OFFICIAL LvG-K DOCUMENTS

Transcription

1 Public Disclosure Authorized OFFICIAL LvG-K DOCUMENTS LOAN NUMBER 8677-TR Public Disclosure Authorized Loan Agreement (Sustainable Cities Project) Public Disclosure Authorized between ILLER BANKASI ANONIM SIRKETI and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized Dated 'bec.0er1, 2016

2 LOAN NUMBER 8677-TR LOAN AGREEMENT Agreement dated 7eCem b<- 2 -, 2016, between ILLER BANKASI ANONIM SIRKETI ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - LOAN The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of one hundred twenty-one million two hundred thousand Euro (E121,200,000) as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.08 of this Agreement ("Loan"), to assist in financing Part B of the project described in Schedule 1 to this Agreement ("Project") The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount The Commitment Charge payable by the Borrower shall be equal to one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance The interest payable by the Borrower for each Interest Period shall be at a rate equal to the Reference Rate for the Loan Currency plus the Fixed Spread; provided, that upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty days, then the interest payable by the Borrower

3 -2- shall instead be calculated as provided in Section 3.02 (e) of the General Conditions The Payment Dates are March 15 and September 15 in each year The principal amount of the Loan shall be repaid in accordance with the amortization schedule set forth in Schedule 3 to this Agreement (a) The Borrower may at any time request any of the following Conversions of the terms of the Loan in order to facilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of the interest rate basis applicable to: (A) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate to a Fixed Rate, or vice versa; or (B) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Reference Rate and the Variable Spread to a Variable Rate based on a Fixed Reference Rate and the Variable Spread, or vice versa; or (C) all of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Variable Spread to a Variable Rate based on a Fixed Spread; and (iii) the setting of limits on the Variable Rate or the Reference Rate applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding by the establishment of an Interest Rate Cap or Interest Rate Collar on the Variable Rate or the Reference Rate. (c) Any conversion requested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a "Conversion", as defined in the General Conditions, and shall be effected in accordance with the provisions of Article IV of the General Conditions and of the Conversion Guidelines. Promptly following the Execution Date for an Interest Rate Cap or Interest Rate Collar for which the Borrower has requested that the premium be paid out of the proceeds of the Loan, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amounts required to pay any premium payable in accordance with Section 4.05 (c) of the General Conditions up to the amount allocated from time to time for the purpose in the table in Section IV of Schedule 2 to this Agreement.

4 -3- ARTICLE III - PROJECT The Borrower declares its commitment to the objective of the Project. To this end, the Borrower shall carry out the Project in accordance with the provisions of Article V of the General Conditions Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower, the Guarantor, and the Bank shall otherwise agree, the Borrower shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - EFFECTIVENESS; TERMINATION The Additional Condition of Effectiveness consists of the following, namely, that the Borrower shall have adopted the Operational Manual satisfactory to the Bank The Effectiveness Deadline is the date one hundred and twenty (120) days after the date of this Agreement. ARTICLE V - REPRESENTATIVE; ADDRESSES The Borrower's Representative is its Director General The Borrower's Address is: Iller Bankasi Anonim Sirketi Kizilirmak Mahallesi Ufuk Universitesi Caddesi No: Cukurambar/Cankaya Ankara Republic of Turkey Facsimile: The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Telex: Facsimile: (MCI) or (MCI)

5 -4- AGREED at Ankara, Republic of Turkey, as of the day and year first above written. ILLER BANKASI ANONIM SIRKETI By: 4 sbfbpiat el Miidfir V. Name: Title: Authorized Representative By: fc, Authorized Representative Na A icahit DEMIRTA$ 7finmfim Kui ulu Bakau Title: INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By: Authorized Representative Name: /9J AL-- Title: -A

6 -5- SCHEDULE 1 Project Description The objective of the Project is to improve the planning capacity of, and access to targeted municipal services in, participating municipalities and utilities. The Project consists of the following parts: Part A. Sustainable City Planning and Management Systems 1. Provision of technical assistance and goods to selected municipalities and their affiliated utilities to ensure comprehensive and integrated planning, including support for spatial, social, environmental and financial/capital investment planning and management. 2. Provision of support to selected municipalities and their affiliated utilities in their preparation of feasibility studies, social and/or environmental impact assessments and engineering designs for Sub-projects. 3. Strengthening the capacity of the Borrower to implement the above described activities under this Part A and to manage sustainable city systems, including in the areas of contract management, management and implementation of sustainable city investments through: (a) provision of support for embedding city-level actions for climate change, energy efficiency, water, urban transport, solid waste management, and urban planning and in building awareness on international practices to promote and implement sustainable cities actions; provision of training and capacity building to municipalities; and (c) preparation of reports and studies that examine required reforms and propose changes with an aim to improving planning practices for integrated and comprehensive planning. Part B. Municipal Investments Establish and operate a municipality credit facility targeted to infrastructure investments, through the provision of Sub-loans to Sub-borrowers (including municipalities and their affiliated utilities) to finance the cost of goods, works, nonconsultant services and consultants' services required to carry out investments in Subprojects, including in the public transport, water and sanitation, solid waste management, and energy sectors. Part C. Project Management Provision of support to the Borrower for implementation of Part B of the Project including provision of goods and consultants services for supervision and monitoring and evaluation, as well as for public outreach and communication.

7 -6- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. The Borrower shall: (a) maintain, until the completion of the Project, the Project Management Unit ("PM_U") established within its International Relations Department and responsible for coordinating and supervising Project implementation; and ensure that the PMU functions at all times in a manner and with staffing, budgetary resources and authority, necessary and appropriate for Project implementation acceptable to the Bank. B. Project Operational Manual 1. (a) The Borrower, for purposes of implementing the Project, shall develop an Operational Manual ("OM") setting out, inter alia: (i) (ii) (iii) (iv) policies and procedures: relating to implementation of the Project; for the selection of municipalities that will benefit from the technical assistance and support to be provided under Parts A. 1 and A.2 of the Project; and for the selection and financing of Subprojects; financial management arrangements, requirements and detailed procedures consistent with the provisions of Section II.B of this Schedule 2; guidelines and procedures for procurement consistent with the provisions of Section III of this Schedule 2; and safeguards obligations consistent with the provisions of Section I.D of this Schedule 2 and requirements under the Anti-Corruption Guidelines. (c) The Borrower shall carry out the Project in a timely manner and in accordance with the provisions of the OM. The Borrower shall not amend or waive, or permit to be amended or waived the OM or any provisions thereof, except with the prior written approval of the Bank.

8 -7- C. Anti-Corruption The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. D. Safeguards 1. The Borrower shall, and cause each relevant Sub-borrower to, with respect to civil works under the Project: (a) prepare an ESIA, Partial ESIA, or ESMP, as the case may be, in accordance with the principles and procedures set forth in the ESMF; thereafter, provide said ESIA, Partial ESIA, or ESMP to the Bank for review; and (c) commence and implement such works in accordance with said ESIA, Partial ESIA or ESMP as shall have been accepted by the Bank as being satisfactory. 2. The Borrower shall, and cause each Sub-borrower to: (a) take all necessary actions to minimize, to the extent possible, any involuntary loss by persons of shelter, productive assets, or access to productive assets or income or means of livelihood, temporarily or permanently, in carrying out the Project; and for this purpose, whenever implementation of Project activities would give rise to Displaced Persons with respect to civil works related to said activities: (i) prepare, and cause to be prepared, a RAP in accordance with the principles and procedures set forth in the LARPF; (ii) thereafter, provide said RAP to the Bank for review; and (iii) commence and implement such works in accordance with the RAP as shall have been accepted by the Bank as being satisfactory. 3. The Borrower shall ensure that the ESMF, LARPF, ESIAs, Partial ESIAs, ESMPs and RAPs and any provision thereof, shall not be amended, suspended, abrogated, terminated or waived or permitted to be amended, suspended, abrogated, terminated or waived, except with the prior written consent of the Bank. 4. The Borrower shall: (a) maintain, and cause each Sub-borrower to maintain, policies and procedures adequate to enable them to monitor and evaluate, in accordance with guidelines acceptable to the Bank, the implementation of any of the ESMF, LARPF, ESIAs, Partial ESIAs, ESMPs and RAPs and the achievement of the objectives of said frameworks and plans; and include in the Project Report, which is to be prepared under Section II.A paragraph I of this Schedule, the results of the monitoring and evaluation

9 -8- activities with respect to the frameworks and plans referred to in subparagraph (a) above. E. Technical Assistance under Part A of the Project 1. For purposes of carrying out Part A of the Project, the Borrower shall select municipalities and utilities in accordance with eligibility criteria and procedures acceptable to the Bank and as set out in the Operational Manual. 2. The Borrower shall ensure that the terms of reference of any consultancy in respect to Part A of the Project shall be satisfactory to the Bank following its review thereof and, to that end, such terms of reference shall duly incorporate the requirements of the Bank's Safeguards Policies then in force, as applied to the advice conveyed through such technical assistance. F. Sub-projects under Part B of the Project 1. With respect to Part B of the Project, the Borrower shall make Sub-loans to Subborrowers for the carrying out of Sub-projects, all in accordance with eligibility criteria and procedures acceptable to the Bank and as set out in the Operational Manual. 2. The Borrower shall: (a) (c) (d) make each Sub-loan under a Sub-loan Agreement with the respective Subborrower on terms and conditions set forth in the Operational Manual, including without limitation, the terms and conditions set forth in Annex 1 to this Schedule; obtain, through the Sub-loan Agreement, rights adequate to protect its interests and those of the Bank and the Guarantor, including the right to suspend or terminate the right of a Sub-borrower to use the proceeds of the Sub-loan, or to obtain a refund of all or any part of the amount of the Subloan then withdrawn, upon the Sub-borrower's failure to perform any of its obligations under the Sub-loan Agreement; obtain the Bank's approval of the Sub-loan and its related Sub-project prior to execution of a Sub-loan Agreement with a Sub-borrower concerned; and exercise its rights and carry out its obligations under each Sub-loan Agreement in such manner as to protect the interests of the Borrower, the Guarantor and the Bank and to accomplish the purposes of the Loan. Except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive any Sub-loan Agreement or any of its provisions.

10 -9-3. The Borrower shall, except as the Bank and the Borrower may otherwise agree: (a) open and thereafter maintain on its books, in accordance with its normal financial practices and on conditions acceptable to the Bank, and ensures that the Sub-Borrowers open separate escrow accounts to which it shall credit each payment of interest or other charges on, or repayment of principal payments under, any Sub-loan; and utilize all amounts so credited to said separate escrow account to meet the Borrower's payment or repayment obligations to the Bank under this Agreement, without prejudice to the Borrower's obligation to make all such payments and repayments to the Bank even if the amounts in said escrow account are insufficient to cover such obligations. Section II. Project Monitoring Reporting and Evaluation A. Project Reports 1. The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of indicators acceptable to the Bank. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the Bank not later than forty-five (45) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1. The Borrower shall maintain a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. 2. The Borrower shall prepare and furnish to the Bank not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Bank. 3. The Borrower shall have: (a) the Financial Statements for the Project audited in accordance with the provisions of Section 5.09 of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six (6) months after the end of such period; and its entity financial statements audited in accordance with standards set forth in Section 5.09 of the General Conditions. Each audit of such entity financial statements shall cover the period of one fiscal year of the Borrower and be furnished to the Bank not later than six (6) months after the end of such period.

11 -10- Section III. Procurement A. General 1. Goods, Works and Non-consulting Services. All goods, works and nonconsulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in Sections II and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The following methods, other than International Competitive Bidding, may be used for procurement of goods, works and non-consulting services for those contracts specified in the Procurement Plan: (a) (c) National Competitive Bidding, subject to the additional provisions set forth in Annex 2 to this Schedule 2; Shopping; and Direct Contracting.

12 -11- C. Particular Methods of Procurement of Consultants' Services 1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following methods, other than Quality and Cost-based Selection, may be used for procurement of consultants' services for those contracts which are specified in the Procurement Plan: (a) (c) (d) (e) Least Cost Selection; Selection based on Consultants' Qualifications; Single-source Selection of consulting firms; Procedures set forth in Section V of the Consultant Guidelines for the Selection of Individual Consultants; and Single-source procedures for the Selection of Individual Consultants. D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank's Prior Review. All other contracts shall be subject to Post Review by the Bank. Section IV. Withdrawal of Loan Proceeds A. General 1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Bank shall specify by notice to the Borrower (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the Bank and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan ("Category"), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category.

13 -12- Amount of the Loan Percentage of Category Allocated Expenditures to be (expressed in Euro) financed (1) Goods, works, nonconsulting (inclusive of Taxes) services, and 120,897,000 consultants' services for 100% Part B of the Project (2) Front-end Fee 303,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 of the General Conditions (3) Interest Rate Cap or 0 Amount due pursuant to Interest Rate Collar Section 2.08(c) of this premium Agreement TOTAL AMOUNT 11L2000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for payments made prior to the date of this Agreement. 2. The Closing Date is July 31, 2024.

14 -13- ANNEX 1 to SCHEDULE 2 For the purposes of Section I.F.2 of this Schedule 2, the terms and conditions of Sub-Loans made available to Sub-borrowers shall be those set forth below. TERMS 1. The principal amount to be relent out of the proceeds of the Loan to a Sub-borrower under its respective Sub-loan Agreement shall be denominated in Euro. CONDITIONS 2. When presenting a Sub-loan to the Bank for approval, the Borrower shall furnish to the Bank an application, in form acceptable to the Bank, together with: (a) (c) (d) a description of the Sub-borrower and an appraisal of the Sub-project, including a description of the expenditures proposed to be financed out of the proceeds of the Loan; evidence of compliance with the Operational Manual and specifically with the environmental review and land acquisition procedures set forth in the Operational Manual; evidence of compliance with Sub-loan evaluation criteria adopted by the Borrower and acceptable to the Bank; and such other information as the Bank or the Borrower shall reasonably request. 3. Sub-loans shall be made to the Sub-borrowers which each shall have established and maintain during the duration of its respective Sub-loan, to the satisfaction of the Borrower that: (a) it has no overdue payments to the Guarantor's Undersecretariat of Treasury; and it has a satisfactory financial structure and the organization, management, staff and financial and other resources required for the efficient carrying out of its operations, including the carrying out of the Sub-project. 4. The Sub-loans shall be made for Sub-projects which are each determined, on the basis of an appraisal carried out in accordance with procedures acceptable to the Bank set forth in the Operational Manual, to:

15 -14- (a) be technically feasible, economically, financially viable and environmentally beneficial; (c) (d) support infrastructure investments, including in the public transport, water and sanitation, solid waste management, and energy sectors; be in compliance with the ESMF and LARPF; and be in compliance with the requirements pertaining to environmental protection applicable under the laws and regulations of the Guarantor and the environmental review and land acquisition procedures set forth in the Operational Manual. 5. Sub-loans shall be made on terms whereby the Borrower shall obtain, through Subloan Agreements with the Sub-borrowers, rights adequate to protect its interests and those of the Bank and the Guarantor, including the right to require the Subborrower to: (a) (c) (d) (e) carry out its Sub-project with due diligence and efficiency and in accordance with sound technical, economic, financial, managerial, environmental and social standards and practices satisfactory to the Bank, including in accordance with the provisions of the Anti-Corruption Guidelines applicable to recipients of loan proceeds other than the Borrower; provide, promptly as needed, the resources required for the purpose; procure the goods, works and services to be financed out of the Sub-loan in accordance with the provisions of this Agreement; and maintain policies and procedures adequate to enable it to monitor and evaluate in accordance with indicators acceptable to the Bank, the progress of the Sub-project and the achievement of its objectives; comply with environmental review and land acquisition procedures set forth in the ESMF and LARPF respectively and: (i) with respect to civil works under its Sub-project, to: (A) prepare an ESIA, Partial ESIA or ESMP, as the case may be, in accordance with the principles and procedures set forth in the ESMF; (B) thereafter, provide said ESIA, Partial ESIA or ESMP to the Bank for review; and (C) commence and implement such works in accordance with the ESIA, Partial ESIA or ESMP as shall have been accepted by the Bank as being satisfactory;

16 -15- (ii) (iii) (A) take all necessary actions to minimize to the extent possible any involuntary loss by persons of shelter, productive assets or access to productive assets or income or means of livelihood, temporarily or permanently in carrying out the Project; and (B) for this purpose, whenever implementation of Project activities would give rise to Displaced Persons, with respect to civil works related to said activities: (I) prepare, and cause to be prepared, a RAP in accordance with the principles and procedures set forth in the LARPF; (II) thereafter, provide said RAP to the Bank for review; and (III) commence and implement such works in accordance with the RAP as shall have been accepted by the Bank as being satisfactory; and ensure that the ESMF, LARPF, ESIAs, Partial ESIAs, ESMPs and RAPs and any provision thereof, shall not be amended, suspended, abrogated, terminated or waived, except with the prior written consent of the Bank. (f) (g) (h) (i) maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Bank, both in a manner adequate to reflect the operations, resources and expenditures related to the Sub-project; and (ii) at the Bank's or the Borrower's request, have such financial statements audited by independent auditors acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank, and promptly furnish the statements as so audited to the Borrower and the Bank; enable the Borrower and the Bank to inspect the Sub-project, its operation and any relevant records and documents; and prepare and furnish to the Borrower and the Bank all such information as the Borrower or the Bank shall reasonably request relating to the foregoing.

17 -16- Annex 2 to SCHEDULE 2 Mandatory Provisions for Procurement under Bank-Financed Contracts Subject to National Competitive Bidding The procedures to be followed for National Competitive Bidding shall be those set forth in the Public Procurement Law of the Guarantor (Law No. 4734), as amended from time to time, with the latest amendment dated February 26, 2016 (the "PPL") notwithstanding anything to the contrary in the Guarantor's Law on Public Procurement Contracts (Law No. 4735), as amended from time to time, with the latest amendment dated April 23, 2015, and subject to the following provisions: A. Eligibility The eligibility of bidders shall be as defined under Section I of the Procurement Guidelines; accordingly, no bidder or potential bidder shall be declared ineligible for contracts financed by the Bank for reasons other than those provided in Section I of the Procurement Guidelines. Bidding shall not be restricted to domestic bidders. No restrictions in respect of eligibility to participate in bidding for contracts shall be placed on the basis of nationality of the bidder and/or the origin of goods other than those set forth in paragraph 1.10 of the Procurement Guidelines. No restriction of any kind shall be applied to foreign bidders who wish to submit a bid. Bidding shall not be restricted to pre-registered firms, and foreign bidders shall not be required to be registered with local authorities as a prerequisite for submitting bids. B. Procedures (i) (ii) (iii) Invitations to bid shall be advertised in the Guarantor's official gazette, or in at least one widely circulated national daily newspaper, or in an electronic portal of free access allowing a minimum of thirty (30) days for the preparation and submission of bids. The sale and/or issuance of bidding documents shall not be restricted only to entities invited by the procuring entity. Prequalification procedures acceptable to the Bank shall be used for large, complex and/or specialized projects.

18 -17- C. Assessment of Bidders' Qualifications In the procurement of goods, works and non-consulting services, where prequalification is not used, the qualifications of the bidder who is recommended for award of contract shall be assessed by post-qualification, applying minimum experience, technical and financial requirements which shall be explicitly stated in the bidding documents and which shall be determined by a 'pass/fail' method, not through use of a merit point system. D. Participation by Government-owned Enterprises Government-owned enterprises in the Republic of Turkey shall be eligible to participate in bidding only if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency of the Borrower. Furthermore, they will be subject to the same bid and performance security requirements as other bidders. E. Participation by Joint Ventures Participation shall be allowed from joint ventures on the condition that such joint venture partners will be jointly and severally liable under the contract. F. Bidding Documents Procuring entities shall use the Bank's sample National Competitive Bidding documents for Europe and Central Asia Region for goods and works in a manner acceptable to the Bank, and shall draft prequalification documents (where applicable), contracts and conditions of contract, acceptable to the Bank. G. Bid Evaluation (i) (ii) (iii) Evaluation criteria other than price shall be quantified in monetary terms. Evaluation of bids shall be made in strict adherence to the monetarilyquantifiable criteria declared in the bidding documents and a merit point system shall not be used. An extension of bid validity, if justified by exceptional circumstances, may be requested in writing from all bidders before the bid validity expiration date and shall be allowed once only for the minimum period required to complete the evaluation or award a contract, but not more than thirty (30) days. No further extensions shall be requested without the prior approval of the Bank.

19 -18- (iv) (v) Contracts shall be awarded to qualified bidders having submitted the lowest evaluated substantially responsive bid, and no negotiation as to the price or substance of the bid shall take place. No preference shall apply under National Competitive Bidding. H. Price Adiustment Civil works contracts of long duration (i.e. more than eighteen (18) months) shall contain an appropriate price adjustment clause, acceptable to the Bank. I. Reiection of All Bids All bids (or the sole bid if only one bid is received) shall not be rejected, the procurement process shall not be cancelled, and new bids shall not be solicited without the Bank's prior written concurrence. No bids shall be rejected solely because they fall below or exceed the estimated or reference price. J. Securities Bid securities should not exceed 3% (three percent) of the estimated cost of the contract; performance securities should not exceed more than 10% (ten percent) of the cost of the contract. No advance payments shall be made to the suppliers without a suitable advance payment security. The wording of all such securities shall be included in the bidding documents and shall be acceptable to the Bank. Bidders shall be given at least twenty-eight (28) days from the receipt of notification of contract award to submit performance securities, and bid securities shall remain valid for such period. K. Fraud and Corruption Each bidding document and contract financed out of the proceeds of the Loan shall include provisions on matters pertaining to fraud and corruption set forth in paragraph 1.16 of the Procurement Guidelines. The Bank will sanction a firm or an individual, at any time, in accordance with prevailing Bank sanctions procedures. L. Audit Rights In accordance with paragraph 1.16(e) of the Procurement Guidelines, each bidding document and contract financed out of the proceeds of the Loan shall provide that: (i) the bidders, suppliers and contractors, and their subcontractors, agents, personnel, consultants, service providers, or suppliers shall permit the Bank, at its request, to inspect their accounts and records relating to the bid submission and performance of the contract, and to have said accounts and records audited by auditors appointed by the Bank; and (ii) acts intended to materially impede the exercise of the Bank's audit rights may amount to an obstructive practice as defined in paragraph 1.16(a)(v) of the Procurement Guidelines.

20 -19- M. Debarment The Bank may recognize, if requested by the Guarantor, exclusion from participation as a result of debarment under the national system, provided that the debarment is for offenses involving fraud, corruption or similar misconduct, and further provided that the Bank confirms that the particular debarment procedure afforded due process and the debarment decision is final.

21 -20- SCHEDULE 3 Amortization Schedule The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) On each March 15 and September 15 Beginning March 15, % through September 15, If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph I of this Schedule. Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph I of this Schedule for said Principal Payment Date ("Original Installment Share") and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies.

22 (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs I and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount.

23 -22- APPENDIX Section I. Definitions 1. "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January "Bank's Safeguards Policies" means the Bank's operational policies and procedures, set forth in the Bank's operational manual and identified as OP/BP 4.01, 4.04, 4.09, 4.10, 4.11, 4.12, 4.36, 4.37, 7.50 and 7.60, as said manual is published under www. World Bank.org/opmanual. 3. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 4. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 5. "Displaced Persons" means persons who, on account of the execution of the Project, have experienced or would experience direct economic and social impacts caused by: (a) the involuntary taking of land, resulting in (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not such persons must move to another location; or the involuntary restriction of access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such persons; and a "Displaced Person" means any of such Displaced Persons. 6. "Environmental and Social Impact Assessment" or "ESIA" means a site-specific environmental and social impact assessment, prepared in accordance with the ESMF and the provisions of Section I.D. 1 of Schedule 2 to this Agreement and acceptable to the Bank, and providing details of the specific actions, measures and policies designed to facilitate the achievement of the objective of the ESMF, 7. "Partial Environmental and Social Impact Assessment" or "Partial ESIA" means a site-specific partial ESIA, prepared in accordance with the ESMF and the provisions of Section I.D. I of Schedule 2 to this Agreement and acceptable to the Bank, and giving details the specific actions, measures and policies designed to facilitate the achievement of the objective of the ESMF. 8. "Environmental and Social Management Plan" or "ESMP" means a site-specific environmental management plan, prepared in accordance with the ESMF and the provisions of Section I.D. I of Schedule 2 to this Agreement and acceptable to the

24 -23- Bank, and giving details the specific actions, measures and policies designed to facilitate the achievement of the objective of the ESMF. 9. "ESMF" means the Environmental and Social Management Framework prepared by the Borrower and disclosed by the Borrower on its website on March 28, 2016, and in the Bank's Infoshop on March 29, 2016, which framework sets forth, inter alia, policies and procedures for: screening (including impact on physical cultural resources, natural habitats and dam safety) of proposed Project activities; preparation of environmental assessment and environment management plans therefor; consultation and disclosure and monitoring and reporting during the implementation of the Project, as said framework may be amended from time to time with the prior concurrence of the Bank. 10. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for Loans", dated March 12, 2012, with the modifications set forth in Section II of this Appendix. 11. "LARPF" means the Land Acquisition and Resettlement Policy Framework prepared by the Borrower and disclosed in the Borrower's website on March 28, 2016, and the Bank's Infoshop on March 28, 2016, which framework sets out the policies and procedures for land acquisition, resettlement, compensation and rehabilitation of Displaced Persons, preparation of resettlement action plans therefor, consultation, disclosure, grievance redress, and monitoring and reporting during Project implementation, as said framework may be revised from time to time with the prior agreement of the Bank. 12. "Operational Manual" and "OM" mean the manual referred to in Section 4.01 of this Agreement and Section I.B. 1 of Schedule 2 to this Agreement, setting out the policies and procedures for implementation of the Project. 13. "PMU" means the project management unit of the Borrower, established on April 29, 2005, and confirmed by a decision of the Board of Directors of the Borrower on January 25, 2006, or any successor to such unit. 14. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 15. "Procurement Plan" means the Borrower's procurement plan for the Project, dated November 9, 2016, and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with said paragraph. 16. "Resettlement Action Plan" and RAP" mean a site-specific resettlement action plan relating to land acquisition and/or resettlement or economic displacement of

25 -24- Displaced Persons, as the case may be, prepared in accordance with the LARPF and the provisions of Section I.D.2 of Schedule 2 to this Agreement and acceptable to the Bank; and "Resettlement Action Plans" and "RAPs" mean, collectively, all such RAPs. 17. "Sub-borrower" means a municipality or utility, which satisfies the appropriate criteria as set out in the Operational Manual and in paragraph 4 of Annex 1 to Schedule 2 to this Agreement, to which the Borrower proposes to make or has made a Sub-loan. 18. "Sub-loan" means a loan made, or proposed to be made by the Borrower, out of the proceeds of the Loan for purposes of financing all or a portion of the expenditures incurred by a Sub-borrower for goods, works, non-consulting services and consultants' services under a Sub-Project. 19. "Sub-loan Agreement" means an agreement entered or to be entered into between the Borrower and a Sub-borrower pursuant and referred to in Section I.F.2 of Schedule 2 to this Agreement and paragraph 5 of Annex 1 to Schedule 2 to this Agreement, as the same may be amended from time to time, and such term includes all schedules supplemental to the Sub-loan Agreement. 20. "Sub-project" means a specific project, selected in accordance with provisions of paragraph 4 of Annex 1 to Schedule 2 to this Agreement, which is proposed to be carried out by a Sub-borrower, in whole or in part, through the utilization of the proceeds of a Sub-loan. Section II. Modifications to the General Conditions The General Conditions are hereby modified as follows: 1. In the Table of Contents, the references to Sections, Section names and Section numbers are modified to reflect the modifications set forth in the paragraphs below. 2. Section (Front-end Fee) is modified to read as follows: "Section Front-end Fee; Commitment Charge (a) The Borrower shall pay the Bank a front-end fee on the Loan amount at the rate specified in the Loan Agreement (the "Front-end Fee"). The Borrower shall pay the Bank a commitment charge on the Unwithdrawn Loan Balance at the rate specified in the Loan Agreement (the "Commitment Charge"). The Commitment Charge shall accrue from a date sixty days after the date of the Loan Agreement to the respective dates on which amounts are withdrawn by the Borrower from the Loan

26 -25- Account or cancelled. The Commitment Charge shall be payable semiannually in arrears on each Payment Date." 3. In the Appendix, Definitions, all relevant references to Section numbers and paragraphs are modified, as necessary, to reflect the modification set forth in paragraph 2 above. 4. The Appendix is modified by inserting a new paragraph 19 with the following definition of "Commitment Charge", and renumbering the subsequent paragraphs accordingly: "19. "Commitment Charge" means the commitment charge specified in the Loan Agreement for the purpose of Section 3.01." 5. In the renumbered paragraph 49 (originally paragraph 48) of the Appendix, the definition of "Front-end Fee" is modified by replacing the reference to Section 3.01 with Section 3.01 (a). 6. In the renumbered paragraph 68 (originally paragraph 67) of the Appendix, the definition of the term "Loan Payment" is modified to read as follows: "68. "Loan Payment" means any amount payable by the Loan Parties to the Bank pursuant to the Legal Agreements or these General Conditions, including (but not limited to) any amount of the Withdrawn Loan Balance, interest, the Front-end Fee, the Commitment Charge, interest at the Default Interest Rate (if any), any prepayment premium, any transaction fee for a Conversion or early termination of a Conversion, the Variable Spread Fixing Charge (if any), any premium payable upon the establishment of an Interest Rate Cap or Interest Rate Collar, and any Unwinding Amount payable by the Borrower." 7. In the renumbered paragraph 73 (originally paragraph 72) of the Appendix, the definition of "Payment Date" is modified by deleting the word "is" and inserting the words "and Commitment Charge are" after the word "interest".