Page 1 June 3, 2002 Mr. P. J. Ngumbullu Permanent Secretary Ministry of Finance P. O. Box 9111 Dar Es Salaam, Tanzania Sir: TANZANIA: Programmatic Structural Adjustment Credit (Cr. 3379-2-TA) Second Agreement Amending Development Credit Agreement (Amendment to SDR amount) We refer to the Second Agreement Amending Development Credit Agreement (the “Agreement”) for the above-referenced Project, dated February 15, 2002, between the United Republic of Tanzania (the “Borrower”) and the International Development Association (the “Association”). It has come to our attention that, by mistake, the Dollar amount was used instead of the SDR amount. We would therefore propose to amend the Agreement as follows (all changes are indicated in bold): 1. Paragraph (C) of the Preamble to the Agreement is amended to read as follows: “(C) the Borrower has requested the Association to provide additional assistance in support of the Program, by increasing the amount made available under the Development Credit Agreement by an amount in various currencies equivalent to four hundred fifty thousand Special Drawing Rights (SDR 450,000 ); and”. 2. Section 1.02 to the Agreement is amended to read as follows: “Section 1.02. Section 2.01 of the Development Credit Agreement is amended to read as follows: “Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to one hundred forty-two million nine hundred eighty thousand Special Drawing Rights (SDR 142,850,000 ) (the Credit), which includes: (a) an original amount in various currencies equivalent to one hundred forty-one million eight hundred thousand Special Drawing Rights (SDR 141,800,000) (the Initial Financing); (b) an additional amount in various currencies equivalent to six hundred thousand Special Drawing Rights (SDR 600,000) (the First Additional Financing); and (c) an additional amount in various currencies equivalent to four hundred fifty thousand Special Drawing Rights (SDR 450,000 ) (the Second Additional Financing).” Page 2 3. The table in paragraph 1 of Schedule 1 to the Agreement is amended to read as set forth in Annex 1 to this letter. All other provisions of the Agreement, except as amended herein shall remain in full force and effect. Please indicate your agreement with the foregoing, on behalf of the Borrower, by countersigning and dating the form of confirmation on the two original copies of this letter provided and returning one original, as countersigned, to us. Upon receipt by the Association of the copy of this letter countersigned by you, this amendment shall become effective as of the date of countersignature of this letter by you. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION By: ____________________________ Judy M. O'Connor Country Director for Tanzania Africa Region CONFIRMED: UNITED REPUBLIC OF TANZANIA By: ______________________ Authorized Representative Date:______________________ Annex “SCHEDULE 1 Withdrawal of the Proceeds of the Credit and Excluded Expenditures 1. Subject to the provisions set forth or referred to in this Schedule, the table below sets forth the amounts in SDR allocated to the specific Tranches to be withdrawn from the Credit Account. Amount of the Credit Allocated % of Page 3 Category (Expressed in SDR Equivalent ) Expenditures to be Financed (1) Effectiveness Tranche 22,400,000 100% (2) Short Term Tranche 29,850,000 100% (3) Economic Governance Tranche 29,850,000 100% (4) Business Environment Tranche 29,850,000 100% (5) Privatization and Regulation Tranche 29,850,000 100% (6) FY01 IDA Reflows Tranche (7) FY02 IDA Reflows Tranche 600,000 450,000 100% 100% TOTAL 142,850,000 =========