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December 15, 1995
Mr. B.K. Kipkulei
Permanent Secretary/Treasury
Ministry of Finance
P.O. Box 30007
Nairobi, Kenya
Dear Mr. Kipkulei,
       Kenya Forestry Development Project (Cr. 2198-KE) - Amendment to
                       Development Credit Agreement
     We refer to the above-mentioned Development Credit Agreement (the
Agreement), dated February 21, 1991, between the Republic of Kenya (the
Borrower) and International Development Association (the Association),
and to the letter from Mr. Shakaba, dated October 26, 1995, requesting
an amendment to the Credit Agreement to include local expenditures
under Categories 1 and 2 of the Project.
     This letter is to inform you of our agreement and to propose the
following amendment to the Agreement:
     Schedule 1 to the Agreement should be amended to read as follows
for Categories 1 and 2:
"
Category              Amount of the             % of
                     Credit Allocated         Expenditures
                       (Expressed in         to be Financed
(1)  Vehicles            2,230,000           100% of foreign
                                             expenditures and 90%
                                             of local expenditures
(2) Furniture and        1,600,000           100% of foreign
    equipment                                expenditures and 90%
                                             of local expenditures
     This amendment shall have effect in respect of all disbursement
applications submitted as of the date of this letter. All provisions
of the Agreement, except as amended herein, shall remain in full
force and effect.  Please confirm your agreement to the amendments by
countersigning, dating and returning the enclosed copy of this letter.
                               Yours sincerely,
                                 James Adams
                                   Director
                           Eastern Africa Department
CONFIRMED:
REPUBLIC OF KENYA
By:  /s/ B.K. Kipkulei
         Authorized Representative
Date: January 15, 1996