Conformed Copy - C1996 - Private Small and Medium Enterprise Development Project - Amendment

Page 1 December 19, 1990 His Excellency Dr. Kwesi Botchwey The Provisional National Defense Council Secretary for Finance and Economic Planning Ministry of Finance and Economic Planning P.O. Box M-40 Accra, Republic of Ghana Dear Dr. Botchwey: Re: GHANA - Credit No. 1996-GH (Private Small and Medium Enterprise Development Project) Amendments to the Development Credit Agreement and the Project Agreement We refer to the Development Credit Agreement (Private Small and Medium Enterprise Development Project) dated May 1, 1989, between the Republic of Ghana and the International Development Association (the Association) and to the Project Agreement of the same date between the Association and the Bank of Ghana. Following the discussions during the 1990 Annual Meetings here in Washington, we propose to amend the Development Credit and Project Agreements as follows: 1. Paragraph C.1 (a) of Schedule 2 to the Project Agreement shall be amended to read as follows: "(a) Beneficiaries shall contribute at least 25% of the Investment Project cost in equity or from internally- generated resources; provided, however, that in the case of expansion and/or rehabilitation projects, the Borrower's equity investment in the existing enterprise shall be included in the calculation of the 25% minimum contribution to the Investment Project." 2. Paragraph C.1 (e)(i) of Schedule 2 to the Project Agreement shall be amended by changing the maximum size of a Sub-loan under Part A of the Project from $500,000 equivalent to $750,000 equivalent. 3. Paragraph C.1 (e)(iv) of Schedule 2 to the Project Agreement shall be amended to read as follows: "(iv) the maximum financing from the proceeds of the Credit would be 7O% of the cost of an Investment Project made under Part A of the Project in case of new projects and 100% of the cost of an Investment Project made under Part A of the Project in case of expansion and/or rehabilitation projects." 4. The table set forth in paragraph 1 of Schedule 1 to the Development Credit Agreement shall be amended by changing the disbursement percentage related to Category (1) as follows: "100% of amounts disbursed for Sub-loans and Investments under Part A of the Project up to 7O% of the total cost of the Investment Project in case of new projects and up to 10O% of the total cost of the Investment Project in case of expansion and/or rehabilitation projects, and 10O% of amounts disbursed for Subloans under Part C of the Project." Please confirm your agreement with the foregoing amendment to the Development Credit Agreement by signing the form of confirmation Page 2 below on the enclosed copy and returning it to us and obtain Bank of Ghana's agreement to the amendment of the Project Agreement by having an authorized representative of Bank of Ghana signing the form of confirmation below. This amendment shall become effective upon receipt of the signed copy by the Association. Sincerely yours, Jorge C. Barrientos Acting Director Western African Department CONFIRMED: REPUBLIC OF GHANA By Authorized Representative Date: January 7, 1991 CONFIRMED: BANK OF GHANA By Authorized Representative Date: January 7, 1991