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               REPUBLIC OF PANAMA
                           January 13, 1994
International Bank for
  Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
    Re: Loan No. 2686 PAN
        (Roads Rehabilitation Project)
        Supplemental Letter No. 2
Gentlemen:
    I refer to Section 3.08 of the Loan Agreement
(the Agreement) of even date herewith between the
International Bank for Reconstruction and Development
(the Bank) and the Republic of Panama (the Borrower).
    The terms of reference for the preparation of the
Indigenous Peoples Development Plan for the Quebrada
Aguacate-Canitas-Bayano road are
herein attached.
                         Yours Respectfully,
                         REPUBLIC OF PANAMA
  By:
       Authorized Representative
Accepted:
INTERNATIONAL BANK OF RECONSTRUCTION
AND DEVELOPMENT
By: _________________________
     Authorized Representative
Date: _______________________