Conformed Copy - L4196 - Financial Markets Development Project - Supplemental Letter 1

Page 1 July 29, 1997 Ministry of Finance and Public Credit Santa Fé de Bogotá Republic of Colombia Re: Loan No. 4196- CO (Financial Markets Development Project) Section 2.02 (b) (i), (ii), (iii) and (iv) of the Loan Agreement 1. This is in connection with the Loan Agreement between the Republic of Colombia and the International Bank for Reconstruction and Development (the Bank) for the above Project of even date herewith (the Loan Agreement). More specifically, the connection is with subparagraphs (i), (ii), (iii) and (iv) of Section 2.02 (b) of the Loan Agreement, with Categories (1) through (4) of the Table in paragraph 1 of Schedule 1 to the Loan Agreement (the Table) and with the breakdown of Loan proceeds allocated to said Categories for purposes of financing Parts B.3, D, E.2 and E.3 of the Project described in Schedule 2 to the Loan Agreement. Within that context, this letter will record certain understandings that we have reached with respect to the amounts allocated to certain Categories for the financing of different items under said Categories and the availability of the Loan proceeds allocated thereto. 2. With respect to subparagraphs (i) and (ii) of said Section 2.02 (b) and Part B.3 of the Project, the aggregate proceeds of the Loan which have been allocated to Category 4 of the Table amount to $1,395,000. Out of the said aggregate amount of $1,395,000, the Loan proceeds for Part B.3 of the Project are divided as follows: (A) $140,000 for training; (B) $360,000 for goods; and (C) $895,000 for consultant services. 3. With respect to subparagraph (iv) of said Section 2.02 (b) and Parts E.2 and E.3 of the Project, the aggregate proceeds of the Loan which have been allocated to Category 4 of the Table amount to $1,365,000. Out of the said aggregate amount of $1,365,000, the Loan proceeds are divided as follows: (A) $165,000 for training; (B) $890,000 for goods; and (C) $310,000 for consultant services. 4. With respect to subparagraph (iii) of said Section 2.02 (b), the respective amounts of Loan proceeds for purposes of financing the carrying out of Part D of the Project currently allocated to Categories (1) and (3) of the Table are: $40,000 and $3,240,000 for Training and for consultant services, respectively. 5. Thus, barring changes which could in the future be made in connection with said Categories and amounts, such as reallocations of Loan proceeds, the aforesaid aggregates are all the proceeds of the Loan allocated for purposes of said Parts of the Project in respect of which withdrawal applications could be submitted, once the conditions respectively stipulated in said subparagraphs (i) and (iv) shall have been met. However, in the case of said subparagraphs (ii) or (iii), the withdrawal applications may be submitted to the extent that the event(s) triggering the conditions under said subparagraphs shall not have occurred. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ____________________________________ Regional Vice President Latin America and the Caribbean Page 2 AGREED: REPUBLIC OF COLOMBIA By __________________________ Authorized Representative Date ________________________