Conformed Copy - L7107 - Tuberculosis Control Project - Supplemental Letter 2

Page 1 PEOPLE’S REPUBLIC OF CHINA CONFORMED COPY March 24, 2002 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 Re: Loan No 7107- CHA (Tuberculosis Control Project) Loan Conversion Provisions Dear Sirs and Madames: We refer to the Loan Agreement of even date herewith between People’s Republic of China (the Borrower) and the International Bank for Reconstruction and Development (the Bank) for the above-captioned Project (the Loan Agreement) This letter is to advise you that with reference to Section 2.01 of the Loan Agreement, I hereby confirm that the Borrower does not intend to request any Conversion pursuant to Section 2.09(a) for any Loan amounts disbursed, until such time as the corresponding amount of the DFID Grant has been applied. I further notify the Bank that, in respect of Section 2.09(c), the change in the interest rate basis from a Variable Rate to a Fixed Rate should not apply until further written notice is provided to the Bank. Please confirm the understanding on behalf of the Bank to the application of this notification by signing the form of confirmation below. Sincerely yours, By /s/ Rui Yuehua Authorized Representative AGREED: INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Yukon Huang ____________ Authorized Representative Page 2