On the Ratification of the Loan Agreement (Normal Operations) (CAREC Transport Corridor 1 [Zhambyl Region Sites] [Western Europe-Western China International Transit Corridor] Investment Program - Project 1) between the Republic of Kazakhstan and the Asian Development Bank

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On the Ratification of the Loan Agreement (Normal Operations) (CAREC Transport Corridor 1 [Zhambyl Region Sites] [Western Europe-Western China International Transit Corridor] Investment Program - Project 1) between the Republic of Kazakhstan and the Asian Development Bank

Law of the Republic of Kazakhstan dated July 7, 2009 No. 170-IV

To ratify the Loan Agreement (Normal Operations) (CAREC Transport Corridor 1 [Zhambyl Region Sites] [Western Europe-Western China International Transit Corridor] Investment Program - Project 1) between the Republic of Kazakhstan and the Asian Development Bank, signed in Astana on March 30, 2009.

President of the Republic of Kazakhstan N. Nazarbayev

[Translated from English]

______________________________________________________________

LOAN NUMBER 2503-KAZ

LOAN AGREEMENT (Normal operations)

(CAREC Transport Corridor 1 [Zhambyl Region Sites] (Western Europe-Western China International Transit Corridor) Investment Program - Project 1) between the REPUBLIC of KAZAKHSTAN and the ASIAN DEVELOPMENT BANK

date_________

______________________________________________________________

LAL:KAZ_____

LOAN AGREEMENT (Normal operations)

LOAN AGREEMENT dated ________ between the REPUBLIC OF KAZAKHSTAN (hereinafter referred to as the Borrower) and the ASIAN DEVELOPMENT BANK (hereinafter referred to as ADB).

TAKING INTO ACCOUNT THE FOLLOWING

(A) in accordance with the financing framework agreement from _______ concluded between the Borrower and ADB, ADB undertakes to provide a multi-tranche financing mechanism (MMF) in accordance with the following terms to the Borrower to finance projects under the Investment Program; (B) by submitting a periodic request for financing from ______ The Borrower has applied to ADB for a loan for the purposes of the Project described in Annex 1 of this Loan Agreement; and (C) ADB has agreed to provide the Borrower with a loan from ADB's regular capital resources on the terms and conditions set out below; TAKING INTO ACCOUNT THE ABOVE, the parties to this agreement have agreed on the following:

ARTICLE I

Loan rules; Definitions

Section 1.01. All loan provisions for ordinary operations applicable to loans at the London Interbank Rate allocated from ADB's Ordinary Core Resources dated July 1, 2001, are hereby deemed to be applicable to this Loan Agreement and in full force as if they were set out in the text of this Agreement, but subject to the following amendments (the aforementioned The Loan Rules for Ordinary Transactions, as amended, are hereinafter referred to as the Loan Rules):

(a) Section 3.03 has been deleted and replaced by the following:

Reservation fee; Credit . (aa) The Borrower undertakes to pay a reservation fee for the unclaimed loan amount at the rates and conditions stipulated in this Loan Agreement. (bb) ADB undertakes to provide the Borrower with a loan at the rates stipulated in this Loan Agreement, and such loan is not subject to change until the end of the loan term. ADB undertakes to apply the amount of this loan in relation to the interest payable by the Borrower.

(b) Section 3.06 has been deleted and replaced by the following:

(aa) Upon each notification from ADB that the fixed spread applicable to new loans will be reduced, ADB undertakes to provide refunds to each Borrower with an unclaimed loan to which a higher fixed spread applies. The amount of the refund will be determined by multiplying (i) the difference between the fixed spread applicable to the unclaimed loan and the fixed spread applicable to new loans (expressed as an annual percentage value) by (ii) the principal amount of the unclaimed loan, on which the Borrower undertakes to pay interest for all interest periods starting from the date of the entry into force of the reduced fixed spread applicable to new loans. (bb) Upon each notification from ADB that its calculations of debt consolidation costs in relation to the loan currency (or approved currency) have resulted in cost savings in any half-year, ADB undertakes to reimburse the Borrower. The amount of the refund will be determined by multiplying (i) the cost of debt consolidation (expressed as an annual percentage) by (ii) the principal amount of the loan, on which the Borrower undertakes to pay interest during the interest period beginning immediately after the half-year in which the cost of debt consolidation was calculated. ADB undertakes to deduct the amount of the refund from the interest payable by the Borrower during the interest period beginning after the half-year in which the debt consolidation costs were calculated.

(aa) Upon each notification from ADB that the fixed spread applicable to new loans will be increased, each Borrower with an unclaimed loan to which a lower fixed spread applies undertakes to pay an additional amount to ADB. This amount will be determined by multiplying (i) the difference between the fixed spread applicable to new loans and the fixed spread applicable to unclaimed loans (expressed as an annual percentage value) by (ii) the principal amount of the unclaimed loan, on which the Borrower undertakes to pay interest for all interest periods starting from the date of the entry into force of the increased fixed spread applicable to new loans. (bb) After each notification to ADB that its debt consolidation costs in relation to the loan currency (or approved currency) in any half-year resulted in additional costs, the Borrower undertakes to pay the additional amount to ADB. This amount will be determined by multiplying (i) the weighted cost of debt consolidation (as an annual percentage) by (ii) the principal amount of the loan on which the Borrower undertakes to pay interest during the interest period beginning after the half-year in which the cost of debt consolidation was calculated. ADB undertakes to add the amount of the additional payment to the interest payable by the Borrower during the interest period beginning after the half-year in which the debt consolidation costs were calculated. Section 1.02. In each case used in this Loan Agreement, unless otherwise required by the context, the following terms defined in the Loan Terms have their respective meanings, as well as several additional terms have the following definitions: (a) "CAREC Transport Corridor 1" is a segment of the Western Europe-Western China international transit corridor from Khorgos on the border with the People's Republic of China (PRC) through Almaty and Shymkent to the western border with the Russian Federation; (b) "EOBOC" unified environmental impact assessment prepared for the Investment Program, implemented by the Borrower and agreed with ADB; (c) "Guidelines for Attracting Consulting Services" - ADB Guidelines for Attracting Consulting Services by the Asian Development Bank and its Borrowers (2007, as periodically amended); (d) "KAD" means the Committee of Highways of the Borrower's MTK and its legal successor; (e) "EPA" means the Environmental Impact Assessment Framework agreed between the Borrower and ADB and included by reference in Appendix 5 to the RSF; (f) "EPA" is the Environmental Protection Plan included in the Preliminary Environmental Impact Assessment (EPA); (g) "EPA" is the Preliminary Environmental Impact Assessment prepared for the Project by the Borrower and approved by ADB; (h) "MMF" is the multi-tranche financing mechanism provided by ADB to the Borrower to finance projects under the Investment Program; (i) "RSF" is a financing framework agreement from _______ concluded between ADB and the Borrower in relation to the MMF; (j) "HIV/AIDS" - human immunodeficiency virus/acquired immunodeficiency syndrome; (k) "IFI" - international financial institutions; (l) "Investment Program" - Borrower's Investment Program for the Taraz-Kordai section of the CAREC 1 Transport Corridor in accordance with Annex 1 of the RSF; (m) "OVZP" - Fundamentals of land purchase and Resettlement, agreed between the Borrower and the ADB and included by reference in Appendix 5 of the RSF; (n) "PRSP" - A Plan for the purchase of land and resettlement within the framework of the project; (o) "Loan Repayment Guide" - ADB Loan Repayment Guide (2007 with periodic amendments); (p) "MF" - Ministry of Finance of the Borrower and its legal successors; (q) "MTK" - Ministry of Transport and Communications of the Borrower; (r) "NGO" - non-governmental organization; (s) "RFP" - a periodic request for financing submitted by the Borrower for the purpose of obtaining a loan under the MMF and for the purpose of obtaining funds from this Loan Agreement means a periodic request for financing from_______; (t) "CBM-ADB" is a group of project management consultants in accordance with paragraph 2 of Annex 5 of this Agreement; (u) "CBM-WB" is a project management group established under a loan from the World Bank; (v) "Procurement Manual" is the ADB Procurement Manual (2007, with (w) "Procurement Plan" means the procurement plan for the project dated October 10, 2008, agreed between the Borrower and ADB, with periodic updates in accordance with the Procurement Manual, Consultant Engagement Manual and other principles agreed with ADB; (x) "Project" is a general definition given in the Loan Rules and is referred to as Project 1 under the Investment Program for this Loan Agreement; (y) "Project Territory" is the Taraz-Kordai site, Zhambyl region, on the territory of the Borrower; (z) "Project Executive Agency" or "IA" - for the purposes and within the framework of the Loan Rules means the ITC and its legal successor as the organization responsible for the execution of the project; (aa) "Project facilities" - facilities that will be built or provided as part of the project; (bb) "Project Road" - sections of the CAREC 1 Transport Corridor between Taraz and Kordai from km 404 to km 483 and from km 214 to km 260 on the project territory to be reconstructed within the framework of the Project; (cc) "Region" - administrative division unit of the Borrower; (dd) "EiS" - operation and maintenance; (her) "district" - a unit of administrative and territorial division within the region; (ff) "PRAD" - the Borrower's Highway Development Program for 2006-2012; (gg) "KOVOS" - a brief summary; (hh) "WB Loan" means a loan provided by the World Bank to the Borrower for the development program of the Western Europe-Western China international transit corridor; (ii) "Works" means construction work financed by the loan, including services such as drilling or mapping, as well as services related to the project and provided in as part of a single commitment or a turnkey construction contract, with the exception of consulting services.

ARTICLE II

Loan

Section 2.01. (a) ADB agrees to provide a loan to the Borrower from ADB's ordinary capital resources in the amount of three hundred and forty million US dollars ($340,000,000), and this amount may be converted periodically as part of the Conversion in accordance with the provisions of Section 2.06 of this Loan Agreement. (b) The loan assumes a principal repayment period of 20 years, as well as a grace period in accordance with paragraph (c) of this Article. (c) The definition of "grace period" used in paragraph (b) of this Article means the period preceding the first Payment Date for repayment of the principal amount of the loan in accordance with the repayment schedule set out in Annex 2 of this Loan Agreement. Section 2.02. The borrower undertakes to pay interest to ADB on the principal amount of the loan, demanded and unclaimed, periodically at the rates of each interest period equal to the amount of the London Interbank Rate and 0.60% in accordance with Section 3.02 of the Loan Terms, minus the loan 0.40% in accordance with Section 3.03 of the Loan Terms. Section 2.03. The Borrower undertakes to pay a reservation fee in the amount of 0.15% annually. This commission is charged on the unclaimed loan amount upon expiration of sixty (60) days after the conclusion of this Loan Agreement. Section 2.04. Interest and other loan payments are due once a half-year on April 15 and October 15 of each year. Section 2.05. The Borrower undertakes to pay the principal amount of the loan claimed from the Loan Account in accordance with the provisions of Appendix 2 of this Loan Agreement. Section 2.06. (a) The Borrower may at any time request the following loan conversions in order to optimally manage the loan: (i) Changing the loan currency of the full or partial loan amount, demanded or unclaimed, to the approved currency; (ii) Changing the interest rate applicable to the full or partial amount of a loan from a floating interest rate to a fixed one and vice versa; and (iii) Setting a limit on the floating interest rate applicable to the full or partial amount of a loan, demanded or unclaimed, by setting an interest "cap" (fixed maximum interest rate) or fixed minimum and the maximum interest rate. (b) A request for changes stipulated in paragraph (a) of this Article, approved by ADB, should be considered a "Conversion" as defined in Section 2.01(6) of the Loan Rules, effective in accordance with the provisions of Section V of the Loan Rules and the Conversion Instructions.

ARTICLE III

Use of loan funds

Section 3.01. The Borrower undertakes to use the loan funds to finance the project in accordance with the provisions of this Loan Agreement. Section 3.02. Work and consulting services, as well as other expenses financed from the loan, and the allocation of loan amounts to various categories of work, consulting services and other expenses must be carried out in accordance with the provisions of Annex 3 of this Loan Agreement, with periodic additions to this Annex permitted by agreement of the Borrower and ADB. Section 3.03. Unless otherwise specified by ADB, all work and consulting services financed by the Loan must be performed in accordance with the provisions of Annex 4 of this Loan Agreement. ADB has the right to refuse to finance a contract for which work and consulting services have not been performed in accordance with the procedures agreed upon by the Borrower and ADB, or if the terms and conditions of the contract do not meet the requirements of ADB. Section 3.04. Unless otherwise specified by ADB, the Borrower undertakes to ensure that all work and consulting services financed by the loan are used solely for the purpose of executing the project. Section 3.05. The closing date for withdrawal of funds from the loan account for the purposes set out in Section 9.02 of the Loan Terms is December 31, 2013, or another date agreed between the Borrower and ADB.

ARTICLE IV

Special conditions

Section 4.01. (a) The Borrower undertakes to execute the Project with due responsibility and efficiency and in accordance with sound administrative, financial, engineering, environmental and social safety measures, as well as in accordance with procedures for the operation and maintenance of roads. (b) During the implementation of the Project and the operation of the Project Facilities, the Borrower undertakes to fulfill or commission the fulfillment of all obligations set out in Appendix 5 of this Loan Agreement. Section 4.02. The Borrower undertakes to immediately provide funds, facilities, services, land and other resources, in addition to the Loan funds, necessary for the execution of the Project and for the operation and maintenance of the Project Facilities. Section 4.03. (a) During the implementation of the Project, the Borrower undertakes to ensure the involvement of competent and qualified consultants and contractors, in agreement with ADB, for a period and on terms that meet the requirements of the Borrower and ADB. (b) The Borrower undertakes to ensure that the Project is implemented in accordance with the plans, design standards, specifications, work schedules and construction methods approved by ADB. The Borrower undertakes to develop or commission the development of these plans, design standards, specifications and work schedules, as well as any subsequent material changes, with the degree of detail that ADB reasonably requires. Section 4.04. The Borrower undertakes to ensure that all actions of its ministries and organizations regarding the execution of the Project and the operation of the Project Facilities are carried out in accordance with sound administrative policies and procedures. Section 4.05. (a) The Borrower undertakes (i) to maintain or commission the maintenance of separate accounts for the Project; (ii) to conduct an annual audit of these accounts and related financial statements in accordance with relevant auditing standards, with the involvement of independent auditors whose qualifications, work experience and terms of reference meet the requirements of the ADB; (iii) provide ADB, as soon as it receives, but in no case more than six (6) months after the end of each relevant fiscal year, copies of these reports that have not been audited and no more than six (6) months after the end of the relevant fiscal year, certified copies of these accounts and the financial statements that have been audited, as well as the auditors' report (including the auditors' opinion on the use of the loan funds and compliance with the financial terms of this Loan Agreement), in English; and (iv) provide ADB with other information relevant to these accounts and financial statements and the audit, upon ADB's periodic reasonable request. (b) The Borrower undertakes to grant ADB the right, at the request of ADB, to periodically discuss the Borrower's financial statements for the project and its financial affairs related to the Project with auditors hired by the Borrower in accordance with the provisions of Section 4.05(a) and undertakes to authorize and require any representative of the auditors to participate in this discussion., at the request of the ADB, provided that the discussion will be conducted only in the presence of an authorized representative of the Borrower, unless otherwise specified by the Borrower. Section 4.06. The Borrower undertakes to provide an opportunity for ADB representatives to inspect the Project and the Project Facilities financed by the Loan, as well as relevant records and documents. Section 4.07. The Borrower undertakes to ensure that all Project Facilities are operated, maintained and repaired in accordance with sound administrative, financial, engineering, environmental and social safety measures, as well as in accordance with procedures for the operation and maintenance of roads.

ARTICLE V

Temporary suspension; Reduction of repayment period

Section 5.01. The following is an additional case of suspension of the Borrower's right to withdraw funds from the loan account for the purposes set out in Section 9.01(I) of the Loan Rules: if the WB Loan is subject to suspension or cancellation, or is due to be repaid before the agreed repayment date. Section 5.02. The following is an additional case of shortening the repayment date of the loan for the purposes set out in Section 9.07(a)(iv) of the Loan Terms and Conditions: if the events described in Section 5.01 of this Loan Agreement have occurred.

ARTICLE VI

Entry into force

Section 6.01. The date sixty (60) days after the conclusion of this Loan Agreement shall be deemed to be the effective date of the Loan Agreement for the purposes set out in Section 10.04 of the Loan Terms.

ARTICLE VII

Other provisions

Section 7.01. The Borrower's Minister of Finance acts as the Borrower's representative for the purposes set out in Section 12.02 of the Loan Rules. Section 7.02. The following details are provided for the purposes set out in Section 12.01 of the Loan Terms:

The borrower

Ministry of Finance 11 Pobedy Avenue Astana, 010000 Republic of Kazakhstan

Fax: +7(7172)71 77 85

ADB

Asian Development Bank P.O. Box 789 0980 Manila, Philippines

Fax number: (632) 636-2444 (632) 636-2428.

IN SUPPORT OF THE ABOVE, the parties, represented by their authorized representatives, have ensured that this Loan Agreement is signed with appropriate signatures and delivered to ADB headquarters on the date and year indicated above.

REPUBLIC OF KAZAKHSTAN ____________________________ Authorized representative

ASIAN DEVELOPMENT BANK ____________________________

APPENDIX 1

Project Description

1. It is expected that the implementation of the Investment Program will ensure stable economic development of the Borrower. 2. As part of the Investment Program, the Project is aimed at developing an efficient transport system in the Project Area. 3. The project consists of two components: (i) road development, including the construction and reconstruction of about 125 km of the Project Road, and (ii) the road maintenance and maintenance component, described in more detail in the RFP. 4. The project is expected to be completed by December 31, 2012.

APPENDIX 2

Loan Repayment Schedule (CAREC Transport Corridor 1 [Zhambyl Region Sites] (Western Europe-Western China International Transit Corridor) Investment Program - Project 1)

1. The following table shows the Repayment Dates of the principal amount of the loan and a percentage of the total principal amount of the loan for each Repayment Date of the principal amount of the loan (Regular Installment). If the loan funds were fully withdrawn at the time of the first repayment date for the principal loan, the principal amount of the loan to be repaid by the Borrower on each repayment date will be determined by ADB by multiplying: (a) the total principal amount of the loan claimed and unclaimed at the time of the first repayment date for the principal loan; (b) On the next installment for each payment date for repayment of the main loan, the repayment amount will be modified as necessary to deduct the amounts described in paragraph 4 of this Annex to which the Conversion applies.

Sequence

Payment date

The next installment (expressed in %)

15 Apr 2014

2,500000

October 15, 2014

2,500000

15 Apr 2015

2,500000

October 15, 2015

2,500000

15 Apr 2016

2,500000

October 15, 2016

2,500000

15 Apr 2017

2,500000

October 15, 2017

2,500000

15 Apr 2018

2,500000

October 15, 2018

2,500000

15 Apr 2019

2,500000

October 15, 2019

2,500000

15 Apr 2020

2,500000

October 15, 2020

2,500000

15 Apr 2021

2,500000

October 15, 2021

2,500000

15 Apr 2022

2,500000

October 15, 2022

2,500000

15 Apr 2023

2,500000

October 15, 2023

2,500000

15 Apr 2024

2,500000

October 15, 2024

2,500000

15 Apr 2025

2,500000

October 15, 2025

2,500000

15 Apr 2026

2,500000

October 15, 2026

2,500000

15 Apr 2027

2,500000

October 15, 2027

2,500000

15 Apr 2028

2.500000

October 15, 2028

2.500000

15 Apr 2029

2.500000

October 15, 2029

2.500000

15 Apr 2030

2.500000

October 15, 2030

2.500000

15 Apr 2031

2.500000

October 15, 2031

2.500000

15 Apr 2032

2.500000

October 15, 2032

2.500000

15 Apr 2033

2.500000

October 15, 2033

2.500000

Total

100.000000

2. If the loan funds have not been fully claimed before the first payment date for repayment of the principal loan, the principal amount payable by the Borrower on each payment date for repayment of the principal loan will be determined as follows: (a) To the extent of the loan funds that should have been claimed before the first payment date for repayment of the principal loan, the Borrower undertakes to pay the amount demanded and not demanded at the time of this date in accordance with paragraph 1 of this Annex. (b) Withdrawals after the first repayment date of the principal loan are repayable on each repayment date of the principal loan, after the date of the withdrawal, in amounts determined by ADB by multiplying the amount of each withdrawal by a fraction, the numerator of which is the initial Installment indicated in the table in paragraph 1 of this Annex for the aforementioned payment date. in repayment of the main loan (Initial Installment), and the denominator of which is the sum of all remaining Initial Regular Contributions for the payment dates for repayment of the main loan after this date. These payment amounts will be modified, if necessary, to deduct the amounts specified in paragraph 4 of this Annex to which the Conversion applies. 3. Withdrawals made within two calendar months prior to any of the main loan repayment dates, solely for the purpose of calculating the principal amounts payable on the main repayment days, should be considered claimed and unclaimed at the time of the second main loan repayment date after the withdrawal date, and this amount is payable on each payment date. in repayment of the main loan, starting from the second date after the withdrawal of funds. 4. Regardless of what is specified in paragraphs 1 and 2 of this Annex, when Converting currencies in full or in part of the requested loan funds into an approved currency, the amount of funds converted into the aforementioned approved currency, which is due to be repaid on any of the main repayment dates after the conversion period, will be determined by ADB by multiplying this amount in the currency that had place immediately before Conversion to either: (i) a currency exchange rate reflecting the amounts in the specified approved currency to be paid to ADB under the dual currency conversion, related to the aforementioned Conversion; or (ii) as decided by ADB in accordance with the Conversion Instructions, to a component of the exchange rate of the established rate. 5. If the principal amount of a loan, claimed and unclaimed, is periodically denominated in more than one loan currency, the provisions of this Annex should be applied separately to the amounts denominated in each loan currency in order to develop a separate repayment schedule for each of these amounts.

APPENDIX 3

Allocation and withdrawal of loan funds

General provisions

1. The table in this Appendix defines the Categories of Goods, Works, consulting services and other expenses financed by the loan, as well as the distribution of loan amounts for each of the Categories (hereinafter referred to as the Table). (Further references to the terms "Category" or "Categories" in this Appendix refer to the Category or Categories of the Table).

Percentage values of ADB financing

2. Unless otherwise agreed by ADB, the expenditures of the Categories listed in the Table will be financed from the loan funds based on the percentage values shown in the Table.

Redistribution

3. Regardless of the allocation of the loan funds and the demand interest shown in the Table, (a) if the loan amount allocated for each category is insufficient to finance all agreed expenditures in that Category, ADB may, subject to notification to the Borrower, (i) reallocate funds for that Category to fill the shortfall by funds allocated to another category that, in the ADB's opinion, are not needed to finance other expenses, and (ii) if this reallocation does not make up for the shortfall, reduce the percentage of funds required for these expenses so that further claims for this Category are made until all expenses have been covered; and (b) if the loan amount allocated to any Category exceeds all agreed expenses in this Category, ADB may, subject to notification to the Borrower, redistribute the excess amount in favor of another Category.

Loan repayment procedure

4. Unless otherwise agreed by ADB, the loan funds for financing Work, consulting services and other expenses are payable in accordance with the Loan Repayment Guidelines.

The condition for withdrawing funds from the loan account

5. Regardless of the other provisions of this Loan Agreement, withdrawals from the loan account may not be made until the Borrower confirms to ADB, in a format and content satisfactory to ADB, that the CBM-ADB group has been properly formed, including the appointment of a Project Director, and has begun its work in accordance with ADB requirements., in order to implement the Investment Program.

Addendum to Appendix 3

table

ALLOCATION AND DEMAND OF LOAN FUNDS (CAREC Transport Corridor 1 [Zhambyl Region Sites] (Western Europe-Western China International Transit Corridor) Investment Program - Project 1)

category

THE BASIS OF ADB FINANCING

Number

Name

Total amount for ADB financing

$ Category

Percentage of ADB financing from the Loan Account

Works

297,000,000

85 percent of the total requested amount

Consulting services

14,000,000

100 percent of the total requested amount *

Unallocated funds

29,000,000

Total

340,000,000

* Not including taxes and duties levied on the territory of the Borrower

APPENDIX 4

Procurement of Works and Consulting services

A. General provisions

1. All Works and Consulting Services financed by the loan are subject to execution and control in accordance with the Procurement Manual and the Consultant Engagement Manual, respectively. 2. All terms used and not defined in this Loan Agreement are defined in the Procurement Manual and/or the Consultant Engagement Manual, as appropriate.

B. Procurement of Works

3. Unless otherwise agreed by ADB, the Works must be purchased based on the procurement procedure set out below.:

International competitive bidding

The procurement procedure, among other conditions, is subject to execution in accordance with the detailed agreement and the threshold cost specified in the Procurement Plan. The borrower has the right to modify the procurement procedure or the threshold cost only subject to prior agreement with ADB, and all changes should be reflected in the additions to the Procurement Plan.

C. The condition of the contract

 4. The Borrower undertakes to ensure that the contract for the performance of work under the project is not concluded until the Loan Agreement has been prepared by the Borrower, if necessary based on the design results, and approved by ADB in accordance with paragraph 11 of Annex 5 of this Loan Agreement.

D. Selection of consulting services

5. The choice is based on an assessment of the quality and price of services. Unless otherwise specified by the ADB, the Borrower undertakes to instruct the IA to select and hire consulting services based on an assessment of the quality and price of the services. The Project is expected to involve the following consulting services: (i) project management, (ii) construction supervision, (iii) improvement of the highway management system, and (iv) development of an Intelligent Transportation System. The borrower has the right to change the method of attracting consultants or their project assignment with prior approval from ADB, while all changes should be reflected in the additions to the Procurement Plan.

E. Industrial and intellectual property rights

6. (a) The Borrower undertakes to instruct IA to ensure that the purchased Works (including, but not limited to, all computer hardware and software, computer systems purchased either separately or as part of other goods and services) do not infringe on the industrial or intellectual property rights of third parties. (b) The Borrower undertakes to instruct IA to ensure that all contracts for the procurement of Works contain appropriate assurances, guarantees and, if necessary, guarantees of damages from the contractor or supplier in respect of the cases specified in subparagraph (a) of this paragraph. 7. The borrower undertakes to instruct IA to ensure that all contracts with consultants funded by ADB contain appropriate assurances, guarantees and, if necessary, guarantees of compensation from consultants, while ensuring that the consulting services provided do not infringe on the rights of third parties to industrial or intellectual property.

APPENDIX 5

Project implementation and operation of project facilities; Financial issues

Implementation procedure

1. The Borrower undertakes to appoint MTK as the IA responsible for the overall execution of the project and liaises with ADB and other IFIs involved in the reconstruction of the CAREC Transport Corridor 1. The borrower undertakes to instruct the ITC to appoint the KAD as the organization responsible for the implementation of the project. The ITC undertakes to appoint a Project Director from among its qualified staff with experience as a project manager satisfying the ADB. The Project Director assumes responsibility for the day-to-day execution of the project and the Investment Program, including project preparation, execution, monitoring and reporting. 2. The borrower undertakes to instruct MTK to ensure that (a) the CBM-ADB group is formed in a timely manner, and (b) the Project Director is provided with adequate support during the project execution period by MTK personnel responsible for engineering, financial, legal and procurement issues. 3. The borrower undertakes to instruct the ITC to ensure that the Project Director receives the necessary support from the CBM-ADB in the execution of the project. 4. The Borrower undertakes to instruct the ITC to ensure that the CBM-WB group is formed in a timely manner to coordinate all actions within the framework of the reconstruction of the CAREC 1 Transport Corridor and provides the necessary support in the areas of safety compliance, legal and financial management within the framework of the project.

Co-financing

5. Without prejudice to the general meaning of Section 4.02 of this Loan Agreement, the Borrower undertakes to provide all co-financing funds necessary for the timely and effective execution of the project and the PRA in the form of annually allocated budgetary funds for the MTC and undertakes to ensure that the necessary resources are provided in a timely manner. The Borrower undertakes to instruct the ITC to include all changes in the financing needs of the project and the Investment Program in its annual development programs.

Financing the development and maintenance of highways

6. The Borrower undertakes to instruct the ITC to (a) allocate a budget for current maintenance in accordance with the PRAD Road Development Plan; and (b) ensure that for each fiscal year after 2012, the budget is increased by at least the annual inflation rate, provided that a stable fiscal balance is maintained under all circumstances. The Borrower undertakes to audit such expenses annually and provide audit reports to ADB upon request.

Quality of construction work

 7. The Borrower undertakes to instruct the ITC to ensure that (a) the project is executed and in accordance with the necessary technical specifications and plans, and that construction supervision, quality control and project management are carried out in accordance with applicable standards and international best practices; and (b) other road sections related to the Road Development Plan are maintained in accordance with the relevant standards and the best international experience.

Ensuring road safety

 8. The borrower undertakes to instruct the ITC to (a) ensure that all non-construction contracts include the contractor's obligation to implement road safety measures; and (b) monitor the accident rate and traffic intensity after the start of operation of the project road.

Environment

9. The Borrower undertakes to ensure that (a) design decisions, construction, operation and maintenance of Project Facilities are carried out in accordance with the ADB Environmental Policy (2002), the Borrower's environmental legislation, the EPA, the EPA, and the EPA; and (b) the potential harmful impact of the project on the environment is reduced by taking measures to minimize the impact environmental impact assessment and monitoring, in accordance with the EPA.

10. The Borrower undertakes to ensure that (a) the EPA is updated prior to the issuance of a notice of commencement of construction; (b) sufficient resources are provided for the execution, monitoring and reporting of the EPA; (c) Semi-annual environmental reports are prepared and submitted to ADB by the Project Director, within three (3) months after each reporting period.; (d) The reports include, but are not limited to, a progress report on the implementation of the EPA, issues and measures to address these issues; (e) the detailed engineering plan and construction contracts for the project include the necessary environmental measures outlined in the EPA; and (f) construction contractors are monitored to ensure compliance with the requirements of the EPA and EPA.

Prioritization of land and resettlement

11. The Borrower undertakes to ensure that, to the maximum extent possible, the Project does not require the purchase of land or the involuntary relocation of residents, and all work will be carried out within the framework of existing road rights. However, if, according to the detailed Project plan, additional land plots are required leading to land purchase, relocation of residents or loss of assets, the Borrower undertakes to instruct the ITC to ensure that the Project is executed in accordance with the Borrower's current legislation, ADB Policy on Involuntary Resettlement (1995) and HIA, including, but not limited to the following provisions: (a) The HIA should be prepared during the meeting and brought to the attention of the affected residents in accordance with the provisions of the HIA; (b) The LRA must be submitted to ADB for review and approval before any construction contracts are awarded; (c) All land and allotment certificates required for the project must be acquired in a timely manner; (d) Compensation and resettlement assistance must be provided to the affected persons prior to their eviction; (e) Effective mechanisms should work in accordance with the PRSP to help affected individuals resolve issues and complaints, if they arise, in a timely manner; (f) Appropriate staff and resources should be provided within the CCMP-WB to independently monitor the implementation of the PRSP and provide the results to ADB semi-annually. Semi-annual reports must be submitted within three (3) months after the end of each reporting period. Internal monitoring should be carried out by the district administration; (g) If, during the period of implementation of the PRA, terrain changes, road closures, or additional environmental impacts and resettlement are carried out, it is necessary to make additions to the PRA and obtain the approval of ADB and relevant government authorities before the subsequent implementation of the PRA.

Execution of work contracts

12. The borrower undertakes to ensure that, after the conclusion of contracts, notices of the commencement of work to the contractor for the relevant sections and sections of the project road are not issued until the relevant provisions of the PRRA (including, in particular, timely payment of compensation to affected persons), as well as the provisions of the EPA and the EPA are complied with.

Occupational safety, health, gender equality and social protection

13. The borrower guarantees that the ITC will include (a) special provisions in the tender documents to ensure that construction contractors comply with (i) the applicable basic standards of the Labor Code, labor laws and the application of relevant workplace safety standards; (ii) equal pay for men and women for equal work; (iii) non-use of child labor during the construction and maintenance of roads; and (iv) maximize the employment of the local poor and unemployed in order to implement the project, provided that job requirements are effectively and adequately met, and (b) relevant organizations, such as NGOs, will disseminate information on the risks of sexually transmitted diseases, including HIV/AIDS, among employees of contractors involved in this Project and among local residents living in close proximity to the road of this Project.

Reform of the road industry

14. The borrower undertakes to ensure that (a) the road sector policy plan, which defines development actions in accordance with Table 1 of Appendix 1 of the RSF, is properly implemented (including sound governance and accountability, stable financing, policy and management plan, management reforms and development of productive capacities, road safety, stability of the road sector, and the operation and management of road transport); (b) the ADB is promptly notified of any changes affecting the project, its financing plan and its progress; and (c) the necessary meetings are held with the ADB in the form of a dialogue on these issues.

Fight against corruption

15. The Borrower undertakes to follow the ADB's Anti-Corruption Policy (1998, as amended). The Borrower, in accordance with its commitment to good governance, accountability, and transparency, agrees (a) that ADB has the right to investigate, directly or through its agents, all alleged cases of corruption, fraud, collusion, or coercion related to the project, and (b) to cooperate fully and facilitate such investigation by providing the necessary support, including providing access to relevant reports and records, as necessary, for the investigation. The Borrower also undertakes to (a) conduct periodic reviews of contractors' actions related to the execution of loan funds and disbursements; (b) ensure that all contracts financed by ADB under the project include provisions stipulating ADB's right to audit and verify all reports, records and accounts of all contractors, suppliers and consultants, as well as other persons providing services within the framework of the project; (c) ensure that the construction supervision consultant verifies contractors' payment certificates in accordance with the working drawings and specifications of the contract; and (d) ensure the implementation of the anti-corruption plan agreed with ADB.

Financial Management Action Plan

16. The Borrower undertakes to entrust MTK with the implementation of the financial management action plan, so that (a) within six (6) months from the Effective Date, the financial management functions of the project will be transferred to the appropriate unit within the Department of Finance of MTK, staffed with appropriate qualifications; (b) A financial procedure manual should be developed and approved within nine (9) months from the Effective Date; training of project financial management personnel should begin; Install an automated accounting system capable of recording and reporting on an annual basis all project transactions and preparing interim financial reports.

Project operation monitoring system

17. The Borrower undertakes to instruct the MTK to implement the SMFP within six (6) months from the Effective Date and to collect initial data for monitoring the operation. The key indicators and assumptions listed at the impact and outcome levels in the project and monitoring plans provide the basic information needed for analysis.

Project Overview

18. The borrower undertakes to instruct the ITC, represented by the Project Director, to provide to ADB: (i) quarterly reports on the status of the project within two (2) weeks after the end of the reporting quarter and (ii) other reports on the functioning and monitoring of the project once every six months. A consolidated interim review should be conducted two (2) years after entry into force. The interim review should cover the engineering, environmental and social safety measures of the project, compliance with the terms of the loan and the obligations set out in the RSF. The review provides for any necessary interim amendments to ensure the successful implementation and achievement of the objectives set within the framework of the project and the Investment Program.

I hereby certify that this translation corresponds to the text of the Loan Agreement (Normal Operations) (CAREC Transport Corridor 1 [Sections in Zhambyl Region] (Western Europe-Western China International Transit Corridor) Investment Program - Project 1) between the Republic of Kazakhstan and the Asian Development Bank in English, signed in Astana on March 30, 2009.

Head of the HR and Document Management Department Ministry of Finance of the Republic of Kazakhstan N. Shabanov

President

Republic of Kazakhstan

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