Conformed Copy - C2239 - Urban Water Supply and Sanitation Rehabilitation Project - Amendment 1

Page 1 January 23, 1992 Mr. T.N. Pant Secretary Ministry of Finance His Majesty's Government Kathmandu, Nepal Mr. G.R.S. Kharel General Manager Nepal Water Supply Corporation P.O. Box 5349 Kathmandu, Nepal Re: Development Credit No. 2239-NEP (Urban water Supply and Sanitation Rehabilitation Project) - Amendment of the Development Credit and Project Agreements Dear Sirs: We refer to the Development Credit Agreement (Urban Water Supply and Sanitation Rehabilitation Project) between the Kingdom of Nepal (the "Borrower") and the International Development Association (the "Association") dated October 10, 1991, and to the Project Agreement between the Association and the Nepal Water Supply Corporation ("NWSC"), of even date. We refer also to your Ministry's letter of December 31, 1991 requesting the Association to waive the condition of effectiveness set forth in Section 6.01 (b) of the Development Credit Agreement. The Association is pleased to inform you that, after due consideration, it has agreed to amend the Development Credit and Project Agreements as follows: 1. Section 6.01 (b) of the Development Credit Agreement is hereby deleted, and Sections 6.01 (c), and 6.01 (d) are renumbered 6.01 (b) and 6.01 (c), respectively. 2. Paragraph 5 of Part B of Schedule 2 to the Development Credit Agreement is hereby amended to read as follows: "Provision of equipment and materials to carry out a leak detection and control program and an on-site sanitation program." 3. The term "FY1992" in the 6th line of Section 4.02 of the Project Agreement is hereby amended to read "FY1993". 4. A new Section 4.05 shall be inserted in the Project Agreement and shall read as follows: "Not later than July 15, 1992, NWSC shall increase its annual sewerage charges from their present levels to a new level equivalent, in the case of each consumer residing in a sewered area, to 50 percent of the metered water charges periodically billed to such consumer, irrespective of whether the said consumer is connected to the sewer system or not." All the terms and conditions of the Development Credit Agreement not amended hereby shall remain in full force and effect. Please confirm your agreement with the foregoing amendments by signing and dating the enclosed form of confirmation and returning it to us. This Amendment shall become effective only upon receipt by the Association of both conformed copies of this Amendment duly signed by the Borrower and NWSC. Sincerely, Page 2 By /s/ Jochen Kraske Director Country Department 1 South Asia Region CONFIRMED: HIS MAJESTY'S GOVERNMENT OF NEPAL By /s/ Authorized Representative Date February 6, 1992 NEPAL WATER SUPPLY CORPORATION By Authorized Representative Date: February 6, 1992