On the ratification of the Loan Agreement (Loan in Support of the Development Program) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

Home / RLA / On the ratification of the Loan Agreement (Loan in Support of the Development Program) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

The Law of the Republic of Kazakhstan dated July 15, 2010 No. 329-IV

To ratify the Loan Agreement (Loan in Support of the development Program) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development, signed in Astana on May 31, 2010.

President of the Republic of Kazakhstan N. Nazarbayev

LOAN NUMBER 7911-KZ

Loan Agreement (Loan in support of the development program) between the REPUBLIC OF KAZAKHSTAN and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Date May 31, 2010

LOAN AGREEMENT

Agreement dated May 31, 2010, concluded between the Republic of Kazakhstan (the Borrower) and the International Bank for Reconstruction and Development (the Bank) to provide financing in support of the Development Program (as defined in the Addendum to this Agreement). The Bank decided on this financing based on, among other things, (a) the actions taken by the Borrower under the Program and set out in Section I of Annex 1 to this Agreement, and (b) the Borrower's maintenance of an appropriate macroeconomic policy. The Borrower and the Bank hereby agree on the following:

ARTICLE 1 — GENERAL CONDITIONS; DEFINITIONS

1.01. The General Terms and Conditions (defined in the Addendum to this Agreement) are an integral part of this Agreement. 1.02. Unless the context otherwise requires, the terms used in this Agreement starting with capital letters have the meanings assigned to them in the General Terms and Conditions or in the Addendum to this Agreement.

ARTICLE 2 — LOAN

2.01. The Bank agrees to provide the Borrower with an amount equal to one billion US dollars ($1,000,000,000) for the term and conditions set forth or specified in this Agreement, and this amount may be converted periodically through Currency Conversion in accordance with the provisions of paragraph 2.07 of this Agreement (Loan). 2.02. The Borrower has the right to withdraw the Loan funds in support of the Program in accordance with Section II of Appendix 1 to this Agreement. 2.03. The one-time commission payable by the Borrower is one quarter of one percent (0.25%) of the Loan amount. The Borrower pays a One-time Commission no later than sixty days after the Effective Date. 2.04. The remuneration payable by the Borrower for each Interest Period will be calculated at a rate equal to the LIBOR rate for the Loan Currency plus a Variable Spread; provided that, upon Conversion of all or any part of the principal amount of the Loan, the amount of remuneration payable by the Borrower during the Conversion Period for this amount must be determined in accordance with the provisions of Article 4 of the General Terms and Conditions. Notwithstanding the above, if any part of the Withdrawn Outstanding Loan Balance remains unpaid on time and is not paid within thirty days, the amount of remuneration payable by the Borrower must then be calculated in accordance with the provisions of Section 3.02 (d) of the General Terms and Conditions. 2.05. The payment dates are March 15th and September 15th of each year. 2.06. The principal amount of the Loan will be repaid in accordance with the repayment schedule set out in Appendix 2 to this Agreement. 2.07. (a) The Borrower has the right at any time to request any of the following Loan Terms Conversions in order to ensure sound debt management: (i) changing the Loan Currency of all or any part of the Loan principal amount, whether withdrawn or not, to an Approved Currency; (ii) changing the interest rate basis applicable to all or any part of the withdrawn and outstanding principal amount of the Loan from a Variable Rate to a Fixed Rate, and vice versa; and (iii) introducing limits on the Variable rate applicable to all or any part of the withdrawn and outstanding principal amount of the Loan by setting an upper or lower limit limits for a variable rate. (b) Any modification requested in accordance with subparagraph (a) of this Section and approved by the Bank will be considered a "Conversion" as defined in the General Terms and Conditions and will take effect in accordance with the provisions of Article 4 of the General Terms and Conditions and the Conversion Guidelines. 2.08. Without prejudice to the provisions of Section 5.08 of the General Terms and Conditions (renumbered in accordance with paragraph 4 of Section II of the Supplements to this Agreement and related to Interactions and consultations), the Bank may reasonably periodically request information regarding the provisions of this Article 2, and the Borrower must promptly provide the Bank with the requested information.

ARTICLE 3 — THE PROGRAM

3.01. The Borrower declares his commitment to the Program and its implementation. For this purpose and in accordance with Section 5.08 of the General Terms and Conditions: (a) The Borrower and the Bank should from time to time, at the request of one party or the other, exchange views on the Borrower's macroeconomic policy and progress made during the implementation of the Program; (b) prior to each such exchange of views, the Borrower should provide the Bank with a report on the results achieved during the implementation of the Program with such a degree of detail that which the Bank may reasonably require; and (c) without limiting the provisions of paragraphs (a) and (b) of this Section, the Borrower must promptly inform the Bank of any situations that may significantly hinder the actual achievement of the Program's objectives or the implementation of any actions taken under the Program, including any actions defined in Section I of Annex 1 to this Agreement.

ARTICLE 4 — LEGAL MEASURES OF THE BANK

4.01. An additional case involving a temporary suspension includes the following: the occurrence of a situation as a result of which it is practically impossible to implement the Program or a significant part of it. 4.02. An additional case leading to an acceleration of the suspension includes the following: the case described in paragraph 4.01 of this Agreement occurs and continues for a period of 30 days after the Bank notifies the Borrower of the occurrence of such an event.

ARTICLE 5 — ENTRY INTO FORCE; TERMINATION

5.01. An additional condition for entry into force is as follows: The Bank is satisfied with the progress made by the Borrower during the implementation of the Program and the consistency of the Borrower's macroeconomic policy. 5.02. The deadline for entry into force is one hundred and eighty (180) days after the date of signing this Agreement.

ARTICLE 6 — REPRESENTATIVES; ADDRESSES

6.01. The Borrower's representative is the Minister of Finance. 6.02. Borrower's address:

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

Telex: Fax: 265126 (FILIN) 7-7172-717785

6.03. Bank's address:

International Bank for Reconstruction and Development 1818 N. Street, N.W. Washington, D.C. 20433 United States of America

The Telegraph: Telex: Fax: INTBAFRAD 248423 (MCI) or 1-202-477-6391 Washington, D.C. 64145 (MCI)

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

For the Republic of Kazakhstan Authorized representative

For an International Bank Reconstruction and Development Authorized representative

APPENDIX 1

Program actions; Availability of Loan funds

Section I. Actions taken under the Program The actions taken by the Borrower under the Program include the following:

1. Published Decree of the President of the Republic of Kazakhstan No. 962 dated April 2, 2010 "On the concept of formation and use of funds of the National Fund of the Republic of Kazakhstan", which sets a limit on the annual guaranteed transfer of funds from the National Fund to the national budget in the amount of 8 billion US dollars and obliges the placement of assets of the National Fund exclusively in financial instruments traded on foreign financial markets. 2. The borrower accepted The Code of the Republic of Kazakhstan dated December 4, 2008 No. 95-IV "Budget Code of the Republic of Kazakhstan" (with amendments and additions as of April 2, 2010), which, with the adoption of relevant regulations, puts into effect: (i) the development and approval of three-year budgets on a rolling basis at the national and local levels based on strategic plans of state (ii) delegating authority to administrators of budget programs at the national and local levels to redistribute funds between subprograms during budget execution; (iii) establishment of internal control services of central state bodies and executive bodies, financed from the regional budget, the budget of the city of republican significance and the capital. 3. The borrower accepted The Law of the Republic of Kazakhstan dated December 7, 2009 No. 219-IV "On the Republican Budget for 2010 - 2012", revised on March 29, 2010; among other things, it provides for a reduction in the share of non-priority administrative expenses and expenses for the acquisition of financial assets of national companies in favor of increasing the share of social expenditures in consolidated budget expenditures. 4. In accordance with the Law of the Republic of Kazakhstan dated July 11, 2009 No. 185-IV "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on improving the legislation of the Republic of Kazakhstan on payments and money transfers, accounting and financial reporting of financial organizations, banking and the activities of the National Bank of the Republic of Kazakhstan", BTA Bank and Alliance The Bank has signed the Main Commercial Terms (of the restructuring) with the creditors' committee of BTA Bank and the creditors' committee of Alliance Bank, respectively, which, among other things, They include a restructuring plan aimed at ensuring the viability of these banks and providing for the cancellation of most of the external debts. 5. The borrower accepted The Law of the Republic of Kazakhstan dated July 11, 2009 No. 185-IV "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Improving the Legislation of the Republic of Kazakhstan on Payments and Money Transfers, Accounting and Financial Reporting of financial organizations, banking and the Activities of the National Bank of the Republic of Kazakhstan"; It provides for strengthening the system of settlement of problem banks, including through the creation of stabilization banks, purchase and commitment agreements, as well as restructuring by specialized financial courts. 6. The borrower has accepted The Law of the Republic of Kazakhstan dated October 23, 2008 No. 72-IV "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the sustainability of the financial system"; It provides for the creation of an early response system through which the AFS can (i) monitor the bank's performance indicators, and (ii) in the event of a deterioration in such indicators, may require the implementation of an action plan providing for early response measures, and (iii) intervene in the bank's activities even in the absence of obvious violations of prudential standards. 7. The Agency of the Republic of Kazakhstan for Regulation and Supervision of the Financial Market and Financial Organizations has issued Board Resolution No. 358 dated September 30, 2005 "Instruction on Regulatory Values and Methods for Calculating Prudential Standards for Second-tier Banks", as amended and supplemented on November 30, 2009, which, among other things, provides for: (i) an increase in equity capital adequacy requirements for commercial banks, starting from July 1, 2011 and (ii) a limitation on the amount of the total liabilities of a commercial bank to non-residents in relation to its own capital.

Section II. Availability of loan funds

But. General provisions. The Borrower may withdraw the Loan funds in accordance with the provisions of this Section and those additional instructions specified by the Bank in the notification to the Borrower.

V. Allocation of Loan funds. The loan is allocated in the form of a One-time tranche, from which the Borrower can withdraw borrowed funds. The distribution of Loan amounts is shown in the following table:

Allocation of funds

The amount of the allocated loan (expressed in US dollars)

(1) One-time tranche

1 000 000 000

TOTAL AMOUNT

1 000 000 000

With. Payment of a one-time commission. The Borrower cannot withdraw funds from the Loan account until the One-time Fee is fully paid.

D. Conditions for allocation of the tranche. Funds in the form of a One-time Tranche cannot be withdrawn until the Bank is satisfied with (a) the Program implemented by the Borrower and (b) the consistency of the Borrower's macroeconomic policy.

E. Deposit of Loan funds. Except in cases where otherwise agreed with the Bank:

1. Any withdrawal of funds from the Loan Account must be deposited by the Bank into an account specified by the Borrower and acceptable to the Bank; and 2. The Borrower must ensure that each time a certain amount of the Loan is deposited into this account, the equivalent amount will be recorded in the Borrower's budget management system, in a form acceptable to the Bank.

F. Unauthorized expenses. The Borrower assumes responsibility for preventing the use of Loan funds to finance unauthorized expenses. If the Bank discovers at any time that the Loan funds have been used to cover unauthorized expenses, the Borrower must reimburse the Bank for the equivalent amount immediately after receiving notification from the Bank. The amounts reimbursed to the Bank upon such request will be cancelled.

G. Closing date. The closing date is January 7, 2011.

APPENDIX 2

Repayment schedule

1. The following table shows the Repayment Dates of the principal debt and the percentage of the total principal amount of the Loan to be repaid on each Repayment Date of the principal debt (Repayment Share). If the Loan funds are fully withdrawn on the first Repayment Date of the Principal debt, the principal amount of the Loan that will be repaid by the Borrower on each such Repayment Date will be determined by the Bank by multiplying: (a) the Loan Amount withdrawn on the first Repayment Date of the principal debt, and (b) the Repayment Share for each The repayment date of the principal debt. This amount to be paid will be adjusted as necessary in order to deduct the amounts provided for in paragraph 4 of this Annex and to which Currency Conversion applies.

The date of payment of the principal debt

Repayment rate (in percentage terms)

March 15 and September 15 of each year, starting from September 15, 2013 to September 15, 2034.

2,27 %

March 15, 2035

2,39 %

2. If the Loan funds are not fully withdrawn on the first Repayment Date of the principal debt, the principal amount of the Loan that will be repaid by the Borrower on each such Repayment Date will be determined as follows: (a) To the extent that any Loan funds have been withdrawn on the first Repayment Date of the Principal Debt, the Borrower must repay the Loan Amount withdrawn on that date in accordance with paragraph 1 of this Annex. (b) Any amounts withdrawn after the first Repayment Date of the principal debt must be repaid on each Repayment Date of the principal debt after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the initial amount of the Repayment Share specified in the table in paragraph 1 of this Annex for that Repayment Date. debt (The Initial amount of the Repayment Share), and the denominator of which is the sum of all remaining Initial Amounts of the Repayment Share of Payments on or after the Repayment Date of the principal debt. This amount to be paid will be adjusted as necessary in order to deduct the amounts provided for in paragraph 4 of this Annex and to which Currency Conversion applies. 3. (a) Loan amounts withdrawn within two calendar months prior to any Repayment Date of the Principal debt solely for the purpose of calculating the amounts of the principal debt payable on any Repayment Date of the principal debt will be considered withdrawn and outstanding on the second Repayment Date of the principal debt after the withdrawal date and will be repaid on each Repayment Date of the principal debt; starting from the second Repayment Date of the principal debt after the withdrawal date. (b) Notwithstanding the provisions of subparagraph (a) of this paragraph, if at any time the Bank adopts a payment billing system in which invoices are issued on or after the relevant Principal Repayment Date, the provisions of this subparagraph will not apply to such withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Annex, when Converting the currency of all or any part of the loan into an Approved Currency, the amount thus converted into the Approved Currency, which is due on any Repayment Date of the Principal debt occurring during the Conversion Period, must be determined by the Bank by multiplying such amount in the currency of its denomination directly before conversion to: (i) an exchange rate that reflects the amounts of the principal debt in an Approved Currency payable by the Bank under Currency Hedging Transactions related to the Conversion; or (ii) the currency component of the Interest Rate, if the Bank decides to do so in accordance with the Conversion Guidelines.

addition

Section I. Definitions

1. "Alliance" means Alliance Bank Joint Stock Company, originally formed on August 13, 2001 and subsequently renamed and restructured by the Agency for Regulation and Supervision of the Financial Market and Financial Organizations of the Republic of Kazakhstan, which issued Board Resolution No. 268 dated December 30, 2009 "On Compulsory Repurchase of Shares of Alliance Bank Joint Stock Company and their sale to the Joint-Stock Company National Welfare Fund Samruk-Kazyna. 2. "BTA" means a bank formed by Resolution of the Government of the Republic of Kazakhstan No. 73 "On the reorganization of the Kazakh Joint-Stock Bank Turanbank and AlemBank Kazakhstan" dated January 15, 1997 and officially renamed into the Joint-Stock Company BTA Bank in February 2008.3. "Unauthorized expenses" means any expenses: (a) for goods or services provided under contracts financed or to be financed by any national or international financial institution or agency other than a Bank or Association, or financed by a Bank or Association under other loans, credits or grants; (b) for products belonging to the following groups or subgroups of International Trade Classification Standards, Version 3 (SITC, Rev.3), published by the United Nations in the Collection of Statistical Materials, Series M, No. 34/Version 3 (1986) (SITC), or in any other subsequent groups or subgroups of new versions of International Trade Classification Standards, about which the Bank must notify the Borrower:

Group

The subgroup

Product Description

112

Alcoholic beverages

121

Tobacco, non-industrial tobacco, tobacco waste

122

Industrial tobacco (with/without tobacco substitutes)

525

Radioactive or related materials

667

Pearls, processed or unprocessed precious and semi-precious stones

718

718.7

Nuclear reactors and its parts, fuel cells (cartridges), non-irradiated, for nuclear reactors

728

728.43

Tobacco production equipment

897

897.3

Jewelry made of gold, silver, and platinum (excluding watches and watch cameras), as well as jewelry made of gold and silver (including inserts made of precious stones)

971

Non-monetary gold (excluding gold-bearing ores and concentrates)

(c) for goods intended for military or paramilitary purposes or for consumption as luxury goods; (d) for environmentally hazardous goods, the production, use and import of which are prohibited by the laws of the Borrower or international agreements to which the Borrower is a party; (e) for any payments prohibited by a decision of the Security Council Of the United Nations, adopted in accordance with Chapter VII The UN Charter; and (f) in respect of which the Bank has discovered that any representative of the Borrower (or any other recipient of any Loan funds) has participated in corrupt, deceptive, fraudulent, coercive or collusive practices in connection with the use of Loan funds, and the Borrower (or any other recipient) has not accepted timely measures and appropriate actions, satisfactory to the Bank, aimed at the prompt elimination of such practices. 4. The Agency of the Republic of Kazakhstan for Regulation and Supervision of the Financial Market and Financial Organizations means an agency established for the first time By Decree of the President of the Republic of Kazakhstan dated December 31, 2003 No. 1270 "On further improvement of the public administration system of the Republic of Kazakhstan", responsible for the implementation of state regulation and supervision of the financial market and financial organizations. 5. "General Terms and Conditions" - "General Terms and Conditions for Loans of the International Bank for Reconstruction and Development" dated July 1, 2005, as amended on February 12, 2008), taking into account the changes presented in Section II of this Addendum. 6. "National Fund" means the Borrower's national fund formed by By Decree of the President of the Republic of Kazakhstan dated August 23, 2000 No. 402 "On the National Fund of the Republic of Kazakhstan". 7. "Program" means a program of actions, goals, and strategies designed to stimulate growth and achieve progressive poverty reduction, as defined or referenced in the letter dated April 19, 2010. DGZ-1/4909, where the Borrower declares to the Bank his obligations to implement the Program and asks the Bank for assistance in supporting its implementation. 8. "One-time tranche" means the Loan amount allocated under the "One-time Tranche" category in the table given in Part B of Section II of Annex 1 to this Agreement.

Section II. Amendments to the General Terms and Conditions

The following changes have been made to the General Terms and Conditions: 1. The last sentence of paragraph (a) of Section 2.03 (regarding Withdrawal Requests) has been completely deleted. 2. Sections 2.04 (Allocated accounts) and 2.05 (Eligible expenses) have been completely deleted, and the remaining Sections in Article 2 have been renumbered accordingly. 3. Paragraph (a) of Section 2.05 (renumbered according to paragraph 2 above) reads as follows:

"Section 2.05. Advance payment for preparation for refinancing; Capitalization of One-time commission and remuneration

(a) If the Loan Agreement provides for the payment of an advance from the funds of a Loan provided by the Bank or the Association ("Preparation Advance"), the Bank, on behalf of the Loan Party, must withdraw from the Loan account on or after the Effective Date such amount as is necessary to repay the withdrawn and outstanding amount of the advance on the day of withdrawal withdraw this amount from the Loan account, and pay all accrued and unpaid fees for the amount of the advance on that date, if applicable. The Bank will pay this amount withdrawn in this way in its favor or in favor of the Association, depending on the circumstances, and must cancel the outstanding amount of the advance."

4. Section 5.01 (General Principles of Project Execution) and 5.09 (Financial Management; Financial Reporting; Audit) have been completely deleted, and the remaining Sections of Article 5 have been renumbered accordingly.

5. Paragraph (a) of Section 5.05 (renumbered according to paragraph 4 above and relating to the Use of Goods, works and services) has been completely deleted. 6. Paragraph (c) of Section 5.06 (renumbered according to paragraph 4 above) reads as follows:

"Section 5.06. Plans; Documents; Accounts

...(c) The Borrower shall keep all records (contracts, payment orders, invoices, invoices, receipts and other documents) confirming the expenses under the Loan for two years after the Closing Date. The Borrower provides the Bank's representatives with the opportunity to examine these accounts." 7. Paragraph (c) of Section 5.07 (renumbered according to paragraph 4 above) reads as follows:

Section 5.07. Monitoring and evaluation of the Program

...(c) The Borrower prepares or prepares and submits to the Bank, no later than six months after the Closing Date, a report of such volume and with such level of detail as the Bank may reasonably require on the implementation of the Program, the fulfillment by the Loan Parties and the Bank of their respective obligations under the Legal Agreements and on the fulfillment of the objectives of the Loan. 8. The following concepts and definitions were changed or deleted in the Addendum, as well as the following new concepts and definitions were introduced in alphabetical order with a corresponding change in the numbering of concepts: (a) The definition of "Acceptable expense" is as follows:: "Eligible expense" means any expenditure of funds from a Loan allocated to support the Program, other than expenses that are not permitted to be financed under this Loan Agreement." (b) The concept of "Financial statements" and its definition are completely excluded. (c) The term "Project" has been changed to mean "Program" and its definition is as follows (and all references to "Project" throughout these General Terms and Conditions are considered to refer to the "Program"): "Program" means the program referred to in the Loan Agreement and for which the loan is allocated. (d) The concept of "Advance for the preparation of the Program" (renamed as such in accordance with the above subparagraph 8 (c) has been replaced by the concept of "Advance for preparation", and the amended definition accordingly reads as follows: "Preparation Advance" means the advance referred to in this Loan Agreement and payable in accordance with Section 2.05. (f) The concept of "Conversion date" is as follows:: "Conversion Date" means, with respect to the Conversion, the Execution Date (as defined in this paragraph) or any other date requested by the Borrower and accepted by the Bank when the Conversion takes effect, as indicated in the Conversion Guidelines.

I hereby certify that this translation corresponds to the text of the Loan Agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and Development (Loan in Support of the development program) in English, signed in Astana on May 31, 2009.

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

Note. RCPI. The following is the text of the Agreement in English.

President

Republic of Kazakhstan

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