Conformed Copy - C2268 - Third Power Project - Amendment

Page 1 October 8, 1992 The Honorable Dr. J.S. Mayanja Nkangi Minister of Finance and Economic Planning P.O. Box 8147 Kampala Uganda Re: Third Power Project (Credit Number 2268 UG) Amendment Dear Mister Minister I refer to the Development Credit Agreement between the Republic of Uganda (the Borrower) and the International Development Association (the Association) and the Project Agreement between the Association and Uganda Electrity Board (UEB) for the above referenced Project dated January 9, 1992. I also refer to the provisions of Section 6.01.(d) and (e) of the Development Credit Agreement which, as conditions precedent to the effectiveness of the Development Credit Agreement require UEB to (1) make appropriate adjustments to its accounts to reflect UEB's revalued net fixed assets, and (2) to appoint consultants to, inter alia, investigate and advise on any necessary dam measures and produce a work program and associated bidding documents required to ensure the safety of the Owen Falls Dam. We have noted that the revaluation of UEB's net fixed assets required under Section 6.01 (d) of the Development Credit Agreement has been completed but that accounts reflecting such evaluation have not been completed. We have also noted that UEB has appointed consultants to investigate and advise on dam safetv measures and that a panel of experts has reviewed the consultants' report and have endorsed the consultants' views that furhter monitoring and investigation should proceed before anv physical remedial works are contemplated. In order to enable the Borrower and UEB to complete the actions required under Sections 6.01 (d) and (e) of the Development Credit Agreement, and to avoid a further delay in the effectiveness of the Development Credit Agreement, the Association agree to make the conditions referred to in Sections 6.01 (d) and (e) of the Development Credit Agreement, conditions of disbursement of credit funds for the Civil Works component of the Project. Accordingly we propose to amend the Development Credit Agreement as follows: 1. Section 6.01 of the Development Credit Agreement Paragraphs (d) and (e) are deleted, and paragraph (f) is renumbered as paragraph (d). 2. Schedule I paragraph 2(c) (ii) of the Development Credit Agreement 2.1 The word 'and' at the end of sub-paragraph 2(c)(ii) is deleted. 2.2 The '.' at the end of sub-paragraph 2(c) (ii) (3) is deleted, and the following sub- paragraphs 2 (c) (ii) (4) and 2(c) (ii) (5) are added to read as follows: "(4)" UEB's net fixed assets have been revalued and appropriate adjustments made to its accounts, and (5) consultants to be employed by UEB, in accordance with terms of reference satisfactory to the Association, have investigated and advised on any dam measures and a work program and associated bidding-documents required to Page 2 ensure the safety of the Owen Falls Dam, and a panel of experts, with a composition and terms of reference satisfactory to the Association, has been appointed by UEB and has reviewed the consultants' proposals for dam safety measures, and has also reviewed and advised on the technical and safety aspects of the Project structure". Please confirm your agreement to the foregoing, proposed amendment by signing, dating and returning the enclosed copy of this letter to us, at which time the amendment shall constitute a binding agreement between the Borrower and the Association. Very truly yours, INTERNATIONAL DEVELOPMENT ASSOCIATION Francis X. Colaio Director Africa Department Africa Region CONFIRMED THE REPUBLIC OF UGANDA By Authorized Representative, Minister of Finance and Economic Planning Date October 8, 1992