On the ratification of the Loan Agreement "Restructuring of the Road Industry (Atyrau - Aktau)" between the Republic of Kazakhstan and the European Bank for Reconstruction and Development

Home / RLA / On the ratification of the Loan Agreement "Restructuring of the Road Industry (Atyrau - Aktau)" between the Republic of Kazakhstan and the European Bank for Reconstruction and Development

Law of the Republic of Kazakhstan dated July 9, 2004 No. 594

To ratify the Loan Agreement "Restructuring of the road industry (Atyrau - Aktau)" between the Republic of Kazakhstan and the European Bank for Reconstruction and Development, signed in Almaty on December 6, 2003.

President of the Republic of Kazakhstan

(Signed copy) (Operation No. 21582)

Loan agreement Restructuring of the road industry (Atyrau-Aktau) between the Republic of Kazakhstan and the European Bank for Reconstruction and Development

dated December 6, 2003

Loan agreement

AGREEMENT dated December 6, 2003 between the REPUBLIC of KAZAKHSTAN (the "Borrower") AND THE EUROPEAN BANK FOR RECONSTRUCTION and DEVELOPMENT ("Bank").

The preamble

As the Bank was established to provide financing for specific projects that promote the transition to an open market economy and the development of private and entrepreneurial initiatives in Central and Eastern European countries, based on and applying the principles of multiparty democracy, pluralism and a market economy; As the Borrower intends to implement the Project in accordance with Appendix 1, which is designed to assist the Borrower in the reconstruction of the Atyrau-Aktau road and support the restructuring of the road industry; As the project will be implemented by the Ministry of Transport and Communications; Since the Borrower has applied to the Bank for assistance in financing part of the Project; As the Bank has completed the process of attracting technical cooperation funds free of charge to assist in the implementation of Part C of the Project; and Whereas the Bank has agreed, based on, among other things, the foregoing, to provide the Borrower with a loan in the amount of one hundred nineteen million two hundred thousand dollars (119,200,000 US dollars) to assist in financing the shares of Part A and Part B of the Project in accordance with the terms and conditions set forth or referred to in this Agreement. The Parties hereby agree on the following:

Article I - Standard Terms and Conditions; Definitions

Section 1.01 Inclusion of Standard Terms and Conditions

All provisions of the Bank's Standard Terms and Conditions dated February 1999 are hereby incorporated into and applied to this Agreement and have the same force and effect as if they were fully set forth in this document (hereinafter referred to as the "Standard Terms and Conditions").

Section 1.02 Definitions

The terms defined in the Preamble and used anywhere in this Agreement (including the Preamble and Annexes), unless otherwise specified separately or required by the context, have the meaning defined therein; the terms defined in the Standard Terms and Conditions have the meaning described therein, and the terms below have the following meaning:

"Authorized Representative means the Borrower's Minister of Finance. representative of the borrower"

"Dollar" or "$" means the legal currency of the United States America.

"Environmental means the Bank's "Environmental Procedures", the EBRD's procedures" that are changed from time to time by the Bank.

"Ecological means an environmental assessment and analysis plan" prepared by the Borrower with the technical cooperation of the Bank as part of the "Support for the development of a Program for the development of the road industry" and presented in the report entitled "Final Report on the analysis of socio-environmental impact: Atyrau-Aktau Road" dated February 2003.

"Executive" means the Ministry of Transport and the Borrower's Communications agency, represented by Committee of Highways and Infrastructure Complex Construction.

"Reference means showing the offered London page" of the interbank rates of major banks on deposits in the loan currency, designated as page 3750 on Moneyline Telerate (or another similar page that may replace page 3750 on Moneyline Telerate in order to show the offered London interbank deposit rates in the loan currency).

"Special Account" means the special deposit account specified in Section 2.03 and Appendix 3.

""World Bank" means the International Bank for Reconstruction and Development, established on May 1, 1945 in accordance with the Agreement on the Establishment of the International Bank for Reconstruction and Development.

Section 1.03 Interpretation

In this Agreement, a reference to the specified Article, Section or Appendix is interpreted, except for the cases specified in this Agreement separately, as a reference to this specified Article or Section or Appendix to this Agreement.

Article II - Basic loan terms

Section 2.01 Loan amount and currency

The Bank agrees to provide the Borrower with a loan in accordance with the terms and conditions set forth or referred to in this Agreement, in the amount of one hundred nineteen million two hundred thousand dollars ($119,200,000).

Section 2.02 Other financial terms of the Loan

(a) The minimum loan amount is one hundred thousand dollars ($100,000). (b) The minimum early repayment amount is five million dollars ($5,000,000). (c) The minimum amount to be cancelled is five million dollars ($5,000,000). (d) The interest payment dates are set for August 28 and February 28 of each year. (e) The Borrower repays the principal amount of the loan on time and in the amount specified below:

Loan repayment date Amount to be paid

February 28, 2007 4,966,666 August 28 , 2007 4,966,666 February 28 , 2008 4,966,666 August 28, 2008 4,966,666 February 28, 2009 4,966,666 August 28, 2009 4,966,666 February 28, 2010 4,966,666 August 28, 2010 4,966,666 February 28, 2011 4,966,666 August 28, 2011 4,966,666 February 28, 2012 4,966,666 August 28, 2012 4,966,666 February 28, 2013 4,966,666 August 28, 2013 4,966,666 February 28, 2014 4,966,666 August 28, 2014 4,966,666 February 28, 2015 4,966,666 August 28, 2015 4,966,666 February 28, 2016 4,966,666 August 28, 2016 4,966,666 February 28, 2017 4,966,666 August 28, 2017 4,966,666 February 28, 2018 4,966,666 August 28, 2018 4,966,682

(f) The last submission date is December 31, 2007. (g) The reservation fee rate is 0.5% per year. (h) Interest rate The loan is granted at a floating interest rate, which is defined in the "Standard Terms and Conditions" as the sum of the margin and the corresponding market interest rate. For the purposes of Section 3.04 (b) of the Standard Terms and Conditions, the relevant market interest rate is the proposed annual deposit rate in the loan currency, which is displayed on the Reference Page as of 11:00 a.m. London time, on the appropriate day for determining the interest rate for the period closest in duration to the relevant interest period (or if two periods are equally close in duration to the corresponding Interest Period, by the average of the two corresponding interest rates) under the following conditions: (A) if, for any reason, the Relevant market interest rate cannot be determined at this time in relation to the Reference Page, then the Relevant market interest rate is the interest rate that the Bank determines as the arithmetic average (if necessary, rounded up to the nearest 1/16%) of the proposed annual interest rates for deposits in the loan currency in an amount comparable to the portion of the Loan that is scheduled to remain outstanding for a period corresponding to the Interest Period for a period equal to the Interest Period, which will be offered to the Bank by three major banks selected by the Bank from among those operating in the London Interbank Market; and (B) If the Bank determines that deposits in the loan currency in the London Interbank Market are not offered in such amounts or for such periods, then the Relevant market interest rate is the Bank's expenses (expressed as an annual interest rate) for financing the portion of the Loan that remains outstanding during the relevant Interest Period, from any source of his choice.

Section 2.03 Loan selection and special account

(a) The amount provided may be used from time to time, in accordance with the provisions of Annex 2, to cover (1) costs incurred (or, with the consent of the Bank, to be incurred) in respect of goods, works and services at a reasonable price required for the Project and (2) for the payment of a one-time commission. (b) The Borrower hereby authorizes the Bank to use out of the amount provided, an amount equal to a one-time fee and to pay itself a one-time commission on behalf of the Borrower. (c) For the purposes of the Project, the Borrower shall open and maintain a special deposit account in the Loan currency at a commercial bank acceptable to the Bank in accordance with the terms and conditions that are satisfactory to the Bank, including appropriate protection against set-off, confiscation and seizure. If the Borrower wishes to make a selection of the loan with further placement of the amount in a Special Account and deduct payments from it (instead of sampling in accordance with Section 2.03 (a)), then such sampling should be carried out in accordance with the provisions of Appendix 3.

Section 2.04 Authorized representative for loan selection

The Borrower's Minister of Finance is the authorized representative of the Borrower to take any action required or permitted in accordance with the provisions of Section 2.03 (a) of this Agreement and in accordance with the provisions of Sections 3.01 and 3.02 of the Standard Terms and Conditions.

Article III - Project Implementation

Section 3.01 Other Project obligations

In addition to the general obligations set out in Article IV of the Standard Terms and Conditions, the Borrower undertakes, unless the Bank agrees otherwise: (a) to take all measures necessary to ensure sufficient funds for the completion of the Project and to pay its share of the Project costs when due or necessary.; (b) ensure that the draft budget of the Republic of Kazakhstan for each relevant year after the signing of this Agreement and before the Last Submission Date provides for annual financing for the maintenance and rehabilitation of national and transnational highways in the total amount of at least 150 million US dollars; (c) draft a new medium-term program for the development of the road industry, taking into account the recommendations Of the Bank, and ensure its adoption no later than December 31, 2005; (d) instruct the Executive Agency to: (i) develop and implement a pavement management system for the Borrower's road network that provides an adequate level of information on the condition of the pavement, as well as appropriate tools to optimize road maintenance costs; and (ii) submit a report no later than June 30, 2005, demonstrating satisfactory progress for the Bank in implementing road surface management systems; and (e) instruct the Executive Agency to submit a report no later than December 2005 demonstrating satisfactory progress for the Bank in the implementation of the restructuring of the road industry, including the elimination of duplication of responsibilities and the conclusion of all contracts for periodic repair and maintenance of roads on a tender basis.; (f) to implement, by 1 February 2005, a proposal satisfactory to the Bank to increase cost recovery at the expense of road users, including, in particular: (i) an increase in the rate of tolls paid for heavy-duty vehicles; and (ii) a change in the structure of tolls, as a result of which the structure of tolls will be closely linked to damage caused by each class of vehicles.

Section 3.02 Project Implementation

The Borrower, through the Implementing Agency, takes all appropriate measures to coordinate, manage, monitor and evaluate all aspects of the Project, including the procurement of goods, works and services for the Project, and, in particular, allocates adequate resources and acceptable qualified personnel for this purpose.

Section 3.03 Purchases

For the purposes of Section 4.03 of the Standard Terms and Conditions, the following provisions, unless otherwise agreed by the Bank, govern the purchase of goods, works and services required for the Project and subject to Loan financing: (a) goods, works and services (with the exception of consultant services, which are included in Section 3.03 (c)) (b) for the purposes of Section 3.03 (a), the procedures for conducting an open tender and the standards for local competitive tendering procedures are set out in Chapter 3 of the EBRD Rules for the Procurement of Goods and Services.; (c) consultants engaged by the Borrower to assist in the implementation of the Project are selected in accordance with the procedures set out in Chapter 5 of the EBRD Rules for the Procurement of Goods and Services; (d) all contracts are subject to the review procedures set out in the Annex to the EBRD Rules for the Procurement of Goods and Services. All contracts are subject to prior review until the Bank notifies the Borrower otherwise in writing.

Section 3.04 Environmental obligations

Without prejudice to the generally applicable nature of Sections 4.02 (a), 4.04 (a)(iii) and 5.02 (c)(iii) of the Standard Terms and Conditions, the Borrower, unless otherwise agreed by the Bank, undertakes to: (a) carry out the Project in accordance with environmental regulations and regulations that come into force from time to time. the jurisdiction of the Project location, and with the environmental regulations in force in the European Union at that date (or, if such regulations do not exist in the European Union, as set out in the current environmental guidelines of the World Bank); (b) ensure that appropriate environmental protection and safety measures are included in the design of the project facilities and that the project facilities are then constructed, operated and repaired in accordance with the recommendations of the Environmental Analysis prepared for the Project and the Environmental Procedures of the EBRD.

Section 3.05. Consultants

(a) In order to assist in the implementation of the Project, the Borrower, unless otherwise agreed with the Bank, shall, if necessary, engage or ensure the involvement and use of consultants whose qualifications and experience, as well as technical specifications, are satisfactory to the Bank, including consultants required to carry out engineering supervision of construction contracts and, if necessary, to achieve the objectives of the Project, consultants to assist in the implementation of the Project; and (b) The Borrower provides, free of charge, all consultants engaged to assist in matters related to the Borrower's Project or operations with all facilities and support necessary for the performance of their functions, including office space, all documentation, materials and other information that may be relevant to their work.

Section 3.06 Frequency and reporting requirements

(a) Prior to full repayment or cancellation of the Loan, the Borrower submits annual reports to the Bank on environmental issues related to the Project no later than 90 days after the end of the reporting year. Such reports include information on the following specific issues: (1) information on compliance with environmental regulations and regulations that come into force from time to time in the jurisdiction of the Project location, and environmental regulations that exist in the European Union at that date (or, if such regulations do not exist in the European Union, set out in the applicable World Bank environmental guidelines), including the status of any environmental permits required for the Project, and the results of any inspections conducted by environmental authorities., any violations of such environmental rules and regulations and related remedial measures and any fines imposed due to any such violations; (2) measures taken in accordance with the recommendations of the environmental assessment prepared for the project, the Environmental Procedures of the EBRD; and (3) a summary of any significant notices, reports and other communications on environmental issues submitted in relation to the Project to the environmental authorities. (b) The Borrower provides periodic Project performance reports specified in Section 4.04 (a)(iv) of the Standard Terms and Conditions on a semi-annual basis no later than 90 days after the end of the reporting period until the Project is completed. Such reports include the following specific data: (1) General information: (A) the physical progress achieved in the implementation of the Project on the date of the report and during the reporting period; (B) actual or anticipated difficulties or delays in the implementation of the Project and their impact on the implementation schedule and actual measures taken or planned to overcome difficulties and avoid delays; (C) expected changes in the Project completion date; (D) changes in the core staff associated with the Project; (E) issues that may affect the cost of the Project; and (F) any event or activity likely to affect the economic feasibility of any Part of the Project. (2) Financial statements detailing the costs incurred under each Part of the Project and the Loan Sample, together with a report showing: (A) the initial estimated cost; (B) the revised estimated cost, if any, with the reasons for the changes; (C) the initially estimated costs and actual costs at that date; (D) the reasons for the deviation of the actual costs at that date from the original cost estimates at that date; and (E) the estimated costs for the remaining quarters of the year. (c) Immediately upon occurrence of an incident or accident related to a Project that is likely to have a significant adverse impact on the environment, health or safety, the Borrower shall notify the Bank by fax, indicating the nature of such incident or accident and any steps taken by the Borrower or the Enforcement Agency to eliminate them. Without prejudice to the generally applicable nature of the above, an incident or accident is likely to have a significant adverse effect on the environment, health or safety if any applicable law requires notification to a public authority of such incident or accident, such incident or accident results in death or multiple serious injuries requiring hospitalization, or such an incident or accident became known to the public through the media or otherwise.

Article IV - Financial obligations

Section 4.01 Financial accounting and reporting

(a) The Borrower undertakes to: (1) apply procedures, maintain records and accounts sufficient to reflect, in accordance with consistently applied international accounting standards, the operations, resources and costs related to the Project, and to monitor and account for the development of the Project (including its costs and benefits derived from him); (2) organize an audit of financial statements and accounts, including the Special Account specified in Section 4.01 (a), for each financial year by independent auditors acceptable to the Bank in accordance with international auditing principles and standards; (3) provide the Bank as soon as it is ready, but in any case no later than six months after the end of each financial year. financial year, an audit report conducted by such auditors, in the volume and details reasonably requested by the Bank; (4) provide the Bank with other information related to such statements and accounts and their audit, which the Bank may periodically request.

Article V - Suspension, acceleration, cancellation

Section 5.01 Suspension

The following is stipulated for the purposes of Section 7.01 (a) (xiv) of the Standard Terms and Conditions: (a) ownership of assets created or reconstructed as part of the Project has been transferred to a party other than the Borrower.

Article VI - Entry into force

Section 6.01 Conditions of entry into force

The following conditions are specified for the purposes of Section 9.02 (c) of the Standard Terms and Conditions as additional conditions for the entry into force of this Agreement. (a) The Executive Agency submits a plan and schedule, which in form and content are satisfactory to the Bank, on the restructuring of the road industry, including issues of eliminating duplication of responsibilities and concluding all contracts for periodic repair and maintenance of roads on a tender basis; (b) The Bank is provided with evidence that satisfies the Bank in form and content, confirming the existence of a sufficient budget allocation of the counterparty's funds for the Project in 2004.

Section 6.02 Legal opinions

(a) For the purposes of section 9.03 (a) of the Standard Terms and Conditions, the legal Counsel's opinion or opinions are provided on behalf of the Borrower by the Minister of Justice and the following are specified as additional issues to be included in the opinion or opinions provided to the Bank: (i) ratification of the Agreement by the Borrower's Parliament.

Section 6.03 Termination of the Agreement due to non-entry into force

A date of 120 days after the date of signing of this Agreement is stipulated for the purposes of Section 9.04 of the Standard Terms and Conditions.

Article VII - Miscellaneous

Section 7.01 Notifications

The following addresses are provided for the purposes of Section 10.01 of the Standard Terms and Conditions:

The borrower:

Ministry of Finance 473000 Astana 33 Pobedy Avenue

Attention: Minister of Finance

Fax: +3172 717762

Bank:

European Bank for Reconstruction and Development One Exchange Square London EC2A 2JN England

Attention: Operations Management Department

Fax: +44-20-7338-6100

In witness whereof, the parties, acting through their duly authorized representatives, have signed this Agreement, drawn up in English in four copies and delivered on December 6, 2003, on the date and year indicated above at the beginning.

Republic of Kazakhstan

Signature: _____________________ Full name: Position:

European Bank for Reconstruction and Development

Signature: ___________________ Full name: Position:

Appendix 1 - Project Description

1. The purpose of the Project is to assist the Borrower in the reconstruction of the Atyrau-Aktau road in Western Kazakhstan and to help improve the financing and management of the Borrower's road industry. 2. The project consists of the following parts, subject to periodic changes agreed by the Bank and the Borrower: Part A: Reconstruction of the Atyrau-Aktau road Part B: Construction supervision Part C: Consulting services C-1 Consulting services required to develop a restructuring plan for heavy-duty vehicles in accordance with international standards. C-2 Consulting services necessary to improve road maintenance management through the development of a road surface management system. C-3 Consulting services necessary for the implementation of the Project. 3. The project is expected to be completed in November 2007.

Appendix 2 - Loan Categories and selection

1. The table attached to this Appendix sets out the Categories, the Loan amount allocated to each Category, as well as the percentage expenses to be financed in each Category. 2. Despite the provisions of paragraph 1 above, no loan is sampled in respect of costs incurred and paid prior to the date of signing the Loan Agreement.

Addendum to Appendix 2

------------------------------------------------------------------- Category ! Loan Amount, ! Percentage of expenses, ! highlighted ! Thank you ! in the Loan currency ! financing 1 ------------------------------------------------------------------- (1) Works on one 111 500 000 85% of the cost of the contract road reconstruction segment excluding Part A of the Value Added Tax Project 2

(2) Construction supervision 5,000,000 50% of the cost of Part B of the Draft Contract 2

(3) Unforeseen expenses 1,508,000

(4) One-time commission 1 192 000 ------------------------------------------------------------------- Total 119,200,000 -------------------------------------------------------------------

___________________________ 1 The loan funds will not be used to finance value added tax and other taxes and duties. 2 The percentage of costs to be financed by the Borrower may be adjusted upward by written agreement between the Borrower and the Bank.

Appendix 3 - Special Account

1. For the purposes of this Application, the following terms have the following meanings:

"Acceptable category" means Categories 1 and 2 in accordance with the Appendix to Annex 2.

"Acceptable expenses" - expenses incurred taking into account the reasonable cost of goods, works and services necessary for the implementation of the Project, financed by a Loan and periodically attributed to Acceptable categories according to the provisions of Annex 2.

"The maximum balance is an amount equal to five million dollars of a Special Account" ($5,000,000).

"The minimum amount is an amount equal to two hundred thousand samples of 100 dollars ($200,000). Special account"

2. Payments from a Special Account are made exclusively for Acceptable Expenses in accordance with the provisions of this Annex. 3. Upon receipt by the Bank of satisfactory evidence of the proper opening of a Special Account in accordance with the conditions satisfactory to the Bank, including appropriate protection against offsets, confiscation and seizure, the Borrower has the right to select the Available Amount, followed by placing in a Special Account an initial amount not exceeding the Maximum Balance of the Special Account and not lower than the Minimum amount of the sample from the Special Account.. 4. Subsequently, the Borrower is entitled to select additional amounts from the Available Amount and deposit the specified amounts into a Special Account in accordance with the restrictions set out in paragraph 6 below and the following conditions for each loan sample: (a) The Borrower submits to the Bank account statements and documentation, as well as any other evidence of the proper application of the amounts withdrawn from the A special account. (b) After making the requested loan sample and placing the amount of such sample in the Special Account, the balance of the Special Account must not exceed the Maximum Balance of the Special Account. (c) Except in cases of periodic coordination with the Bank, the amount of the requested loan sample with subsequent placement in a Special Account must not be lower than the Minimum amount of the loan sample from the Special Account. 5. Without prejudice to the requirements of subparagraph 4 (a) of this Annex, the Borrower shall at any time, upon the reasonable request of the Bank, submit a report on the balance and other details of the Special Account, including account statements and other documents and evidence of payments from the Special Account in accordance with the requirements established by this Annex. 6. Notwithstanding the provisions of paragraph 4 of this Annex, the Borrower, unless otherwise agreed by the Bank, is not entitled to withdraw the loan from the available amount and then deposit it into a Special Account: (a) if the Bank determines at any time that further loan withdrawals must be carried out in accordance with the provisions of Section 2.03 (a); or (b) if the available amount classified in Acceptable Categories is twice the Maximum Balance of the special account. Subsequently, the loan samples assigned to the appropriate Eligible Categories are subject to the procedures that the Bank may specify in the notification to the Borrower. Such further loan withdrawals are carried out only after the Bank is satisfied that all amounts available on the deposit of the Special Account as of the date of receipt of the notification will be used to make payments for acceptable expenses. 7. If the Bank determines at any time that a payment from a Special Account or the Special Account itself has been used: (a) to cover expenses or in an amount not in accordance with paragraph 2 of this Annex; or (b) without substantiation by evidence submitted to the Bank; the Bank has the right to require the Borrower to: (1) provide additional evidence that the Bank may request; and/or (2) placing on a Special Account (or, at the request of the Bank, paying to the Bank) an amount equal to the amount of such payment or part thereof, which does not meet the conditions of acceptability or is unjustified. In the case of such an establishment in accordance with the above-mentioned sub-paragraphs (a) or (b), further loan withdrawals, unless the Bank agrees otherwise, with subsequent placement in a Special Account will not be carried out until the Borrower either (A) places in a Special Account or pays the Bank an amount equal to the amount of the payment (or part of it), which does not meet the conditions of admissibility or is unfounded, or (C) does not provide additional evidence that meets the Bank's requirements for the proper application of the amounts withdrawn from the Special Account. 8. If: (a) the Bank determines at any time that the amount unpaid on the Special Account will not be required to cover additional payments for eligible expenses; or (b) the Bank obliges the Borrower to pay the amount to the Bank in accordance with subparagraph 7(2);

immediately after receiving the notification from the Bank, the Borrower pays the Bank a portion of the Loan in an amount equal to this amount ahead of schedule. For this purpose, the requirement for early repayment of the Loan in accordance with the interest payment dates in accordance with paragraph 10 below is waived. 9. The Borrower may, by notifying the Bank in advance in accordance with Section 3.07 (a) of the Standard Terms and Conditions, pay all or part of the funds deposited into the Special Account ahead of schedule on any interest payment date. 10. Early repayment in accordance with the above paragraphs 8 or 9 is carried out in accordance with Section 3.07 of the Standard Terms and Conditions, however, bearing in mind that: (a) despite Section 3.07 (c)(i)(A) of the Standard Terms and Conditions, such early repayment amount should not correspond to the Minimum Amount of Early Repayment of the loan, and (b) in case of early repayment of the loan at a time not corresponding to the interest payment date, the costs of changing the terms in accordance with Section 3.10 of the Standard Terms and Conditions will be covered. In case of early repayment in accordance with the above paragraphs 8 or 9, the Bank is governed by Section 3.07 (c)(ii) of the Standard Terms and Conditions.

RCPI's note: the following text is in English (see the paper version).

President

Republic of Kazakhstan

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