Page 1 CONFORMED COPY July 9 , 2002 His Excellency Minister of Finance Ministry of Finance 1 Smilsu Street Riga, LV 1932 Republic of Latvia Re: TF020124 (Latvia Municipal Solid Waste Management Project) Third Amendment His Excellency: We refer to the Grant Agreement (Municipal Solid Waste Management Project) dated April 30, 1998 between the Republic of Latvia (the Recipient) and the International Bank for Reconstruction and Development (the Bank) as amended on October 21, 1998 and June 8, 2000. We also refer to the letters of Mr. Karlis Greiskalns, Executor of Minister of Finances duties, Minister of Education and Science dated May 23, 2002 requesting that the disbursement percentages for Goods and Works be modified to reflect local expenditures. We are pleased to inform you that after due consideration, the Bank has acceded to your request to change the disbursement percentages as recommended. Therefore, the Grant Agreement is hereby amended and the table set forth in paragraph 1 of Schedule 1 (Withdrawal of the Proceeds of the Loan) is amended as a set forth in the Attachment hereto . All the terms and conditions of the Grant Agreement, as amended hereby, shall remain in full force and effect. Please confirm your agreement to the foregoing amendment by signing, dating and returning to us the attached copy of this letter. This amendment will be retroactive as of April 30, 1998 upon receipt by the Bank of the copy of this Amendment Letter countersigned by you. Very truly yours, /s/ Christopher L. Hall Acting Country Director for Estonia, Latvia, Lithuania and Poland Europe and Central Asia Region AGREED AND CONFIRMED: REPUBLIC OF LATVIA Page 2 By: /s/ Gundars Berzins, Minister of Finance Date: July 18, 2002 Cleared with and cc: Ms Nightingale Rukuba-Ngaiza (LEGEC); Mr. David Freese (LOAG1) LIC Attachment Schedule 1: Withdrawal of the Proceeds of the Loan Category Amount of the Grant Allocated (Expressed in SDR Equivalent) % of Expenditures to be Financed (1) Works 1,050,000 100% of foreign expenditures and 100% of local expenditures (2) Goods 1,900,000 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 100% of local expenditures for other items procured locally (3) Consultants’ services and training 850,000 100% TOTAL 3,800,000