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September 29, 1989
The Honorable L. J. Chimango
Minister of Finance
Ministry of Finance
P.O. Box 30049
Capital City
Lilongwe, Malawi
     Re:  MALAWI: Dutch Grant Related to Credit Number 1920-MAI
          (Industrial and Trade Policy Adjustment Credit)
Dear Sir:
1.   We refer to the Dutch Grant Agreement between the Republic of
Malawi (the Recipient) and the International Development Association
as Administrator on behalf of the Minister for Development
Cooperation of the Netherlands (the Administrator), dated July 14,
1989 whereby the Administrator agreed to extend to the Recipient a
grant in an amount of seven million eight hundred thousand Dutch
guilders (f.7,800,000) to assist the Recipient in carrying out the
Program referred to in the First Recital of the Preamble to the
Dutch Grant Agreement.  We also refer to the Administrator's letter
dated May 17, 1989, from the Netherlands Authorities providing for
a second contribution of five million Dutch guilders (f.5,000,000)
for the above-mentioned Program.
3.   We propose the following amendment to the Dutch Grant
Agreement to give effect to this additional contribution:
     The amount in, the Third Recital of the Preamble to, and in
     Section 2.01 of, the Dutch Grant Agreement shall now read
     twelve million eight hundred thousand guilders (f.12,800,000).
4.   All conditions of the Dutch Grant Agreement as amended hereby
shall remain in full force and effect.
5.   Kindly confirm your agreement to the above amendment by
countersigning and dating the enclosed copy of this letter and
returning it to us.
Yours sincerely,
INTERNATIONAL DEVELOPMENT ASSOCIATION
Sven Sandstrom, Director
Southern Africa Department
CONFIRMED:
REPUBLIC OF MALAWI
BY:
     Authorized Representative
DATE:  October 10, 1989