On the ratification of the Loan Agreement (A project to increase the competitiveness of small and medium-sized enterprises) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

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On the ratification of the Loan Agreement (A project to increase the competitiveness of small and medium-sized enterprises) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

The Law of the Republic of Kazakhstan dated December 2, 2015 No. 431-V SAM

 To ratify the Loan Agreement (a project to increase the competitiveness of small and medium-sized enterprises) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development, signed in Astana on July 20, 2015.

President

Republic of Kazakhstan

N. NAZARBAYEV

LOAN No. 8477-KZ

LOAN AGREEMENT (Project to increase the competitiveness of small and medium-sized enterprises) between the REPUBLIC OF KAZAKHSTAN and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN AGREEMENT dated July 20, 2015

Agreement dated July 20, 2015 between the Republic of Kazakhstan (the "Borrower") and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank have hereby agreed on the following:

ARTICLE I — GENERAL CONDITIONS; DEFINITIONS

1.01. The General Terms and Conditions (defined in the appendix to this Agreement) are an integral part of this Agreement.

1.02. Unless the context otherwise requires, the terms used in this Agreement starting with capital letters have the meanings attributed to them in the general terms and conditions or the annex to this Agreement.

ARTICLE II - LOAN

 2.01. Under the terms described in or with reference to the Agreement, the Bank agrees to provide the Borrower with an amount equal to forty million US dollars (40,000,000), and this amount may be converted periodically by currency conversion in accordance with the provisions of Section 2.08 of this Agreement (the "Loan"), in order to assist in financing the project described in Appendix 1 to this Agreement (the "Project").

 2.02. The Borrower has the right to withdraw the loan funds in accordance with Section IV of Appendix 2 to this Agreement.

2.03. The one-time commission payable by the borrower is one quarter of one percent (0.25%) of the Loan amount. The Borrower shall pay a one-time commission no later than sixty (60) days after the effective date of this Agreement.

 2.04. The reservation fee payable by the Borrower is one quarter of one percent (0.25%) per year of the outstanding Loan balance.

2.05. The interest payable by the Borrower during each interest period will be calculated at a rate equal to the reference rate for the Loan currency plus a variable spread; provided that upon conversion of all or any part of the principal amount of the Loan, the interest payable by the Borrower during the conversion period for such amount can be determined in accordance with the relevant provisions of article IV of the General Terms and Conditions. Notwithstanding the above, in the event that any portion of the withdrawn outstanding Loan balance remains unpaid on time and is not paid within thirty days, the amount of remuneration payable by the Borrower will then be calculated in accordance with the provisions of section 3.02 (e) of the General Terms and Conditions.

2.06. The payment dates are May 15 and November 15 of each year.

 2.07. The principal amount of the Loan is repaid in accordance with the repayment schedule set out in Appendix 3 to this Agreement.

2.08. (a) The Borrower may at any time request any of the following Loan terms and conditions to be converted in order to ensure sound debt management:

(i) changing the Loan currency of all or any part of the Loan principal amount, both withdrawn and not withdrawn, to the approved currency;

 (ii) a change in the interest rate basis applicable: (A) to all or any part of the withdrawn and outstanding principal amount of the Loan from a variable rate to a fixed rate or vice versa; or (B) to all or any part of the principal amount of the Loan, withdrawn and outstanding, from a variable rate based on a reference rate and a variable spread, for a variable rate based on a fixed reference rate and a variable spread, or vice versa; or (C) to the entire principal amount of the Loan, withdrawn and outstanding, from a variable rate based on a variable spread to a variable rate based on a fixed spread; and

(iii) determining the limits of the variable rate or reference rate applicable to all or any part of the withdrawn and outstanding principal amount of the Loan by setting an upper limit on the interest rate or a lower limit on the interest rate for the variable rate or reference rate.

(b) Any modification requested pursuant to paragraph (a) of this section, which is accepted by the Bank, will be considered a "Conversion" as defined in the General Terms and Conditions and will take effect in accordance with the provisions of Article IV of the General Terms and Conditions and the Conversion Guidelines.

ARTICLE III — THE DRAFT

3.01. The Borrower declares his commitment to the Project objective. To this end, the Borrower implements the Project through the Ministry of National Economy (MNE) in accordance with the provisions of Article V of the General Terms and Conditions.

 3.02. Without prejudice to the provisions of Section 3.01 of this Agreement, unless otherwise agreed between the Borrower and the Bank, the Borrower, through the MNE, will ensure the implementation of the Project in accordance with the provisions of Appendix 2 to this Agreement.

ARTICLE IV – ENTRY INTO FORCE; TERMINATION

4.01. Additional conditions for entry into force are as follows:

 (a) The Ministry of National Economy has issued an order for the establishment of hydraulic fracturing, as specified in section I.A.2 of Appendix 2 to this Agreement;

 (b) The Borrower, through the MNE, has established a Commission for the Implementation of the project as specified in section I.A.2 of Appendix 2 to this Agreement;

(c) The Borrower, through the MNE, has accepted the Project Implementation Guidelines on terms acceptable to the Bank; and

(d) The DOE has selected a financial management specialist and a procurement specialist for hydraulic fracturing on terms and with qualifications acceptable to the Bank.

4.02. The deadline for the entry into force of this Agreement is the date following the expiration of one hundred and eighty (180) days after the date of signing this Agreement. The deadline for the entry into force of this Agreement may be extended by agreement between the Borrower and the Bank.

ARTICLE V - REPRESENTATIVE; ADDRESSES

 5.01. The representative of the Borrower is the Minister of Finance of the Republic of Kazakhstan.

5.02. Borrower's address:

Ministry of Finance

 11 Pobedy Avenue

 Astana, 010000

Republic of Kazakhstan

Telex: Fax number:

265126 (FILIN) (7) (7172) 717785

5.03. Bank Address:

International Bank for Reconstruction and Development

Street H 1818, N.W.

Washington, DC, 20433

United States of America

Telegraphic address: Telex: Fax number:

INTBAFRAD 248423(MCI) or 1-202-477-6391

Washington, D.C. 64145(MCI)

AGREED ______________, ___________, on the day and year specified above.

REPUBLIC OF KAZAKHSTAN

Whom:

____________________________________

Authorized representative

Full name.: ____________________________

Post: _________________________

INTERNATIONAL BANK

RECONSTRUCTION AND DEVELOPMENT

Whom:

____________________________________

Authorized representative

Full name.: ____________________________

Post: _________________________

ADDENDUM 1 Project Description

The aim of the project is to increase the competitiveness and potential of targeted small and medium-sized enterprises in the Borrower's territory.

The project consists of the following parts:

Component 1 SME Capacity Building Program

 Strengthen and expand existing consulting programs for SMEs, as outlined in the project implementation guide, including a network of business consultants, through the provision of goods, training and consulting services.

Component 2 Interconnections of SMEs in competitive sectors

1. Supplier development activities: Implement supplier development activities designed to enhance the ability of SMEs to participate in the local operations of multinational corporations, large domestic companies, and state-owned enterprises by upgrading supplier skills, improving business and management practices, providing communication and relationships between potential suppliers and large buyers of SMEs, and establishing a supplier development office by providing goods, training, and consulting services.

2. Competitive sectors: Developing increased production of high-value-added products and enhancing the competitiveness of SMEs in non-resource sectors and around priority geographical areas through institutional capacity-building through the provision of training and advisory services.

3. Strategic Factoring assessment: Conducting a detailed assessment for factoring and chargeback on the Borrower's premises, including an online platform for registering SMEs and verifying their accounts receivable.

Component 3 Impact assessment and monitoring of SME programmes

Strengthen monitoring and evaluation, public-private sector dialogue, and transparency in SME policy development through the provision of training and advisory services.

Component 4 Project Management

Provision of consulting services, training and payment of operating costs for the implementation, management and coordination of the project.

ADDENDUM 2 Project Execution Section I. Implementation mechanisms

A. Institutional arrangements

 1. The borrower through the MNE:

(a) (i) establish and continue to operate and maintain the Hydraulic fracturing unit until the completion of the project; and (ii) ensure that all functions of the hydraulic fracturing unit are performed properly at all times and with all necessary human resources (including financial management and procurement specialists) and financial resources acceptable to the Bank;

(b) no later than sixty (60) days after the effective date of the Loan, the Borrower must ensure that the PIU employs financial management and procurement specialists, in accordance with paragraph (a) above, with terms of reference and qualifications acceptable to the Bank; and

(c) no later than sixty (60) days after the effective date of the Loan, the Borrower must ensure that the financial management and financial reporting module for the project is integrated into the MNE accounting software on terms acceptable to the Bank.

 2. The Borrower will establish and continue to support a Project Implementation Commission with a composition (including representatives of the relevant ministries and departments of the Borrower and chaired by the Vice Minister of the Ministry of National Economy), functions and responsibilities acceptable to the Bank, as specified in the project implementation guide.

3. The borrower through the MNE must:

(a) adopt and maintain Project Implementation Guidelines in a form and content that satisfies the Bank's requirements;

 (b) conduct the Project in accordance with the provisions of the Project Implementation Guidelines; and

B. Anti-corruption measures

 The borrower, through the MNE, ensures the implementation of the project in accordance with the Anti-Corruption Guidelines.

Section II. Monitoring, reporting and evaluation of the Project

A. Project Reports

1. The Borrower, through the MNE, will monitor and evaluate the progress of the Project, as well as prepare Project reports in accordance with the provisions of section 5.08 of the General Terms and Conditions and based on indicators agreed between the Borrower and the Bank. Each project report must cover a period of one half-year and be submitted to the Bank no later than forty-five (45) days after the end of the period covered by such report.

2. Without prejudice to the provisions specified in section 5.08 (b) of the General Terms and Conditions, by December 31, 2017 or another date, as agreed with the Bank, the Borrower, through the MNE, together with the Bank, shall carry out a mid-term review of the implementation of project activities (mid-term review). The mid-term review evaluates the progress made in the implementation of the project. After such a mid-term review, if necessary, the Borrower, through the MNE, should act appropriately to take corrective measures agreed with the Bank.

B. Financial management, financial reports and audit

 1. The Borrower, through the MNE, will maintain or ensure the maintenance of a financial management system in accordance with the provisions of section 5.09 of the General Terms and Conditions.

2. Without prejudice to the provisions of Part A of this section, the Borrower, through the MNE, will prepare and submit to the Bank, no later than forty-five (45) days after the end of each calendar quarter, interim financial reports on the Project acceptable to the Bank in form and substance for the relevant calendar quarter that have not been audited.

3. The Borrower will ensure that its financial statements are audited in accordance with the provisions of section 5.09 (b) of the General Terms and Conditions. Each audit of financial statements should cover the period of one financial year of the Borrower. The audited financial statements for each such period must be submitted to the Bank no later than six months after the end of the relevant period.

Section III. Purchases

A. General provisions

1. Goods and non-consulting services. All goods and non-consulting services required for the implementation of the Project and financed from the Loan funds are purchased in accordance with the requirements contained or referenced in section I of the Procurement Manual, as well as in accordance with the provisions of this section.

2. Consulting services. All consulting services required for the Project and financed from the Loan funds must be procured in accordance with the requirements contained or referenced in sections I and IV of the Consultant Manual, as well as in accordance with the provisions of this section.

3. Definitions. The capitalized terms used below in this section to describe individual procurement methods or the Bank's review methods for individual contracts refer to the relevant method described in sections II and III of the Procurement Manual or sections II, III, IV and V of the Consultant Manual, as appropriate.

B. Selected methods of purchasing goods and non-consulting services

1. International competitive bidding. Unless otherwise provided in paragraph 2 below, the purchase of goods and non-consulting services will be carried out under contracts awarded in accordance with international competitive bidding procedures.

2. Other methods of purchasing goods and non-consulting services. In addition to international competitive bidding, the following methods of procurement of goods and non-consulting services may be used for those contracts specified in the procurement plan:

 a) national competitive bidding, which is governed by the additional provisions specified in the annex to this Appendix 2;

 (b) Procurement on the open market; and

 c) Direct contracts.

C. Selected methods of procurement of consulting services

1. Selection based on quality and cost. Unless otherwise provided in paragraph 2 below, the procurement of consulting services will be carried out within the framework of contracts awarded in accordance with the selection procedure based on quality and cost.

2. Other methods of procurement of consulting services. In addition to Selection based on quality and cost, the following methods of procurement of consulting services can be used for those contracts specified in the Procurement Plan:

a) Quality-based selection;

 b) selection with a fixed budget;

 c) Lowest cost selection;

d) Selection based on the qualifications of consultants;

 e) procurement of consulting firms' services from a single source;

 (f) Selection of individual consultants; and

 (g) Procedures for selecting individual consultants from a single source.

D. The Bank's review of procurement decisions

The Procurement Plan should specify those contracts that are subject to preliminary review by the Bank. All other contracts are subject to review by the Bank after the fact.

Section IV. Withdrawal of Loan funds

A. General provisions

1. The Borrower may withdraw the Loan funds in accordance with the provisions of article II of the General Terms and Conditions, this section, and those additional instructions that the Bank specifies in the notification to the Borrower (including the World Bank's "Guidelines for the Disbursement of Project Funds" dated May 2006, periodically reviewed by the Bank and applicable to this Agreement in accordance with such instructions), to finance eligible expenses according to the table given in paragraph 2 below.

2. The table below shows the categories of eligible expenses that can be financed from the Loan (the "Category"), the Loan amounts allocated for each Category, and the percentage of expenses to be financed as eligible expenses for each Category.

Category

Loan amount allocated (expressed in US dollars)

Share of expenses to be financed (excluding taxes)

(1) Goods, non-consulting services, consultant services and training for component 1 of the project

11453568

85%

(2) Goods, non-consulting services, consulting services and training for the 2nd, 3rd and 4th components of the project

28546432

100%

TOTAL AMOUNT

40000000

B. Withdrawal conditions; withdrawal period

1. Regardless of the provisions of Part A of this section, funds should not be withdrawn:

 (a) from the Loan account until the Bank receives the full amount of the One-Time Fee;

(b) for payments made prior to the date of this Agreement.

2. The Loan closing date is June 30, 2020.

Appendix to APPENDIX 2

 The procurement procedures to be used in conducting national competitive bidding will be the competitive bidding procedures set out in the Law of the Republic of Kazakhstan dated July 21, 2007 No. 303-III "On Public Procurement" as amended by the Law of the Republic of Kazakhstan dated September 29, 2014 No. 239-V; however, provided that such procedures will be conducted in accordance with the provisions of section I and paragraphs 3.3 and 3.4 of the Procurement Manual and the following additional provisions:

(a) Eligibility: The eligibility of bidders to participate in the procurement process and enter into a Bank-funded contract will be determined in accordance with section I of the Procurement Manual; accordingly, no bidder or potential bidder may be declared ineligible to enter into Bank-funded contracts for reasons other than those that specified in section I of the Procurement Manual. Foreign bidders are allowed to participate in the CNT procedures, and they are not required to enter into partnerships with local bidders to participate in the procurement process.

(b) Registration: Competitive bidding should not be limited to pre-registered firms, nor is it required that foreign bidders register with local authorities as a condition for submitting bids.

(c) Preferences: No preferences of any kind should be applied in the evaluation of bids based on the nationality of the bidder; origin of goods, services or labor; local content; share of local ownership; and/or any other preference programs.

(d) Tender documents: procurement organizations should use an appropriate standard package of tender documents, including contract provisions acceptable to the Bank.

 (e) Estimated costs: Estimated costs are confidential information and should not be disclosed to potential bidders.

(f) Period of validity of the tender application: an extension of the period of validity of bids, if due to exceptional circumstances, may be requested in writing from all bidders before the expiration of the period of validity of bids and for the minimum period necessary to complete the evaluation or award of the contract, provided that such extension will cover only the minimum period required to complete the evaluation and/or award of the contract, and should not exceed four (4) weeks. No additional extensions should be requested without the prior written consent of the Bank.

(g) Submission and opening of bids: Potential bidders will be given at least thirty (30) days from the date of publication of the invitation to bid or the readiness of the tender documentation, whichever is later, to prepare and submit bids. Applications are opened publicly, immediately after the deadline for their submission. A copy of the tender opening protocol must be immediately provided to all bidders who submitted bids and to the Bank in respect of contracts subject to preliminary review by the Bank.

(h) Qualifications: The qualification criteria should be clearly stated in the bidding documents. All the criteria specified there, and only these specified criteria, should be used to determine the qualifications of the bidder. Qualifications should be assessed using the "passed or failed" method, and no points should be used. Such assessments should be based entirely on the capabilities and resources of the bidder or potential bidder necessary to effectively execute the contract, taking into account objective and measurable factors, including: (i) relevant general and specific experience and a satisfactory track record of successful execution of such contracts over a specified period; (ii) financial situation; and, depending on (iii) availability of construction and/or production facilities.

(i) Prequalification procedures and documents satisfactory to the Bank should be used for contracts for large, complex and/or specialized work. Verification of the information on the basis of which the bidder has been prequalified, including the current obligations and capabilities of the bidder regarding personnel and equipment, should be carried out at the time of awarding the contract.

(j) In cases where prequalification is not used, the qualifications of the bidder who is submitted for the award of the contract will be evaluated during the postqualification process using the qualification criteria specified in the tender documentation.

(k) Evaluation of bids: The evaluation criteria should be clearly stated in the bidding documents. The evaluation of bids should be carried out in strict accordance with the quantifiable criteria stated in the tender documentation. Evaluation criteria other than price should be quantified in monetary terms. No points or the method of extremes should be used, and no minimum points or percentages should be used to determine the importance of price in evaluating bids. Bidders should not be excluded on the basis of minor, insignificant deviations. The bidder may request clarifications from bidders necessary to evaluate their bids, but he may not ask or allow bidders to change the nature or price of their bids after opening the bids.

(l) Contracts should be awarded to a qualified bidder whose bid: (i) substantially meets the requirements of the bidding documents; and (ii) and offers the lowest estimated value. There should be no negotiations regarding the price or the nature of the bid.

 (m) Rejection and resubmission of bids: no bids should be rejected solely because their price is lower or higher than the estimated value, falls outside the range or beyond the limits of the cost of bids. All bids (including cases where less than two bids have been received) should not be rejected, the procurement process should not be canceled, and the invitation to submit new bids should not be published without the prior written consent of the Bank.

(n) Guarantees: Guarantees for bids and performance of contracts must be submitted in the format and have the required validity period specified in the tender documentation. If necessary, the security of the tender application can be expressed in the form of a fixed amount and should not exceed two percent (2%) of the estimated contract value. No advance payments should be made to contractors without an appropriate advance payment guarantee.

(o) Confidentiality: The process of evaluating bids should be kept confidential until information about the award of the contract is published.

(p) E-bidding systems: e-procurement systems may be used, provided that the Bank is satisfied with the parameters of the systems, while, among other things, the system must be secure and maintain the integrity, confidentiality and authenticity of submitted bids.

(q) Fraud and corruption: According to the Procurement Manual, all tender documents and contracts must include provisions of the Bank's policy on the application of sanctions against firms or individuals found to be engaged in fraudulent and/or corrupt activities, as defined in the Procurement Manual.

(r) Rights regarding inspections and audits: according to the Procurement Manual, each package of tender documents and each contract financed by Loan funds must contain provisions that bidders, suppliers and contractors, as well as their subcontractors, agents, employees, consultants, service providers or suppliers will allow the Bank to verify their accounts, accounting and other documentation related to the submission of bids and the execution of contracts, as well as to allow auditors appointed by the Bank to audit accounts and accounting documents. Actions aimed at creating significant difficulties in the Bank's exercise of its rights during inspections and audits provided for in the Procurement Manual are an obstructive practice as defined by the specified Manual.

 (s) Publication of information on the award of contracts: the bidder must publish the following information on the award of contracts on a free website with open access or using other means of publication acceptable to the Bank: (a) the name of each bidder who submitted the application; (b) the prices of the bids that were announced during the (c) the names of the participants and the estimated value of each bid that has been evaluated.; (d) the names of the bidders whose bids were rejected and the reasons for rejecting those bids; (e) the name of the winning bidder and the price offered by him, as well as the duration and a brief overview of the scope of the awarded contract.

ADDENDUM 3 Repayment Schedule

 1. The table below shows the repayment dates of the main Loan and the percentage of the total principal amount of the Loan payable on each repayment date of the main debt (the "Next Payment"). If the Loan funds are fully withdrawn on the first payment date for repayment of the main Loan, the principal amount of the Loan to be repaid by the Borrower on each payment date for repayment of the main Loan is determined by the Bank by multiplying: (a) the Loan amount withdrawn on the first payment date for repayment of the main Loan; (b) a regular payment for each repayment date for the principal Loan, such repayment amount will be adjusted as necessary to deduct the amounts specified in paragraph 4 of this schedule and to which currency conversion applies.

The date of payment for repayment of the main Loan

Next payment (as a percentage)

Every May 15 and November 15, starting from May 15, 2020 to May 15, 2031

4.17 %

November 15th, 2031

4.09 %

2. If the Loan funds are not fully withdrawn before the first payment date for repayment of the main Loan, the principal amount of the Loan to be repaid by the Borrower on each payment date for repayment of the main Loan is determined as follows:

 (a) To the extent that any Loan funds have been withdrawn on the first payment date to repay the principal Loan, the Borrower must repay the Loan amount withdrawn on that date in accordance with paragraph 1 of this Schedule.

(b) Any amounts withdrawn after the first repayment date of the principal Loan must be repaid on each repayment date of the principal Loan after the date of such withdrawal in amounts determined by the Bank by multiplying the amounts of each such withdrawal by a fraction, the numerator of which is the initial Regular payment indicated in the table in paragraph 1 of this Schedule. for repayment of the principal debt of the Loan ("Initial Next Payment") and, the denominator of which is the sum of all remaining Initial Next payments for the payment dates for repayment of the main Loan, on or after such date, such amounts to be repaid will be adjusted as necessary to deduct the amounts specified in paragraph 4 of this Schedule and to which Currency Conversion applies.

3. (a) Loan amounts withdrawn within two calendar months prior to any repayment date of the principal debt, solely for the purpose of calculating the amounts of the principal debt payable on any repayment date, will be considered withdrawn and outstanding on the second repayment date of the principal debt after the withdrawal date and will be repaid on each repayment date the principal debt starting from the second repayment date of the principal debt after the withdrawal date.

(b) Notwithstanding the provisions of subparagraph (a) of this paragraph, if at any time the Bank adopts an invoice date system in which invoices are issued on or after the relevant payment date for repayment of the principal Loan, the provisions of such subparagraph will no longer apply to any withdrawals after the adoption of such billing system.

 4. Regardless of the provisions of paragraphs 1 to 2 of this Schedule, in the case of Currency Conversion of all or any part of the Withdrawn Loan Amount into an approved currency, the amount thus converted into an approved currency that is due to be repaid on any payment date for repayment of the main Loan occurring during the Conversion Period must be determined by the Bank by multiplying such amount amounts in the currency of its denomination immediately prior to Conversion to or: (i) an exchange rate that reflects the amounts of the principal debt in an approved currency payable by the Bank under currency hedging transactions, related to Conversion; or to (ii) the currency component of the screen rate, if the Bank decides accordingly in accordance with the Conversion Guidelines.

 5. If the Withdrawn Loan Funds are denominated in more than one Loan Currency, the provisions of this Addendum apply separately to the amount denominated in each Loan Currency so that it is possible to develop a separate Repayment Schedule for each of these amounts.

application

Section I. Definitions

1. "Anti-Corruption Guidelines" means "Guidelines for the Prevention and Combating of Fraud and Corruption in Projects Financed from IBRD Loans and IDA Loans and Grants" dated October 15, 2006, as amended and amended in January 2011.

2. "Business Consultant Network" means a network of Business Consultants hired by the Borrower through the MNE to provide free services to SMEs in the Borrower's territory.

 3. "Category" means the category listed in the table in section IV of Appendix 2 to this Agreement.

4. "Guidance on Consultants" means "Guidance on the Selection and Hiring of Consultants under IBRD Loans, IDA Loans and Grants Provided to World Bank Borrowers dated January 2011 (as amended and supplemented in July 2014).

 5. "General Terms and Conditions" means the "General Terms and Conditions for Loans of the International Bank for Reconstruction and Development" dated March 12, 2012, with the modifications provided for in section II of this Annex.

6. "MNE" means the Ministry of National Economy of the Borrower or any of its legal successors.

 7. "Operating expenses" means reasonable and necessary expenses for the implementation, management, coordination, monitoring and evaluation of the Project, approved by the Bank on the basis of semi-annual budgets acceptable to the Bank, and including, but not limited to, expenses for: (i) utilities and communications; (ii) organization of seminars; (iii) office supplies goods; (iv) media interaction and advertising, printing and publications; (v) interpretation and translation; (vi) bank fees; and (vii) car rental and refueling. Operating expenses do not include salaries or benefits for government employees of the Borrower.

 8. "Project Implementation Guide" means a guide prepared and accepted by the Borrower, through the Ministry of Finance, acceptable to the Bank, which, inter alia, describes operational and administrative procedures for the preparation, approval, processing, financing, implementation and supervision of the Project, including a financial management guide and an SME advisory program according to component 1 of the Project.

9. "Procurement Manual" means the "Guidelines for the Procurement of Goods, Works and Non-Consulting Services for IBRD Loans, IDA Loans and Grants by World Bank Borrowers" dated January 2011 (with amendments and additions dated July 2014).

10. "Procurement Plan" means the Borrower's procurement plan for the Project dated January 21, 2015, specified in paragraphs 1.18 of the Procurement Manual and 1.25 of the Guidelines for the Selection and Hiring of Consultants. It will be updated periodically in accordance with the provisions of these paragraphs.

 11. "Project Implementation Group" or "PIU" means the group corresponding to Section I of Part A of paragraph 1 of Appendix 2 to the Agreement.

 12. "Project Implementation Commission" or "KP" means the Project Implementation Commission in accordance with Section I of Part A of paragraph 2 of Appendix 2 to the Agreement.

13. "SME" means small and medium-sized enterprises operating in the Borrower's territory.

 14. "Training" means expenses (other than consulting costs) incurred within the framework of the Project and approved by the Bank on the basis of semi-annual training plans and study trips acceptable to the Bank, including reasonable and necessary travel within the country and abroad, visa costs incurred by participants in training seminars, including accommodation, meals, daily subsistence allowance at home and abroad, according to the Borrower's standards, registration costs, tuition fees, payment for facilitators, minor organizational expenses (including the cost of office supplies, handouts and training materials), translation and interpretation costs, the cost of renting a room, and other expenses directly related to conducting training seminars and study trips.

Section II. Changes to the General Terms and Conditions

The following changes are hereby made to the General Terms and Conditions:

1. The content links to sections, their names and numbering are changed to reflect the changes provided below.

2. The following changes are made to section 3.01. (One-time commission):

"Section 3.01. One-time commission; Reservation fee

(a) The Borrower pays a One-Time Fee to the Bank in respect of the Loan amount at the rate stipulated in the Loan Agreement (the "One-Time Fee").

(b) The Borrower pays the reserve fee to the Bank in respect of the outstanding Loan balance at the rate stipulated in the Loan Agreement (the "Reserve Fee"). The reservation fee is charged from the date 60 days after the date of the Loan Agreement to the corresponding dates when the amounts are withdrawn or cancelled by the Borrower from the loan account. The reservation fee is payable on a semi-annual basis at the end of each period on each payment date."

3. In the Definitions Appendix, all relevant references to section and paragraph numbers are changed as necessary to reflect the changes provided for in paragraph 2 above.

4. The annex is being amended by including a new paragraph 19 with the following definition of "Reservation Fee" with a corresponding renumbering of all subsequent paragraphs.:

"19. "Reservation Fee" means the reservation fee provided for in the Loan Agreement for the purposes of Section 3.01(b)."

5. In the renumbered paragraph 49 (originally paragraph 48) of the annex, the definition of "One-time commission" was changed by replacing the reference from section 3.01 to section 3.01 (a).

6. In the renumbered paragraph 68 (originally paragraph 67) of the annex, the definition of the term "Loan payment" has been changed as follows:

"68. Loan Payment" means any amount payable by the Parties to the Loan to the Bank in accordance with legal agreements or these general terms and conditions, including (but not limited to) any amount of Loan funds withdrawn, remuneration, One-time Fee, Reservation Fee, late payment interest rate (if any), any penalty for early repayment, any transaction fee for conversion or early termination of conversion, variable spread fixing fee (if any), what- or a bonus, payable after the establishment of a fixed upper or lower limit of the interest rate and any costs associated with the change in terms to be paid by the Borrower. "

 7. In the renumbered paragraph 73 (originally paragraph 72) of the annex, the definition of "Payment date" was changed by deleting the word "is" and inserting the words "and Reservation Fee" after the word "percentage".

I hereby certify that this translation corresponds to the text of the Loan Agreement (Project to increase the Competitiveness of Small and Medium-sized Enterprises) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development in English, signed on July 20, 2015 in Astana.

Head of the Department

editing and linguistic

examination of documents

Department of Document Management

Ministry of Finance

Republic of Kazakhstan

B. Akhmetzhanova

President

Republic of Kazakhstan

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