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CONFORMED COPY
December 7, 2001
H.E. Ahmed M. Sofan
Minister of Planning and Development
Ministry of Planning and Development
Sana’a, Republic of Yemen
Re:
Credit No. 3132-YEM
Sana’a Emergency Power Project
Amendment to the Development Credit Agreement
Excellency:
We refer to the Development Credit Agreement (Sana’a Emergency Power Project) between the 
Republic of Yemen (the Borrower) and the International Development Association (the Association), 
dated October 5, 1998 (the Credit Agreement).  We also refer to the proposed amendments discussed in 
the Aide-Memoire dated May 31-June 27, 2001, following the mid term review and as confirmed by our 
letter thereto dated August 9, 2001.
We are pleased to inform you that the Association, after due consideration, has acceded to the 
proposed amendments.  Accordingly, the Credit Agreement is amended as follows:
1.
Section 4.02 (a) of the Credit Agreement is amended to read as follows:
“Section 4.02 Except as the Association shall otherwise agree, the Borrower shall: (a) by 
December 31, 2002, replace the current desalination plant at Hiswa with a smaller desalination 
plant with capacity sufficient only for the supply of water to the Hiswa Power Plant; and”
2.
The table in paragraph 1 of Schedule 1 to the Credit Agreement is amended to read as follows:
“SCHEDULE 1
Withdrawal of the Proceeds of the Credit
1.
The table below sets forth the Categories of items to be financed out of the proceeds of the 
Credit, the allocation of the amounts of the Credit to each Category and the percentage of H.E. Yahya 
Al-Abyad 
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December 7, 2001
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expenditures for items so to be financed in each Category:
  Amount of the
Credit Allocated
%
   (Expressed in
    Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Works under:
(a) Part A of the Project
 15,390,000
100% of foreign
expenditures
(b) Part C of the Project
 7,720,000
90%
(2)
Consultants’ services
and training under:
(a) Parts A through D
   2,820,000
100%
     of the Project
(b) Part E of the Project
   2,580,000
100%
(3)
Goods
  9,720,000
100% of foreign
expenditures, 100%
of local expenditures
(ex-factory cost), and
90% of local
expenditures for other
items procured locally
(4)
Operating Costs
     800,000
90%
for PSPIU
(5)
Refunding of
 1,200,000
Amounts due
Project Preparation
pursuant to
Advance
Section 2.02 (c)
of this Agreement
(6)
Unallocated
    370,000
TOTAL
40,600,000
”
3.
Part C of Schedule 2 to the Credit Agreement is amended to read as follows:
“
Part C: Sana’a Transmission and Sub-transmission Systems
Debottlenecking and reinforcing the Sana’a transmission and sub-transmission systems 
through expansion of the Asser substation, by connecting into the station the 132kV/33kV double 
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circuit Dhamar-Amran line, establishing a 132kV double bus reliability, adding a 60 @ MVA 
transformer, expanding the 33kV switchgear with 3 bus sections, and adding more 33kV 
outgoing feeder lines, and additional transformer capacity at several substations to provide 
adequate 33kV interconnection capacity between Dhahban and the Asser substation, to 
accommodate the Dhahban peaking capacity and provide for reliable supply of the Sana’a load 
and provision of goods required for the reduction of PEC’s grid systems losses.”
4.
Part E of Schedule 2 to the Credit Agreement is amended to read as follows:
“Part E: Long Term Sector Planning
1. Preparation of a master plan for long term investment to expand electric power 
generation and transmission and to utilize domestic natural gas for generation.
2. Carrying out of an institutional and organizational study to design a power sector 
reform program, and establishment of a Power Sector Program Implementation Unit to 
implement such program.
3. Carrying out advisory services for the Marib Private Power Project.”
5.
Paragraph 2 of Schedule 4 to the Credit Agreement is amended to read as follows:
“2.
The Borrower shall:
(a) prepare, under terms of reference satisfactory to the Association and furnish to the 
Association, on or about September 30, 2002, a plan for a new tariff structure, tariff schedule, 
and tariff setting mechanism;
(b) review with the Association, by December 31, 2002, the plan referred to in 
sub-paragraph (a) above, and taking the Association’s comments thereon into account, the 
Borrower shall carry out said plan for the new tariff program;
(c) prepare under terms of reference satisfactory to the Association, and furnish to the 
Association, on or about July 31, 2001, the design of an institutional and the organizational 
reform program for the power sector, based on the Program, and setting out the measures 
recommended to ensure the achievement of the objectives thereof during the period following 
such date; and
(d) review with the Association, by June 30, 2002, the design and recommended 
measures referred to in sub-paragraph (c) above, and thereafter, take all measures to ensure the 
achievement of the objectives of the Program, based on the conclusions and recommendations of 
the said reform program and the Association’s views on the matter.”
6.
All the terms and conditions of the Development Credit Agreement, as amended hereby, shall 
remain in full force and effect.
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Please confirm your agreement with the foregoing by signing, dating and returning to us the form 
of confirmation in the enclosed copy of this letter.
Sincerely yours,
International Development Association
/s/ Mahmood A. Ayub
Mahmood A. Ayub
Country Director
Egypt, Yemen and Djibouti
Country Department
Middle East and North Africa Region
CONFIRMED:
REPUBLIC OF YEMEN
By: /s/ H.E. Ahmed M. Sofan
Authorized Representative
Date: January 6, 2002