Loan Agreement OFFICIAL DOCUMENTS. Public Disclosure Authorized LOAN NUMBER TR. Public Disclosure Authorized

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1 Public Disclosure Authorized OFFICIAL DOCUMENTS LOAN NUMBER TR Public Disclosure Authorized Loan Agreement Public Disclosure Authorized (Renewable Energy Integration Project) between TORKIYE ELEKTRIK ILETIM A.$. and Public Disclosure Authorized INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated ULy 40,2014

2 LOAN NUMBER TR LOAN AGREEMENT Agreement dated 3U L- 4 0, 2014, between TORKYE ELEKTRIK ILETIM A.$. ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: WHEREAS: (A) Republic of Turkey ("Guarantor") and the Borrower, having been satisfied as to the feasibility and priority of the Project described in Schedule I to this Agreement, have requested the Bank to assist in the financing of the Project; (B) by an agreement ("Guarantee Agreement") of even Guarantor date herewith and the Bank, between the the Guarantor has agreed to guarantee the the Loan Borrower Payment in obligations respect of the of Loan; and (C) by an agreement of even date herewith ("CTF acting Loan as Agreement"), the implementing the Bank, agency of the Clean Technology Fund loan ("CTF") ("CTF has Loan") agreed to to the make Borrower a in the amount of fifty million in Dollars financing ($50,000,000) of Parts I and to assist 2 the Project on the terms and conditions Agreement set forth and the in the Guarantor CTF Loan has agreed to guarantee the Loan Borrower Payment under obligations the CTF of Loan the as set forth in the CTF Guarantee herewith; Agreement and of even date WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement; 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 two hundred and seventeen million six hundred thousand Euros (EUR 217,600,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.07 of this Agreement ("Loan"), to assist in financing the project described in Schedule I to this Agreement ("Project").

3 2.02. 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 Borrower shall pay the Front-end Fee not later than sixty (60) days after the Effective Date 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 Variable 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 (30) days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02 (e) of the General Conditions The Payment Dates are April 15 and October 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. 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. -2-

4 ARTICLE III - PROJECT The Borrower declares its commitment to the objectives 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, the CTF Loan Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Borrower to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled or waived by the Bank The Effectiveness Deadline is the date one hundred twenty (120) days after the date of this Agreement. ARTICLE V - REPRESENTATIVE; ADDRESSES The Borrower's Representative is its General Manager The Borrower's Address is: TUrkiye Elektrik letim A.$. Genel MOdidrhigO Nasuh Akar Mahallesi Turkocagi Caddesi No: 12 PK Balgat/Cankaya Ankara, Turkey Facsimile: (312) The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: Telex: Facsimile: INTBAFRAD (MCI) or Washington, D.C (MCI) -3-

5 AGREED at Ankara, Republic of Turkey, as of the day and year first aboue written. TORKIYE ELEKTRiK ILETIM A.$. By Authorized Representative Title: -6d,te ra LA a g INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: Ob0A'# ('#+L.. Title: 1a c4 oktt rct. Name: gtya \Lb2- -4-

6 SCHEDULE I Project Description The objective of the Project is to assist the Republic of Turkey in meeting its increased power demand by strengthening the transmission system and facilitating large-scale renewable energy generation. The Project consists of the following parts: Part 1. Development of transmission infrastructure Construction and equipping of highly digitalized substations, namely Can Basin 380 kv, Izmir Basin 380 kv, and Vize Basin 380 kv substations and any other substations agreed with the Bank, together with associated grid connection structures for evacuation of wind power in the Selected Provinces. Part 2. Smart-grid investments Carry out investments that enable the Borrower to monitor the transmission grid network status in real-time and to operate the entire network reliably and securely, including: (a) (c) (d) Upgrading the hardware and software of the existing Supervisory Control and Data Acquisition ("SCADA") system at the National Control Center, the Emergency National Control Center and nine (9) Regional Control Centers and addition of a Renewable Energy Resource ("RER") Operator Desk on the SCADA system. Installation of Remote Terminal Units ("RTU") in substations and power plants to facilitate acquisition of real-time transmission network data. Installation of digital protection relays in the power grid to accelerate fault clearing and minimize network disturbances and outage area. Installation of shunt reactors in the bulk-transmission network to control load flow and to secure appropriate system voltage. Part 3. Lapseki 2-Sutluce 2 submarine power cable Construction of a second double-circuit submarine cable across the Dardanelles Strait. Part 4. Strengthening of transmission networks Carry out investments to strengthen the transmission networks, including: (a) Construction of an underground cable to connect the Yeni Ambarli substation to the Yeni Bosna substation. Construction of four (4) 380/154/33 kv substations and related facilities in the province of Istanbul, Antalya and Urgup. -5-

7 (c) (d) Construction of four (4) 154/33 kv substations and related facilities in the provinces Istanbul and Antalya. Construction of four (4) 154 kv underground cables in the provinces of Istanbul and Izmir. -6-

8 SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements Except as the Bank shall otherwise agree, until the completion of the Project, the Borrower shall maintain the Project Coordination Unit within its Research, Planning and Coordination Department with responsibility to oversee and coordinate Project implementation and with necessary and appropriate staffing and budgetary resources satisfactory to the Bank. B. Anti-Corruption The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. C. Safeguards 1. The Borrower shall implement the Environmental Review Framework Document ("ERFD"), and before the Borrower commences any work or installation under the Project or the construction (regardless of financing source) of access roads from the substations under Part I of the Project to the existing main roads and energy transmission lines from the substations under Part I of the Project to the national grid, the Borrower shall: (a) (c) (d) screen for impacts from the proposed work, installation and construction, including impacts on the environment, physical cultural resources, and natural habitats, all in accordance with the principles and procedures set forth in the ERFD; prepare an environment management plan (including management of impact on environment, physical cultural resources, and natural habitat, as the case may be) for said work, installation or construction in accordance with the principles and procedures set forth in the ERFD; thereafter, provide said plan to the Bank for review; and implement such plan as shall have been accepted by the Bank as being satisfactory, as well as implement the Lapseki 2-Sutluce 2 EMP. 2. The Borrower shall: (a) when carrying out the Project and related activities, in accordance with the provisions of Bank's Operation Policy 4.12, the Borrower shall take all necessary actions to minimize, to the extent possible, any involuntary taking of land; and -7-

9 for this purpose, whenever Project activities (including construction of substations under Part I of the Project and the interface points for the Lapseki 2- Sutluce 2 submarine power cable under Part 3 of the Project) or construction by the Borrower (regardless of financing source) of access roads from the substations under Part I of the Project to the existing main roads and of the first energy transmission lines from the substations under Part I of the Project to the national grid would give rise to Project Affected Persons, before starting any work, installation or construction, the Borrower shall: (i) (ii) (iii) apply the LAPF and prepare, and cause to be prepared, a land acquisition action plan in accordance with the principles and procedures set forth in the LAPF; thereafter, provide said plan to the Bank for review; and implement such land acquisition action plan (including disclosure of the plan) as shall have been accepted by the Bank as being satisfactory. 3. (a) With respect to any transmission line to be constructed by a private developer for connection of a wind power project to any of the substations to be constructed or constructed under Part I of the Project, the Borrower shall during Project implementation: (i) (ii) (iii) make the following information available in a timely and documented manner at a place accessible to land owners whose land (which term includes any interest in land, such as an easement) may be affected by said transmission line: (A) that land owners may negotiate and agree with said private developer for use of the affected land by the private developer or decline such offer for use, in which event the land may be acquired by the Borrower and the Borrower shall apply the provisions of the LAPF; (B) a copy of the LAPF, together with a simplified information package that sets out the processes, procedures and compensation available under the LAPF; and (C) the mechanism (including contact information) for land owners to seek clarification on any of the foregoing; apply the LAPF in the event that the Borrower acquires the land for use by the private developer: (A) where the land owner has declined the offer of the private developer or; (R) where the private developer requests the Borrower to acquire the land for purposes of constructing said transmission line; and carry out spot checks on transmission lines constructed by private developers and the spot checks shall: (A) determine the terms and conditions of the agreement between the private developer and the land owner for use of the affected land by the private developer; and (B) report on and document any unresolved claims by any land owner and the status of the claim.

10 During Project implementation, the Borrower shall: (i) consult with the Bank when considering transmission lines for connection to any of the substations to be constructed or constructed under Part I of the Project and finalize the routing studies for the transmission lines by not interfering with the No Go Places defined in the ESDD report; and (ii) furnish to the Bank the list (including site locations and maps) of wind power projects other than the Planned WPPs that meet the criteria for connection to any of the substations to be constructed under Part I of the Project and which list shall be furnished to the Bank when the Borrower provides such list to the Electricity Market Regulatory Agency during the pre-licensing stage. 4. The Borrower shall: (a) (c) Section II. ensure that the ERFD, LAPF, the Lapseki 2-Sutluce 2 EMP, and EMPs any and provision LAAPs thereof, shall not be amended, terminated suspended, or abrogated, waived or permitted to be amended, terminated suspended, or waived, abrogated, except with the prior written consent of the Bank; 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 ERFD, LAPF, the Lapseki 2-Sutluce 2 EMP,EMPs, and LAAPs and the achievement of the objectives of said frameworks and plans; and include in the Project Report, which is to be prepared under Section IIA paragraph I of this Schedule, the results of the monitoring and evaluation activities with respect to the plans referred to in sub-paragraph (a) above. 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 quarter, 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 I1. The Borrower shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. -9-

11 2. Without limitation on the provisions of Part A of this Section, 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 and as defined in the General Conditions) audited in accordance with the provisions of Section 5.09 of the General Conditions. Each such audit of the Financial Statements shall cover the period of one (1) 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 out in of Section 5.09 of the General Conditions. Each audit of such entity financial statements shall cover the period of one (1) fiscal year of the Borrower and be furnished to the Bank not later than eight (8) months after the end of such period. Section U1. Procurement A. General 1. Goods and Non-consulting Services. All goods (including supply and installation) and non-consulting 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. 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. B. Particular Methods of Procurement of Goods and Non-consulting Services I. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods (including supply and installation) and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods and Non-consulting Services. The following method, other than International Competitive Bidding, may be used for procurement of goods and non-consulting services for those contracts specified in the Procurement Plan: (a) Direct Contracting; and Shopping. C. 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

12 Section IV. Withdrawal of Loan Proceeds A. General I. 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. Percentage of Expenditures Amount of the Loan to be financed Allocated (exclusive of Value Added Category (expressed in Euro) Tax) (1) Goods (including supply 41, % until the CTF Loan is and installation) and non- fully disbursed, after which consulting services for Parts 100% to be financed I and 2 of the Project (2) Goods (including supply 175,900, % and installation) and nonconsulting services for Parts 3 and 4 of the Project TOTAL AMOUNT 1(40, (_ B. Withdrawal Conditions; Withdrawal Period I. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) from the Loan Account until the Bank has received payment in full of the Frontend Fee; or for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed EUR 40,000,000 may be made for payments made prior to this date but on or after March 20, 2014, for Eligible Expenditures under Categories (1) and (2). 2. The Closing Date is June 30, l-

13 Section V. Other Undertakings 1I Except as the Bank shall otherwise agree, the Borrower shall: (a) (i) produce, for each of its Fiscal Years, funds from internal sources equivalent to not less than 35% for the Fiscal Year 2015 and in each succeeding Fiscal Year of the Borrower's capital expenditures during the Fiscal Year concerned; (ii) (iii) maintain, beginning with the Fiscal Year 2015, a ratio of current assets to current liabilities of not less than 1.0; and ensure that the Borrower's net revenues shall be at least 1.5 times in 2015 and, each succeeding Fiscal Year, the estimated maximum debt service requirements of the Borrower for any such Fiscal Year on all debt of the Borrower. If any fiscal projections show that the Borrower would not meet the requirements set forth in sub-paragraph (a) of this paragraph I for the Borrower's Fiscal Years covered by such review, the Borrower shall promptly take all measures necessary on its part in order to meet such requirements. (c) For the purposes of this paragraph 1: (i) The term "funds from internal sources" means the difference between: (A) (B) the sum of revenues from all sources related to operations, customer deposits and customer contributions in aid of construction, net non-operating income and any reduction in working capital other than cash; and the sum of all expenses related to operations, including administration, license fees, adequate maintenance and taxes and payments in lieu of taxes (excluding provision for depreciation and other non-cash operating charges and income taxes), debt service requirements, all cash dividends and other cash outflows other than capital expenditures, increase in working capital other than cash. (ii) The term "net non-operating income" means the difference between: (A) (B) revenues from all sources other than those related to operations; and expenses, including taxes and payments in lieu of taxes, incurred in the generation of revenues in (A) above

14 (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) The term "working capital other than cash" means the difference between current assets, excluding cash, and current liabilities at the end of each Fiscal Year. The term "current assets excluding cash" means all assets other than cash which could in the ordinary course of business be converted into cash within twelve (12) months, including accounts receivable, marketable securities, inventories and prepaid expenses properly chargeable to operating expenses within the next Fiscal Year. The term "current liabilities" means all liabilities which will become due and payable or could under circumstances then existing be called for payment within twelve (12) months, including accounts payable, customer advances, debt service requirements, taxes and payments in lieu of taxes, and dividends. The term "debt service requirements" means the aggregate amount of repayments (including sinking fund payments, if any) of, and interest and other charges on, debt. The term "capital expenditures" means all expenditures incurred on account of fixed assets, including interest charged to construction, related to operations, averaged over a three (3) year period covering the year concerned and the year preceding and the year succeeding such year. The term "current assets" means cash, all assets which could in the ordinary course of business be converted into cash within twelve (12) months, including accounts receivable, marketable securities, inventories and prepaid expenses properly chargeable to operating expenses within the next Fiscal Year. The term "debt" means any indebtedness of the Borrower maturing by its terms more than one year after the date on which it is originally incurred. The term "net revenues" means the difference between: (A) (B) the sum of revenues from all sources related to operations and net non-operating income; and the sum of all expenses related to operations, including license fees, administration, adequate maintenance, taxes and payments in lieu of taxes, but excluding provision for depreciation, other non-cash operating charges and interest and other charges on debt. (xi) Whenever for the purposes of this paragraph I it shall be necessary to value, in terms of the currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevailing

15 lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable for the purposes of servicing such debt, or, in the absence of such rate, on the basis of a rate of exchange acceptable to the Bank. -14-

16 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 April 15 and October 15 Beginning October 15, 2019 through October 15, % On April 15, % 2. 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. 3. (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

17 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 subparagraph 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

18 APPENDIX 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 "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 3. "CTF Loan" means a loan in the amount of fifty million Dollars ($50,000,000) to be made to the Borrower pursuant to the CTF Loan Agreement defined below. 4. "CTF Loan Agreement" means an agreement of even date with this Agreement between the Borrower and the Bank, acting as the implementing agency of the Clean Technology Fund, pursuant to which the Bank has agreed to make a loan to the Borrower in the amount of fifty million Dollars ($50,000,000) to assist in financing of Parts I and 2 the Project on the terms and conditions set forth in said agreement. 5. "ERFD" means the Environmental Review Framework Document satisfactory to the Bank, and disclosed on the Borrower's website on March 4, 2014, and the Bank's Infoshop on March 5, 2014, which framework sets out, inter alia policies and procedures for: the preliminary screening (including impact on physical cultural resources and natural habitat and exclusion of investments classified as Category A) 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. 6. "EMP" means a site-specific environmental management plan prepared for specific investment activities under the Project in accordance with the requirements set out in the ERFD and accepted by the Bank as being satisfactory; and "EMPs" means, collectively, all such EMPs. 7. "ESDD Report" means the Environmental and Social Due Diligence Report dated September 2013, which sets out the approach and methodology used for the environmental and social due diligence conducted on the substations to be constructed under Component I and its associated facilities (access roads and electric transmission lines) as well as the Planned WPPs, and the results of the due diligence. 8. "Fiscal Year" means the fiscal year of the Borrower starting on January I and ending on December 31 of each year. 9. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for Loans", dated March 12,

19 10. "LAAP" means a site-specific land acquisition action plan prepared for specific investment activities under the Project in accordance with the requirements set out in the LAPF and accepted by the Bank as being satisfactory; and "LAAPs" mean, collectively, all such LAAPs. 11. "LAPF" means the Land Acquisition Policy Framework, satisfactory to the Bank and disclosed on the Borrower's website on March 19, 2014, and in the Bank's Infoshop on March 19, 2014, which sets out the policies and procedures for land acquisition, resettlement, compensation and rehabilitation of Project Affected 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. "Lapseki 2-Sutluce 2 EMP" means the Environmental Management Plan for 380 kv Lapseki 2-Sutluce 2 Submarine Cable dated September 2013, satisfactory to the Bank and disclosed locally on October 13, 2013 and in the Bank's Infoshop on November 13, "Planned WPPs" means collectively, the following planned wind power projects, being developed by the private sector and which will be connected to the respective substations to be constructed under Part I of the Project: (a) (c) For Canakkale substation: Ucpinar, Kocalar and Koru wind power projects. For Vize Substation: Evrencik, Airres, and Vize 2 wind power projects. For Izmir substation: Bergres and Kinik wind power projects. 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 "Procurement Plan" means the Borrower's procurement plan for the Project, dated March 21, 2014, and referred to in paragraph 1.18 of the Procurement Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 16. "Project Affected 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 "Project Affected Person" means any of such Project Affected Persons. 17. "Selected Provinces" means the Provinces of Canakkale, Izmir, Kirklareli and any other provinces selected by the Borrower in agreement with the Bank. -18-