer to the loan agreement entered into between the Republic of Tunisia (the Borrower) and the International Bank for Reconstruction and Development (the Bank), dated April 13, 1988 (the Loan Agreement), and to the project agreement entered into and between the Bank and each of Banque de Developpement Economique de Tunisie, Banque du Sud, Banque de Tunisie, Banque de Tunisie et des Emirats d'investissement and Societe Tunisienne de Banque (collectively the e Participating Banks) of even date therewith (the Project Agreement), both in respect of the above-referenced Project. Please also refer to the requests submitted last September and recently confirmed by the Participating Banks and Agence de Promotion de l'Industrie (API) that ceilings for investments, subloans and cost per job created be raised to reflect the experience gathered since the inception of this Project, and that the purpose of the API technical assistance component be redefined to be consistent with its new role. We are pleased to inform you that the Bank has agreed to the above requests. The purpose of this letter is to amend the relevant provisions of the Loan Agreement and Project Agreement to reflect the requests submitted. Therefor, the Loan Agreement and Project Agreement are hereby amended as follows: I - Loan Agreement 1. Category (2) in paragraph 1 of Schedule 1 to the Loan Agreement shall read as follows: (2) Technical assistance for Part B.1 of the Project: (a) goods 240,000 100% of foreign expenditures and 70% of local expenditures (b) consultants 150,000 100% of foreign services expenditures and 75% of local expenditures (c) training 110,000 100% of foreign 2. Part B(1) of Schedule 2 to the Loan Agreement shall read as follows: "Provision of API of training for its staff, consultants' services and computer equipment, in order to enable API to establish the "Investors' Full Service Teller Booth" and the "National Exchange for Sub-contracting", and to strengthen its overall investment promotion capabilities. II - Project Agreement 1. Paragraph (a) of Schedule 1 to the Project Agreement shall Page 2 read as follows: "Sub-loans or Investments shall be made for: (i) the establishment of new Investment Enterprises whose total investments do not exceed two million Dinars at constant December 1987 value, including working capital funds; or (ii) the expansion, modernization, diversification, rehabilitation and restructuring of existing Investment Enterprises whose total investments do not exceed three million three hundred thousand Dinars at constant December 1987 value, including supplementary working capital funds and net fixed assets;" 2. In paragraphs (d) and (e) of schedule 1 to the Project Agreement, the figure "40,,, Dinars" replaces the figure "30,000 Dinars". 3. Paragraph 2 in Chapter III of Schedule 2 to the Project Agreement shall read as follows: "Unless the Bank and Borrower shall otherwise agree, Sub-loans for or Investments in an Investment project shall not in the aggregate exceed 1.1 million dollars equivalent for the same Investment Project. Amounts committed by a Participating Bank for all its Investments shall not in the aggregate exceed 800,000 dollars equivalent." Please confirm your respective agreements to the foregoing amendments by signing, dating and returning to us the attached duplicate original of this amendment letter. A signed original of this amendment is enclosed for each of your records. We are pleased to inform you that the Bank, after due consideration, has agreed to the above request. Accordingly, the Loan Agreement is hereby amended to read as follows: The table in paragraph 1 of Schedule 1 is amended to read as follows: Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Kemal Dervis Director, Country Department II Europe, Middle East and North Africa Region CONFIRMED: SOCIETE TUNISIENNE DE BANQUE By /s/ Ali Majoul - D.G.A. Date: ______________________