Conformed Copy - C1877 - Second Borgou Rural Development Project - Amendment

Page 1 May 31, 1988 His Excellency Barnabd Bidouzo Minister of Finance and Economy Ministry of Finance and Economy, Cotonou People's Republic of Benin Re: Credit No.1721 BEN (Second Water Supply Project) Credit No.1807 BEN (Transport Infrastructure Rehabilitation and Maintenance Project) Credit No.1877 BEN (Second Borgou Rural Development Project) Introduction of Variable Commitment Charge Dear Minister: The International Development Association (the Association) has decided to institute a system of variable commitment charges on its development credits, set on an annual basis, with a maximum charge of 1/2 of 1 percent (0.5%) per annum, which has been the rate of commi , tment charges since their introduction in 1982. Under the new system, the Association will set the commitment charges payable on its development credits on June 30 in each year, and, for an initial period, commencing July 1, 1988, the rate has been set at zero (0). The current rate of 1/2 of 1 percent (0.5%) per annum will continue to be applicable until June 30, 1988. To effect these changes, the Association proposes to amend development credit agreements already signed. Therefore, the Association hereby agrees to amend Section 2.04 of each of the Development Credit Agreements entered into between the People's Republic of Benin (the Borrower) and International Development Association (the Association) for the above-captioned Projects to read as follows: "Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled at the rates set from time to time pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied as of the next payment date in that year specified in Section 2.06 of this Agreement, except that the rate set as of June 30, 1988 shall be applied as of July 1, 1988. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or insuch other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section". Kindly confirm the agreement of the Borrower to the foregoing by signing and dating the confirmation form on the enclosed copy of this letter and returning it to us for our files. Very truly yours, Ismail Serageldin Page 2 Occidental and Central Africa Department Africa Region CONFIRMED: PEOPLE'S REPUBLIC OF BENIN Barnabe Bidouzo Authorized Representative Date: July 26, 1988