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September 6, 1996
H.E. Abdulkader Ba-Jamal
Deputy Prime Minister and
Minister of Planning and Development
Ministry of Planning and Development
P.O. Box 175
Sana'a
Republic of Yemen
              Re: Credit No. 2913-YEM
                  (Taiz Water Supply Pilot Project)
                  Section 3.01(a) of the Credit Agreement
Excellency:
     With reference to the above-captioned provision of the Credit
Agreement between us of even date herewith, we hereby confirm the
implementation arrangements, schedule, and evaluation indicators set
forth in the attachment to this letter.
     In order to achieve the objectives of the Project, the implemen-
tation schedule and evaluation indicators may be revised from time to
time upon agreement between the Borrower and the Association.
     Please confirm your agreement with the foregoing by signing the
form of confirmation below.
                  Very truly yours,
                  INTERNATIONAL DEVELOPMENT
                   ASSOCIATION
                  By /s/ Inder Sud
                      Acting Regional Vice President
                      Middle East and North Africa
CONFIRMED:
REPUBLIC OF YEMEN
By /s/ Moshin A. Alaini
      Authorized Representative
Attachment