On the ratification of the Loan Agreement (Anti-Crisis Support Program) between the Republic of Kazakhstan and the Asian Development Bank

Home / RLA / On the ratification of the Loan Agreement (Anti-Crisis Support Program) between the Republic of Kazakhstan and the Asian Development Bank

Law of the Republic of Kazakhstan dated October 27, 2009 No. 196-IV

To ratify the Loan Agreement (Anti-Crisis Support Program) between the Republic of Kazakhstan and the Asian Development Bank, signed in Astana on September 14, 2009.

President of the Republic of Kazakhstan N. Nazarbayev

LOAN NUMBER 2643-KAZ

LOAN AGREEMENT (Anti-Crisis Support Program)

between

BY THE REPUBLIC OF KAZAKHSTAN

and

BY THE ASIAN DEVELOPMENT BANK

SEPTEMBER 14TH, 2009

PLL: KAZ 43330

LOAN AGREEMENT (Normal operations)

LOAN AGREEMENT dated September 14, 2009 between the REPUBLIC OF KAZAKHSTAN (hereinafter referred to as the "Borrower") and the ASIAN DEVELOPMENT BANK (hereinafter referred to as the "ADB").

TAKING INTO ACCOUNT THE FOLLOWING

(A) ADB received from the Borrower a Development Policy Letter dated August 26, 2009 (hereinafter referred to as the "Policy Letter") defining the Borrower's future objectives, policies, and actions on anti-crisis measures (hereinafter referred to as the "Borrower's Anti-Crisis Measures"), as described in Appendix 1 of this Loan Agreement; (C) The Borrower has requested a loan from ADB under its Crisis Support Program (hereinafter referred to as the "Support Program") to support the Borrower's Anti-Crisis Measures; and (C) the ADB has agreed to provide the Borrower with a loan from the resources of the Support Program 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 2.01(22) has been deleted; (b) The definition of "Fixed Spread" in section 2.01(23) has been deleted in all places mentioned in this subsection and replaced with "2.0%"; (c) Section 2.01(49) has been deleted and replaced by the following: (49) The definition of "Program" means a Support Program for which ADB has agreed to provide the loan described in the Loan Agreement, and its description may be changed from time to time by agreement between ADB and the Borrower. (d) The term "Project" will be replaced by the term "Program" wherever it is mentioned in the Loan Terms; (e) Section 2.01 (51) has been deleted and replaced by the following: (51) The term "Program Executive Agency" means the body or bodies responsible for the implementation of the Support Program as provided for in the Loan Agreement. (f) The term "Project Executive Agency" will be replaced by the term "Program Executive Agency" wherever it is mentioned in the Loan Terms; (g) Section 3.03 has been deleted and replaced by the following: Section 3.03. Reservation fee. The Borrower undertakes to pay a reservation fee for the unclaimed loan amount at the rates and conditions stipulated in this Loan Agreement. (h) Section 3.06 has been deleted and replaced by the following: Section 3.06. Refund. After each notification from ADB that its calculations of the cost of margin financing in relation to the loan currency (or the approved currency) in any half-year have resulted in cost savings, ADB undertakes to reimburse the Borrower. The amount of the refund will be determined by multiplying (i) the cost of the financing margin (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 the financing margin 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 cost of margin financing was calculated. (i) Section 3.07 has been deleted and replaced by the following: Section 3.07. Additional amount. After each notification from ADB that its calculations of the cost of margin financing in relation to the loan currency (or the 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 the financing margin (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 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 after the half-year in which the cost of financing margin was calculated. (j) Section 6.01 (a) has been deleted and replaced by the following: Section 6.01. Withdrawal from the loan account. (a) Subject to any provisions or restrictions provided for in the Loan Agreement, the Borrower has the right to withdraw from the Loan account the amount required to pay for expenses required under the Program and financed under the Loan Agreement. 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, and the additional terms listed below have the following definitions: (a) "Partner Financing" means funds in Tenge due to the Borrower and paid for from the proceeds of the Loan under the Support Program and specified in Appendices 1 and 5 to this Loan Agreement; (b) "Escrow Account" means the account specified in paragraph 4 of Annex 3 to this Loan Agreement; (c) "Authorized Items" means goods, works and services imported for the purposes agreed with the Support Program (except those specifically excluded in accordance with the addendum to Annex 3 to this Agreement (d) "Policy Letter" means the development policy letter specified in Schedule A of this Loan Agreement.; (e) "Program Executive Agency" means, for the purposes and within the meaning of the Loan Rules, the Borrower's Ministry of Finance, which is responsible for the implementation of the Support Program; (f) "Program Period" means the period from January 1, 2009 to June 30, 2010; and (g) "Tenge" or The "KZT" sign means the Borrower's currency.;

ARTICLE II Loan

Section 2.01. (a) ADB agrees to provide a loan to the Borrower from its Anti-Crisis Support Program, funded from ADB's regular capital resources, in the amount of five hundred million US dollars ($500,000,000), and this amount may be converted periodically as part of Currency Conversion in accordance with the provisions of Section 2.06 of this Loan Agreement. (b) The loan assumes a principal repayment period of 2 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 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 2.00% in accordance with Section 3.02 of the Loan Rules. Section 2.03. The borrower undertakes to pay a reservation fee in the amount of 0.75% per year. This fee is charged on the unclaimed loan amount upon expiration of sixty (60) days after the conclusion of this Loan Agreement on the relevant dates when the amounts will be withdrawn from the loan account or will be cancelled. Section 2.04. Interest and other loan payments are payable once a half-year on March 15 and September 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 Annex 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, subject to the availability of appropriate market opportunities for ADB: (i) Changing the loan currency of the full or partial loan amount, whether required or unclaimed, to the approved currency; (ii) Changing the interest rate applicable to the full or partial amount of a floating-rate loan 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 maximum interest rates. (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 expenses for Anti-Crisis Measures under the Support Program in accordance with the provisions of this Loan Agreement. Section 3.02. Loan funds may be withdrawn from the loan account only for the purpose of financing expenses in foreign currency required for Authorized Positions under the Support Program 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 the ADB, all Authorized Positions financed by the Loan must be made in accordance with the provisions of Appendix 4 of this Loan Agreement, Section 3.04. Unless otherwise specified by ADB, no withdrawals will be made from the loan account to cover Costs for Authorized Positions made more than one hundred eighty (180) days prior to the effective date. 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, 2010, or another date agreed between the Borrower and ADB.

ARTICLE IV Special conditions

Section 4.01. (a) The Borrower undertakes to execute the Program with due responsibility and efficiency and in accordance with sound administrative, financial, public policy, social and public administration measures. (b) During the implementation of the Support Program, 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 and other resources, in addition to the Loan funds, necessary for the implementation of the Support Program. Section 4.03. The Borrower undertakes to ensure and coordinate the activities of its departments and agencies in relation to the implementation of the Program in accordance with sound administrative policies and procedures. Section 4.04. (a) The Borrower undertakes to provide or facilitate the maintenance of records and documents necessary to identify Authorized Positions financed from the loan and indicate the status of the implementation of the Support Program. (b) The Borrower undertakes to allow ADB representatives to inspect the relevant records and documents specified in paragraph (a) of this section. Section 4.05. (a) As part of the reports and information specified in Section 7.04 of the Loan Terms, the Borrower will provide or facilitate the provision to ADB of quarterly reports and other such information as requested by ADB regarding the implementation of the Support Program as specified in the Policy Letter. (b) The reports prepared under (a) above will be used at the end of the Support Program to prepare a full report on the overall impact of the Borrower's Anti-Crisis Measures described in the Policy Letter.

ARTICLE V Entry into force

Section 5.01. The date thirty (30) days after the conclusion 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:

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) 636-2424.

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 ____________________________ STEVEN VERMERT, Acting Director ADB representative offices in Kazakhstan

APPENDIX 1 Project Description

1. The main objectives of the Borrower's Anti-Crisis Measures and Support Program are to provide fiscal stimulus and protect the Borrower's objectives and programs for budget spending and poverty reduction, as well as support its long-term development goals. The Borrower's anti-crisis measures and Support Program are described in detail in the Policy Letter. 2. The Support Program, which is aimed at supporting the Borrower's Anti-Crisis Measures, will be implemented from January 1, 2009 to June 30, 2010. 3. In support of the Support Program: (a) the loan funds will be used to finance the cost of the list of permitted foreign currency positions; and (b) the Partnership Financing will be used to finance local currency expenditures carried out to implement certain programs and other activities aimed at achieving the objectives of the Support Program, in accordance with the provisions of Section 5, paragraph 1, of this Loan Agreement. 4. The loan funds are expected to be withdrawn in one tranche and used by June 30, 2010.

APPENDIX 2

Loan repayment schedule (Anti-Crisis Support Program)

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.

Payment date  The next installment (expressed in %)

September 15, 2012 25.000000 March 15, 2013 25.000000 September 15, 2013 25.000000 March 15, 2014 25.000000

Total 100.000000

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 claimed and unclaimed at the time of that 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 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 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 Withdrawal of loan funds

1. Unless otherwise agreed by ADB, the following provisions of this Annex will apply to the withdrawal of loan funds from the loan account. 2. (a) Withdrawals from the loan account will be made to finance the cost of authorized goods in foreign currency. (b) No withdrawals will be made from the account to cover any expenses that have been financed from loans and grants from international and bilateral agencies with official assistance or from any other loans or grants from ADB. 3 (a) The loan withdrawal request will be submitted by the Borrower to ADB in a format that satisfies ADB. (b) Such withdrawal request will be accompanied by a Borrower's certificate confirming that (i) if the loan funds finance imports that have already been made, the value of the authorized imports during the period under review must exceed the amount of requested withdrawal; or (ii) if the loan funds will finance the goods to be imported, the value of the permitted imports for the previous one year must be equal to or greater than the amount of the requested withdrawal plus other amounts expected to be withdrawn from the loan account during the next one year. (c) For the purposes of this paragraph, the term "Permitted imports" means the total amount of imports by the Borrower during the relevant period, minus the imports listed below during the same period.: (i) Imports from non-ADB member countries; (ii) imports of unauthorized goods listed in the Appendix to this Annex; and (iii) imports financed by other official international and bilateral aid agencies or from any other loans and grants from ADB. (d) The Borrower will allow experts appointed by ADB to verify the value of authorized imports for any time period for which the Borrower has determined the value of the permitted import is indicated in his withdrawal request. 4. (a) Prior to submitting an application to ADB for withdrawal of funds from the loan account, the Borrower will open or designate an account (deposit account) with the National Bank of the Republic of Kazakhstan to which all withdrawals from the loan account will be deposited. The Escrow account will be established, managed, and liquidated in accordance with the terms and conditions satisfactory to ADB. (b) Individual accounts and records relating to the escrow account will be maintained in accordance with sound accounting principles consistently applied. At ADB's request, the Borrower will audit the escrow account by independent auditors whose qualifications, experience, and terms of reference are acceptable to ADB in accordance with relevant auditing standards. Immediately after their preparation, but in any case, no more than 6 months after the date of the ADB request, certified copies of the audited accounts and records will be submitted to the ADB, and all in English. (c) During the entire Program period, the Borrower will provide trade statistics and any other information, as ADB will need to assess the Borrower's compliance with the formula for determining permitted imports from time to time. (d) The Borrower will enable ADB, upon request from ADB, to discuss from time to time the Borrower's financial relationships in relation to the Support Program with auditors appointed by the Borrower in accordance with subparagraph 4 (b) above and will authorize and request any representative of such auditors to participate in any such discussions at the request of ADB, provided that such a discussion will be held only in the presence of the authorized employee of the Borrower, unless otherwise agreed by the ADB. 5. If ADB determines at any time that (i) any portion of the Loan funds remains undeveloped until December 31, 2010, or (ii) any payment from the Loan funds has not been made for authorized goods or there is no evidence satisfying ADB, the Borrower, immediately after notifying ADB, must provide additional proof, at the request of the ADB, or to return to the ADB the undeveloped part of the loan funds and the amount for unauthorized payments.

Addendum to Appendix 3

List of unauthorized financing positions

1. The loan funds cannot be spent on:

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

____________________________________________________________________ Chapter Title Description 112 Alcoholic beverages 121 Tobacco, unprocessed; tobacco production waste 122 Processed tobacco (with or without tobacco substitutes) 525 Radioactive and related materials 667 Pearls, precious and semi-precious stones, unprocessed and processed 718 718.7 Nuclear reactors and their components, fuel cells (cartridges), non-emitting radiation for nuclear reactors 728 728.43 Tobacco processing equipment 897 897.3 Precious jewelry made of metals of the gold, silver or platinum group (excluding watches and watch cases), as well as gold and silver jewelry products (including precious stones) 971 Gold, non-monetary (excluding gold ore and concentrates) _____________________________________________________________________ Source: United Nations

(ii) covering expenses in the Borrower's currency or for goods shipped from the Borrower's territory; (iii) payment for goods delivered under a contract that has been financed or agreed to be financed by a national or international financial institution or agency, including all contracts financed from other ADB loans or grants; ((iv) Payment for goods intended for military or pro-military purposes or luxury goods; (v) payment for drugs; and (vi) payment for environmentally hazardous goods, the production, use or import of which is prohibited by the Borrower's legislation or international treaties to which the Borrower is a signatory; and (vii) payment against any payments prohibited by the Borrower in accordance with a decision of the United Nations Security Council adopted in accordance with Chapter VII of the Charter The United Nations.

APPENDIX 4 Purchases

1. Unless otherwise agreed by ADB, the procedures described in the following paragraph of this Annex will be applied in the procurement of authorized loan-financed goods. (a) Except as provided in paragraph 2 (b) below, each contract for authorized goods will be awarded based on the buyer's usual commercial procurement rules in the case of private sector procurement, or the Borrower's established procurement procedures in the case of public sector procurement, with an appropriate economy and efficiency approach. (b) Each contract for the supply of authorized goods that are common tradable goods will be awarded based on procedures acceptable to trade and satisfactory to ADB.

APPENDIX 5 Implementation of the Support Program and Other issues

Partner financing

1. The Borrower guarantees that the partner financing will be used to finance expenses in local currency for the implementation of the Support Program and other activities in accordance with the objectives of the Borrower's anti-crisis measures.

Management of the Support Program

2. The Ministry of Finance (MOF) will be the executive agency of the Program responsible for the implementation of the Support Program activities, reporting to ADB, administration and disbursement of partner financing funds, monitoring budget execution and account management. 3. The Borrower undertakes to ensure effective coordination between the Ministry of Economy and Budget Planning (MEBP), the Ministry of Labor and Social Protection of the Population (MLSPP) and other government agencies. ADB and other development partners may be invited to participate in meetings between ministries as observers.

Political discussion

4. The borrower will: (a) notify ADB, and the Borrower and ADB will exchange views from time to time on economic sectors, reform policies, and additional reforms during the Program period that may be necessary or recommended as part of the Borrower's anti-crisis measures, including the status of implementation of the measures described in the Policy Letter; (b) discuss immediately problems and constraints with ADB that have emerged during the implementation of the Borrower's anti-crisis measures, including the Support Program and necessary measures to address or mitigate such problems and constraints; and (c) inform ADB of policy discussions with other international or bilateral agencies that have implications for the implementation of the Borrower's anti-crisis measures, including the Support Program, and will enable ADB to comment on any policy proposals. The borrower will take into account the views of the ADB before accepting and implementing any such proposal.

Anti-corruption and governance

5. The Borrower undertakes to comply with the ADB's Anti-Corruption Policy (1998, as amended). The Borrower, consistent with its obligations to good governance, accountability, and transparency, agrees (a) that ADB reserves the right to investigate, directly or through its agents, any corruption, fraud, collusion, and coercion in relation to the Support Program, and (b) to cooperate closely with any such investigation and provide all necessary assistance. assistance.

Monitoring and Evaluation

6. The Borrower guarantees that reporting on the status of the Borrower's Anti-Crisis Measures during the Program implementation period has been conducted through periodic meetings of the Borrower's relevant authorities. In particular, the Borrower provides the ADB with quarterly reports on the state of the macroeconomic and financial sectors, reports on the implementation of Anti-crisis measures and reports on the implementation of the republican budget, prepared jointly by the Ministry of Finance, the Ministry of Economic Development and the Ministry of Economic Development. The Ministry of Finance, through the Financial Control Committee, ensures control over the expenditure of funds allocated from the national budget to support Anti-crisis measures. The borrower works with ADB and consultants hired by ADB to monitor Anti-crisis measures funded from the budget. The Ministry of Finance, if necessary, will hold consultative meetings with the private sector and development partners to obtain their views on the new rules and their impact on the implementation of the Borrower's Anti-Crisis Measures, including the Support Program. 7. The Ministry of Finance and the Ministry of Economy and Budget Planning and the ADB will jointly conduct quarterly reviews of the macroeconomic and fiscal state of the Borrower's economy and assess the impact and benefits of the Borrower's Anti-Crisis measures for the real economy and the social sector, in accordance with the Program Management System, the MF, together with the MEBP, will be responsible for collecting all monitoring data. and assessment of the benefits of the Borrower's anti-crisis measures. Within five months of the Program implementation period, the Borrower undertakes to submit a final report to ADB, which will assess the degree of progress and impact of the Borrower's anti-crisis measures, including the Support Program.

I hereby certify that this translation corresponds to the text of the Loan Agreement between the Republic of Kazakhstan and the Asian Development Bank within the framework of the Anti-Crisis Support Program for the Asian Development Bank member Countries in English, signed in Astana on September 14, 2009.

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

The RCPI's note. The text of the Agreement in English is attached below.

President

Republic of Kazakhstan

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