On ratification of the Loan Agreement (Project for improvement of irrigation and Drainage systems) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development dated June 25, 1996

Home / RLA / On ratification of the Loan Agreement (Project for improvement of irrigation and Drainage systems) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development dated June 25, 1996

On ratification of the Loan Agreement (Project for improvement of irrigation and Drainage systems) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development dated June 25, 1996

The Law of the Republic of Kazakhstan dated September 27, 1996 N 36-1

To ratify the Loan Agreement (Irrigation and Drainage System Improvement Project) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development dated June 25, 1996, signed in the District of Columbia, United States of America.

President

Republic of Kazakhstan

Loan number 4041 KZ Loan Agreement

(Irrigation and Drainage System Improvement Project) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development Dated June 25, 1996, Loan number 4041 KZ Loan Agreement Agreement dated June 25, 1996 between the Republic of Kazakhstan (the Borrower) and the International Bank for Reconstruction and Development (the Bank). Whereas (A) The Borrower, having verified the feasibility and priority of the Project described in Appendix 1 to this Agreement, requested the Bank to assist in financing this Project. Since the Bank has agreed, based, in particular, on the above, to extend the Loan to the Borrower on the terms stipulated in this Agreement, as well as in the Project Agreement between the Bank and the NBK dated the same date: The Parties hereby agree on the following:

Article I. General terms and conditions. Definitions.  

Section 1.01. "General Terms and Conditions applicable to Loan and Guarantee Agreements" of the Bank dated January 1, 1985 (General Terms and Conditions), as amended below, are an integral part of this Agreement: (a) The last sentence of Section 3.02 is deleted. (b) The second sentence of section 5.01 has been amended to read as follows: "Except in cases where there is another agreement between the Bank and the Borrower, no withdrawals are made: (a) in respect of expenses in the territories of any country that is not a member of the Bank, or payment for goods and services produced from such territories: or (b) for the purpose of making payments to individuals or organizations, or to pay for imports of goods, if such payments or imports, which are known to the Bank, are prohibited by a decision of the United Nations Security Council, adopted in accordance with Chapter VII of the Charter of the United Nations." (b) In section 6.02, subparagraph (k) was renamed to subparagraph (1) and a new subparagraph (k) was added as follows: "(k) An emergency situation has arisen in which any further withdrawal of Loan funds does not comply with the provisions of Article III, section 3 of the Articles of Agreement of the Bank." Section 1.02. Unless the context otherwise requires, some of the terms defined in the General Terms and Conditions have the meanings that correspond to those set out in these definitions, and additional terms have the following meanings: (a) "Komvodresursy" means the Committee on Water Resources, the administrative organization for Borrowers, as well as all its legal successors; (b) "OE" means the Department of Ecology to be established by the Borrower at the Ministry of Agriculture, referred to in paragraph 3 of Part A of Annex 5 to this Agreement; (c) "MCC" means the interdepartmental coordinating committee specified in paragraph 1 of Part A of Annex 5 to this Agreement; (d) "Ministry of Agriculture" means the Ministry of Agriculture of the Borrower; (e) "MIEB" means the Ministry of Ecology and Bioresources; (f) "OCC" means the regional coordinating committees specified in paragraph 5 of Part A of Annex 5 to this Agreement; (g) "participating farm" or "participating farms" means the farm or farms selected to participate in the Project in accordance with paragraphs 1 (a) of Annex 5 to this Agreement; (h) "EGUIS" means the experimental irrigation system management group specified in paragraph 7 of Part A of Annex 5 to this Agreement; (i) "PIU" means the project implementation group established by the Borrower at the Ministry of Agriculture in accordance with Order No. 182 dated November 24, 1995. (j) "Advance for Project Preparation" means advance funds the Project preparation documents provided by the Bank to the Borrower based on the exchange of letters dated April 14, 1995 and July 27, 1995 between the Borrower and the Bank. (k) "Resolution" means a resolution or resolutions, any annexes and supplements adopted by the Borrower pursuant to paragraph 1. of Part B of Annex 5 to this Agreement, which may be supplemented by the Borrower from time to time with the consent of the Bank. (l) "Special Account" means the account described in section 2.02 (b) of this Agreement. (m) "Subproject" means a subproject selected for inclusion in Part A of the Project in accordance with paragraph B. 1 (a) of Annex 5 to this Agreement; (n) "WUAs" means the Water User Associations described in paragraph 6, Part A of Annex 5 to this Agreement.  

Article II Loan  

Section 2.01. The Bank agrees, on the terms set forth or specified in the Loan Agreement, to provide the Borrower with a loan in various currencies, which will have a total value equivalent to eighty million US dollars (80,000,000 US dollars), representing the amount of funds withdrawn under the Loan, and each withdrawal is assessed by the Bank on the date of such withdrawal. withdrawals. Section 2.02. (a) The Loan funds may be withdrawn from the Loan account in accordance with the provisions of Annex 1 to this Agreement to cover the costs incurred (or, if the Bank agrees, which must be incurred) for the purchase at similar prices of goods and services necessary for the implementation of the Project described in Annex 2 to this Agreement and to be financed from the Loan funds. (b) For the purposes of the Project, the Borrower opens and maintains a special dollar deposit account with a commercial bank on terms acceptable to the Bank, including adequate protection of funds from counter-claims, confiscation or seizure. Deposits to a Special Account and payments from this account are made in accordance with the provisions of Annex 6 to this Agreement. (c) Immediately after the effective date of the Loan Agreement, the Bank, on behalf of the Borrower, withdraws from the Loan account and pays itself the amount necessary to reimburse the principal amount of the Project Preparation Advance withdrawn from the account and not repaid on that date, as well as to pay all unpaid charges in this regard. After that, the outstanding balance of the amount of Advance Payments subject to such withdrawal is canceled. Section 2.03. The closing date of the Loan Account is December 31, 2003 or such later date as the Bank determines, the Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower periodically pays the Bank commitment fees for the principal amount of the Loan that has not been withdrawn from the account at a rate of three quarters of one percent (3/4 of 1%) per year. Section 2.05. (a) The Borrower shall periodically pay interest on the withdrawn and outstanding principal amount of the Loan at a rate for each interest accrual period equal to the cost of qualified borrowings determined in respect of the previous six months, plus half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement. The borrower pays the interest accrued on the principal, withdrawn outstanding Loan amount during the previous interest accrual period, calculated at the rate in effect during this interest accrual period. (b) At the end of each half-year, the Bank notifies the Borrower as soon as possible of the cost of qualified borrowings determined in respect of such half-year. (c) For the purposes of this section: (i) "Interest Accrual Period" means a period of six months ending on the day immediately preceding each date specified in section 2.06 of this Agreement, beginning with the interest accrual period during which this Agreement is signed. (ii) "Cost of qualified borrowings" means the cost reasonably determined by the Bank and expressed as an annual percentage of the value of the Bank's outstanding borrowings granted to it after June 30, 1982, excluding those borrowings or parts thereof that the Bank has allocated to finance: (A) the Bank's investments; (C) loans that may be provided by the Bank after July 1, 1989, at interest rates determined differently from those specified in paragraph (a) of this section. (iii) "Half-year" means the first six months or the second six months of a calendar year. (d) On such date as the Bank may specify in a notification sent to the Borrower at least six months in advance, paragraphs (a), (b) and (c) (iii) of this section shall be amended to read as follows: "(a) The Borrower periodically pays interest on the principal amount of the withdrawn funds. and outstanding Loan funds at a quarterly rate equal to the cost of qualified borrowings determined in relation to the previous quarter, plus half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay the interest accrued on the principal outstanding amount of the Loan during the previous interest accrual period, calculated at the rate applicable to such interest accrual period."(b) At the end of each quarter, the Bank shall notify the Borrower as soon as possible of the cost of qualified borrowings determined in respect of such quarter."(c) (iii) "Quarter" means a three-month period beginning on January 1, April 1, July 1 or October 1 of a calendar year." Section 2.06. Interest and other fees are paid once every six months - on June 1 and December 1 of each year. Section 2.07. The Borrower repays the principal amount of the Loan in accordance with the repayment schedule set out in Appendix 3 to this Agreement.  

Article III Project Execution

Section 3.01. (a) The Borrower declares its commitment to the objectives of the Projects set out in Annex 2 to this Agreement, and to this end will implement Parts A and B of the Project through the Ministry of Agriculture, and Part C of the Project through the Ministry of Agriculture, the IEBR and other organizations of the Borrower with due integrity and efficiency, and in accordance with appropriate financial, economic and administrative procedures, and will, if necessary, provide timely facilities, services and other resources necessary for the implementation of the Project. (b) Without reservations or limitations with respect to the obligations provided for in paragraph (a) of this section, and unless otherwise agreed by the Bank and the Borrower. The Borrower will carry out the Project in accordance with the Implementation Program described in Annex 5 to this Agreement; Section 3.02. Unless otherwise agreed with the Bank, the purchase of goods, works and services of consultants necessary for the implementation of the Project and subject to financing from the Loan funds is carried out in accordance with the provisions of Annex 4 to this Agreement; Section 3.03. For the purposes of Section 9.07 of the General Terms and Conditions and without limitation of its provisions, the Borrower: (a) based on guidance acceptable to the Bank, will prepare and submit to the Bank, no later than six months after the Closing Date or, for this purpose, such later date as agreed between the Bank and the Borrower, a plan for future Project activities. (b) provide the Bank with an opportunity to exchange views on the above plan with the Borrower; Section 3.04 The Borrower: (a) implements policies and implements appropriate procedures that enable it to monitor and evaluate, on an ongoing basis and in accordance with acceptable performance indicators for the Bank, the implementation of the Project and the fulfillment of relevant project objectives; (b) prepare, in accordance with the terms of reference acceptable to the Bank, and submit to the Bank on or about September 30, 1999, a report including the results of the monitoring and evaluation activities carried out in accordance with paragraph (a) of this section on the results achieved during the period preceding the date of the specified reports, setting out recommended measures to ensure the effective implementation of the Project and the fulfillment of relevant tasks during the period after the specified date; (c) to review, in conjunction with the Bank, the report referred to in paragraph (b) of this section by October 31, 1999, or such later date as the Bank may request, and subsequently take all necessary measures to ensure the effective completion of the Project and related tasks, based on the conclusions and recommendations of the said report; and the Bank's views on this issue; Section 3.05. The Borrower: (a) implements policies and appropriate procedures enabling it to monitor and evaluate on an ongoing basis, in accordance with indicators acceptable to the Bank, the Bank's national investment program in the irrigation sector; (b) prepares, in accordance with the terms of reference acceptable to the Bank, and submits to the Bank on or about September 30, 1997, 30 September 1998, September 30, 1999, September 30, 2000, September 30, 2001 and September 30, 2002 An annual report including the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this section during the period preceding the date of the said report, and outlining the appropriate necessary measures to ensure that the Borrower's investments in the irrigation sector are appropriate and meet the objectives of the Project, and specifically the Borrower's obligations under section 3.01 (a) of this Agreements to provide the necessary funds and other resources for the execution of the project, as well as: (c) jointly review with the Bank the reports referred to in paragraph (b) of this section by October 31, 1997, October 31, 1998, October 31, 1999, October 31, 2000, October 31, 2001, October 31, 2002, or such later date as the Bank may request; and will subsequently continue to implement the national investment program in the irrigation sector, taking into account the Bank's views on this issue and the Borrower's obligations under section 3.01 (a) of this Agreement to provide the necessary funds and other resources for the Project.  

Article IV Financial conditions

Section 4.01. (a) The Borrower maintains or ensures the maintenance of adequate accounting documents and accounts reflecting, in accordance with good accounting practices, the results of activities, availability of resources and costs related to the implementation of the Project, those institutions and departments to Borrowers who are responsible for the implementation of the Project or any part of it. (b) The Borrower: (i) conducts audits of the accounting documents and accounts referred to in paragraph (a) of this section, including accounting documents and Special Account accounts for each financial year, in accordance with appropriate auditing principles duly applied by independent auditors who meet the Bank's conditions; (ii) provides the Bank, as soon as it is ready, but no later than six months after the end of the financial year, with a report on such audit conducted by the said auditors of such volume and with such degree of detail as the Bank may reasonably request; and (iii) provides the Bank with other information in connection with the said accounting documents, accounts and audit reports. checks that the Bank may reasonably request from time to time. (c) For all expenses for which funds were withdrawn from the Loan account based on the expense statements, the Borrower is required to: (i) maintain or ensure, in accordance with paragraph (a) of this section, the maintenance of accounting documents and accounts reflecting such expenses; (ii) keep, for at least one year after the Bank receives the audit report for the financial year during which the last withdrawal of funds was made from the loan account or payments were made from the Special Account, all accounting documents (contracts, orders, invoices, receipts, invoices, etc.) confirming (iii) provide an opportunity for representatives of the Bank to verify such documentation.; (iv) ensure that such accounting documents and accounts are included in the annual audit referred to in paragraph (b) of this section and that the audit report contains a separate opinion from those auditors on whether the expense statements presented during that financial year could serve as a basis for those withdrawals, taking into account the internal control procedures and methods applied during their preparation.

Article V Bank protection tools

Section 5.01. In accordance with section 6.02 (1) of the General Terms and Conditions, the following additional event is stipulated, namely, the amendment of the Decree, its cancellation or refusal to execute it. Section 5.02. In accordance with section 7.01 (h) of the General Terms and Conditions, the following additional event is stipulated, and the event provided for in section 5.01 of this Agreement will occur.

Article VI Effective date. Termination of the action.

Section 6.01. The following event establishes as an additional condition for the entry into force of this Loan Agreement in accordance with Section 12.01 (c) of the General Terms and Conditions. Section 6.02. The following is established as an additional issue in accordance with section 12.02 (c) of the General Terms and Conditions, which must be included in the Opinion or Opinions submitted to the Bank, namely, that the Decree has been duly adopted and put into effect. Section 6.03. A period of ninety (90) days from the date of signing this Agreement is hereby established for the purposes of Section 12.04 of the General Terms and Conditions.

Article VII Representatives of the Borrower; addresses

Section 7.01. Minister of Finance or Deputy Minister of Finance

The Borrower is defined as the Borrower's representative for the purposes of

Section 11.03 of the General Terms and Conditions.

Section 7.02. For the purposes of Section 11.01 of the General Terms and Conditions, the following are defined

the following addresses:

For the Borrower:

Ministry of Finance

480091 Republic of Kazakhstan

97 Ablay Khan Avenue, Almaty

Telex: 251 245 FILIN

For the Bank:

International Bank for Reconstruction and Development

1818 H Straight, N, W.

Washington, D. S. 20433

United States of Amerika

The Telegraph: Telex:

INBAFRAD 248423 (RCA)

Washington, D.With 82987 (FTCC)

64145 (WUI) or 197688 (TRT)

In witness whereof, the Parties, acting through their duly authorized representatives, have signed this agreement. The Agreement is in the District of Columbia, United States of America, on the day of the year indicated above.

For the Republic of Kazakhstan

Authorized representative

For the International Bank

Reconstruction and Development

Vice President

Europe and Central Asia Region

Appendix 1

Withdrawal of loan funds from the account

The table below identifies the categories of expenses to be financed from the loan, the allocation of Loan funds for each category, and the percentage of expenses to be financed from the Loan for each category.:

category The allocated Loan amount is the share of expenses (in dollar terms) subject to financing

(in %)

(1) Goods 3,500,000 100% of foreign expenses,

100% of local expenses

(ex-factory price)

85% of local expenses for

other products,

purchased locally.

(2) Jobs 60 400 000 70%

(3) Services 11,600,000 100%

consultants

(4) Refund of 1,500,000 Amounts due

advance payment for according to section 2.02 (c)

Preparation Agreements

the project

(5) Undistributed- 3,000,000 funds

Total 80,000,000

For the purposes of this Application:

(a) the term "foreign expenses" means expenses in the currency of any country other than the Borrower's country for the purchase of goods and services supplied from the territory of any country other than the Borrower; (b) the term "local expenses" means expenses in the Borrower's currency for the purchase of goods and services supplied from the territory of the Borrower. 3. Regardless of the provisions of paragraph 1 above, withdrawals will not be made in respect of: (a) payments to cover expenses included in category (2), unless the Borrower approves the relevant subproject for which payments approved by the Bank in accordance with Annex 7 of this Agreement will be made. 4. The Bank may request that funds be withdrawn from the Loan account to pay for the purchase of goods on a contractual basis in the amount of less than $200,000, works in the amount of up to $50,000; contract consulting services in the amount of up to (i) $100,000. (ii) USD 50,000 for consulting firms and (ii) USD 50,000 for individuals was carried out on the basis of expense statements in accordance with the terms that the Bank will notify the Borrower about.

Appendix 2

Project Description The objectives of the Project are (a) to contribute to the development of sustainable irrigated agricultural production in the Republic of Kazakhstan by reconstructing irrigation and drainage systems, improving the water management system, improving its operation and repair; (b) to introduce more efficient and productive agricultural practices, establish information services for farmers, and ((c) Strengthen the institutional capacities of the Borrower's organizations and agencies dealing with irrigation and drainage systems. Subject to subsequent changes that the Borrower and the Bank may periodically agree on to achieve these goals, the Project includes the following parts; Part A. Reconstruction of irrigation and drainage systems Improving the reliability and efficiency of irrigation water use through the reconstruction of economic and inter-economic irrigation and drainage systems within the framework of subprojects. Part B. Agricultural development of privatized farms Stimulating the agricultural development of privatized farms by providing necessary goods and services in order to improve the training of agricultural workers, develop the practice of demonstration tests and information services. Part C: Institutional development 1. Strengthening the institutional capacities of the Ministry of Agriculture, the Ministry of Economic Development, the Hydraulic Fracturing Company and other organizations of the Borrower in order to implement the Project by providing goods, services, and training. 2. Improving the operation and management of inter-farm irrigation systems by conducting a survey on the establishment of EGMIS through the provision of services.

Note.

The Project is expected to be completed by December 31, 2002.

Appendix 3

Loan repayment schedule

Payment date Payment of the loan's principal amount (in dollars)

December 1, 2001 1,550,000

June 1, 2002 1,605,000

December 1, 2002 1,660,000

June 1, 2003 1,720,000

December 1, 2003 1,780,000

June 1, 2004 1,845,000

December 1, 2004 1,905,000

June 1, 2005 1,975,000

December 1, 2005 2,040,000

June 1, 2006 2,115,000

December 1, 2006 2,185,000

June 1, 2007 2,265,000

December 1, 2007 2,345,000

June 1, 2008 2,425,000

December 1, 2008 2,510,000

June 1, 2009 2,595,000

December 1, 2009 2,685,000

Note. The numbers in this column represent the dollar equivalent determined on the relevant withdrawal date. See General Terms and Conditions sections 3.04 and 4.03.

Early repayment premium

In accordance with section 5.04 (b) of the General Terms and Conditions, the fee paid for early repayment of the principal amount of a Loan of any maturity is a percentage determined at the appropriate time of early repayment.:

Early repayment period Prize

The interest rate (in

as a percentage per year),

applicable to the Loan amount for

early release day

repayments multiplied by:

No more than three years to maturity of 0.15

More than three years, but not more than six years 0.30

before the maturity date

More than six years, but not more than 11 years before 0.55

repayment period

More than 11 years, but not more than 16 years up to 0.80

repayment period

More than 16 years to maturity, but not 0.90

more than 18 years to maturity

More than 18 years to maturity of 1.00

Appendix 4

Procurement and consulting services

Section I Procurement of goods and works Part A: General information The procurement of goods and works is carried out in accordance with the provisions of section I "Guidelines. Purchases of IBRD loans and IDA loans", published by the Bank in January 1995 and revised in January 1996 (guidelines), as well as in accordance with the following provisions of this section: Part B: International competitive bidding 1. With the exception of the provisions of Part C of this Annex, the procurement of goods and works is carried out under contracts concluded in accordance with the provisions of sections II of the "Guidelines" and the provisions of paragraph 5 of Annex 1. 2. The following provision applies to the purchase of goods and works under contracts awarded in accordance with the provisions of paragraph 1 of Part B. Notification and announcement An invitation to participate in a pre-qualified selection or tender for a contract valued at USD 10,000,000 or more is placed in accordance with the procedures applicable to large contracts set out in paragraph 2.8 of the Guidelines. Part C: Other procurement procedures 1. National competitive bidding for Works with an estimated value of less than the equivalent of 500,000 US dollars per contract, and the total cost does not exceed the equivalent of 2,000,000 US dollars. The United States dollars may be purchased under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 2. International procurement Goods with an estimated value of less than the equivalent of US$ 200,000 per contract and a cumulative value of less than the equivalent of US$ 3,000,000 may be purchased under contracts awarded based on international procurement procedures in accordance with paragraphs 3.5 and 5.6 of the Guidelines. 3. National procurement Goods with an estimated value of less than the equivalent of $50,000. USD per contract, and the total amount does not exceed the equivalent of USD 2,000,000, may be procured under contracts awarded on the basis of national procurement procedures in accordance with provisions 3.5 and 3.6 of the Guidelines. 4. Procurement of small-scale works with an estimated cost equivalent to less than $100,000 per contract, and the total amount does not exceed the equivalent of $500,000. The United States dollars may be purchased under fixed-price contracts awarded based on quotations received from three (3) qualified domestic contractors in response to a written invitation. The invitation includes a detailed description of the work, including the main specifications, the required completion date, the basic form of the contract acceptable to the Bank and, if applicable, the relevant drawings. The contract is awarded to the contractor who offers the lowest price for the required work and has the experience and resources to successfully complete the contract. Part D: Verification of procurement decisions by the Bank 1. Procurement planning Before sending out invitations to pre-selection for bidding or to submit bids in accordance with the provisions of paragraph 1 of the annex to the Guidelines, the proposed procurement plan for the Project must be submitted to the Bank for review and approval. The purchase of all goods and works must be carried out in accordance with the procurement plan approved by the Bank and in accordance with the provisions of paragraph 1.2. Preliminary check For each contract for the purchase of goods with an estimated value of USD 200,000 or more; each contract for the purchase of works with a value of more than USD 500,000 or more; the first contract for the purchase of works in accordance with national competitive bidding procedures and the first contract for the performance of small works, the purchase of which is carried out According to Part C.4, the procedure set out in paragraphs 2 and 3 of Annex 1 to the Guidelines applies. 3. Follow-up check For each contract that has not been concluded in accordance with paragraph 2 of this Part, the procedures set out in paragraph 4 of Annex 1 to the Guidelines shall apply. Section II. Hiring consultants 1. The contract for the provision of advisory services is concluded in accordance with the provisions of the "Guidelines: The use of consultants by Borrowers of the Bank and the World Bank as an Executive organization", published by the Bank in August 1981 (Guidelines on the Use of Consultants). For complex, time-consuming assignments, such contracts should be based on the standard form of a contract for the provision of consulting services issued by the Bank, with those changes that are agreed with the Bank. In the absence of the relevant standard contract documentation issued by the Bank, the Borrower uses other standard documents acceptable to the Bank. 2. Regardless of the provisions of paragraph 1 of this Section, the provisions of the Guidance on the Use of Consultants, which provide for the preliminary review or approval by the Bank of budgets, short lists, selection procedures for invitation letters, proposals, evaluation reports and contracts, do not apply to: (a) contracts for the hiring of consulting firms, if the estimated cost of each such contract less than the equivalent of USD 100,000; or (b) selection of consulting companies in the absence of a competition; (c) assignments reasonably identified by the Bank as particularly important; (d) changes made to contracts for the hiring of individual consultants, as a result of which the contract value is equivalent to or exceeds 50,000 in dollars.

Appendix 5

Project implementation Program

Part A: Overall responsibility for the implementation of the Project 1. MCC. Until the completion of the Project, the Borrower ensures the activities of the interministerial Coordination Committee (IAC), chaired by a high-ranking official from the Ministry of Agriculture, whose members are representatives of the Borrower's ministries: Ministry of Finance, Ministry of Economy, Ministry of Geology, Ministry of Construction, Ministry of Economic Development, Komvodresursy, Hydraulic Fracturing, Committee on the Use of Foreign Capital, Goskomzema, Hydrometeorological Service, gosepidemstantsii, Ministry of Health, State Committee of the Borrower. The IWC is responsible for reviewing the progress of the Project and resolving all common issues related to interagency coordination within the framework of the Project. 2. The Ministry of Agriculture and Hydraulic Fracturing. The Ministry of Agriculture is responsible for the overall Project implementation and control. The PIU is responsible for day-to-day Project management, management, and coordination activities, including those related to, among others, procurement, accounting, disbursement and disbursement of borrowed funds, auditing, reporting, and identification, development, analysis, and selection of potential subprojects. The Hydraulic fracturing is assisted by qualified consultants appointed in accordance with the provisions of Section II of Annex 4 to this Agreement, who provide advice to the hydraulic Fracturing on matters related, but not limited to: (i) the overall planning and management of the Project; (ii) the design and conduct of irrigation and drainage works; (iii) the management of (iv) environmental management; (v) procurement; (vi) financial management; and (vii) evaluation of subprojects and monitoring of work results. 3. EP. By March 31, 1997, the Ministry of Agriculture will organize an environmental division (EP) within the Ministry of Agriculture. The EP, which will be staffed with the necessary number of environmental specialists, will be headed by a senior employee of the Ministry of Agriculture. The EP will be responsible, among other things, (i) for the development and practical implementation of the sectoral environmental protection policy and work plan: (ii) planning and management in order to comply with the responsibility of the Ministry of Agriculture under the Borrower's Environmental Legislation; (iii) developing the capabilities of the Ministry of Agriculture to assess the state of the environment in the implementation of sectoral, regional and specific project activities; (iv) coordinating training on sectoral ecology; and (v) interaction with other environmental organizations of the Borrower. 4. MABR. The Ministry of Ecology and Bioresources is responsible for coordinating environmental protection issues within the framework of the Project. 5. OKK. The Borrower, in accordance with contractual terms acceptable to the Bank, ensures the activities of the regional Coordination Committees (OCCs) that assist the hydraulic fracturing company in resolving interdepartmental issues related to subprojects at the regional level until the completion of the Project. 6. AVP. The Ministry of Agriculture studies and develops, with the help of consultants, to the extent necessary and in a manner acceptable to the Bank, the regulatory framework for the establishment of water user associations (WUAs) within the boundaries of former state farms and collective farms, within which WUAs will be responsible for the operation and management of drainage systems. 7. EGUIS. Ministry of Agriculture: provides and completes by April 30, 1997 the survey related to the legal, organizational, functional and technical aspects of the EGUIS in accordance with the terms of reference acceptable to the Bank. Part B: Specific responsibilities for Project Implementation 1. The Borrower will adopt a Decree satisfactory to the Bank, which sets out the legal framework for the implementation of Part A of the Project, including procedures, legal criteria, as well as the terms and conditions set out in Annex 7 of this Agreement. 2. The Borrower: (a) selects subprojects for Part A of the Project, as well as farms for inclusion in the Project in accordance with the procedures and criteria for participation in the Project, as well as in accordance with the terms and conditions set out in the Decree and acceptable to the Bank, including the procedures for criteria for participation in the project, as well as the terms and conditions set out in the Annex 7 to this Agreement and (b) implements subprojects in accordance with the terms and conditions set out in the Decree and acceptable to the Bank, including the terms and conditions of Part C of Annex 7 to this Agreement. 3. The borrower ensures the continuous operation of the Project Implementation Group (PIU) at the Ministry of Agriculture until the completion of the project in accordance with the established procedure. Ensures that the group is constantly staffed and managed by qualified specialists in accordance with the terms of reference necessary for the successful implementation of the Project and acceptable to the Bank. 4. The borrower will provide nationwide reimbursement rates for the operation, maintenance and repair of irrigation and drainage infrastructure located outside the borders of former state farms and collective farms in the amount of at least fifty-five percent (55%) by December 31, 1997, seventy percent (70%) by December 31, 1998, eighty percent (80%) by December 31, 1999 and more than ninety percent (90%) by December 31, 2000.

Appendix 6

Special Account 1. For the purposes of this Annex (a), the term "eligible categories" means the categories (1), (2) and (3) specified in the table of paragraph 1 of Annex 1 to this Agreement; (b) the term eligible expenses" means expenses for the purchase at similar prices of goods and services necessary for the implementation of Of the Project and financed from the Loan funds allocated periodically to the appropriate categories in accordance with the terms of Annex 1 to this Agreement.; (c) The term "authorized allocation" means: an amount equivalent to 1,000,000 US dollars, which is withdrawn from the Loan account and credited to a Special Account in accordance with paragraph 3 (a) of this Annex, however, subject to the condition that, unless the Bank agrees otherwise, the limited amount of Authorized Allocation will be 500 000 in dollars until the total amount of funds withdrawn from the Loan Account plus the total amount of all outstanding special obligations assumed by the Bank in accordance with Section 5.02 of the General Terms and Conditions exceeds or is equal to 2 million. USD; 2. Payments of funds from a Special Account must be made exclusively for the relevant expenses in accordance with the terms of this Application. 3. After providing acceptable evidence to the Bank that the Special Account has been opened properly, the appropriate withdrawal of authorized funds and subsequent withdrawals to replenish the Special Account will be made in the following order: (a) in order to withdraw funds from authorized funds, the Borrower submits requests to the Bank for a deposit or deposits that do not exceed the total amount of authorized funds. Based on such request or requests, the Bank, on behalf of the Borrower, makes withdrawals from the Loan account and deposits them in a Special Account in the amount or amounts requested by the Borrower. (b) (i) in order to replenish the Special Account, the Borrower submits requests to the Bank for funds transfer to the Special Account at intervals determined by the Bank. (ii) prior to receipt of each mentioned request or upon receipt of such request, the Borrower shall submit to the Bank the documentation and other evidence provided for in paragraph 4 of this Annex for making the payment or payments in accordance with which replenishment of funds in the Special Account is requested. On the basis of each such request, the Bank, on behalf of the Borrower, makes withdrawals from the Loan account and credits them to a Special Account in the amount requested by the Borrower, the validity of which is confirmed by the mentioned financial and other documents attesting to the withdrawal of this amount from the Special Account to pay eligible expenses. The Bank's withdrawal of the specified deposits from the Account is carried out within the framework of the eligible categories and in the corresponding equivalent amounts, which is confirmed by the submitted financial and other documents. 4. For each payment made by the Borrower from a Special Account, the Borrower, within the period specified in the Bank's request, submits to the Bank documentation and other evidence that such payment was made solely for eligible expenses. 5. Regardless of the provisions of paragraph 3 of this Annex, the Bank does not accept requests for further deposits to the Special Account: (a) if at any time the Bank determines that all further withdrawals will be made by the Borrower directly from the Loan account, as provided for in Article V of the General Terms and Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) if the Borrower fails to submit to the Bank, within the time limits specified in section 4.01 (b) (ii) of this Agreement, the required audit reports pursuant to that section regarding the audit of the accounting records and accounts of the Special Account; (c) if at any time the Bank notifies the Borrower of its intention to fully or partially suspend the Borrower's right to withdraw funds from the Loan Account in accordance with the provisions of Section 6.02 of the General Terms and Conditions; or (d) the total outstanding amount of the Loan funds intended to finance eligible categories, less any outstanding amount designated in accordance with the provisions of section 5.02 of the General Terms and Conditions, within the framework of the Project will be twice the amount of authorized expenses. After that, the withdrawal from the Loan account of the remaining outstanding amounts intended for financing eligible categories is carried out in accordance with the procedures specified by the Bank in a special notification to the Borrower. Such withdrawals will be made in amounts acceptable to the Bank only after the Bank has verified that all amounts remaining in the Special Account deposit as of the date of the said notification will be used to make payments for eligible expenses. 6. (a) If the Bank determines at any time that any payments from the funds of the Special Account (i) were made to cover expenses or in amounts that do not comply with the terms of paragraph 2 of this Annex, or (a) are not justified by the documentation provided to the Bank, the Borrower immediately upon receipt of the Bank's notification: (A) will provide such additional confirmation as the Bank may request; or (C) deposits into a Special Account (or, upon request of the Bank, reimburses the Bank) an amount equal to the amount of such payment or part of it that is not sufficiently confirmed or is not eligible. Unless the Bank agrees otherwise, no funds will be deposited into the Special Account by the Bank until the Borrower, depending on the specific case, submits such confirmation or makes the mentioned contribution to the Special Account or reimburses the funds. (b) If the Bank determines at some point that any outstanding amount in the Special Account will not be required to cover further payments for related expenses. The Borrower will immediately refund the outstanding amount to the Bank upon receipt of the notification from the Bank. (c) Upon receipt of the Bank's notification, the Borrower may reimburse the Bank in whole or in part for the funds deposited in the Special Account. (d) Funds reimbursed to the Bank in accordance with paragraph 6 (a), (b) and (c) of this Annex shall be credited to the Loan account for subsequent withdrawal or cancellation in accordance with the provisions of this Agreement, including the General Terms and Conditions.

Appendix 7

Procedures, selection criteria, conditions and deadlines applicable to participating farms and Subprojects

Part A: Procedures 1. Prior to selecting each of the Subprojects, the Borrower submits a proposal for such a Subproject to the Bank for approval. 2. In addition to the general procedures set out in paragraph 1. of Part A of this Annex, the following subproject selection procedures apply: (a) The Farm, before becoming a participant in the project, submits a letter of intent to the PIU, expressing interest in the implementation of the subproject and summarizing its contents. (b) The PIU determines, based on the information provided in the letter, the intentions of the consultation and confirmation of the absence of objections from the Bank, the need for further development and evaluation of the proposed Subproject. (c) If, subject to the above procedures, the PIU decides to continue the development of the proposed Subproject, the PIU, in acceptable situations, in consultation with the participating farms, shall prepare the proposed subproject: (i) a feasibility study in the form required by the Decree, acceptable to the bank; and (ii) an environmental impact assessment acceptable to the Bank. The feasibility study should contain; (i) information about the participating farm, including the legal status and form of ownership; (ii) a copy of the charter and regulations of the participating farm; (iii) information about the subproject; (iv) cost estimates for the subproject; (v) economic and financial analysis of the subproject; (vi) an assessment of the potential impact of the proposed Subproject, if any, on coastal countries; and (vii) an operational and maintenance plan and proposed organizational arrangements for WUAs. (d) Prior to the approval of the Subproject, the PIU submits the proposed Subproject for review and approval by the Bank. When the PIU submits the proposed Subproject to the Bank, it is also accompanied by: (i) the reports referred to in paragraph 2 (c); (ii) the conclusions of the State environmental assessment report; (iii) the letter of intent referred to in paragraph 2 (a) above; and (iv) other information reasonably requested by the Bank. Part B: Participation criteria 1. The farms and Subprojects participating in the Subproject are selected exclusively through the selection and evaluation process in accordance with the participation criteria acceptable to the Bank, including the criteria set out below. 2. When selecting farms participating in the Project and Subproject, the Borrower ensures that: (a) The Subprojects aim to reconstruct existing irrigation systems; (the Subprojects do not provide for irrigation of any new areas, except for those areas that were previously irrigated); and depending on the assessment of the potential impact of the proposed projects on others; (c) As a result of the Subprojects, significant areas of natural wetlands should not be drained or reclaimed, which will have a significant impact on the natural habitat of wild animals or fish farming; (d) During the implementation of Subprojects, untreated domestic wastewater should not be used for irrigation; (e) Irrigation of tobacco plantations is not eligible for inclusion (f) The economic rate of return and the financial rate of return of the Subprojects should be at least twelve percent (12%); (g) The farms applying for the project must be private; (h) The subprojects involve the risk of unknown archaeological sites or historical sites being discovered by adopting and following appropriate procedures acceptable to the Bank; (i) Subprojects should not cause deterioration of water quality outside the boundaries of the subprojects, meet all local and national environmental standards and requirements, while adequate environmental protection measures are provided for in the development of the scheme and implementation of the Subproject in accordance with local and national health, environmental, and occupational safety requirements. Part C: Terms and Conditions 1. All Subprojects are implemented with due integrity and efficiency under the supervision of qualified and experienced management, assisted by a sufficient number of competent personnel, in accordance with established standards and norms in the technical, financial, environmental, commercial and managerial fields, including local and national environmental protection requirements. 2. The Borrower ensures that the farms involved in the Project provide access to representatives of the Bank, if requested by the Bank, for inspection of goods and construction sites, works, structures and installations provided for in the Subproject, Project activities, as well as any relevant reports and documents. 3. The borrower guarantees that all farm investment costs

Each Subproject will be covered in accordance with the following

criteria:

(a) the cost coverage will be based on the payment per hectare;

(b) expenses will be covered during a period not exceeding

less than 30 years old;

percent and not less than seventy percent (70%).

President

Republic of Kazakhstan

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