Conformed Copy - L2997 - First Housing Sector Project - Amendment 2

Page 1 November 1, 1990 Mr. Erman Gonzalez Minister of Economy Hipolito Yrigoyen 250 Buenos Aires Argentina Re: ARGENTINA - Loan No. 2997-AR (First Housing Sector Project) Amendment to the Loan Agreement Dear Sir: Please refer to the Loan Agreement (the "Loan Agreement"), dated November 29, 1988 between the Argentine Republic and International Bank for Reconstruction and Development (the Bank), as amended. We are pleased to advise you that the Bank agrees to your requests to redefine the indexing system for the maximum income of a Beneficiary and for the maximum amount of an Improvement Loan, to include a definition of "INDEC", to amend the Bank's financing share in respect of civil works during the first and latter half of disbursements in respect of such expenditures and to have the Loan Agreement reflect the reclassification of Secretaria de Vivienda y Ordenamiento Ambiental as Subsecretaria de Vivienda y Ordenamiento. The Bank, therefore, proposes the following amendments to the Loan Agreement: 1. References to SVOA All references to "SVOA" throughout the Loan Agreement shall be deemed to be references to Subsecretaria de Vivienda y Ordenamiento Ambiental, the Subsecretaria of Housing and Environmental Management of the Borrower, instead of Secretaria de Vivienda y Ordenamiento Ambiental, the Secretariat of Housing and Environmental Management of the Borrower. 2. Section 1.02 (a) Paragraph (d) is hereby deleted and the following new paragraph (d) substituted therefor: "(d) "Beneficiary" means any person who is the borrower in respect of a Housing Loan or an Improvement Loan (as such terms are hereinafter defined) whose monthly income, when added to all other income of his or her household, shall not exceed $280 equivalent, calculated applying the exchange rate of $1 - 650 Australes representing the rate applicable on October 31, 1989. Such maximum amount is subject to adjustment from time to time in accordance with INDEC (as hereinafter defined)." (b) Paragraph (k) is hereby deleted and the following new paragraph (k) substituted therefor: "(k) "Improvement Loan" means a loan, made or proposed to be made by the Borrower through SVOA utilizing a Financial Agent (as hereinafter defined) to a Beneficiary for purposes of financing the improvement of a Housing Unit, in an amount not in excess of the equivalent of $1,800, calculated applying the exchange rate of $1 - 650 Australes representing the rate applicable on October 31, 1989. Such maximum amount is subject to adjustment from time to time in accordance with INDEC (as hereinafter defined)." (c) The word "and" following the semicolon after paragraph (s) is hereby deleted, a semicolon is hereby substituted for the period at the end of paragraph (t), and the word "and" is hereby added following such semicolon. (d) The following new paragraph (u) is hereby added: (u) "INDEC" means Indice del Costo de la Construccion, published by Instituto Nacional de Estadistica y Censos of the Borrower." 3. Section 5.02 Page 2 Section 5.02 is hereby amended by deleting two references to "10 percent" therein and substituting "20 percent" therefor. 4. Schedule I Category (1) in the table of paragraph 1 of Schedule 1 is hereby deleted and the following substituted therefor: Amount of the % of Loan Allocated (Expressed Expenditures Category in Dollar Equivalent) to be Financed (1) Civil Works under 250,000,000 70%, until the Part A of the Project aggregate amount of withdrawals from the Loan Account in respect of this Category 1 shall have reached the equivalent of $125,000,000, and 30% thereafter. The above amendments shall become effective on the date the Bank receives a duplicate copy of this letter, duly countersigned by the Argentine Republic, and the percentages of the expenditures to be financed, specified paragraph 5 above, shall apply in respect of payments made for expenditures after such date. Please confirm your agreement to the foregoing by signing and dating the attached confirmation copy of this letter and returning the same to the undersigned. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Pieter Bottelier Director Country Department IV Latin America and the Caribbean Region CONFIRMED: THE ARGENTINE REPUBLIC By /s/ Antonio Erman Gonzalez Authorized Representative Date: