Conformed Copy - L4231 - Second Municipal Finance Project - Supplemental Letter 2

Page 1 COMMUNAL INFRASTRUCTURE FUND October 7, 1997 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, DC 20433 U. S. A. Re: Loan No. 4231-MOR (Second Municipal Finance Project) Performance Indicators Section 3.04 of the Loan Agreement Dear Sirs and Mesdames: We refer to the Performance Indicators to be utilized by the Communal Infrastructure Fund (the Borrower), pursuant to the provisions of Section 3.04 of the Loan Agreement of even date herewith between the International Bank for Reconstruction and Development (the Bank) and the Borrower to measure the degree to which the Project objectives are being achieved. We hereby confirm that said indicators shall consist of the parameters set forth in the Attachment to this Letter. Very truly yours, COMMUNAL INFRASTRUCTURE FUND By /s/ El Mostafa Sahel Authorized Representative AGREED AND CONFIRMED: INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Kemal Dervis Regional Vice President Middle East and North Africa Attachment PROJECT OUTPUTS Mid-term (December 1998) and end of project 90 % of the number of investment sub-projects and 75% of total investment financed by Bank loan to benefit directly rural and urban communes with a population below 150,000 Basic municipal services (water supply and sewerage, solid water, wholesale markets and urban roads) to account for about 70% of aggregate amount of sub-loans Transformation of FEC into a Joint Stock Company PROJECT COMPONENTS Disbursements according to estimated schedule Estimated Disbursements (in US Dollars)1999 annual 25,020,070,00 Implementation of the institutional development program Page 2