On the ratification of the Loan Agreement (Normal Operations) (Investment Program for the CAREC Transport Corridor 2 (sections of Mangystau Region) – Project 1) between the Republic of Kazakhstan and the Asian Development Bank

Home / RLA / On the ratification of the Loan Agreement (Normal Operations) (Investment Program for the CAREC Transport Corridor 2 (sections of Mangystau Region) – Project 1) between the Republic of Kazakhstan and the Asian Development Bank

On the ratification of the Loan Agreement (Normal Operations) (Investment Program for the CAREC Transport Corridor 2 (sections of Mangystau Region) – Project 1) between the Republic of Kazakhstan and the Asian Development Bank

The Law of the Republic of Kazakhstan dated February 16, 2012 No. 558-IV SAM

To ratify Loan Agreement (Normal Operations) (Investment Program for the CAREC Transport Corridor 2 (sections of Mangystau region) – Project 1) between the Republic of Kazakhstan and the Asian Development Bank, signed in Astana on August 22, 2011.

President of the Republic of Kazakhstan N. NAZARBAYEV

LOAN NUMBER 2728-KAZ

LOAN AGREEMENT (Normal operations)

(Investment Program for the CAREC Transport Corridor 2 (Mangystau Region sections) – Project 1) between

BY THE REPUBLIC OF KAZAKHSTAN

and

BY THE ASIAN DEVELOPMENT BANK

Date August 22, 2011

LOAN AGREEMENT (Normal operations)

LOAN AGREEMENT dated August 22, 2011 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) Pursuant to the financing framework agreement dated April 7, 2011 between the Borrower and ADB ("RSF"), ADB has agreed to provide a multi-tranche financing facility to the Borrower for the purpose of financing projects under the Investment Program ("Investment Program") of the CAREC Transport Corridor 2 (sections of the Mangystau Region); (B) through a periodic financing request dated December 15, 2010 provided by the Borrower, the Borrower applied to ADB for a loan for the purposes of the Project described in Appendix 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. IN VIEW OF THE ABOVE, the parties 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, however, subject to the following amendments: (a) Article 3.03 is deleted and replaced by the following:

Reservation fee; Credit

(a) The Borrower undertakes to pay a reservation fee for the unclaimed loan amount at the rates and conditions stipulated in this Loan Agreement. (b) ADB undertakes to provide the Borrower with a loan at the rates stipulated in this Loan Agreement, which 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: (a) Upon each notification to 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 and after effective dates of the reduced fixed spread applicable to new loans. (b) Upon each notification to ADB that its financing cost margins in respect of the Loan currency (or approved currency) in any half-year have resulted in savings to ADB, ADB undertakes to provide a refund to the Borrower. The amount of the refund will be determined by multiplying (i) the margin of the financing cost (expressed as an annual percentage) by (ii) the principal amount of the Loan, for which the Borrower undertakes to pay interest during the interest period beginning immediately after the half-year for which the financing margin was calculated. ADB undertakes to deduct the amount of the refund to the interest payable by the Borrower during the interest period beginning immediately after the half-year for which the financing margin was calculated. (c) Section 3.07 has been deleted and replaced by the following: (a) After each notification to 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 and after the effective date of the increased fixed spread applicable to new loans. (b) Upon each notification from ADB that its calculations of the financing margin in respect of the loan currency (or approved currency) in any half-year have resulted in additional costs, the Borrower undertakes to pay the additional amount to ADB. This amount will be determined by multiplying (i) the margin of the financing cost (in the form of an annual percentage value) 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 for which the financing margin was calculated. ADB undertakes to add the amount of the additional payment to the interest payable by the Borrower during the interest period beginning immediately after the half-year for which the financing margin was calculated. Section 1.02. In each case of use 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" means the Central Asian Regional Economic Cooperation; (b) "CAREC Corridor 2" means the transport corridor from Istanbul in Turkey through the port of Baku in Azerbaijan and Aktau in Mangystau Region and the territories of Uzbekistan, Tajikistan, and the Kyrgyz Republic to the ports of Lianyunang Tianjing and Shanghai in the People's Republic of China; (c) “Guidance on Attracting Advisory Services" means the ADB Guidance on Attracting advisory services provided by the Asian Development Bank and its Borrowers (as of 2010, with periodic amendments); (d) “Advisory services“ means the services to be financed from the Loan funds set out in sub-paragraphs 2 (b) to 2 (d) of Annex 1 of this Loan Agreement; (e) ”CEOEA" means the environmental assessment review concept prepared for the investment program by the Borrower and agreed with ADB, and incorporated through references in the RSF; (f) “Environmental Protection Plan” means the Environmental Protection Plan prepared by the Borrower for the Project and agreed with ADB; (g) “Mechanism” means the multi-tranche financing mechanism provided by ADB to the Borrower for the purpose of financing projects under the Investment Program; (h) “RAM” means the Guidance on the Administration of the Mechanism for the Investment Program dated September 2, 2010 and agreed between the Borrower and ADB, adjusted from time to time in accordance with the relevant procedures of the Borrower and ADB; (i) “GPA” means the gender action plan set out in paragraph 7 of Annex 5 of this Loan Agreement; (j) “PEO“ means a preliminary environmental assessment prepared by the Borrower for the Project and agreed with ADB; (k) ”Km" means a location indicating a certain mileage on the project road, and "km“ means a kilometer; (l) ”HIA" means the Basics of land purchase and Resettlement prepared by the Borrower for the Investment Program and agreed with ADB, included by reference in the RSF; (m) “RFP" means the Land Purchase and Resettlement Plan for the Project prepared by the Borrower for the Project and agreed with ADB; (n) “Loan Disbursement Guide” means the ADB Loan Disbursement Guide (dated 2007, as periodically amended); (o) “MTK” means the Ministry of Transport and Communications or any of its successors; (p) “Region” means the administrative unit of the Borrower; (q) “PPF” means a periodic request an application for financing submitted or submitted by the Borrower for the purpose of obtaining a Loan under the mechanism and for the purposes of this Loan Agreement means a periodic request for financing No. 1 dated December 15, 2010; (r) “Procurement Manual“ means the ADB Procurement Manual (dated 2010, as periodically amended); (s) ”Procurement Plan" means the procurement plan for the Project dated September 2, 2010, agreed between the Borrower and ADB, with periodic updates in accordance with the Procurement Manual, the Procurement Manual consulting services and other activities agreed with ADB; (t) “Project Execution Agency” means, for the purposes and within the framework of the Loan Terms, the ITC responsible for the execution of the Project; (u) “Project Facilities“ means facilities that will be built or provided as part of the Project; (v) ”Project Road" means road sections described in more detail in Annex 1 of this Loan Agreement; and (w) "Works" means construction or construction work financed by the Loan, including services such as drilling or mapping, and Project-related services provided as part of a single commitment or 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 two hundred and eighty-three million US dollars ($283,000,000), 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 twenty (20) years, and a grace period in accordance with paragraph (c) of this Section. (c) The definition of "grace period" used in paragraph (b) of this Section means the period preceding the first Repayment Date for the principal Loan in accordance with the repayment schedule set out in Appendix 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 0.30% 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 full Loan amount (minus amounts withdrawn periodically), starting from the date sixty (60) days after signing this Loan Agreement. Section 2.04. Interest and other Loan payments are payable semi-annually on February 15 and August 15 of each year. Section 2.05. The Borrower undertakes to pay the principal amount of the Loan requested 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 ensure the rational management of the Loan: (i) A change in the Loan currency of the full or partial Loan amount, required or unclaimed, to an approved currency; (ii) A change in the base interest rate applicable to the full or partial Loan amount, required or unclaimed, from a floating interest rate to a fixed one and vice versa; and (iii) Setting limits on the floating interest rate applicable to the full or partial principal amount of the Loan, claimed or unclaimed, by setting a fixed maximum interest rate or minimum of any specified floating interest rate. (b) Any request for changes, in accordance with paragraph (a) of this Section, approved by ADB, should to be considered a "Conversion" as defined in Section 2.01(6) of the Loan Rules, and effective in accordance with the provisions of Article V of the Loan Rules and the Conversion Guidelines.

ARTICLE III

Use of Loan funds

Section 3.01. The Borrower undertakes to use the Loan funds to finance the Project costs in accordance with the provisions of this Loan Agreement. Section 3.02. Loan funds must be allocated and withdrawn in accordance with the provisions of Appendix 3 of this Loan Agreement, while periodic additions to this Appendix are permitted with the consent of the Borrower and ADB. Section 3.03. Unless otherwise specified by ADB, the Borrower purchases or undertakes to purchase for all items of expenditure financed by the Loan, in accordance with the provisions of Appendix 4 of this Loan Agreement. ADB has the right to refuse to finance a contract for which such a purchase has not been substantially carried out 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 ADB agrees otherwise, the Borrower undertakes to ensure that all expenditure items financed from the Loan are used solely for the purpose of executing the Project. Section 3.05. The closing date of the Loan for the purposes set out in Section 9.02 of the Loan Terms is January 31, 2016, 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 technical, financial, commercial and road development practices. (b) During the implementation of the Project and the operation of the Project Facilities, the Borrower undertakes to fulfill or ensure the fulfillment of all obligations set out in Appendix 5 of this Loan Agreement. Section 4.02. The Borrower undertakes to immediately, as necessary, provide, in addition to the Loan funds, funds, facilities, services, land and other resources 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 acceptable to ADB, to the extent and for a period and conditions that meet the requirements of the Borrower and ADB. (b) The Borrower undertakes to ensure that the Project is implemented in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to ADB. The Borrower undertakes to provide or ensure the provision of these plans, design standards, specifications and work schedules, as well as any significant changes to these documents, made subsequently with the degree of detail that the 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 ensure the maintenance of separate accounts for the Project; (ii) conduct an annual audit of these accounting accounts and related financial statements in accordance with the strict application of relevant auditing standards, with the involvement of independent auditors whose qualifications, work experience and scope of authority 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, certified copies of these audited accounts and financial statements, as well as the auditors' report (including the auditors' opinion on the use of loan funds and compliance with financial in accordance with the terms of this Loan Agreement), in English, and (iv) provide ADB with other information relevant to these accounts and financial statements and audits upon ADB's periodic reasonable request. (b) The Borrower undertakes to grant ADB the right, upon request by 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 above Section 4.05 (a) and undertakes to authorize and require any representative of the auditors to participate in this discussion, at the request of 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

Validity period

Section 5.01. The date sixty (60) days after the date of signing of this Loan Agreement is considered to be the effective date of the Loan Agreement for the purposes set out in Section 10.04 of the Loan Terms.

ARTICLE VI

Other provisions

Section 6.01. 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 6.02. The following details are provided for the purposes set out in Section 12.01 of the Loan Terms:

For the Borrower

Ministry of Finance 11 Pobedy Avenue Astana 010000 Republic of Kazakhstan

Fax number:

+7 (7172) 717785.

For the ADB

Asian Development Bank 6 ADB Avenue Mandaluyong City 1550 Metro Manila Philippines

Fax number:

(632) 636-2444 (632) 636-2428.

IN SUPPORT OF THE ABOVE, the parties to this Agreement, 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

______________________________ [Authorized representative]

APPENDIX 1 Project Description

1. The purpose of the Investment Program is to increase transport connectivity and efficiency, as well as institutional efficiency through the following activities: (a) road improvement (reconstruction of about 790 km of sections of the CAREC 2 Transport Corridor in Mangystau region); (b) strengthening the capacity for Project planning, management and assets of the Project; and (c) improving the border infrastructure and adjacent facilities. 2. As part of the Investment Program, the Project will support the following activities described in detail in the PPF: (a) reconstruction of about 200 km of road sections (between Km 372.6 and Km 514.3; and between Km 574 and 632.3), including canals and bridges, overpasses, road signs and signal posts, along accident-prone areas; (b) assistance in construction supervision and project management; (c) development feasibility studies of subsequent projects; and (d) capacity development for road construction and maintenance, design procurement, contract management, strengthening environmental protection and resettlement activities; and border crossing activities. 3. The Project is expected to be completed by June 30, 2015.

APPENDIX 2

Loan Repayment Schedule (CAREC Transport Corridor 2 (sections of Mangystau region) 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 have been fully withdrawn at the time of the first repayment date for repayment of the principal amount of the Loan, the principal amount of the Loan to be repaid by the Borrower on each payment date of the principal amount 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 repayment of the principal Loan; (b) The next installment for each repayment date for the principal Loan, such repayment amount will be modified as necessary to deduct any amounts described in paragraph 4 of this Annex to which Currency Conversion applies.

Payment date

The next installment (expressed in %)

February 15th, 2016

2 500000

August 15th, 2016

2 500000

February 15th, 2017

2 500000

August 15th, 2017

2 500000

February 15th, 2018

2 500000

August 15th, 2018

2 500000

February 15th, 2019

2 500000

August 15th, 2019

2 500000

February 15th, 2020

2 500000

August 15th, 2020

2 500000

February 15, 2021

2 500000

August 15th, 2021

2 500000

February 15, 2022

2 500000

August 15th, 2022

2 500000

February 15, 2023

2 500000

August 15th, 2023

2 500000

February 15, 2024

2 500000

August 15th, 2024

2 500000

February 15, 2025

2 500000

August 15th, 2025

2 500000

February 15, 2026

2 500000

August 15th, 2026

2 500000

February 15, 2027

2 500000

August 15th, 2027

2 500000

February 15th, 2028

2 500000

August 15th, 2028

2 500000

February 15th, 2029

2 500000

August 15th, 2029

2 500000

February 15, 2030

2.500000

August 15th, 2030

2 500000

February 15th, 2031

2 500000

August 15th, 2031

2 500000

February 15th, 2032

2 500000

August 15th, 2032

2 500000

February 15th, 2033

2 500000

August 15th, 2033

2 500000

February 15th, 2034

2 500000

August 15th, 2034

2 500000

February 15th, 2035

2 500000

August 15th, 2035

2 500000

Total

100 000 000

2. If the Loan funds were not fully claimed before the first payment date for repayment of the main Loan, the principal amount payable by the Borrower for each payment date for repayment of the main Loan will be determined as follows: (a) To the extent of the Loan funds that should have been claimed prior to the first payment date for repayment of the main Loan, the Borrower undertakes to pay the amount required and not required at the time of that date in accordance with paragraph 1 of this Annex. (b) Any withdrawal made after the first repayment date of the principal Loan is due to be repaid on each repayment date of the principal Loan falling 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 Appendices for the above-mentioned payment date for repayment of the main Loan (Initial Next Installment), and the denominator of which is the sum of all remaining Initial Regular Contributions for the repayment dates of the main Loan that fall on and after this date, these payment amounts will be modified, if necessary, to deduct the amounts specified in paragraph 4 of this Annex, to which Currency 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 due 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 withdrawal of funds. 4. Regardless of the provisions of 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 of the denomination immediately before by the aforementioned Conversion to either: (i) a currency exchange rate reflecting the amounts in the specified approved currency payable to ADB under the currency hedge, related to the aforementioned Conversion; or (ii) as decided by ADB in accordance with the Conversion Guidelines, 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 Annex sets out the Categories of Goods, works, consulting services and other expenses financed by the Loan, as well as the distribution of Loan amounts for each such Category (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 withdrawal percentages 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 for another category but, in the ADB's opinion, not needed to finance other expenses, and (ii) if this reallocation cannot fully fill the calculated deficit, reduce the percentage of withdrawals for these expenses so that further withdrawals for this Category are made until all expenses have been covered; (b) if the Loan amount allocated to any Category exceeds all agreed expenses in this Category, ADB may, by notifying the Borrower, redistribute such excess the amount in favor of another Category.

Loan repayment Procedure

4. Unless otherwise agreed by ADB, the Loan funds 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 for work cannot be made until the Borrower provides the appropriate funds for the purchase of MTK lands, as well as all land and road rights, without any third-party claims and encumbrances necessary for construction works.

Addendum to Appendix 3

table

ALLOCATION AND WITHDRAWAL OF LOAN FUNDS (CAREC Transport Corridor 2 (sections of Mangystau region) Investment Program – Project 1)

category

ADB FINANCING

Number

Name

Total amount allocated for ADB financing ($) Category

The percentage and basis for withdrawing the Loan from the account

Works

242 300 000

100 percent of the total requested cost amount *

Consulting services

16 000 000

100 percent of the total requested cost amount *

Unallocated funds

24 700 000

Total

283 000 000

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

APPENDIX 4

Procurement of works and consulting services

General provisions

1. All works and consulting services financed by the Loan funds are subject to execution and control in accordance with the Procurement Guidelines and Guidelines for Obtaining Consulting Services, respectively. 2. All terms used and not otherwise defined in this Loan Agreement have the meanings set forth in the Procurement Manual and/or the Advisory Services Engagement Manual, as appropriate.

Purchase of works

3. Unless otherwise agreed by the ADB, the works will have to be purchased on the basis of international competitive bidding procedures. 4. The procurement procedure, among other conditions, is subject to execution in accordance with the detailed cost threshold agreements 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.

The condition of the contract

5. The MTK undertakes not to conclude a contract for the performance of work until: a) The PEO will not be approved by ADB; b) The PRSP will not be approved by ADB.

Selection of consulting services

6. Unless otherwise specified by the ADB, the ITC undertakes to select and engage consulting services based on an assessment of the quality and price of the services. 7. The ITC undertakes to hire individual consultants to manage the program in accordance with procedures acceptable to ADB when hiring individual consultants.

Industrial and intellectual property rights

8. (a) The ITC undertakes to ensure that all 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 or infringe on the industrial or intellectual property rights of third parties. (b) The ITC undertakes 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. 9. The ITC undertakes 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 any third-party industrial or intellectual property rights.

ADB review of procurement decisions

10. All contracts purchased under international competitive bidding procedures and consulting services contracts are subject to prior review by ADB, unless otherwise agreed by the ITC and ADB and specified in the Procurement Plan.

APPENDIX 5

Project execution and operation of Project facilities; Financial issues

Implementation procedure

1. The Borrower undertakes to ensure the implementation of the Project in accordance with the detailed measures set out in the Framework. Any changes to the FRAMEWORK should take effect after the Borrower has agreed on such a change with the ADB. In the event of any inconsistency between the Loan Agreement and this Loan Agreement, the provisions of the Loan Agreement shall prevail.

Environment

2. The Borrower undertakes to ensure that the preparation, design, construction, implementation, operation and decommissioning of the Project and project facilities are carried out in accordance with: (a) relevant national laws and regulations; (b) The ADB's Environmental Protection Policy (2009), as well as (c) the EPR, PEO, and EPR and all environmental impact mitigation measures as specified in the EPR. 3. The Borrower undertakes to ensure that: (a) appropriate financing and human resources are provided for the execution, monitoring and reporting of the implementation of the EPA; (b) Semi-annual environmental reports are prepared and submitted to ADB within 3 months after each reporting period.; (c) relevant information from such reports is provided to the individuals concerned, and (d) effective grievance mechanisms acceptable to ADB have been established to address and take timely action to address the concerns, complaints, and claims of those affected. 4. The ITC undertakes to ensure that all tender documents and work contracts contain provisions that require the contractor to: (a) comply with appropriate environmental measures in accordance with the PEO, with updated provisions of the PEO, the EPA, and any other corrective or preventive measures outlined in the monitoring report; (b) provided financing for such environmental measures; (c) provided the Borrower, with a copy to ADB, with a written notification of any expected environmental risks or impacts that may arise during the construction or implementation of the Project that were not provided for in the PEO and EPA; (d) ensured that the condition of roads, agricultural land and other infrastructure was properly taken into account prior to the start of the Project. transportation of materials and construction; Upon completion of the construction, he completely restored the tracks, other local infrastructure facilities and agricultural land, at least to the condition in which these facilities were before the construction of the Project.

Relocation

5. The Borrower undertakes to ensure that the Project is executed in accordance with: (a) all relevant laws and regulations of the Borrower related to the purchase of land and involuntary resettlement of residents; (b) the ADB Policy of Protective Measures (2009); (c) the OVZP and the PVZP, in particular, including the following provisions: (a) all land and road rights required for the contractor's work must be acquired in a timely manner; (b) no physical or economic displacement must occur before (i) the final development of the PRRA; and (ii) relocation compensation will be fully paid to each displaced person, together with the compensation stipulated in the PRA, for the relevant sections of roads ready for construction; (c) no work should begin until the PRA is agreed with ADB, and no work should begin until The final version of the PRSP has not been implemented in accordance with its terms; (d) Effective complaint resolution mechanisms acceptable to ADB should be established to address and take timely action to address concerns, complaints, and grievances in order to assist affected individuals. (e) Appropriate funding and human resources should be provided within the budget for Consulting Services for the implementation, monitoring and accounting of the implementation of the PRSP; (f) independent monitoring experts acceptable to ADB should be engaged within 3 months of the effective date of the Loan to monitor and evaluate the PRA and provide the results to ADB on a semi-annual basis; (g) if any terrain changes, road closures, or additional impacts are made during the PRA period. environment and resettlement, it is necessary to make the necessary additions to the PRSP and obtain the approval of all relevant government authorities before subsequent implementation.

Labor standards and healthcare

6. The ITC undertakes to ensure that all work contracts contain specific provisions that construction contractors: (a) comply with all relevant Labor Codes and labor laws of the Borrower; (b) involve women and the local population, including disadvantaged people living near the construction of the Project, as far as possible; (c) disseminate information about safety measures at the construction site to all employees; (d) provide equal pay to men and women for equal work; (e) ensure safe working conditions and separate appropriate facilities for use by men and women; and (f) do not use child labor. The ITC undertakes to ensure that the social impact is strictly monitored throughout the Project, and a report on this issue is submitted to the ADB every six months.

Gender issues and development

7. The Borrower, within 3 months from the effective date of the Loan, will review and prepare the final version of the GPA prepared for the MMF in order to ensure the following, in addition to equal pay for women and their job security: (a) information on the risks of sexually transmitted diseases, including HIV/AIDS, among contractors involved in the Project and among local residents living in the immediate vicinity of the Project Road; (b) specific and rigorous measures to detect and prevent trafficking in persons; (c) Women and men are equally informed about the Project and are encouraged to participate in land acquisition and resettlement activities.; (d) Women from displaced families and vulnerable groups are involved in addressing unforeseen social and environmental impacts during the Project period. The ITC will ensure that the GPA was fully implemented on time during the Project period and sufficient resources were allocated for this purpose, as well as that the implementation of the GPA will be reflected in the monitoring process and a corresponding report will be provided to ADB twice a year.

Co-financing

8. Without limiting the general meaning of Section 4.02 of this Loan Agreement, the Borrower undertakes to provide all counter-funds necessary for the timely and effective execution of the Project in the form of annual contributions from the ITC and undertakes to ensure that the necessary resources are provided in a timely manner. The Borrower undertakes to instruct the ITC to include the updated Project financing requirements in its annual development programs.

Governance and anti-corruption

9. The Borrower undertakes (i) to follow ADB's Anti-Corruption Policy (dated 1998, as amended) and 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 (ii) to cooperate in to fully support and facilitate such an investigation by providing the necessary support for the satisfactory conclusion of any such investigation. 10. The ITC undertakes to ensure that all contracts and tender documents include anti-corruption provisions acceptable to ADB, including provisions stipulating ADB's right to audit and verify all reports, records and accounts of the ITC and all contractors, suppliers and consultants, as well as other persons providing services under the Project.

Quality of construction work

11. The ITC undertakes to ensure that the Project is executed in accordance with applicable 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.

Ensuring road safety

12. The ITC undertakes to: (a) ensure that all construction contracts include the contractor's commitment to comply with road safety measures; and (b) monitor accident rates and traffic intensity during the operation of the Project Road.

President

Republic of Kazakhstan

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