Conformed Copy - L3954 - Power Market Development Project - Supplemental Letter 2

Page 1 March 26, 1996 International Bank for Reconstruction and Development 1818 H Street N. W. Washington, D.C. 20433 United States of America Re: Loan No. 3954-CO (Currency Pool) Loan No. 3955-CO (Floating Rate Single Currency) Power Market Development Project Section 3.04 of each of the Loan Agreements Dear Sirs: This is connection with each of the Loan Agreements for the above Project of even date herewith (the Loan Agreements) between International Bank for Reconstruction and Development (the Bank) and Interconexion Electrica S. A.- ESP (the Borrower), and, more specifically, in connection with the resettlement and/or compensation plans under Section 3.04 of each of the Loan Agreements. We wish to make clear that our policy will be to provide equivalent housing to the persons displaced and that cash compensation would be acceptable only if preferred by the persons affected or if part of a package including housing or in the cases of rental replacement or loss of income. Nevertheless, there may be cases in which certain persons under special circumstances may require a different compensation than that offered to other persons under regular circumstances. For those cases, the Borrower shall seek ad-hoc approval from the Bank. If you are in conformity with the aforesaid, please indicate so by countersigning below. Very truly yours, INTERCONEXION ELECTRICA S.A. - ESP By /s/ _________________________________ Authorized Representative AGREED BY: INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ _______________________________ Acting Vice President Latin America and Caribbean Region Date: ___________________________