On the ratification of the Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development regarding Amendments No. 2 to the Loan Agreement No. 7681-KZ (South-West Highway Development Project: Western Europe-Western China International Transit Corridor (CAREC 1b and 6b)) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

The Law of the Republic of Kazakhstan dated December 15, 2017 No. 116-VI SAM.

     To ratify the Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development regarding Amendments No. 2 to the Loan Agreement No. 7681-KZ (South-West Highway Development Project: Western Europe–Western China International Transit Corridor (CAREC 1b and 6b)) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development, completed in Astana on September 26, 2017.

     President of the Republic of Kazakhstan

N. NAZARBAYEV

Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development regarding Amendments No. 2 to the Loan Agreement No. 7681-KZ (South-West Highway Development Project: Western Europe–Western China International Transit Corridor (TSAREC 1b and 6b)) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

     to Mr. Bakhyt Sultanov

     To the Minister of Finance

     Ministry of Finance

     Astana

     Kazakhstan

     Cas: Republic of Kazakhstan

     South–West Highway Development Project:

     Western Europe International Transit Corridor –

     Western China" (CAREC 1b and 6b)

     Loan No. 7681-KZ

      Amendment No. 2 to the Loan Agreement

      Dear Mr. Sultanov:

       We refer to the above-mentioned Loan Agreement between the Republic of Kazakhstan (hereinafter referred to as the Borrower) and the International Bank for Reconstruction and Development (hereinafter referred to as the Bank) dated June 13, 2009, as amended (hereinafter referred to as the Loan Agreement). We also refer to the letter from the Borrower's Ministry of Finance dated February 10, 2017, requesting a restructuring of the Project and making certain amendments to the Loan Agreement in connection with the proposed restructuring.

      We are pleased to inform you that, after due consideration, the Bank proposes to amend the Loan Agreement as follows::

       1. Part 5 of Appendix 1 of the Loan Agreement shall be worded as follows:

      "Part 5: Supervision of construction works

       Provision of consulting services for the supervision of construction works in Part 1, Part 2 and Part 6 of the Project."

      2. A new Part 6 has been added to Appendix 1 of the Loan Agreement.:

       "Part 6: Modernization and reconstruction of road sections within the Almaty region

      Providing support work:

      (i) modernization and reconstruction of road sections within the Almaty region, including: (a) Kurty–Togyz section; (b) Uzynagash– Otar section;

      (ii) Improving (a) road safety; (b) roadside maintenance; and (c) road maintenance and operation."

       3. Paragraph I.A.1 of Annex 2 of the Loan Agreement should be worded as follows:

      "1. The Borrower, through the WORLD, with the help of the CBM, implements the Project in accordance with the requirements, criteria, organizational mechanisms and operational procedures set out in the Project Implementation Guide, the RPPC Action Plan, the Resettlement Policy Framework, the EIA and the ESIA, and will not assign functions, make changes, cancel or waive the requirement. implementation of the Project Implementation Guide, the Action Plan for the RPPK, the Basics of Resettlement Policy, EIA and ESIA without prior approval of the Bank."

       4. Paragraph I.A.3 of Annex 2 of the Loan Agreement should be worded as follows:

      "3. A borrower across the WORLD:

      (a) prepare Environmental Management Plans satisfactory to the Bank in accordance with the EIA and ESIA prior to the commencement of any Project work;

      (b) implements the Project in accordance with the relevant Environmental Management Plans;

      (c) ensure that Accidental Discovery Procedures are followed in cases where tangible cultural resources are found during the course of the Project. The borrower will also ensure that provisions for Accidental Discovery Procedures are included in the construction contracts and that such provisions are applied during the implementation of the project; and

      (d) will not amend, suspend or cancel any provisions of the relevant Environmental Management Plans without the prior approval of the Bank."

       5. The table in paragraph IV.A.2 of Annex 2 of the Loan Agreement should read as follows:

Category

Allocated loan amount (in US dollars)

Percentage of funded expenses (including taxes)

(1) Work on Part 1 of the Project

1,085,300,000

85%

(2) Work on Part 2 of the Project

700,000,000

85%

(3) Consultant services for Part 3 of the Project

8,200,000

85%

(4) Consultant services for Part 4 of the Project

3,000,000

85%

(5) Consulting services for Part 5 of the Project

55,500,000

85%

(6) Products for Part 4 of the Project

1,000,000

85%

(7) Unallocated expenses

0

(8) Work on Part 6 of the Project

272,000,000

85%

TOTAL AMOUNT

2 ,125,000,000

       6. Paragraph IV.B.2 of Annex 2 of the Loan Agreement should be worded as follows (the amendments are in italics):

      "2. The project's closing date is December 31, 2021."

      7. Two new paragraphs I.3 and I.6 have been added to Supplement the Loan Agreement and, accordingly, the following paragraphs have been renumbered:

      "3. 'Accidental discovery procedures' means procedures to be followed in cases where tangible cultural resources are discovered during the course of the project, which require the Borrower to take appropriate security measures, including temporarily suspending activities at the site and reporting to the government agency responsible for cultural property."

      "6. "Environmental and Social Impact Assessment" or "ESIA" means the final environmental and social impact assessment reports prepared and disclosed by the Borrower on March 31, 2017, and satisfactory to the Bank, containing, among other things: (i) a detailed description of the facilities where the activities will be carried out for Part 6 of the Project; (ii) potential and actual adverse environmental impacts of the activities referred to in paragraph (i) above; and (iii) determining the specific facility-specific measures that will be taken during the implementation and operation of the Project in order to mitigate, eliminate or otherwise compensate for the adverse environmental impacts of the Project."

       8. Paragraph I.8 (previously paragraph I.6) Amendments to the Loan Agreement should be worded as follows:

       "8. "Socio-Environmental Management Plans" or "PSES" means facility-specific documents accepted by the Borrower and satisfactory to the Bank in accordance with the ESIA and paragraph 3 of Section I.A of Annex 2 of this Agreement with respect to the work performed by the Borrower on the Project, which define, in particular: (i) detailed measures to manage potential environmental risks. risk management and measures to mitigate, reduce and/or compensate for the negative environmental impact caused by the implementation of Project activities, along with adequate institutional mechanisms, monitoring and reporting mechanisms capable of ensuring proper implementation and regular information on their compliance; (ii) potential impacts on natural habitats and appropriate mitigation measures for contractors during Project work; (iii) tangible cultural resources and management plans prepared in accordance with the Borrower's legislation, which may periodically be adjusted and supplemented with the prior written consent of the Bank; and the term "PSEA" refers to one such document."

      The definitions of "Environmental Management Plans" and "EMP" should be replaced by "Socio-environmental Management Plans" and "EMP", and all references to "Environmental Management Plans" of "EMP" are considered references to "Socio-Environmental Management Plans" and "EMP".

      9. Paragraph I.11 (previously paragraph I.9) The additions to the Loan Agreement should be worded as follows, and all references to the ITC or the Ministry of Transport and Communications in the Agreement are considered references to the WORLD:

      "11. "MIR" means the Ministry of Investment and Development of the Borrower or its legal successor."

      10. Paragraph I.17 (previously paragraph I.15) of the Addendum to the Loan Agreement should be worded as follows:

      "17. "Resettlement Policy Framework" means a document prepared, approved and published by the Borrower on May 1, 2008, updated and published by the Borrower (i) on March 18, 2009 and via the Bank's Infoshop on March 25, 2009, and (ii) on June 25, 2015 and November 17, 2015, respectively, establishing the resettlement procedure, institutional mechanisms, qualification criteria, rights, and compensation, including cost assessment procedures, public consultation and public participation, monitoring and evaluation, and disclosure criteria, applied in the preparation of the Resettlement Action Plan (RAP) for specific facilities and all necessary tasks to mitigate the negative social impact of the Project."

      All other provisions of the Loan Agreement, which are not amended here, remain unchanged and have full legal force.

      Please confirm your acceptance of the above changes on behalf of the Borrower by signing, dating and returning to us the attached copy of this letter. The Amendment will enter into force upon receipt by the Bank of a notification indicating that the execution and transmission of this amendment on behalf of the Borrower has been duly authorized or ratified by all necessary government procedures. 

Sincerely yours,

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Signature ______________________________ Lilia Burunchuk

Regional Director for Central Asia

 AGREED: REPUBLIC OF KAZAKHSTAN Signature: ____________________________ Bakhyt Sultanov Position: Minister of Finance Date: September 26, 2017. The accompanying document  

     I hereby certify that this translation corresponds to the text of the Letter of Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development regarding Amendments No. 2 to Loan Agreement No. 7681-KZ (South-West Highway Development Project: Western Europe-Western China International Transit Corridor (CAREC 1b and 6b)) between the Republic of Kazakhstan and the Republic of Kazakhstan. Kazakhstan and the International Bank for Reconstruction and Development in English, done on September 26, 2017 in Astana.

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

B. Akhmetzhanova

President    

Republic of Kazakhstan     

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