On approval of the loan agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and development (project" regulation of the Syrdarya riverbed and preservation of the northern part of the Aral Sea (Phase 1)")

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On approval of the loan agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and development (project" regulation of the Syrdarya riverbed and preservation of the northern part of the Aral Sea (Phase 1)")

Law of the Republic of Kazakhstan dated March 20, 2002 No. 307-II

To approve the loan agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and development (project"regulation of the Syrdarya riverbed and preservation of the northern part of the Aral Sea (Phase 1)", signed in Astana on October 22, 2001. President of the Republic of Kazakhstan loan number 4609 KZ loan agreement between the Republic of Kazakhstan and the International Bank for Reconstruction and development (project" regulation of the Syrdarya riverbed and preservation of the northern part of the Aral Sea (Phase 1)") October 22, 2001 loan number 4609 KZ Loan Agreement

The Republic of Kazakhstan (borrower) and the International Organization for reconstruction and development

Agreement between the Bank (Bank) dated October 22, 2001. Considering that the borrower has applied to the Bank for assistance in financing the project, with absolute confidence in the implementation and priority of the project, the description of which is given in Annex 2 to this Agreement (project); considering that the Bank, among other things, on the basis of the above, has agreed to provide the borrower with a loan on the basis of the terms and conditions set out in this agreement; taking into account the above; the parties have agreed in this agreement that:

Article I general conditions. Definitions Section 1.01

An integral part of this agreement is the "general terms and conditions applicable to loan agreements and guarantees for loans in a single currency" (general terms and conditions) of May 30, 1995, as amended by the bank from October 6, 1999 inclusive. Section 1.02 a number of terms, the definitions of which are given in general terms, unless otherwise provided by the context, shall have the corresponding meaning specified in them, and the following additional terms shall have the following meanings: (a) "ICT" means the Valley advisory group formed by the borrower in accordance with paragraph 6 of Annex 5 to this Agreement; (b) " src " means the Water Resources Committee of the Ministry of Natural Resources and environment of the borrower implementing the project; (C) "favorable categories" refers to the categories (1) and (2) mentioned in the table of Section 1 A. in Annex 1 to this Agreement; (d) "favorable expenses" refers to the expenses for goods and works mentioned in part 2.02 of this Agreement; (E) "EMP" refers to the Environmental Protection Plan suitable for the bank, prepared by the borrower and adopted on February 14, 2001, which describes the weakening of Environmental Protection, current control and institutional measures in accordance with the project about which it is mentioned in Annex 5 to this Agreement; (f) " EMR "means the interdepartmental coordination committee, which establishes the borrower in accordance with paragraph 4 of Annex 5 to this Agreement; (g) "SHBSTT" means an independent group of experts on the Shardara dam, which establishes the borrower in accordance with paragraph 7 of Annex 5 to this Agreement; (h) " EMRM "means the borrower's Ministry of energy and mineral resources or any legal successor; (i)" ESM " means the borrower's Ministry of Economy and trade or any legal successor means; (j) " MF "means the borrower's Ministry of Natural Resources and environment or any of its legal successor; (k)" MF "means the borrower's Ministry of Finance or any of its legal successor; (l)" Project Management report "means each report prepared in accordance with Section 4.02 of this Agreement; (m)" Project Management Group " means the project management group within the Water Resources Committee, which is generally responsible for preparing, executing and coordinating the project; (n) in accordance with paragraph 5 of Annex 5 to this Agreement, the" OIC " is the borrower

(O)" Project Preparation loan "refers to the project preparation loan provided by the bank to the borrower in accordance with the contract letter signed on behalf of the bank on February 1, 2000 and on behalf of the borrower on February 3, 2000; and (P)" special account " refers to the account mentioned in Part B of Annex 1 to this Agreement. Section 1.03 in general cases, each reference to the project executing organization is considered a reference to the SRC.

Article II loan part 2.01

The bank agrees to provide the borrower with an amount equal to sixty-four million five hundred thousand US dollars (US.64,500,000) in the terms and conditions mentioned in the loan agreement or about which they are mentioned in it. Section 2.02 (a) in accordance with the provisions of Annex 1 to this loan agreement, the loan amount may be charged from the loan account for expenses incurred (or forthcoming, if the bank agrees to it) in relation to the corresponding value of goods and works required for the project and financed from the loan funds, interest and other payments on the loan and the commission fee referred to in Section 2.04 of this Agreement. (b) immediately after the date of entry into force of the agreement, the Bank is required to repay the principal amount of the loan for the preparation of the project, which is withdrawn from the account on behalf of the borrower and on which it is not submitted for payment on such a date, and to make all payments that have not been made on them

"I'm sorry," he said. It is allowed to use the amount of debt for the preparation of the project, the balance not withdrawn from the account is canceled after that. Section 2.03 the final date for using the loan funds is February 28, 2007 or a later date set by the Bank. The bank immediately notifies the borrower of this later date. Section 2.04 the borrower pays the Bank a commission fee in the amount of one percent (1%) of the loan amount. On the day of entry into force of the agreement or immediately after such a date, the bank, on behalf of the borrower, receives the amount of the above commission fee from the loan account and pays it itself. Episode 2.05

The borrower pays the Bank a commission fee for the obligation to issue a loan at a rate of three quarters of one percent (3/4 of 1%) per year on the principal amount of the loan, which is not withdrawn from the account at this moment.

Section 2.06 (a) the borrower pays interest on the rate for each period in which interest equal to the total spread of LIBOR is calculated on the principal amount of the loan, which is withdrawn from the account and on which there is an amount not offered for payment at a certain time, to the base rate of LIBOR. (b) for the purpose of this section: (I) "interest accrual period" inclusive means the initial period up to that date without including the first date of payment of interest starting after the date of this Agreement, and after the initial period - including the date of payment of interest, each period up to that date without including the next date of payment of interest; (II) "interest payment date" means the date of this Agreement

2.07 means any date specified in Section; (III) the "LIBOR base rate" for each period for which interest is accrued means the valuation rate in US dollars of deposits made for a period of six months on the first day of such period in which interest is accrued on the London interbank market, which is reasonably determined by the Bank and expressed in annual interest, or on the date of payment of interest, which begins on the first day of such period in which interest is accrued, or on the day after such day of such period in which interest is accrued; (iv) the "LIBOR total spread" for each period in which the percentages are calculated means: (A)for a quarter of one percent (3/4 of 1%); (C) taking (or adding) the average size margin for such a period in which interest is calculated is lower (or higher) than the deposit rates for a six-month period in which the Bank reasonably determines it and is expressed in annual interest, in relation to the parts of such loans transferred to the bank to finance loans in the London interbank market, (C) The Bank shall notify the borrower of the LIBOR base rate and the total LIBOR spread for each period for which interest is accrued immediately after their determination. (d) in connection with changes in market practice affecting the determination of interest rates referred to in this section 2.06, the Bank shall, in the interests of both its borrowers and the Bank as a whole, determine the use of the basis for determining the interest rates applicable to the loan, different from the basis provided for in the above section, the bank may change the basis for determining the interest rates applicable to the loan, notifying the borrower of the new basis for at least six (6) months. Basis after the expiration of the period of time provided for notification

it comes into force if the borrower does not notify the Bank of its objection against such a basis within the specified period of time - a situation in which the above-mentioned change does not apply to the loan.

Section 2.07 interest and other payments on the loan must be made and paid once every six months - on February 15 and August 15 of each year. Section 2.08 the borrower repays the principal amount of the loan in accordance with the schedule of gradual repayment of the debt given in Annex 3 to this Agreement. Article III execution of the project part 3.01

(a) the borrower declares his / her commitment to the objectives of the project and, in accordance with the relevant administrative, financial, engineering and environmental practices, shall carry out the project through the SRC in compliance with the requirements in force for this purpose and achieve the desired results, and shall, as necessary, immediately, and without limitation or reduction of any other obligations in accordance with the loan agreement, provide the means, equipment and premises and other resources required for the implementation of the project. (b) the borrower shall execute the project through the SRC in accordance with the project execution program referred to in Annex 5 to this agreement, without limiting the provisions of Paragraph (A) of this section and except in cases where there is another agreement between the borrower and the Bank. Section 3.02 the purchase of goods and works necessary for the implementation of the project and financed from the loan funds is governed by the provisions of Annex 4 to this Agreement, unless otherwise decided by the Bank.

ARTICLE IV

Regulations on financial activities management section 4.01 (a) the borrower maintains or maintains a financial activities management system, including accounting documents and accounts, and prepares financial statements in a form acceptable to the Bank and that meets the current requirements for reflecting project-related operations and expenses. (b) the borrower shall: (i) maintain the accounting and account documents referred to in Paragraph (A) of this section, including the accounting and account documents relating to the special account for each financial year in which the audit is conducted in accordance with the relevant principles of conducting the audit, which are regularly used by independent auditors suitable for the Bank; (ii) submit to the bank immediately after preparation, but in any case no later than six (6) months after the end of each such financial year,; and (iii) provide the bank with the above accounting documents and other such information relating to the accounts and its audit requested by the Bank at a certain time. (C) for all expenses in respect of which funds were withdrawn from the loan account on the basis of project management reports or expense inventories, the borrower: (i) maintains or ensures the maintenance of accounting documents and accounts reflecting such expenses in accordance with Paragraph (A) of this section; (II) keeps all accounting documents (contracts, assignments, invoices, accounts, receipts and other documents) confirming such expenses for at least one (1) year after the bank receives the audit results report for the financial year in which the last withdrawal of funds from the loan account was made; (iii) allows the bank's representatives to verify such accounting documents; (iv) to ensure that such accounting and account documents referred to in Paragraph (b) of this section are included in the annual audit, and the report on such audit should contain separate conclusions of the above-mentioned auditors on whether it is possible to create a basis for the project management report or the statement of expenses issued during this financial year, together with the procedures and internal control involved in their preparation, to justify the withdrawal of funds from these accounts. Section 4.02 (a), without limiting the provisions of Section 4.01 of this Agreement, shall implement an action plan in accordance with the schedule established for the bank to strengthen the financial activities management system referred to in Section 4.01 (a) mentioned above, in order to enable the borrower to prepare a quarterly report on project management favorable for the bank no later than July 1, 2002 or at a later date determined by the Bank, in each of which: (I) (A) actual sources of funds and their use for the project - for the period accumulated and covered in the above report, as well as the planned sources and the use of funds for the project within a period of six months after the period in respect of the said report, and (C) the expenses financed from the loan funds during the period in respect of the said report and the expenses provided for financing from the loan funds within a period of six months after the period in respect of the above report separately; (II) (A) the progress of the project is described both for the period in respect of the above report; (C) the gaps between the actual and previously stipulated control figures are explained; and (III) the state of affairs related to the procurement under the project and expenses related to the contracts financed from the loan funds at the end of the period relating to the aforementioned report is stated. (B) at the end of the implementation of the action plan referred to in Paragraph (A) of this section, the borrower prepares a project management report for such period in accordance with the rules acceptable to the Bank and submits it to the bank no later than 45 days after the end of each waiting quarter.

ARTICLE V

Effective date. Termination of action section 5.01 the following events shall be specified as additional conditions for the entry into force of this loan agreement in the sense of Section 12.01 (C) of the general terms, i.e. the borrowers shall appoint auditors referred to in Section 4.01 (b) (I) of this Agreement; Section 5.02 hereby specifies the date commencing ninety (90) days after the date of this Agreement for the purposes of section 12.04 of the general terms and conditions.

ARTICLE VI

Representatives of the borrower; address section 6.01

For the purposes of Section 11.03 of general agreements, the borrower's representative is appointed the Minister of Finance or Deputy Minister of Finance of the borrower. Section 6.02 for the purposes of Section 11.01 of the general terms and conditions, the following addresses are indicated: borrower's address: Ministry of Finance of the Republic of Kazakhstan 33, Pobeda Ave Ministry of Finance 473000 Astana Astana 473000 Republic of Kazakhstan Zhenis Ave., 33 Teleh: 264126 (FILIN) Telex: 264126 (FILIN) bank address: International Bank of international reconstruction Reconstruction and Development and Development Bank 1818 N Street, N. W. 1818 Eich Street, North-West Washington, D. C. 20433 Washington, DC 20433 United States of America United States cable address: INTBAFRAD Telegraph address INTBAFRAD Washington, D.S. Washington, D.C. Teleh: 248423 (MCI) or Telex: 248423 (MCI) or 64145 (MCI) 64145 (MCI) certifying this, the parties to this Agreement, acting through their respective authorized representatives, have ensured the signing of this agreement from their names in Astana, Republic of Kazakhstan, on the date and year specified above. The International Bank for reconstruction and development of the Republic of Kazakhstan _________________________________ _______________________________ Authorized Representative Vice President for Europe and Central Asia

1-withdrawal of additional loan funds from the account

A. general provisions 1. The table below shows the categories of items of expenses financed from the loan funds, the distribution of the amount of the loan for each category and the percentage of expenses for items financed in each category on such a basis: Category loan allocated financing amount (us expense % in dollars) (1) Engineering and construction works 57,955,000 84% (2) Goods 100,000 100% expenses in foreign currency, 100% expenses in local currency( franc- cost of the plant) and 84% costs in local currency for goods purchased at the site (3) project preparation 1,800,000 loan repayment amount due in accordance with Section 2.02 (C) of this Agreement (4) commission fee fee 645,000 amount due in accordance with Section 2.04 (C) of this agreement (5) retained amount 4,000,000 total 64,500,0000 2. for the purposes of this Annex:

a) the term" expenses in foreign currency "means expenses in the currency of any country other than the country of the borrower for goods imported from the territory of any country other than the country of the borrower; (b) the term" expenses in local currency " means expenses in the currency of the borrower for goods imported from the territory of the borrower. 3.no withdrawal of funds from any account shall be made in respect of payments that occurred before the date of signing this Agreement, regardless of the rule set out in Paragraph 1 Above. 4. Bank loan funds may include: (a) goods whose value in US dollars is less than 100,000 each according to the contract; (b) works whose value in US dollars is less than 200,000 each according to the contracts, on the basis of the statement of expenses incurred, all may require that the Bank be withdrawn from the loan account in accordance with such terms and C. Special Account 1. The borrower opens and maintains a special deposit account with a commercial bank on favorable terms and rules for the Bank, including appropriate protection against accounting, confiscation or seizure, and maintains it in US dollars. 2. After the bank receives a confirmation document on the opening of a special account suitable for it, the funds withdrawn from the loan account in the amount deposited in the above-mentioned special account are made in the following form: (a) the bank receives the following documents: (i) the first project management report referred to in Section 4.02 (b) of this Agreement, and (II) on the basis of the project management; (b) any subsequent withdrawal of funds from the account shall be made in accordance with the provisions of Annex B to this Annex 1 upon receipt by the Bank of the project management report in accordance with Section 4.02 (b) of this agreement, attached to the application of the borrower for withdrawal of funds from the account on the basis of the project management report. 3.payments from a special account are made only for reasonable expenses. For each payment made by the borrower from a special account, the borrower submits to the bank such documents and other supporting documents for which the payment was made only for reasonable expenses within the period reasonably requested by the Bank. 4. regardless of the provisions of Part B. 2 of this annex, if: (a) The Bank determines that at any time the information required under Section 4.02 of this Agreement has not been properly presented in the project management report; (b) The Bank determines that any subsequent withdrawal of funds from the loan account at any time must be made by the borrower directly; or (C) if the borrower does not submit to the bank any reports on the results of the audit, which are required to be submitted to the Bank in accordance with the above section regarding the audit within the period specified in Section 4.01 (b) (II) of this Agreement: (a) accrual documents and reports on a special account; or (C) reports reflecting the 5. If at any time the bank notifies the borrower of its intention to fully or partially terminate the borrower's right to withdraw funds from the loan accounts in accordance with Section 6.02 of the general terms and conditions, it is not obliged to make subsequent deposits of funds in a special account in accordance with the provisions of Section B. 2 of this Annex. After such notification, the bank only at its own discretion determines whether the deposit of funds in a special account should be followed or what procedures must be followed to deposit such funds and notifies the borrower of its decision. 6. (A) if the bank determines at any time that any payment from the special account has been made for expenses that are not a suitable account, or is not justified by a supporting document submitted to the Bank, the borrower, upon receipt of the notification, immediately submits such additional confirmation requested by the bank to the bank, or deposits an amount equal to the amount of such payment in the special account (or returns it to the bank, if the bank requires it). If the bank does not make any other decision, the bank will not make subsequent depositing of funds in any special account until the borrower submits such confirmation or, depending on the circumstances, makes such a deposit. (b) if the bank determines at any time that the amount not offered for payment in the special account is not required to ensure reasonable expense payments within six months after such a decision, the borrower shall return the amount not offered for payment to the bank upon receipt of the Bank's notification. (c) the borrower returns to the Bank all or part of the funds deposited into the special account upon receipt of the bank's notification. (d) funds returned to the bank in accordance with sub-paragraphs (A), (b) or (C) of paragraph 6 of this paragraph shall be credited to the loan account for subsequent withdrawal or cancellation in accordance with the provisions of the Loan Agreement. Appendix 1 includes a replenishment of a special account in cases where the withdrawal of funds from the account is not made on the basis of the Project Management Report 1. for the purposes of this replenishment: the term "authorized transfer" is an amount of 1,500,000 in US dollars, which is withdrawn from the loan account and deposited into the special account in accordance with paragraph 2 of this replenishment; however, if the bank does not make any other decision, the allowable transfer is limited to an amount that is not provided for payment and is 10,000,000 in US dollars before delivery or increase to the total amount of funds received from the loan account, including the total amount of all special obligations accepted by the Bank in accordance with Section 5.02 of the general terms and conditions. 2. In order to receive authorized transfer funds from a special account and to replenish a special account, further withdrawal of funds is made as follows: (A) in order to receive the above-mentioned authorized transfer funds from a special account, the borrower submits to the Bank a request or request to deposit an amount or amounts not exceeding the above-mentioned authorized transfer amount to a special account. On the basis of each such request, the bank, on behalf of the borrower, receives the amount requested by the borrower from the loan account and deposits it to the above-mentioned special account. (b) to replenish the above-mentioned special account, the borrower submits to the Bank requests for depositing funds to the above-mentioned special account in a sequence determined by the Bank. Before or during each such request, the borrower submits to the Bank the documents and other confirmation required in accordance with Part B. 3 of Annex 1 to this Agreement for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the bank, on behalf of the borrower, receives from the loan account such an amount requested by the borrower and indicated in the above documents and other confirmation for payment of reasonable expenses from the above-mentioned special account, and deposits it to a special account. The amount of each such deposit in the above-mentioned special account is received by the bank from the loan account in one or more favorable categories of special accounts. 3. The bank is not obliged to make a subsequent deposit of funds in the special account when the amount of the loan received has an amount that is not offered for payment in relation to expenses financed from the loan funds allocated for the above categories of withdrawals and the total amount of all special obligations assumed by the Bank in accordance with Section 5.02 of the general After that, the procedures are followed, which the bank notifies the borrower in the notification when withdrawing the amount of the loan allocated for the above categories from the loan account, which remains in an undisclosed state. Withdrawal of funds from such further account is made only after the bank makes sure that all such amounts deposited in the special account remaining on the date of such notification are used to make payments for reasonable expenses and to the extent that the bank makes sure.

Appendix B to annex 1 maintenance of a special account in cases where the withdrawal of funds from the account is made on the basis of project management reports 1. such funds are deposited by the bank into a special account in accordance with the provisions of Annex 1 to this Agreement, except when the bank may indicate otherwise by notifying the borrower when withdrawing funds from the loan account. Funds deposited in each such deposit to a special account are received by the Bank one at a time or under the favorable categories of the above special account. 2. withdraw funds from the loan account for depositing to a special account

each application must be confirmed by a project management report. 3. upon receipt of each application for withdrawal of funds from the loan account, the Bank shall, on behalf of the borrower,: (A) from the amount requested in this way; and (b) within six months after the date of such reporting, withdraw from the loan account an amount equal to an amount less than the amount determined by the bank on the basis of the project management; however, in this way, the amount to be deposited when added to the amount remaining in the special account, indicated in the aforementioned project management report, does not exceed the amount of 1,500,000 in US dollars.

Appendix 2 Project Description Project objectives:

(i) the objectives of the project are to ensure the existence of the North Aral Sea (sat) and to improve the carrying capacity of the Syrdarya River, to improve environmental and conservation conditions and biodiversity related to the conservation of nature in and around the SAT Delta, which will improve the health of people and animals; and (ii) support and reproduction of agricultural products (including; The project consists of the following parts, in which the borrower and the bank can make changes in agreement at any time to achieve such goals: Part A: reconstruction of the North Aral Sea (sat) construction of a dam and a gutter dam across the Strait connecting the SAT and the Ulken South Aral Sea (UAT). Part B. Improvement of hydraulic regulation in the Syrdarya reconstruction and construction of hydraulic structures, including the following works; (i) reconstruction of the aklak gutter dam (and related works); (ii) reconstruction and related works of Aitek and Karozek water regulator buildings; (iii) repair of the main buildings in Kazaly and barriers in Kyzylorda; (iv) reconstruction and construction of a small dam and drainage dam along the river and difficult crossings of the river Strait; Part C: restoration of the Shardara dam restoration of the irrigated Kyzylkum main pond - water supply, drainage system, re-discharge Masters and restoration and related works of the water outlet buildings, tezagars, Karaozek water wells and restoration works on the Shardara dam, including the installation of measuring instruments on the dam. Part D: restoration of hydro resources and development of the fishing industry (I) development and implementation of a plan for the development of the fishing industry; and (II) restoration of stations in Kamysbas and Tastek. Part E: current monitoring and evaluation current monitoring and evaluation of the progress of the project, its impact and the implementation of the Environmental Protection Plan through the provision of services, training and procurement of vehicles and equipment. Part G: Project Management and institutional development (i) support the activities of the project management team (PPE) including overall project management, procurement, accounting, auditing, construction supervision; general control, current monitoring, evaluation and implementation of the Environmental Protection Plan; and (ii) increasing the capacity of the SRC in project management through technical assistance and training;

***

It is assumed that the project will be completed on August 31, 2006.

Appendix 3

Schedule Of Gradual Debt Repayment

Agreed payment date payment of the principal amount (in US dollars) * February 15, 2007 1,355,000 August 15, 2007 1,395,000 February 15, 2008 1,440,000 August 15, 2008 1,480,000 February 15, 2009 1,525,000 August 15, 2009 1,570,000 February 15, 2010 1,620,000 August 15, 2010 1,665,000 February 15, 2011 1,715,000 August 15, 2011 1,770,000 February 15, 2012 1,820,000 August 15, 2012 1,875,000 February 15, 2013 1,935,000 August 15, 2013 1,990,000 February 15, 2014 2,050,000 August 15, 2014 2,110,000 February 15, 2015 2,175,000 August 15, 2015 2,240,000 February 15, 2016 2,310,000 August 15, 2016 2,375,000 February 15, 2017 2,450,000 August 15, 2017 2,520,000 February 15, 2018 2,600,000 August 15, 2018 2,675,000 February 15, 2019 2,755,000 August 15, 2019 2,840,000 February 15, 2020 2,925,000 August 15, 2020 3,010,000 February 15, 2021 3,100,000 August 15, 2021 3,210,000 * the figures in this column represent the amount in US dollars to be reimbursed, except as stated in Section 4.04 (d) of the general terms and conditions. Annex 4 procurement part I procurement of goods and works part a general information procurement of goods and works is carried out in accordance with the provisions of section I "IBRD loans and CDB loan procurement guidance" published by the Bank in January 1995 and revised in January and August 1996, September 1997 and January 1999, as well as the provisions of section I of this Annex.

Part B

International competitive bidding 1.procurement of goods and services shall be carried out in accordance with contracts concluded in accordance with the provisions of Section II of the management and paragraph 5 of Annex 1 to it, except as otherwise provided by Part C of this section. 2.The following rules apply to goods and works purchased in accordance with contracts concluded in accordance with the provisions of Paragraph 1 of this Part B. (a) bidders offering the performance of Works whose preliminary assessment cost is more than US.10,000,000 in accordance with the assessment will be given a preliminary assessment in accordance with the provisions of paragraphs 2.9 and 2.10 of the guidelines. (b) announcement and announcement an announcement with an invitation to undergo a preliminary assessment or submit an offer to conclude each contract whose value is 10,000,000 or more in accordance with the estimate in US dollars is published in accordance with the procedures applicable to large contracts in accordance with paragraph 2.8 of the guidelines.

Part C

Other procurement procedures 1.works in which the cost of competitive bidding within the country is less than 1,000,000 per contract in accordance with the estimate in US dollars may be purchased in accordance with contracts concluded in accordance with the provisions of paragraphs 3.3 and 3.4 of the guidelines for a total amount not exceeding 12,000,000 US dollars. 2. Goods whose purchase value outside the country is less than 100,000 US dollars per contract in accordance with the assessment in US dollars may be purchased in a total amount of no more than 500,000 US dollars in accordance with contracts concluded on the basis of procurement procedures outside the country in accordance with the provisions of paragraphs 3.5 and 3.6 of the management. 3. Goods whose purchase value within the country is less than 50,000 US dollars per contract in accordance with the assessment in US dollars may be purchased in a total amount of no more than 500,000 US dollars in accordance with contracts concluded on the basis of procurement procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the management board. 4. Works whose purchase value of small-sized works is less than 50,000 per contract in accordance with the estimate in US dollars may be purchased at a fixed price in accordance with the contract concluded on the basis of proposals received from three (3) local contractors given in response to a written invitation, when the total amount in accordance with the estimate is not more than 1,000,000 US dollars. The invitation must contain a detailed description of the work, including the deadline for completion, the main technical characteristics that are acceptable to the Bank and, if necessary, require appropriate drawings. The contract is concluded with a contractor who has made an offer at the lowest price and has the appropriate experience and funds for the successful execution of the contract.

Part D

Consideration of procurement decisions by the Bank

1.procurement planning prior to the publication of any invitations to undergo a preliminary assessment for participation or submission of proposals for concluding contracts, the proposed procurement plan for the project is submitted to management for consideration and approval by the Bank in accordance with the provisions of Paragraph 1 of Annex 1.

2.the procedures referred to in paragraphs 2 and 3 of Annex 1 shall apply to the management in respect of each contract for the performance of works in accordance with Part C. 1 of this section, the cost of which is 200,000 or more in accordance with preliminary (A) estimates in US dollars. (B) with respect to initial contracts for the purchase of goods and services conducted in accordance with the procedures referred to in Part C, the following procedures apply: (i) prior to the selection of any supplier in accordance with the procurement procedures and the execution of any contract, the borrower submits to the Bank a report on the comparison and evaluation of the received proposals. (ii) in accordance with the procedures for concluding and purchasing direct contracts

prior to the execution of any concluded contract, the borrower submits to the Bank a copy of the technical specifications and a draft contract; and (III) the procedures referred to in paragraphs 2 (f), 2 (g) and 3 of Annex 1 to the management shall be applied.

3.in respect of each contract, the subsequent review of which is not regulated by Paragraph 2 of this part, the procedures referred to in paragraph 4 of Annex 1 shall be applied to the management. Appendix 5 project execution Program 1. borrower:

(a) adhere to the strategies and procedures that meet the requirements that the borrower and the bank use to ensure that they continuously monitor and evaluate the implementation of the project and the achievement of its goals in accordance with the indicators agreed between them. (b) a report shall be prepared in accordance with the limits of competence acceptable to the Bank and submitted to the bank on January 31 of each year or approximately for such terms, in which the data on the control and evaluation carried out in accordance with Paragraph (A) of this section shall be combined, on the results achieved in the implementation of the project during the period preceding the reporting date mentioned above, and on the measures proposed to ensure the successful implementation of the project and achieve its goals during the period after such date. (C) the report referred to in subparagraph (B) of this paragraph shall be reviewed by the bank on March 31 of each year or until such later date as requested by the Bank and shall then take all necessary measures to ensure the effective completion of the project and to achieve it taking into account the conclusions and recommendations of the above report and the opinions of (d) prepares a semi-annual report on the implementation of the project in accordance with the limits of competence acceptable to the Bank and submits it to the bank on January 31 and July 31 of each year or approximately in such a period; (e) (i) prepares a medium-term review report on the progress of the project in cooperation with the bank no later than July 31, 2004. The medium-term review report contains the results achieved in the implementation of the project objectives; and (ii) follows the recommendations set out in the project Action Plan related to the medium-term review agreed with the Bank and acceptable to the bank within a period not later than one month after the completion of the medium-term review; and (f) for the previous three months of each year, no later than January 31, April 30, July 31 and October 31, the report on the progress of the project, submitted in the appropriate form, shall be prepared and submitted to the bank within the competence acceptable to the Bank, and the report on the progress of the project for the previous three months shall be submitted to the interdepartmental coordination committee (RCC) and the project management committee (RCC) and the Bank. The quarterly reports include:-progress and estimated completion date of contracts for engineering and construction works and the supply of equipment and goods;-progress of institutional components, training and research and activities on the work of the RSE; - monitoring and evaluation of the Environmental Protection Plan Project Impact;-work of procurement and financial service management consultants.

2.for the purposes of Section 9.07 of the general terms and conditions and without limiting its provisions, the borrower prepares a draft of future activities within the framework of the project on the basis of principles acceptable to the Bank and submits to the bank no later than six months (6) following the final date or within such a later period 3. Prior to the completion of the project, the borrower project management ensures the functioning of the project management team for its implementation and coordination of activities related to the project with specialists whose qualifications and competence limits are suitable for the Bank.

4.until the completion of the project, the borrower ensures the functioning of the interdepartmental coordination committee (Vuk) established by him for the purposes of coordinating activities within the project.

5.the borrower shall form the project management committee no later than December 31, 2001. The main objectives of the GBC are: (i) informing the local population about the activities within and in the course of the project, including research work within the framework of the project, its implementation, without limitation, the results of current monitoring and evaluation, activities and programs provided or carried out by donors, financing such activities, etc.; and (ii) ensure that the achievements provided for in the project in the areas of Environmental Protection and social development are achieved.

6.no later than June 30, 2002, the borrower forms an advisory group on the basin of the Aral Sea (ATACT), consisting of persons related to the main project whose competence limits are suitable for the Bank. The main objectives of the ATAC are to ensure the effective participation of the state in the process of distribution and management of Water Resources in the Kazakhstani part of the watershed.

7.in order to monitor compliance with safety measures at the Shardara dam, an independent expert group (STT) is created, consisting of both local and foreign specialists, the main task of which is to analyze the design of preventive measures and monitor their implementation.

8.the borrower ensures the implementation of the Environmental Protection Plan within the framework of a project prepared in the form of a study in order to assess the state of the environment with all necessary measures. For this purpose, the borrower must: (i) include in the work plan the simplified measures proposed under the project; (ii) implement such measures during construction work and subsequent use of the project tools; (iii) to monitor the implementation of the action plan for the effective use of the environment, the PPE is staffed by appropriately qualified specialists, including at least two (2) ecologists and one (1) hydrologists whose qualifications and experience are acceptable to the Bank; (IV) and to hire independent consultants during the project implementation to ensure that the implementation of the Environmental Protection Plan (EMP) is acceptable to the Bank and ensure that their activities, qualifications and experience are acceptable to the Bank.

9. no later than December 31, 2001, the borrower is qualified and consultants whose experience is acceptable to the Bank are hired and subsequently retain this position, who will be responsible for monitoring the implementation of the EMP and monitoring and evaluating the impact of the project.

10.no later than December 31, 2001, the borrower hires consultants whose qualifications and experience are acceptable to the Bank and subsequently retains this position, who will be responsible for the development and supervision of construction. Specialists: Kassymbekov B. A. Bagarova Zh. A.

President

Republic of Kazakhstan

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