Conformed Copy - C2104 - Financial Sector and Private Enterprise Development Project - Amendment 2

Page 1 December 12, 1991 His Excellency The Minister of Finance Ministry of Finance Antananarivo Madagascar Excellency: Re: Credit No. 2104 MAG (Financial Sector and Private Enterprise Development Project) Amendments to the Development Credit Agreement We refer to the above mentioned Development Credit Agreement, dated April 4, 1990, and the letter from the Governor of Banque Centrale de Madagascar (BCRDM), dated October 3, 1991, regarding the possibility for free zone investment enterprises to be included as possible beneficiaries of Sub-loans the above Credit. Further to discussions held with your representatives and representatives of BCRDM, we are pleased to inform you that the Association hereby agrees to the following amendments to the Development Credit Agreement: . In Section 1.02, paragraph (1) is to read: "(l) 'Investment Enterprise' means an enterprise to which a Participating Financial Institution proposes to make or has made a Sub-loan; and 'Free Zone Investment Enterprise' means an Investment Enterprise established and operating pursuant to the Borrower's Law No. 89-027 dated December 29, 1989 and the Borrower's Laws and Decrees relating to said Law:" . Section 3.02 (a) (iv) is to read: "(iv) the foreign exchange risk to be borne by the Borrower, except for a Sub- loan to a Free Zone Investment Enterprise where said Enterprise is to bear the foreign exchange risk; and" . In Section 3.02 (a) (v), after the terms "upon the establishment of the new money market interest rate structure acceptable to the Association, at the general reference rate resulting from that rate structure", the following is added: "and, for a Sub-loan to a Free Zone Investment Enterprise, at a rate equal to London Inter-Bank Offered Rate (LIBOR) plus one percent Please confirm your agreement to the foregoing amendments by signing and :dating the form of confirmation on the enclosed copy of this letter and returning it to us, We further refer to the Project Agreement between the Association and BCRDM for the Project. By separate letter, addressed to BCRDM, a copy of which is enclosed herewith, the Association agrees to the amendments to the Project Agreement as set forth in said letter. It is understood that the amendments to the Development Credit Agreement shall come into force upon: (i) confirmation of your Page 2 agreement as indicated above; (ii) confirmation of BCRDM's agreement to the amendments to the Project Agreement; and (iii) receipt by the Association of the Subsidiary Loan Agreement and of the Participating Agreements, as amended to reflect the amendments in this letter and in the letter to BCRDM. Very truly yours, Bension Varon Acting Director South-Central and Indian Ocean Department Africa Region CONFIRMED: DEMOCRATIC REPUBLIC OF MADAGASCAR By: Authorized Representative Date: 22 Jan 1992