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KINGDOM OF MOROCCO
October 5, 1998
International Bank for
  Reconstruction and Development
1818 H Street, NW
Washington, DC. 20433
United States of America
     Re:
Loan No. 4254-MOR
(Rural Water Supply and Sanitation)
Project Implementation-Budgetary Allocations
Dear Sirs and Mesdames:
We refer to Schedule 5 of the Loan Agreement of even date herewith between the
Kingdom of Morocco (The Borrower) and the International Bank for Reconstruction and
Development (The Bank), for the above captioned project.
In order to allow, before the end of the year, the organization of a meeting of
interested foreign financial institutions, we undertake to provide the Bank with a
preliminary proposal of a global financing plan for the PAGER program, which shall
have the following components:
(i)
Contributions in the form of grants and loans under favorable terms, from
foreign financial institutions, for the gathering of which we shall request Bank
support;
(ii)
Local contributions from the State budget resources and concerned local
entities’ budgetary resources;
(iii)
Setting up of a surtax on potable water tariffs, following the same
scheme as for the program of rural electrification; and
(iv)
Contributions of the local populations concerned, commensurate with their
financial capacity.
One month after the holding of the above mentioned meeting, the Government shall
present the final financing plan, with all its components.
The program’s objective is to increase the number of beneficiaries of potable
water supply in rural areas from 30% approximately today to 80% within the next ten
years.
Very truly yours,
KINGDOM OF MOROCCO
By /s/ Fathallah Oualalou
      Authorized Representative
CONFIRMED AND AGREED
INTERNATIONAL BANK FOR
  RECONSTRUCTION AND DEVELOPMENT
By /s/ Kemal Dervis
Regional Vice President
Middle East and North Africa
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