On the ratification of the Loan Agreement (Active Measures to combat COVID-19 and Cost Support Program) between the Republic of Kazakhstan and the Asian Infrastructure Investment Bank

Home / RLA / On the ratification of the Loan Agreement (Active Measures to combat COVID-19 and Cost Support Program) between the Republic of Kazakhstan and the Asian Infrastructure Investment Bank

The Law of the Republic of Kazakhstan dated December 21, 2020 No. 388-VI SAM.

To ratify the Loan Agreement (Active Measures to combat COVID-19 and the cost support program) between the Republic of Kazakhstan and the Asian Infrastructure Investment Bank, signed in Nur-Sultan on August 26, 2020.

President of the Republic of Kazakhstan

K. TOKAEV

Unofficial translation

LOAN NUMBER L0405A

LOAN AGREEMENT (Active measures to combat COVID-19 and Cost support Program) between the REPUBLIC OF KAZAKHSTAN and the ASIAN INFRASTRUCTURE INVESTMENT BANK dated August 26, 2020

LOAN AGREEMENT

(Entered into force on December 23, 2020, Bulletin of International Treaties of the Republic of Kazakhstan 2020, No. 6, Article 31)

The Agreement dated August 26, 2020 (hereinafter referred to as the Loan Agreement) between the Republic of Kazakhstan (hereinafter referred to as the Borrower) and the Asian Infrastructure Investment Bank (hereinafter referred to as the Bank).

Considering that:

(a) The Bank has received a development policy letter dated June 5, 2020 (hereinafter referred to as the Development Policy Letter), which outlines certain objectives, policies and actions that shape the Borrower's countercyclical development costs related to the COVID-19 pandemic, as described in Appendix 1 to the Loan Agreement (hereinafter referred to as the Program);

(b) The Borrower has applied to the Bank for a Loan for the purposes of the Program;

(c) Policy-based financing provides general budgetary support to the Borrower, and thus the Program funds are not intended to finance any specific expenditures in any particular area of the Borrower;

(d) The Bank has agreed, in particular on the basis of the foregoing, to provide a Loan to the Borrower on the terms and conditions set out in this Loan Agreement.

In view of the above, the Borrower and the Bank have agreed on the following:

ARTICLE I General conditions; Definitions

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

1.02. Unless the context otherwise requires, the terms used in this Loan Agreement starting with capital letters have the meanings assigned to them in the General Terms and Conditions or in the Addendum to this Loan Agreement.

ARTICLE II Loan

2.01. The Bank agrees to provide the Borrower with a Loan in the amount of six hundred and sixty-one million eight hundred thousand euros (661,800,000 euros) (hereinafter referred to as the Loan) on the terms set out in this Loan Agreement, or referred to therein, in order to assist in financing the program described in Appendix 1 to this Loan Agreement (hereinafter referred to as the Program).

2.02. The Borrower has the right to withdraw the Loan funds in accordance with Section III. Appendices 2 to this Loan 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 pays a One-time Commission no later than 60 days after the Effective Date.

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

2.05. The interest paid by the Borrower for each interest period is a reference rate plus a variable spread or such rate as may be applied after conversion in accordance with Section 3.02 (d) 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 provisions of Appendices 3 to this Loan Agreement.

ARTICLE III Program

3.01. The Borrower declares his commitment to the objectives of the Program. To this end, the Borrower implements the Program through the Executive Agency for the Program in accordance with the provisions of Article IV. General terms and conditions.

3.02. Without being limited by the provisions of Section 3.01 of this Loan Agreement, and unless otherwise agreed between the Borrower and the Bank, the Borrower will ensure the implementation of the Program in accordance with the provisions Appendices 2 to this Loan Agreement.

ARTICLE IV Entry into force

4.01. The deadline for the entry into force of this Loan Agreement is the date following the expiration of ninety (90) days after the date of signing this Loan Agreement.

ARTICLE V Representative; addresses

5.01. The representative of the Borrower authorized for the purposes of Section 9.02 of the General Terms and Conditions is the Minister of Finance.

5.02. The Borrower's address for the purposes of Section 9.01 of the General Terms and Conditions:

Ministry of Finance

Mangilik El Avenue, 8

Nur Sultan, 010000,

Republic of Kazakhstan

Fax: (+7 7172) 750352

5.03. Bank Address:

Asian Infrastructure Investment Bank

Asian Financial Center, No. 1, East Tianchen Street

Chaoyang District, Beijing, 100033, People's Republic of China

Fax: +86-10-8358-0002

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

REPUBLIC OF KAZAKHSTAN BY whom: ______________________ Authorized representative Full name: Yerulan Zhamaubaev Position: Minister of Finance ASIAN INFRASTRUCTURE DEVELOPMENT BANK INVESTMENTS BY WHOM:__ __________________________ Authorized Representative Full name: Konstantin Limitovsky Post: Vice President

_____________________

APPENDIX 1

Program Description

The main goal of the Program is to provide fiscal incentives, including mitigating the serious negative impact of the COVID-19 pandemic on health, income and economic opportunities. The Program includes the implementation of: (i) the Borrower's health policy measures against COVID-19 and the fight against the spread of the pandemic; (ii) social protection and employment restoration measures to mitigate the impact on the poor and vulnerable and destabilize businesses and employment; and (iii) economic incentive measures for the Borrower. A more detailed description of the Program is provided in the Development Policy Letter.

APPENDIX 2

Program Execution

Section I. Implementation mechanisms

A. Institutional arrangements

1. The Borrower, through the Executive Agency of the Program, is responsible for the implementation of the Program, including monitoring and reporting.

2. The Borrower ensures that all actions of its departments and organizations in relation to the implementation of the Program are carried out and coordinated in accordance with sound administrative methods and procedures.

B. Political dialogue

1. The Borrower, through the Executive Agency of the Program, will immediately discuss with the Bank the problems and limitations that have arisen during the implementation of the Program, as well as appropriate measures to eliminate and mitigate them.

2. The Borrower, through the Executive Agency of the Program, will inform the Bank regarding policy discussions with other multilateral and bilateral aid agencies that may have implications for the implementation of the Program, and will provide the Bank with the opportunity to comment on all policy proposals arising from them. The Borrower, through the Executive Agency of the Program, will take into account the Bank's point of view prior to the final approval and implementation of any such proposal.

C. Using Partner Financing

1. The Borrower ensures the use of Partner Financing to finance the implementation of certain programs and activities that correspond to the objectives of the Program.

D. Prohibited practices

1. The Borrower ensures that its staff and other representatives involved in the implementation of the Program adhere to the highest ethical standards in the implementation of the Program. To this end, the Borrower must: (a) require that each of these individuals does not engage in any prohibited practices in relation to the Loan; and (b) ensure that the Program is conducted in accordance with the provisions of the Prohibited Practices Policy.

Section II. Monitoring reporting and evaluation of the Program

But. Program Reports

1. The Borrower will monitor and evaluate the progress of the Program, submit quarterly reports up to 6 months after the Effective Date, and engage in dialogue with the Bank throughout the Program period, including on: (a) the state of the macroeconomic and financial sectors, (b) the implementation of anti-crisis measures as part of the Borrower's plan to combat with COVID-19, (c) budget execution, expenditures and movement of funds, and (d) measures and expenditures made from the national budget to support countercyclical development measures, including medical measures, social protection and employment, economic incentive measures, and (e) tracking beneficiaries of social support programs with gender indicators (with data differentiated by gender).

2. The Borrower will provide or ensure that the Bank is provided with all such reports and information reasonably requested by the Bank related to (i) Partner Financing and its use; and (ii) the implementation of the Program, including the achievement of goals and the implementation of actions provided for in the Development Policy Letter.

3. For the purposes of Section 4.08(c) of the General Terms and Conditions, the Completion Report must be provided to the Bank no later than six months after the Closing Date.

Section III. Withdrawal of Loan funds

But. General provisions

1. The Borrower may withdraw the Loan funds in accordance with the provisions of article II. The General Terms and Conditions, this Section and those additional instructions that the Bank will specify in the notification to the Borrower.

B. Withdrawal conditions; withdrawal period

Distributions

The amount of the allocated Loan (expressed in euros)

One-time tranche

661 800 000

TOTAL AMOUNT

661 800 000

 3. Depositing the Loan amount. Except in cases where otherwise agreed with the Bank:

(a) all withdrawals from the Loan Account must be deposited by the Bank into an Escrow Account designated by the Borrower and acceptable to the Bank;

(b) The Borrower must ensure that each time any Loan amount is deposited into an Escrow Account, the equivalent amount will be recorded in the Borrower's budget management system in a form acceptable to the Bank.

4. No Loan funds may be withdrawn to finance the items specified in Appendix 1 to this Annex 2.

5. For the purposes of Section 2.05(c) of the General Terms and Conditions and paragraph 8 of their Addendum, the Closing Date is December 31, 2021.

C. Financial reports; Audits

1. The Borrower must maintain or ensure that separate statements and documentation on the Deposit Account are maintained in accordance with consistently applied accounting standards acceptable to the Bank, and in an appropriate manner to reflect the statements and documentation of the Deposit Account.

2. Upon receiving a request from the Bank, the Borrower organizes an audit of the financial statements exclusively in relation to the Loan funds, Deposit Account (hereinafter referred to as Financial Reports) by independent auditors, whose qualifications, experience and terms of reference are acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank. The Borrower must submit to the Bank the Financial Statements and the Auditors' Opinions in English immediately after their preparation, but in any case no later than six (6) months after the Bank's request.

Section IV. Other commitments

1. The Borrower must provide timely funds, equipment, services, and other resources that are required in addition to the Loan funds to implement the Program.

Appendix 1 to Appendix 2

List of exceptions (unauthorized expenses)

No withdrawal of Loan funds will be made in respect of the following:

(i) expenses related to goods included in the following groups or subgroups of the United Nations Standard Classification of International Trade, vol. 3 (CMT, ed. 3), or any group or subgroup provided for by further amendments to the CMT, as indicated in the Bank's notification to the Borrower.:

Table: Ineligible articles

Chapter

Heading

Description of articles

112

Alcoholic beverages

121

Tobacco, unprocessed; tobacco production waste

122

Processed tobacco (containing or not containing tobacco substitutes)

525

Radioactive and related materials

667

Pearls, precious and semi-precious stones, whether or not worked

718

718.7

Nuclear reactors and their components; non-radiating fuel cells (cartridges) for nuclear reactors

728

728.43

Tobacco preparation or processing equipment

897

897.3

Jewelry made of metals of the gold, silver or platinum group (excluding wristwatches and watch cases) and gold or silver products (including precious stones)

971

Gold, non-monetary (excluding gold ore and concentrates)

 Source: The United Nations.

(ii) expenses related to goods supplied on the basis of contracts for which financing has been made or agreed upon by any national or international financial institution or agency, including any contracts financed under loans or grants from the Bank;

(iii) expenses related to goods intended for military or paramilitary purposes, or luxury goods;

(iv) Drug costs;

(v) expenses for environmentally hazardous goods, the production, use or import of which is prohibited under the Borrower's legislation or international agreements to which the Borrower has acceded, and

(vi) expenses related to payments prohibited by the Borrower in accordance with a decision of the United Nations Security Council adopted in accordance with Chapter VII of the Charter of the United Nations.

APPENDIX 3

Repayment schedule

1. The following table shows the repayment dates of the principal debt of the Loan and the percentage of the total principal amount of the Loan payable on each Repayment Date of the principal debt (hereinafter referred to as the Repayment Share). If the Loan funds are fully disbursed on the first Repayment Date of the Principal debt, the principal amount of the Loan payable by the Borrower on each Repayment Date of the Principal debt will be determined by the Bank by multiplying: (a) the Loan amount withdrawn on the first Repayment Date of the principal debt; (b) the Repayment Share on each Repayment Date of the Principal debt.

Repayment date of the main debt

Repayment rate (in percentage terms)

Every May 15 and November 15, starting from November 15, 2023 to November 15, 2029

7,14%

May 15th, 2030

7,18%

 2. If the Loan funds are not fully withdrawn on the first Repayment Date of the principal debt, the principal amount of the Loan that will be repaid by the Borrower on each Repayment Date of the principal debt will be determined as follows:

(a) To the extent that any Loan funds have been withdrawn on the first Repayment Date of the Principal debt, the Borrower must repay the Loan amount withdrawn on that date in accordance with paragraph 1 of this Annex.;

(b) Any amounts withdrawn after the first Repayment Date of the principal debt must be repaid on each Repayment Date of the principal debt after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the initial amount of the Repayment Share specified in the table in paragraph 1 of this Annex for that Repayment Date. debt (hereinafter referred to as the Initial amount of the Repayment Share), and the denominator of which is the sum of all remaining initial amounts of the Repayment Share of payments on the repayment dates of the principal debt on or after such date.

3. (a) Loan amounts withdrawn during the two calendar months preceding 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 following the withdrawal date, and will be repayable. for each Repayment Date of the principal debt, starting from the second Repayment Date of the principal debt following the withdrawal date.

(b) Notwithstanding the provisions of subparagraph (a) of this paragraph, if at any time the Bank implements a billing system based on payment dates in which invoices are issued on or after the relevant Repayment Date, the provisions of this subparagraph will not apply to any withdrawals made after the introduction of such billing system.

addition

Section I. Definitions

1. "Borrower" means Recipient, as the term is defined in the General Terms and Conditions.

2. "Partner Financing" means funds in local currency received from the funds of a Loan under the Program.

3. "Deposit Account" means the deposit account designated by the Borrower and agreed upon by the Bank to which funds withdrawn from the Loan Account specified in Section III are deposited.B.3. Appendices 2.

4. "Program Executive Agency" means the Ministry of Finance or any of its legal successors acceptable to the Bank.

5. "General Terms and Conditions" means the "General Terms and Conditions for Asian Infrastructure Investment Bank Sovereign Loans" dated March 20, 2020.

6. "Development Policy Letter" means the development policy letter specified in the Preamble (A) of this Loan Agreement.

7. "Prohibited Practices Policy" means the Bank's "Prohibited Practices Policy" dated December 8, 2016.

Section II. Amendments to the General Terms and Conditions

The following changes have been made to the general terms and conditions:

1. In cases where the term "Project" is used in the General Terms and Conditions, this term should be replaced by the term "Program".

2. In cases where the term "Project Executive Agency" is used in the General Terms and Conditions, this term should be replaced by the term "Program Executive Agency".

3. Section 4.01. The general principles of Project execution have been amended as follows: "Section 4.01. General principles of Program execution. The Borrower must ensure that the Program is implemented: (i) with due vigilance and efficiency and in accordance with sound administrative, financial, public, social, and management practices; and (ii) in accordance with the provisions of Legal Agreements."

4. Section 4.09. Financial management; Financial reporting; Audit removed.

I hereby certify that this translation corresponds to the text of the Loan Agreement (Active Measures to Combat COVID-19 and the Cost Support Program) between the Republic of Kazakhstan and the Asian Infrastructure Investment Bank in English, signed on August 26, 2020 in Nur-Sultan.

Head of the Document Editing and Linguistic Expertise Department of the Document Management Department of the Ministry of Finance of the Republic of Kazakhstan

B. Akhmetzhanova

President

Republic of Kazakhstan

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