On ratification Loan Agreement (Water Supply Pilot Project) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development dated January 24, 1997

Home / RLA / On ratification Loan Agreement (Water Supply Pilot Project) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development dated January 24, 1997

The Law of the Republic of Kazakhstan dated May 16, 1997 N 109-1

To ratify the Loan Agreement (Pilot Project on Water supply) between the Republic of Kazakhstan and the International Bank Reconstruction and Development of January 24, 1997, signed in District of Columbia, United States of America.

President

Republic of Kazakhstan

loan number 4129 KZ

LOAN AGREEMENT

(Pilot project on water supply)

between

BY THE REPUBLIC OF KAZAKHSTAN

and

BY THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

dated January 24, 1997

LOAN AGREEMENT

AGREEMENT dated January 24, 1996 between THE REPUBLIC OF KAZAKHSTAN (the Borrower) and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (The Bank). SINCE (A) The Borrower, having become convinced of the feasibility and priority of the Project described in Annex 2 to this Agreement, has requested the Bank to assist in financing this Project; (C) The Borrower plans to receive a grant or other financial assistance to finance Part B2 of the Project, which must be deemed consistent with the agreement (Agreement for Financing Part Project B2); and SINCE the Bank has agreed, on the basis of, among other things, the above, to provide the Borrower with a Loan for the period and conditions stipulated in this Agreement;

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 a different 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 produced and services provided from such territories; or (B) for the purpose of making payments to individuals or organizations, or to pay for the import of goods, if such payments or imports are prohibited, according to the Bank, by a decision of the United Nations Security Council adopted under Chapter VII of the Charter of the United Nations." (c) In Section 6.02, subparagraph (k) was renamed to subparagraph (1) and a new subparagraph (k) was added to read as follows: "(k) In the event of an emergency in which any further withdrawal of Loan funds does not comply with the provisions of Article III, Section 3, of the Bank's Articles of Agreement." (d) Section 6.03 has been amended to read as follows: If (a) the Borrower's right to withdraw Loan funds is subject to a thirty-day restriction on any loan amount, or (b) at any time, the Bank determines, after consulting with the Borrower, that the Loan amount will not be required to finance expenses for a Project to be financed from a Loan, or (c) at any time, the Bank determines in respect of any contract, which should be financed from the Loan funds, that there have been cases of corruption or fraud on the part of representatives of the Borrower or the recipient of the Loan during the procurement or implementation of such a contract, and if the Borrower does not take timely and appropriate actions acceptable to the Bank to remedy the situation, and determines the amount of expenses in respect of this contract, which should have been can be financed from the Loan, or (d) at any time, the Bank determines that the conclusion of any contract that is to be financed from the loan, does not comply with the procedures established or specified in the Loan Agreement and determines the amount of expenses in respect of this contract that should have been financed from the Loan, or (f) after the Closing Date, the Loan amount remains outstanding from the Loan account, or (f) the Bank receives notification from the Guarantor in accordance with Section 6.07 b With respect to the Loan amount, the Bank has the right, by notifying the Borrower and the Guarantor, to revoke the Borrower's right to make withdrawals from this amount. Upon sending such notification, such Loan amount is cancelled. 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 established by these definitions, and the following additional terms have the following meanings: a) The project "PRSNPP" means a Project for water supply and sanitation of settlements in the Aral Sea region, included in the Program for the Aral Sea region, approved by the heads of State: The Borrower, the Republics of Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan on January 11, 1994. (b) "Kyzylorda region" means the Kyzylorda region, the administrative-territorial unit of the Borrower, and includes any of its successors or successors. (c) "Hydraulic Fracturing" means the Project Implementation Group established by the Borrower within the framework of the Committee on Water Resources pursuant to Order No. 176/l of November 13, 1996 and referred to in or in connection with Section 3.04 of this Agreement. (d) "Project Account" means the account referred to in Section 3.06 of this Agreement. (e) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement.

ARTICLE II  

Loan Section 2.01. The Bank agrees, subject to the terms and conditions set forth or specified in the Loan Agreement, to provide the Borrower with a loan in various currencies, which will have a combined value equivalent to seven million US dollars (7,000,000 US dollars), representing the amount of funds withdrawn under the Loan, and each withdrawal is assessed by the Bank as of the date of such withdrawal. 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 to this, should be incurred) for the purchase at reasonable prices of goods, works and services necessary for the implementation of the Project described in Annex 2 to to this Agreement and to be paid from the Loan funds. (B) For the purposes of the Project, the Borrower may open and maintain a separate special dollar deposit account with a commercial bank acceptable to the Bank, on terms and conditions satisfactory to the Bank, including adequate protection of funds from counter-claims, freezing or seizure. Deposits to a Special Account and payments from this account are made in accordance with the provisions of Annex 5 to this Agreement. Section 2.03. The closing date of the Loan Account is December 31, 2001 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 a commission fee on his obligation for the principal amount of the Loan funds not withdrawn from the account at an annual rate of three quarters of one percent (3/4 of 1%). 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 shall pay the interest accrued on the principal outstanding amount of the Loan during the previous interest accrual period, calculated at the rate in effect during that 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: (B) loans that may be granted By the Bank after July 1, 1989 at interest rates determined otherwise than 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 that 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 semi-annually on January 1 and July 1 of each year. Section 2.07. The Borrower repays the principal amount in accordance with the repayment schedule set out in Appendix 3 to this Agreement.  

Article III Project Execution Section 3.01. The Borrower declares its obligations to fulfill the Project objectives set out in Annex 2 to this Agreement, and to this end will execute the Project with due integrity and efficiency and in accordance with appropriate financial, administrative, engineering and utility procedures, and will, if necessary, provide timely funds, facilities, services and other resources required for the implementation of the Project. 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 payable 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 9.08 of the General Terms and Conditions and without limitation of its provisions, the Borrower will: (a) prepare, based on guidelines acceptable to the Bank, and submit to the Bank, no later than six (6) months after the Closing Date or, for this purpose, a later date agreed between the Bank and the Borrower, a plan for future Project activities; and (b) provide the Bank with a reasonable opportunity to exchange views on the above-mentioned plan with the Borrower. Section 3.04. The Borrower must, until the completion of the Project, provide the PIU (Project Implementation Group) with functions and powers and staff it adequately, provide financing, premises and other resources required within the framework of expediency to carry out the Project in an appropriate manner satisfying the Bank. Section 3.05. The Borrower implements policies and appropriate procedures to enable it to monitor and evaluate, on an ongoing basis and in accordance with indicators acceptable to the Bank, the progress of the Project and the achievement of Project objectives. Section 3.06. In order to finance the costs of the Project, the Borrower opens an account in local currency in the amount equivalent to twenty thousand US dollars (20,000 US dollars) and maintains, until the end of the Project, a separate project account with a bank acceptable to the World Bank with a minimum balance amount on it that satisfies the Bank. Section 3.07. The Borrower ensures that the Project Implementation Team performs the following: (a) by August 31 of each year, starting in 1997, until the end of the Project, submit to the Bank for review and comment (i) a report on current activities in a form and level of detail acceptable to the Bank, and (ii) an action plan and budget for the following year, together with recommendations on the proposed timetable for the implementation of the actions presented in the plan; and (B) the implementation of the above-mentioned action plan in accordance with the proposed timetable, taking into account the recommendations of the Bank, if any.

ARTICLE IV Financial Conditions Section 4.01. (a) The Borrower will maintain or ensure the maintenance of adequate accounting records and accounts reflecting, in accordance with good accounting practices, the performance, availability of resources and costs associated with the implementation of the Project, those institutions and departments of the Borrower that are responsible for the implementation of the Project or any other parts of it. (B) The Borrower must: (i) have available the accounting documents and accounts referred to in paragraph (a) of this Section, including the 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) to provide the Bank, as soon as it is ready, but in any case no later than six (6) 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) to provide the Bank with other information in connection with the above-mentioned accounting documents, accounts and audits, which 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 from the Loan Account was made, all accounting documents (contracts, orders, invoices, receipts, invoices, checks, etc.) confirming such expenses; ((iii) Provide an opportunity for representatives of the Bank to verify such documentation; and (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 the basis for those withdrawals, taking into account the procedures and the methods of internal control applied in the preparation of these statements.  

ARTICLE V Protective Measures Section 5.01. According to Section 6.02 (k) of the General Terms and Conditions, the following additional events are defined: (a) The Agreement for Financing Part B2 of the Project will not enter into force by July 1, 1997 or on any other day acceptable to the Bank, provided, however, that the provisions of this paragraph will not apply if the Borrower determines, in a form acceptable to the Bank, that there are Other sources of financing on terms consistent with the Borrower's obligations under this Agreement. (b) (i) Depending on paragraph (ii) of this paragraph; (A) the Borrower's right to withdraw funds from a grant or loan provided to the Borrower to finance Part B2 of the Project will be suspended, cancelled, or terminated in whole or in part in accordance with the terms of the Part B2 financing agreement or other grant or loan agreement; or (C) any such loan will become defensible and payable before the maturity date agreed upon here. (ii) Paragraph (i) of this paragraph will not be applied if the Borrower demonstrates, in a manner acceptable to the Bank, that: (A) such suspension, cancellation, termination or early repayment is not caused by the Borrower's inability to fulfill obligations under such an agreement: (C) the Borrower has adequate funds to finance the Project on the terms, corresponding to the obligations of the Borrower under this Agreement.

ARTICLE VI Effective Date; Termination Section 6.01. The following event is established as an additional condition for the entry into force of this Loan Agreement within the meaning defined in Section 12.01 (c) of the General Terms and Conditions, namely that the Project Account is opened in accordance with the provisions of Section 3.06 of this Agreement.

Section 6.02. The time limit is hereby set at ninety (90) days from the date of signing this Agreement, for the purposes of Section 12.04 of the General Terms and Conditions.

ARTICLE VII

Representatives of the Borrower; addresses

Section 7.01. The Borrower's Minister of Finance is designated 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 addresses are defined:

For the Borrower:

Ministry of Finance

Republic of Kazakhstan

Almaty, 480091

97 Ablay Khan Avenue

Telex 251245 FILIN

For the Bank:

International Bank for

Reconstruction and Development

1818 H Street, N.W.

Washington, D.S.20433

United States of America

Cable address: Telex:

INTBAFRAD 248423 (MCI) or

Washington, D.C. 64145 (MCI)

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 date and 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

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

Category Amount of deductions from the Loan Share of expenses,

(expressed in the subject

dollar equivalent) to financing

(in %)

(1) 5,900,000 jobs 80%

(2) 45,000 products are 100% foreign

expenses,

100% local

expenses, (price

franke- fabr.) and

80% local

expenses for

other positions,

locally purchased

(3) Services 600,000 100%

Consultants

(4) Unallocated 455,000

tools

TOTAL 7,000,000

2. 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 any country other than the Borrower's country: and (b) the term "local expenses" means expenses for the purchase of goods in the Borrower's currency or goods supplied from the Borrower's territory. 3. Regardless of the provisions of paragraph 1 above, withdrawals are not made in respect of payments made for expenses incurred prior to the date of signing this Agreement. 4. The Bank may request that withdrawals from the Loan Account be made on the basis of expense statements to pay for the purchase of (i) goods and works under contracts in the amount equivalent to less than US$ 250,000 and for contract consulting services in the amount equivalent to less than US$ 100,000, for the hiring of consulting firms, and in the amount of equivalent to less than 50,000 US dollars, for the hiring of individual consultants, in accordance with the terms and conditions specified by the Bank in the notification to the Borrower.

APPENDIX 2  

Project Description The purpose of this Project is to assist the Borrower in: preparing for the implementation of the NWFP project and in urgently implementing improvements to the water supply system aimed at restoring water supply services to the population dependent on pipeline water supply. The Project consists of the following parts, subject to such modifications as may be periodically agreed upon by the Borrower and the Bank in order to achieve such goals.

Part A: Improving water supply  

--------------------------------  

Improvement of water supply in settlements and distribution schemes in and between the cities of Aralsk and Kazalinsk, Kyzylorda region, including the following actions: (a) Rehabilitation and replacement of damaged high-pressure concrete pipes with a length of approximately 10 kilometers (km) and a diameter of 800-1000 millimeters (mm), which are part of the main pipeline between Aralsk and Novokazalinsk and the secondary distribution system in Aralsk and Novokazalinsk. (B) Completion of the Pumping Station No. 7a in Novokazalinsk, including: (i) the construction of two water storage tanks, (ii) the supply and installation of equipment at the main pumping station, chlorination plants, storage facilities/garage, electrical substation and water control laboratory, and (iii) the cementing of an adjacent canal on a site of about 500 meters (m) along its border in order to prevent seepage and increase the height of the wall throughout this area to prevent flooding. (c) Rehabilitation of worn sections of the 60-kilometer and 70-kilometer distribution network in the cities of Novokazalinsk and Aralsk by replacing corroded pipes with new PCV pipes with a length of approximately 6 km in each city with a diameter of 200 to 300 mm and provision of equipment.  

Part B: Technical assistance  

---------------------------  

1. Project management and supervision through the provision of technical assistance. 2. Preparation of engineering design and tender documents for

equipment and works for the PVSNPP Project by providing Technical assistance.

3. Strengthen hydraulic fracturing for Project implementation, including assistance in preparing detailed engineering designs and procurement packages through the provision of technical assistance, procurement of communication systems and vehicles.

The project is expected to be completed by June 30, 2001.

Appendix 3

Loan repayment schedule

Payment date Payments on the main Loan

(expressed in US dollars)*

July 1, 2002 135,000

January 1, 2003 140,000

July 1, 2003 145,000

January 1, 2004 150,000

July 1, 2004 155,000

January 1, 2005 160,000

July 1, 2005 165,000

January 1, 2006 175,000

July 1, 2006 180,000

January 1, 2007 185,000

July 1, 2007 190,000

January 1, 2008 200,000

July 1, 2008 205,000

January 1, 2009 210,000

July 1, 2009 220,000

January 1, 2010 225,000

July 1, 2010 235,000

January 1, 2011 245,000

July 1, 2011 250,000

January 1, 2012 260,000

July 1, 2012 270,000

January 1, 2013 280,000

July 1, 2013 290,000

January 1, 2014 300,000

July 1, 2014 310,000

January 1, 2015 320,000

July 1, 2015 330,000

January 1, 2016 340,000

July 1, 2016 355,000

January 1, 2017 375,000

*The footnote. The numbers in this column represent the dollar

the equivalent determined on the relevant withdrawal date. See

General Terms and Conditions, Sections 3.04 and 4.03.

Early repayment premiums

In accordance with Section 3.04 (b) of the General Terms and Conditions, the premium payable on the principal amount of any Loan repayment period paid ahead of schedule is the percentage determined at the appropriate time of early repayment, as shown below:

Early repayment time Prize

Interest rate (expressed

as a percentage per year), applied

to the Loan amount for the day

early repayment,

multiplied by:

No more than three years before the due date [0.15]

repayments

More than three years, but not more than six years, up to [0.30]

Maturity date

More than six years, but not more than eleven [0.55]

years, until maturity

More than eleven years, but not more than [0.80]

Sixteen years old, before the due date

repayments

More than sixteen years, but not more than [0.90]

Eighteen years old, before the due date

repayments

More than eighteen years before the onset of [1.00]

repayment period  

Appendix 4  

Procurement and Consulting Services

Section I. Procurement of goods and works Part A. General information Procurement of goods and works is carried out in accordance with the provisions of Section I of the IBRD and IDA Loan Procurement Guidelines, published by the Bank in January 1995 and revised in January 1996 and August 1996 (the Guidelines), as well as in accordance with the following applicable provisions of this Section. Part B: International competitive bidding Works are procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Annex 1 to this. Part C: Other procurement procedures International procurement Communications equipment and vehicles are purchased under contracts awarded on the basis of international procurement procedures in accordance with the provisions of paragraphs 3.5. and 3.6. of the Guidelines. Part D: Verification of procurement decisions by the Bank

1. Procurement planning Before sending out any invitations to pre-selection for bidding or to submit competitive applications for contracts, the proposed procurement plan for the Project must be submitted to the Bank for review and approval, in accordance with the provisions of paragraph 1 of Annex 1 to the Guidelines. Purchases of all goods and works are made in accordance with the procurement plan approved by the Bank and in accordance with the provisions of paragraph 1 above.  

2. Preliminary check For each contract for the purchase of goods and works awarded in accordance with Parts B and C of this Section, the procedures defined in paragraph 2 of Annex 1 to the Guidelines shall apply.

3. Post-verification For each contract not covered by paragraph 2 of this Part, the procedures specified in paragraph 4 of Annex 1 to the Guidelines shall apply.

Section II. Hiring Consultants

1. Contracts for the provision of consulting services for the development of a pilot project, detailed design and implementation of the project are concluded in accordance with the provisions of the "Guidelines on 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 tasks of the Borrower, such contracts should be based on the standard form of the contract for the provision of consulting services issued by the Bank, with those amendments to it 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, 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 $100,000. (B) contracts for the employment of individual consultants, if the estimated value of each such contract is less than the equivalent of US$ 50,000. However, the specified exceptions regarding the Bank's preliminary review do not apply to (a) technical specifications for such contracts, (b) awarding a contract to a consulting firm without a competition, (c) assignments reasonably determined by the Bank to be critically important, (d) changes made to consulting contracts. firms, as a result of which the estimated value of the contract becomes equal to or exceeds the equivalent of $100,000. (e) changes made to contracts for the employment of individual consultants, as a result of which the estimated value of the contract becomes equal to or exceeds the equivalent of US$ 50,000.  

APPENDIX 5  

Special Account

1. For the purposes of this Annex: (a) the term "eligible Categories" means the Categories (1), (2) and (3) listed in the table in paragraph 1 of Annex 1 to this Agreement. (B) the term "eligible expenditures" means expenditures for the purchase at reasonable prices of goods, works and services necessary for the implementation of the Project and financed from Loan funds allocated periodically to eligible Categories in accordance with the terms of Annex 1 to this Agreement; and (c) The term "Authorized Allocations" means an amount equivalent to 200,000 USD. This Amount must be withdrawn from the Loan Account and deposited into a Special Account in accordance with paragraph 3 (a) of this Annex, which provides, however, that until the Bank agrees otherwise, the Authorized Allocations must be reduced by an amount equivalent to US$ 100,000 to the total amount withdrawn from the Loan Account. plus, the total amount of unpaid special obligations imposed by the Bank in accordance with Section 5.02 of the General Terms and Conditions must be equal to or exceed the equivalent of 1,500,000 US dollars.

2. Payments of funds from a Special Account must be made exclusively for eligible expenses in accordance with the terms of this Appendix.  

3. Upon receipt by the Bank of satisfactory evidence that the Special Account has been opened properly, the corresponding withdrawal of Authorized Funds and subsequent withdrawal of funds for the purpose of replenishing the Special Account will be carried out as follows: (a) In order to withdraw funds from Authorized Funds, the Borrower submits to the Bank a request or requests for a deposit to the Special Account of the amount or amounts that are not exceed the total amount of Authorized Appropriations. Based on such request or requests, the Bank, on behalf of the Borrower, makes withdrawals from the Loan Account and deposits to the Special Account such or such amounts as the Borrower has requested. (B) (i) In order to replenish the Special Account, the Borrower submits to the Bank a request to transfer funds to the Special Account at intervals determined by the Bank. (ii) Prior to or upon receipt of each such request, the Borrower shall submit to the Bank the documentation and other evidence required in accordance with the provisions of paragraph 4 of this Annex for making the payment or payments for which replenishment of the Special Account is requested. Based on each such request, the Bank, on behalf of the Borrower, makes withdrawals from the Loan Account and deposits to the Special Account such or such amounts as the Borrower requested and which are indicated in the mentioned documents and other certificates confirming the withdrawal of funds from the Special Account to pay eligible expenses. All such funds are withdrawn from the Loan Account by the Bank within the relevant eligible Categories and in the appropriate amounts equivalent to those confirmed by the aforementioned documents and other certificates.

4. For each payment made by the Borrower from a Special Account, the Borrower, within a period reasonably established by the Bank, submits to the Bank such documentation and other evidence confirming that such payments were made solely for eligible expenses.

5. Regardless of the provisions of paragraph 3 of these Regulations, the Bank is not obligated to make subsequent deposits to a Special Account in the following cases: (a) if, at any time, the Bank has determined 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 Agreements: (B) if the Borrower fails to submit to the Bank within the time limits specified in Section 4.01 (b) (ii) of this Agreement, any required audit reports in accordance with the specified Section regarding the audit of accounting records and accounts for a Special Account; (c) if, at a certain point in time, the Bank has notified the Borrower of its intention to suspend, in whole or in part, 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) when the total amount of outstanding Loan funds intended to finance eligible Categories, less the total amount of all disbursements The special obligations assumed by the Bank, in accordance with the provisions of Section 5.02 of the General Terms and Conditions for the Project, will be equal to the amount equivalent to twice the amount of Authorized Allocations. 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 subsequent withdrawals are made only to the extent acceptable to the Bank and 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 has determined 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 (ii) have not been confirmed by the documentation submitted to the Bank, the Borrower immediately upon receipt of the Bank's notification: (A) submits such additional confirmation as the Bank may request: or (C) deposits a Special Account (or, if the Bank so requests, reimburses the Bank) an amount equal to the amount of such payment; or the part of it that is not sufficiently confirmed or does not fall into the Category of legitimate payments. Unless the Bank agrees otherwise, no funds will be deposited into the Bank's Special Account 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 any time that any outstanding amount in the Special Account will not be required to cover further payments for eligible expenses, the Borrower will immediately reimburse the Bank for such outstanding amount upon receipt of 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.

President

Republic of Kazakhstan

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