On the ratification of Additional Agreement No. 1 to the Loan Agreement dated March 30, 2009 (South-West Road Corridor Project (International Transit Corridor Western Europe - Western China) between the Republic of Kazakhstan and the European Bank for Reconstruction and Development

Home / RLA / On the ratification of Additional Agreement No. 1 to the Loan Agreement dated March 30, 2009 (South-West Road Corridor Project (International Transit Corridor Western Europe - Western China) between the Republic of Kazakhstan and the European Bank for Reconstruction and Development

On the ratification of Additional Agreement No. 1 to the Loan Agreement dated March 30, 2009 (South-West Road Corridor Project (International Transit Corridor Western Europe - Western China) between the Republic of Kazakhstan and the European Bank for Reconstruction and Development

The Law of the Republic of Kazakhstan dated January 10, 2014 No. 157-V SAM

To ratify Supplementary Agreement No. 1 to Loan Agreement dated March 30, 2009 (South–West Road Corridor Project (International Transit Corridor Western Europe – Western China) between the Republic of Kazakhstan and the European Bank for Reconstruction and Development, signed in Astana on July 11, 2013.

President of the Republic of Kazakhstan N. NAZARBAYEV

(Operation No. 39258)

SUPPLEMENTARY AGREEMENT No. 1 to THE LOAN AGREEMENT dated March 30, 2009

South–West Road Corridor Project (Western Europe–Western China International Transit Corridor)

between

BY THE REPUBLIC OF KAZAKHSTAN

and

BY THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

dated July 11, 2013

SUPPLEMENTARY AGREEMENT NO. 1 TO THE LOAN AGREEMENT DATED MARCH 30, 2009

This Supplementary Agreement dated July 11, 2013 (the "present Agreement") is concluded between the REPUBLIC OF KAZAKHSTAN (the "Borrower") and the EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (the "Bank") (hereinafter collectively referred to as the "Parties").

CONSIDERING THAT:

(A) The Borrower entered into a Loan Agreement with the Bank (South–West Road Corridor Project (Western Europe–Western China International Transit Corridor) dated March 30, 2009 (the "Initial Agreement"), under which the Bank agreed to provide the Borrower with a loan of no more than 180,000,000 US dollars (the "Loan") for the purposes of the South–West Road Corridor Project, as further described in the Original Agreement (the "Initial Project"), subject to and in accordance with the provisions of the Original Agreement. (B) By the Loan Agreement (reconstruction of the Shymkent–Tashkent road section) dated December 12, 2012 (the "Loan Agreement for the reconstruction of the Sh-T Road") between the Borrower and the Bank, the latter agreed to provide the Borrower with a loan of no more than USD 142,000,000 to finance the reconstruction of the Shymkent–Tashkent road section ("Sh-T Road Project") subject to and in accordance with the provisions of the Loan Agreement for the Reconstruction of the Sh-T Road. (C) The Borrower requested the Bank to reallocate the unused portion of the Loan (in the amount of USD 54,500,000) resulting from savings under the Original Project to finance the Sh-T Road Project (D) As provided in Section 10.03 (Amendments) According to the Standard Terms and Conditions (as defined in the Original Agreement), the Borrower and the Bank wish to amend the Original Agreement in certain aspects, based on and subject to the provisions of this Agreement.

THUS, taking into account this document, the Parties have agreed on the following:

Section 1. Definitions and interpretation

(a) The terms defined in the Original Agreement (directly or with reference to any other agreement or legal document), unless otherwise defined in this document or required by the context, have the same meaning in this Agreement. (b) In this Agreement, a reference to a specific Section or Appendix is interpreted, unless otherwise specified in this Agreement, as a reference to that specific Section or Appendix to this Agreement.

Section 2. Amendments and continuity

(a) The Original Agreement will be amended by the amendments set out in annex I to this Agreement, with effect on and from the date (the "Effective Date") on which all of the following conditions are satisfied (such Effective Date will be confirmed by the Bank to the Borrower in writing): (1) The loan Agreement for the reconstruction of the Sh-T road has entered into force in accordance with its terms; and (2) The Bank has received a legal opinion from the Borrower's Minister of Justice, satisfactory in form and content to the Bank, confirming that this Agreement has been duly authorized and/or ratified, and signed and transmitted on behalf of the Borrower, and this Agreement constitutes a valid and legally binding obligation of the Borrower, applicable in accordance with his terms. (b) From the Effective Date, the provisions The original Agreement, as amended by this Agreement, will remain in full force and effect. (c) If the Effective Date has not arrived 120 days after the date of signing this Agreement (or such other date as may be agreed in writing between the Bank and the Borrower), or otherwise the Loan Agreement for the reconstruction of the Sh-T Road will terminate before such date, this Agreement The Agreement will terminate immediately, except that this Section 2 (c) and Section 3 will remain in force.

Section 3. Miscellaneous

(a) This Agreement may be amended only by a legal document duly signed by the Parties in writing. (b) The provisions of article VIII (Legal support; Dispute settlement) The Standard Terms and Conditions will apply to this Agreement as if they were set forth in this Agreement in full, subject to necessary modifications.

IN WITNESS WHEREOF, the Parties, acting through their duly authorized representatives, have ensured the signing of this Agreement and its transmission on the date indicated above.

REPUBLIC OF KAZAKHSTAN

__________________________ Name: Bolat Zhamishev Position: Minister of Finance

EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

__________________________ Name: Anar Omarova Position: Senior Banker and Head of Representative Office in Astana

ANNEX I

AMENDMENTS TO THE ORIGINAL AGREEMENT

On and from the Date of Entry into Force, amendments to the Original Agreement will be made as follows:

(a) Section 1.02 (Definitions) of the Original Agreement will be amended by adding the following definitions in the appropriate alphabetical order: "Stipulated Project Implementation Requirements" means the Requirements for the implementation of projects 1 to 8 and 10 (or, depending on the requirements of the context, any of these Project Implementation Requirements) Project implementation requirements and related to the Bank's environmental and social policies, approved by the Bank's Board of Directors on May 12, 2008 and effective from November 12, 2008.". "Environmental and Social Action Plan (Part of the Sh-T Road Project)" or "ESM (Part of the Sh-T Road Project)" means the environmental and social management and improvement Plan dated December 12, 2012, prepared by the Bank's environmental consultant, Kazakhstan Limited Liability Company CaspiEcology, and approved by The Executive Agency, while such a plan may be amended from time to time with the prior written consent of the Bank.". "Environmental and social law" means any applicable national law or regulation that relates to: (a) pollution or environmental protection, including related laws or regulations concerning open access to information and participation in decision-making; (b) working conditions and employment; (c) Occupational health and safety; (d) public health, safety and protection; (e) indigenous people; (f) cultural heritage; or (g) resettlement or economically optimal movement of people.". "Environmental and social issue" means any issue that falls within the scope of any environmental and social Law, any Prescribed Project Implementation Requirements, an Environmental and Social Action Plan (Part of the Sh-T Road Project) or a Resettlement Plan (Part of the Sh-T Road Project).". "Part of the Initial Project" means the reconstruction and upgrading of the 102 km long road between the border of the Russian Federation and the city of Aktobe, which is part of the Western Europe–Western China International Transit Corridor and part of the Project C A to D, as described in Appendix 1 (Project Description).". "Resettlement Plan (Part of the Sh-T Road Project)" means the resettlement plan for Part of the Sh-T Road Project dated December 12, 2012, prepared in accordance with Requirement 5 for the implementation of projects by the Bank's Environmental Consultant, Kazakhstan Limited Liability Company CaspiEcology, and approved by the Executive Agency, such as The relocation plan may be changed from time to time with the prior written consent of the Bank.". "Project" means collectively Part of the Original Project and Part of the Sh-T Road Project." "Loan agreement for the reconstruction of the Sh-T road" means The Loan Agreement dated December 12, 2012 between the Borrower and the Bank, according to which the Bank agreed to provide the Borrower with a loan in the amount of no more than USD 142,000,000 to finance the reconstruction of the Shymkent-Tashkent road section, subject to compliance with and in accordance with the provisions of the said Agreement, while such Agreement may be amended from time to time changes.". "Part of the Sh-T Road Project" means the reconstruction of the Shymkent-Tashkent road section, forming Part E of the Project, as described in Appendix 1 (Project Description).". (b) Paragraph (f) Section 2.02 (Other Financial Terms of the Loan) of the Original Agreement will be completely deleted and replaced by the following: "(f) The last date of use of the loan will be January 10, 2018, or such other date as the Bank may determine at its discretion and notify the Borrower of.". (c) Section 3.01 (Other positive project commitments) The original Agreement will be amended as follows: (1) Paragraph (b) (2) of Section 3.01 will be amended for interpretation as follows: "(2) with the assistance of a consultant engaged under Part C of the project, and to the extent recommended by such consultant and economically justified, after the inclusion of such a project in the list of projects possible for concession in accordance with the procedure established by the legislation of the Borrower., no later than December 31, 2014, will prepare all necessary tender documents for the selected concession project and publish such a tender in accordance with the schedule agreed with the Bank;" and (2) the following new Paragraph (c) will be added at the end of such Section 3.01 of the Original Agreement: "(c) The Borrower will further ensure, unless otherwise agreed by the Bank, that the Executing Agency in respect of a Portion of the Sh-T Road Project: (1) no later than March 30, 2014, finalize the review of standards and standard technical specifications for construction work in the road industry in accordance with the best industrial practices; (2) no later than March 30, 2015, adopt the relevant standards and standard technical specifications for construction work in the road industry; (3) no later than March 30, 2014, will complete a detailed assessment of the capacity of the Executive Agency and develop detailed proposals for the functioning of an independent road agency (a specialized road organization created to manage the national highway network), prepare an Action Plan for the implementation of such proposals and the corresponding draft amendments to the current legislation; (4) no later than December 31, 2014, submit to the Government of the Borrower an Action Plan for the establishment of an independent road agency, including draft amendments to the legislation allowing the implementation of the proposed reforms.; (5) no later than December 31, 2013, will complete the assessment of the procurement functions of the Executive Agency and develop recommendations in accordance with best practices under Part C of the project under the Loan Agreement for the reconstruction of the Sh-T road, where such a condition is defined, and such part is set out in Paragraph 2 of Annex 1 of the Loan Agreement for reconstruction of the Sh-T road and agreed with the Executive Agency; (6) no later than June 30, 2014, apply the recommendations referred to in subparagraph (5) above and finalize the improvement of the procurement functions of the Executive Agency in accordance with applicable law; (7) no later than June 30, 2015, in the case of the establishment of a road agency, implement the relevant procurement functions of the road Agency in in accordance with the recommendations mentioned above in subparagraph (5); (8) no later than March 30, 2014, will complete a study assessing the willingness of the private sector and the ability of the public sector to tender for performance-based maintenance contracts; (9) no later than March 30, 2015, will prepare tender documents for a multi-year contract for regulatory maintenance and publish such a tender; (10) no later than March 30, 2013, submit to the Borrower's Government for consideration the relevant draft amendments to the legislation on concessions acceptable to the parties to ensure the implementation of PPP-type projects; and (11) after completion of the construction work and during the life cycle of the project until the final payment of the Loan, ensure that the section of road to be reconstructed as Part of the Sh-T Road Project and/or under the Loan Agreement for the Reconstruction of the Sh-T Road and using the funds of the loan or loan under the Agreement on The loan for the reconstruction of the Sh-T Road will be classified as Category 1b." (d) Section 3.04 (Environmental and Social Compliance Conditions) of the Initial Agreement will apply only to a Part of the Initial Project, and accordingly, such a section will be considered changed, as if the references in the specified Agreement to the Project indicate a Part of the Original Project, taking into account the necessary changes. (e) the following new section will be added directly after Section 3.04 (Environmental and Social Compliance Conditions) of the Original Agreement:

"Section 3.04 (two) - Environmental and Social Compliance Conditions for a Part of the Sh-T Road Project

Without prejudice to the generally applicable nature of Sections 4.02(a), 4.04(a)(iii) and 5.02(c)(iii) of the Standard Terms and Conditions, unless the Bank agrees otherwise: (a) except as specified in the ESM (Part of the Sh-T Road Project) and the Relocation Plan (Part Of the Sh-T Road Project), the Borrower will execute and ensure that any contractor completes Part of the Sh-T Road Project in accordance with the Stipulated Project Implementation Requirements. (b) without prejudice to the above, the Borrower will carefully implement and comply with the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part of the Sh-T Road Project) and monitor the implementation of such plans in accordance with the provisions related to monitoring and contained in such plans. (c) The Borrower and the Bank may from time to time agree to amend the ESM (Part of the Sh-T Road Project) and the Relocation Plan (Part of the Sh-T Road Project) in response to changes in the current situation of the Sh-T Road Project or the Borrower, unforeseen events and monitoring results. Without prejudice to the generally applicable nature of the above, (1) if there is any adverse environmental or social impact or issue that was not foreseen or envisaged in the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part of the Sh-T Road Project) either in full or to the extent of its severity, (2) if any mitigation measure outlined in the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part of the Sh-T Road Project) is insufficient to eliminate or reduce any environmental or social impact to the level of, anticipated by the relevant Stipulated Project Implementation Requirements, during the time period set out in the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part of the Sh-T Road Project), or (3) if there is any significant non-compliance with the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part The project of the Sh-T Road) or any environmental and social law has been established by the inspection of any regulatory body or authority, The Borrower will develop and include in the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part of the Sh-T Road Project) as soon as reasonably possible and depending on the Bank's consent such additional or revised mitigation measures as may be necessary to achieve compliance with the Prescribed Project Implementation Requirements and applicable environmental and social law, in each case to the extent necessary, satisfactory to the Bank." (f) in Paragraph (a) Section 3.05 (Consultants) of the Original Agreement will be amended by adding the following words at the end of the paragraph: "as well as consultants to assist in the implementation of Part E of the Project." (g) Paragraph (a) Section 3.06 (Frequency and reporting requirements) The Original Agreement will apply only to a Part of the Original Draft, and, accordingly, such a section will be considered amended., It is as if the links in the specified Section to the Project are pointing to a Part of the Original Project, taking into account the necessary changes. (h) Paragraph (b) Section 3.06 (Frequency and reporting requirements) The Original Agreement will continue to apply to the Part of the Original Project and the Part of the Sh-T Road Project; accordingly, such section will be considered amended. (i) the following new section will be added directly after Section 3.06 (Frequency and reporting requirements) The Initial Agreement:

"Section 3.06 (two) – Other reporting on a Part of the Sh-T Road Project

(a) In the event that it has not yet been submitted to the Bank in accordance with Section 3.06 or the Loan Agreement for the Reconstruction of the Sh-T Road and before the full repayment or cancellation of the full Loan amount, the Borrower, through the Enforcement Agency, will submit annual reports to the Bank on environmental and social issues arising with respect to the Borrower or a Component of the Road Project W-T within 90 days after the end of the reporting year. Such reports will include information on the following specific issues: (1) Information on the Borrower's compliance with the Stipulated Project Implementation Requirements, as described in Section 3.04 (two)(a), and the implementation of the ESM (Part of the Sh-T Road Project) and the Resettlement Plan (Part of the Sh-T Road Project); (2) information on how the Borrower monitored compliance with the Stipulated Project Implementation Requirements and ESM (Part of the Sh-T Road Project) by any contractors engaged in the Sh-T Road Project, and a summary of any significant non-compliance by such contractors with the Stipulated Project Implementation Requirements and ESM (Part of the Sh-T Road Project) and any measures taken to correct such non-compliance.; (3) information on the implementation of the Stakeholder Engagement Plan required by the 10 Project Implementation Requirement, including a summary of any complaints received and how such complaints were resolved; (4) information on the Borrower's compliance with environmental and social laws regarding Part of the Sh-T Road Project, including the status of any permits required for Part of the Sh-T Road Project, the results of any inspections conducted by any regulatory authorities, any violations of applicable laws, regulations or regulations, and any related liquidation measures or any fines imposed for any such violations, and a summary of any significant notices, reports, and other communications on environmental and social issues regarding a Portion of the Sh-T Road Project, submitted by the Borrower to any regulatory authorities; 5) information on occupational health and safety management and the state of health and safety related to the Sh-T Road Project, including the number of accidents, accidents resulting in temporary disability, and incidents, any preventive or mitigating measures that have been taken or are planned by the Borrower, any occupational health and safety training and any other health and safety management initiatives that have been implemented or are planned by the Borrower; (6) a summary of any changes in environmental and social laws that may have a significant impact on a Part of the Sh-T Road Project; and (7) copies of any information on environmental and social issues periodically provided by the Borrower to its shareholders or the public. (b) In the event that it has not yet been submitted to the Bank in accordance with Section 3.06 or the Loan Agreement for the Reconstruction of the Sh-T Road, immediately upon the occurrence of any incident or accident related to a Part of the Sh-T Road Project that is likely to have a significant adverse environmental impact, health or safety, the Borrower will notify the Bank by fax or telex, indicating the nature of such incident or accident and any steps taken by the Borrower or the Enforcement Agency to eliminate it. Without prejudice to the generally applicable nature of the above, (1) an incident or accident relates to a Part of the Sh-T Road Project if it occurs on any site used for a Part of the Sh-T Road Project, or if it is caused by production facilities, equipment, vehicles or vessels used for or in relation to a Part of the Road Project Sh-T (regardless of whether they are used in any part of the Sh-T Road Project, and regardless of whether they are used by authorized or unauthorized persons); (2) an incident or accident is considered to have a significant negative impact on the environment, the public, occupational health or safety if: (A) any applicable law requires that any government agency be notified of such an incident or accident, (B) such an incident or accident results in the death of any person (regardless of whether such person is employed by the Borrower), (C) more than one person (regardless of whether such persons are employed The borrower) suffered serious injuries requiring hospitalization, or (D) such an incident or accident has become known or is likely to become known to the public through the media or otherwise. In the event that it has not yet been submitted to the Bank in accordance with Section 3.06 or the Loan Agreement for the reconstruction of the Sh-T Road, the Borrower will immediately notify the Bank of any significant protest by workers or members of the public directed against or concerning the Borrower or Part of the Sh-T Road Project, and which may have a significant negative impact on the Borrower or Part of the Sh-T Road Project, or which has become known or is likely to become known to the public through the media or otherwise. Within ten days of any such notification, the Borrower will submit a report satisfactory to the Bank, determining the outcome of the Borrower's investigation of such protest and any steps taken or proposed by the Borrower to address the issues raised in the protest." j) Annex 1 (Draft Description) of the Original Agreement will be amended as follows: (1) Paragraph 1 of the specified Application will be completely deleted and replaced by the following: «1. The aim of the Project is to assist the Borrower in (i) the reconstruction and modernization of the 102 km long road running from the border of the Russian Federation to the city of Aktobe, which is part of the Western Europe–Western China International Transit Corridor, and (ii) the reconstruction of the 62 km long section of road between the Zhibek Zholy international border crossing point on the border with the Republic of Uzbekistan and a post on 742 km of the Shymkent–Tashkent road, which is part of the Western Europe International Transit Corridor. – Western China", linking Europe with China." (2) Paragraph 2 of the said Annex will be amended by adding the following paragraph at the end of the said Paragraph:

"Part E: Construction work on the reconstruction of a section (62 km) of the road connecting the state border with Uzbekistan (at the Zhibek Zholy post) with a post on 742 km of the Shymkent–Tashkent road, as follows: - The loan funds will be used to finance the reconstruction of a part of the existing 62 km section connecting the Uzbek border at 804.2 km with a point on the 742 km road, with the technical maintenance of the existing two-lane I-b road and the existing horizontal highway. Since the existing road section is under maintenance, no road expansion is required. - Reconstruction of the road section from the interchange for approximately 799 km to the Zhibek Zholy international border crossing point for 804.2 km from the existing single-lane road of Category III standard to a two-lane road of Category I-b standard. This will require widening the road by 15 meters. At the entrance to the border crossing point, temporary 6 m wide roads will also be added on both sides to ensure local access. - Local temporary roads will be provided in three locations where housing construction is underway near road and multiple small intersections. These temporary roads will carry local traffic to the main intersections and eliminate the need for frequent side exits onto the main M39 highway. - Implementation of road safety works that will include road improvements, road markings and road signs." (3) Paragraph 3 of the specified Annex will be amended to interpret as follows: «3. Part of the Initial Project is expected to be completed by December 31, 2013 (subject to compliance Section 3.01(b)(2)). It is expected that part of the Sh-T Road Project will be completed by December 31, 2016." (k) Paragraph 2 of Annex 2 (Loan Categories and Samples) of the Initial Agreement will be amended for interpretation as follows: «2. Notwithstanding the provisions of paragraph 1 above, no withdrawal of loan funds will be made in respect of: (a) Costs related to the Part of the Initial Project that were incurred prior to March 30, 2009; and (b) costs related to Part of the Sh-T Road Project, except and until project supervision and management consultants are appointed for Part of the Sh-T Road Project in accordance with the Loan Agreement for the Reconstruction of the Sh-T Road; provided that upon fulfillment of such condition, in any case, no withdrawal of the loan funds will be made in respect of any such costs incurred prior to the date of signing the Loan Agreement for the Reconstruction of the Sh-T Road." (l) In addition to Annex 2 (Loan Categories and Selections) of the Original Agreement, amendments will be made for interpretation as follows: