FOR OFFICIAL USE ONLY

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1 Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: AZ Public Disclosure Authorized Public Disclosure Authorized PROJECT PAPER ON A PROPOSED ADDITIONAL FINANCING IN THE AMOUNT OF US$3 MILLION TO THE REPUBLIC OF AZERBAIJAN FOR THE HIGHWAY 2 PROJECT (LOAN N.7356-AZ) Public Disclosure Authorized March 2, 28 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -

2 CURRENCY EQUIVALENTS (Exchange Rate Effective March 28) CurrencyUnit = AZN.85 AZN = US$1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AH2P AH2PAF ARS CPS CY EIA EIRR EMF EMP HDM NPV PAD PDO PIU MOT VAT VPd The Highway 2 Project The Highway 2 Project Additional Financing Azer Road Service JSC Country Partnership Strategy Calendar Year Environmental Impact Assessment Economic Internal Rate of Return Environmental Management Framework Environmental Management Plan Highway Development and Maintenance Model Net Present Value Project Appraisal Document Project Development Objective Project Implementation Unit Ministry of Transport Value Added Tax vehicles per day Vice President: Country Director: Sector Manager: Task Team Leader: Shigeo Katsu, ECAVP D-M Dowsett-Coirolo, ECCU3 Motoo Konishi, ECSSD Olivier Le Ber, ECSSD

3 FOR OFFICIAL USE ONLY AZERBAIJAN HIGHWAY 2 PROJECT. ADDITIONAL FINANCING CONTENTS I. I1. I11. IV. V. VI. VI1. VI11. Annex Page Introduction... 1 Background and Rationale for Additional Financing... 1 Proposed changes... 3 Consistency with CPS... 4 Appraisal of scaled-up project activities... 4 Expected outcomes... 8 Benefits and risks... 9 Financial terms and conditions for the additional financing... 1 Revised Arrangements for Results Monitoring This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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5 Project Paper Data Sheet Date: March 2, 28 Country: Azerbaijan Project Name: Azerbaijan Highway 2 - Additional Financing (AH2PAF) Task Team Leader: Olivier Le Ber Sector Manager: Motoo Konishi Country Director: D-M Dowsett-Coirolo Environmental category: A Borrower: Republic of Azerbaijan Responsible agency: Azer Road Service JSC Current closing date: February 28, 21 1 Revised project development objectives/outcomes [If applicable] There is no change in the Project's Development Objectives. The expected outcomes are a further reduction of transit time and vehicle operating costs along these highways. Does the scaled-up or restructured project trigger any new safeguard policies? No For Additional Financing [XI Loan [ ] Credit [ ] Grant For Loans/Credits/Grants: Total Bank financing (US$m.): $3 million Proposed terms: US Dollar denominated Fixed Spread Loan (FSL), Commitment Linked, with a 17 year maturity and 4 years grace with annuity repayment of ' Combined disbursement schedule based on actual and expected disbursement under AH2P and expected disbursement under the additional financing. Additional financing only.

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7 I. Introduction 1. This Project Paper seeks the approval of the Executive Directors to provide Additional Financing in an amount of US$3 million equivalent to the Republic of Azerbaijan for the Highway 2 Project (AH2P) (Loan: IBRD-7356 AZ). The additional financing would mainly finance (i) upgrading of the remaining 112 km of the M3 highway between Alat and Masalli which was anticipated but not included in the AH2P and (ii) the reconstruction of the R6 highway Tagiyev - Sahil(41 km) which connects the M3 to the M1 (Baku- Russian border) and bypasses Baku. The additional financing would also finance the following activities: (i) rehabilitation of about 2 km of local roads; (ii) technical assistance and (iii) monitoring and evaluation and financial audits. 2. There would be no co-financing from other donors for this project. 11. Background and Rationale for Additional Financing 3. Original proiect: The original AH2P was developed based on the request from the Government to finance the upgrading of the entire Alat-Masalli section (143 km) of North-South corridor (M3) and the rehabilitation of Baku-Shamakhi section (124 km) of the East-West corridor (M4). The project development objective is to reduce road transport costs and improve access, transit and road safety by upgrading and rehabilitating selected sections of the existing East-West (M4) and North-South (M3) corridors. The AH2P has two components. Component 1 finances the upgrading of some sections of the M3 highway between Alat and Masalli, and the rehabilitation of the existing M4 road between Baku-Shamakhi as well as of key access roads. Component 2 supports technical assistance, training and goods to support the capacity development of the Ministry of Transport and Azer Road Service JSC (ARS)3 and project implementation. 4. The original loan amount was US$2 million. It was, however, estimated that an additional US$2 million would be necessary to complete the upgrading of the entire Alat - Masalli section of the M3 Highway as requested by the Government. It was therefore agreed that the AH2P would finance only the first 84 km section of the M3 and that additional financing would be sought to finance the remaining part of the road (see original PAD paragraph B2). 5. The project was restructured in December 26 to include the upgrading of the Ujar- Kurdemir part (41 km) of the M2 East-West highway, which has been estimated to cost about US$5 million (Bank financing US$4 million). Subsequently, the portion of financing from the Bank that was earmarked for the section on M3 Alat-Masalli was reduced to 3 1 km. 6. Rationale of the additional financing: Over the past few years Azerbaijan has been rehabilitating and developing the non-oil sector infrastructure needed to realize rapid growth, benefiting from increasing oil and gas revenues, and also putting in place a credible framework to effectively manage the increase in resource flows, With the oil boom expected to last only for a finite period, it is critical to develop the non-oil economy and reduce poverty with special ARS is under the Ministry of Transport (MOT) and was established in February 27 to succeed to the Road Transport Service Department LLC (RTSD) within MOT. 1

8 attention to rural areas and secondary cities. The poor condition of the national road network poses a significant challenge in this respect. Indeed, the development of road transport infrastructure is part of the six major strategic pillars of the State Program on Poverty Reduction and Economic Development (SPPRED), and considered to be critical for the expansion of the non-oil sector and the improvement of the living standards of the low-income population. 7. Approximately 56% of the main road network is in a poor state and in need of urgent repair, and the majority of lower category roads are in an extremely poor condition. Among other road sections, the East-West road corridor (Baku-Ganja-Kazakh-Georgian border through Alat and a more direct route through Shamakhi) and the North-South road corridor (Russian border-baku-alat-astara-iranian border), as well as feeder roads connecting rural areas with the main corridors, are considered to be key to addressing the transport bottleneck to nationwide development and poverty alleviation. The Government recently prepared the State Program for Rehabilitation and Development of Azerbaijan Republic Highways ( ), which calls for a considerable increase of funding to rehabilitate and upgrade critical road links, both from loans from international financial institutions and the state budget. The program anticipates the Bank to finance the upgrading of the entire Alat-Masalli section of M3 Highway, as discussed when AH2P was prepared. 8. Over the last two years, the original AH2P has provided critical support to meet transport sector challenges. The project is performing well. The loan is implemented by ARS with the support of a Project Implementation Unit (PIU) in ARS. More than half of the funds under the original project have already been committed and the second half will be fully committed by June 28, well before the closing date of February 28, As of January 28, US$26. million, or 13% of the loan amount of US$2 million, has been disbursed. Disbursement pace will pick up in spring 28 as the next construction season starts. 9. Works started in 26 for the first section on M3 (a 22 km section south of Alat - completion expected by end 28). As for the rehabilitation of M4, the contractor will be fully mobilized in March 28 and complete the civil works in July 29. The design of Ujar- Kurdemir road is completed, and the works are expected to start in June 28 and to be completed by December 29. The works inspected by the task team are of good technical quality. Design, environmental and social studies on the other sections of M3 are progressing according to the plan and several bidding documents will be available in the coming months. Prequalification is already ongoing. 1. The AH2P has also been supporting critical institutional development and sector reforms. The consultant submitted the first report on the draft new road law. Alternative norms and standards in line with European standards are under development. A new expropriation law to ensure expedient and transparent land acquisition has been drafted and is expected to be submitted to the parliament in March. All in all, AH2P has been providing comprehensive support for the development of the road sector in Azerbaijan not only through civil works but also critical institutional development to support the sustainability of road assets that are fast developing in Azerbaijan. 2

9 111. Proposed changes 11. The table below summarizes the proposed changes to the project under the additional financing. The section Ujar-Kurdemir was introduced by Amendment in January 27. The additional financing would complement the financing of the road Alat-Masali (only partially financed under AH2P and add the road Tagiyev - Sahil (R6). It also includes a contingency fund that amounts to US$48 million, to accommodate the increase of cost due to high inflation in Azerbaijan (about 15% a year) which is expected to continue for the next few years and the (unforeseen) depreciation of the US$ over the past years. Proposed additional Bank financing only, figures rounded to the nearest US$ million It is expected that the Government will also request Highways 3 and 4 in the near future tojnance other roads for which the design has been contracted recently under AH2P 12. There will be no change to the Project Development Objectives (PDO). The additional financing will finance the upgrading and rehabilitation of those sections of the North-South corridors which are not financed under AH2P. Specifically, the additional financing will (i) upgrade the remaining 112 km of the M3 highway between Shorsulu and Masalli and the rehabilitation of Tagiyev - Sahil section (41km) of the Baku bypass that connect M3 with the M1 highway that forms the northern part of the North-South corridor leading to Russian border, and (ii) continue to support the modernization of the road sector. The components are detailed below. The results framework and the monitoring indicators (see below section VI), have been updated to reflect the addition of these road sections. The total financing required to complete the project is about US$55 million with the Government providing about US$25 million and the Bank US$3 million. 13. Component 1: Upgrading of the remaining sections of the M3 highway between Alat and Masalli and rehabilitation of the existing R6 Baku bypass between Tagiyev and Sahil, as well as about 2 km of secondary and local roads (US$348.5 million). This component comprises the civil works for the above roads as well as the consultancy services for engineering design and the supervision of the works. Land acquisition and resettlement costs required for acquiring the Right of Way of about 5 hectares would be solely financed by the Government. 3

10 14. Component 2: Provision of technical assistance, training and goods to support strengthening of MOT and ARS and carry out project implementation (US$9.3 million). This component will finance continued capacity development of ARS through provision of support to the development of standard documents for domestic investment projects, a Traffic Safety Strategy, a Road Development Master Plan, seminars and training to the investment divisions of the ARS, support to technical universities for curriculum development, equipment such as weighing scales and installation of automatic traffic counters; PIU salaries, incremental operating costs, vehicles and project auditing. IV. Consistency with CPS 15. As pointed out in the Country Partnership Strategy (CPS) FY7-1, Significant investment in infrastructure and transit corridors;., J... will be needed to develop Azerbaijan s non-oil growth potential. For this reason the CPS includes developing essential Transit Corridors as well as access roads in order to enhance accessibility from villages and small towns as part of its second pillar, supporting sustainable and balanced growth of the non-oil economy. AH2P as well as the proposed additional financing address these issues and are part of the stream of road projects foreseen in the CPS. V. Appraisal of scaled-up project activities 16. Economic and financial: The economic analysis was carried out for the upgrading of the entire Alat-Masalli road when AH2P was prepared, and the additional financing, which will finance only the remaining part of the road not financed under AH2P, will not affect the result. The preliminary economic analysis of Tagiyev - Sahil road, however, given the assessment of the current traffic volume and of the expected future increase of traffic, indicates that the economic rate of return will not be less than 12%. The economic analysis of the yet to be identified secondary and local roads as well as other roads will be carried out as they are identified, however, they should meet the following criteria: (a) for roads with traffic above 25 vehicles per day (vpd), the Economic Internal Rate of Return (EIRR) should be at least 12%; (b) if the traffic is between 15 and 25 vpd, the EIRR should be at least 1%; and (c) if the traffic is below 15 vpd, the EIRR should be at least 8%. For very low volume roads, (less than 1 vpd) the Bank could consider the use of the producer surplus method or simpler methods based on relevant thresholds. 4

11 17. The economic analysis of Alat-Masalli road was carried out using the Highway Development and Maintenance Model (HDM IV). The cost benefit analysis carried out compared the without project case, assumed to be a do little case, with the proposed project. Since the upgrading of the Alat-Masalli road was planned to be carried out in two stages, the economic analysis was conducted separately for Alat-Shorsulu section (85 km), which was to be financed under AH2P, and for the remaining Shorsulu-Masalli section (94 km4). The cost benefit analysis yielded the EIRR of 25% for the first section and 29.2% for the second section. The estimated EIRR for the entire Alat-Masalli road is 26.6%. 18. The project cost of upgrading the M3 highway between Alat - Masalli is now estimated at $341.3 million (price of September 27) versus $221.2 million (price of June 25) when the AH2P was prepared, a 46% increase of the price per km in US$, a 33% increase if expressed in local currency (which appreciated by 1% over the same period). This 33% increase compares well with the increase of the Consumer Price Index of 27% between June 25 and September 27. This significant cost increase does not impact the economics of the projects because the price increase is due to inflation and US$ depreciation. It is not due to underestimating of the works (or the quantities), While costs are increasing, so is the value of the benefits (whether it is value of time or vehicle operating costs). Furthermore, the economic analysis done when appraising the whole project in 25 was very robust. The sensitivity analysis indicates that, even if the traffic is 2% less than assumed and the project costs 2% more than anticipated, the upgrading of the entire Alat-Masalli road will yield an EIRR of 17.7% and a Net Present Value (NPV) of US$125.3 million. For more information, please refer to the Annex 9 of the AH2P PAD. Section EIRR Alat-Shorsulu 25% Shorsulu-Masalli 29.2% Total Alat-Masalli 26.6% NPV~ (US$ million) Technical: The main focus under this project is on modernizing the road network through road improvements. There are no technical issues with the proposed investments. However, the Kura-Talysh area is known for seismic activity with earthquakes registering magnitudes of between 6 and 7 on the Richter scale; the design shall take this constraint in consideration. Design standards for all the investments are well established by reputable consultants and there are plenty of quality contractors to carry out the works. No trial or experimentation is involved and there are no risks related to technology, design or installation, and future maintenance of the roads. 2. Procurement: Procurement capacity of the PIU and the project procurement system have been strengthened during the implementation of AHP and AH2P. Implementation has been without any anomalies. The PIU established within the ARS under the AHP and AH2P will continue to implement the proposed additional financing. Procurement under AHP is almost 85 km and 94 km are the length of the existing road. The project roads will be about 36 km shorter. No relevant road construction cost index exists. But during the same period, price indexes for road construction items such as liquefied hel, wage and construction materials increased respectively by 85.3%, 59%, and 25.2%. The NPV is computed with an annual discount rate of 12%. The NPV is a June 25 value. 5

12 completed. Under AH2P, procurement of contract packages is on-going. Given the substantial sizes of the contract packages under AH2P, almost all procurement are subject to prior review. No procurement fiduciary problems have occurred. The PIU procurement officer and his two assistants are fully knowledgeable in Bank procurement policies. The PIU has established systems for record keeping, filing, and reporting. The existing procurement capacity and the established systems are acceptable to the Bank for the implementation of the additional financing. Bank procurement and consultant guidelines dated May 24 and revised October 26 will be applicable to the procurement under the additional financing. Accordingly, all activities under the Project which are financed out of the proceeds of the Additional Financing will be carried out in accordance with the provisions of the Anti-Corruption Guidelines dated October 15, 26. A procurement plan for the additional financing has been developed. In view of the ongoing implementation of the projects and the mitigation measures enforced, the procurement risk is considered to be moderate Financial: The existing PIU will have the overall responsibility for financial management of the additional financing. The existing project Financial Management System (FMS) is acceptable to the Bank. No significant delays in the counterpart funds had been identified. The PIU has in place a 1C accounting system which is customized to automatically generate the required interim Financial Monitoring Reports (IFRs). The same system would be used for the additional financing. Although the additional financing would run in parallel with the ongoing AH2P, the current financial management staff will be able to manage the financial management aspects of the additional financing as most of the contracts are large civil works contracts disbursed through direct payments. Overall financial management risk is assessed as moderate. 22. There are no outstanding audit reports. The current project auditing arrangements are satisfactory to the Bank, and the same arrangements will be adopted for auditing the Project Financial Statements under the additional financing. The annual audited project financial statements will be submitted to the Bank within six months of the end of each fiscal year audited. An independent operational review will also be carried out at the mid-term of project implementation, which will assess and verify that the accounting and financial management systems and the controls adopted for the implementation of the project, including accounting and administrative controls, budgeting, procurement, contracts administration, flow of funds and financial reporting are adequate and follows the Operational Manual and Loan Agreement. 23. Disbursement: The Bank loan will finance 7% of project cost excluding VAT for all categories, rather than 8% without VAT under the existing AH2P, following the decision by the Government to lift the VAT exemption that has been applied to projects financed by loans from the International Financing Institutions (IFIs). Because all contracts are being implemented in parallel, and no commitment fee applies to the additional financing, it is in the interest of the Government to first fully disburse the original loan before drawing on the additional financing loan. Furthermore, it is not expected that the packaging of the works would allow assigning each contract to a single loan. Therefore, most likely each contract tendered after February 1, 28 would be first financed under the original loan and then completed under the additional financing. The expected disbursement period is four years (CY29 - CY 212). However, only contracts procured under the Bank Procurement and Consultant Guidelines dated May 24 and revised October 26 will be eligible for disbursement under the additional financing. 6

13 Expenditure Category Amount in US$ million Financing Percentage Works, goods, consultancy services, training % and incremental operating costs Total Project Costs Front-end Fee The Operational Manual will be amended as a condition of project effectiveness to (i) make it applicable to the AH2PAF, (ii) clarify that invoices submitted for disbursement will be without VAT (VAT will be paid separately by the Government funds) and (iii) to be eligible for funding under the additional financing loan, contracts will have to be awarded using the Bank Procurement and Consultant Guidelines dated May 24 and revised October 26. For the reasons mentioned above, it is expected that the government will use immediately the new guidelines even for contracts which were part of the original project. 25. Considering that the project is already under implementation, the Designated Account for the AH2PAF will have an authorized allocation set to US$24 million. The Borrower will open a Project Account with a minimum deposit of US$5 million equivalent within one month of the first withdrawal. The Project Account will be replenished on a monthly basis. 26. Social: The upgrading of the entire Alat-Masalli roads will entail expropriation of about 8 ha of land. The Resettlement Policy Framework has been developed and disclosed during the preparation of the AH2P. It covers road sections to be financed under the additional financing. The draft Resettlement Action Plan (RAP) for Alat-Salyan section of M3 is under development. A separate RAP will be developed for each section of roads' to be financed under the additional financing as per policies and principles set forth in the RPF and OP The capacity of the PIU in land acquisition has been strengthened during the AH2P, however, continuous support will be provided to ensure land acquisition and physical relocation will be carried out as per Bank safeguard policies. 27. Environment: the upgrading of 112 km section of the M3 that will be financed under the additional financing has been classified as Category A. The rehabilitation of Tagiyev-Sahil road is Category B. A Regional Environmental Review (RER) has been prepared during the preparation of AH2P which covers the entire Alat-Masalli road and describes the existing environment, discusses and compares project alternatives, and identifies risks and issues to be addressed during project implementation. An Environmental Management Framework (EMF) has also been developed and disclosed that outlines the procedures for the environmental screening, management, consultation and disclosure related to the proposed Category A and B sub-projects. The EMF is compatible with the national Law on Environmental Protection and the guidelines contained in Azerbaijan's Environmental Impact Assessment (EIA) Handbook, * Southern part of the road is heavily populated agricultural lands and physical relocation of households will be necessary. The Consultant has determined the number of households that need to be relocated. 7

14 which, while not legally binding, contains a framework for EIAs that is consistent with international environmental assessment practices. 28. The additional financing will finance the new construction of four lane roads through the Madmudchala and Akhchala wetlands, which provide natural habitats for numerous rare and endangered wildlife species and have significance as a buffer zone for the adjoining wetlands that form part of the Gizilagach State Reserve, an official Ramsar site located 3-5 km from this area. The water balance in the Akhchala wetland is unstable and under constant threat of drying out. Controlled hunting is permitted here and there is pressure from poaching and fishing. 29. An EIA has been carried out for the entire Alat-Masalli roads that compared the environmental impact of different alternatives, and helped identify alignments with least environmental impact as well as critical environmental risks. Environmental Management Plan (EMP) are developed for each section. Indeed, the railway alignment, which runs in parallel of the existing railway through the wetland, has been selected based on the EIA which anticipates little lasting impact on the environment in and natural habitat of the wetland. All other environmental issues identified during project preparation have been addressed as per policies and procedures laid out in the EMF. The draft EIA report and EMPs has been reviewed and commented by the Bank. The Borrower carried out public consultation of the draft EIA and EMPs in July - August 27, which were attended by representatives of local Non-governmental Organizations (NGOs), local governments, municipalities and villages. The minutes of the consultation meeting has been attached to the draft EIA report. It is expected that the final EA report be ready and final consultation meetings be carried out in the next few months for each section. The environmental analysis will also be carried out for Tagiyev-Sahil road as per EMF, and the necessary EMP will be developed. VI. Expected outcomes PDO The main PDO is to reduce road transport costs and improve access, transit and road safety within Azerbaijan s East-West and North- South corridors, through (i) upgrading the Alat-Masalli road of the Baku-Iran highway (M3);(ii) rehabilitating the Baku-Shamakhi road (M4); (iii) rehabilitating the Kurdemir-Ujar road (M2); and (iv) reconstructing the R6 highway Tagiyev-Sahil which connects the M3 to the M1 and bypasses Baku Revised Results Framework Project Outcome Indicators Reduction in transit timehehicle operating cost from Alat to Masalli Reduction in transit timehehicle operating cost from Baku to Shamakhi Reduction in transit timehehide operating cost from Kurdemir-Ujar Reduction in transit timehehicle operating cost from Tagiyev to Sahil; Number of road accidents in the project roads Use of Project Outcome Information The information will be used by MOT and ARS to monitor the condition of the road network and to feed ARS road management policy 8

15 Intermediate Outcomes Component One Upgrade the M3 highway between Alat and Masalli Rehabilitation of the existing M4 road Baku-Shamakhi Rehabilitation of the existing M2 road Kurdemir-Ujar Rehabilitation of the R6 highway Tagiyev-Sahil Component Two Technical assistance and goods to support ARS strengthening and project implementation: Updating and modernization of the Road Transport Law Complete the Road Data Bank (RDB) Establish technical road classes superimposed on the functional road classification through: Review and update geometric and structural design standards to replace the existing Soviet era standards Develop road condition norms for each technical class Develop a new civil engineering curriculum for technical universities Develop a Road Safety Strategy Develop a Road Master Plan Intermediate Outcome Indicators Component One Number of km upgraded for Alat- Masalli Number of km rehabilitated for Baku-Shamakhi Number of km rehabilitated for Kurdemir-Ujar Number of km rehabilitated for Tagiyev-Sahil Component Two Preparation of the revised Road Transport Law Number of km of road data introduced in the RDB Number of people trained in its use Preparation of new geometric and structural design standards Preparation of the new norms for maintenance New curriculum developed Road Safety Strategy developed Road Master Plan developed Use of Intermediate Outcome Monitoring Component One The information will be used by MOT and ARS to monitor implementation progress and prepare an action plan to address possible delays Component Two The information will be used by MOT and ARS to monitor implementation progress and prepare an action plan to address possible delays The information will be used by MOT and ARS to update the Multi Year Program Use of new technical classes in annual maintenance planning, use of new standards in design. The information will be used by MOT and ARS to monitor implementation progress and prepare an action plan to address possible delays A revised table of arrangements for results monitoring is included as an annex to this document. VII. Benefits and risks 3. No significant additional risks have been identified. Risks previously identified during appraisal of the AH2P have been dealt with adequately. In particular, potential delay in the land acquisition process is mitigated by the development of a new expropriation law (to be approved in March by the parliament) that will ensure an expedient and transparent land acquisition for public purposes. Risks related to cost increase is taken into account and an adequate provision for price contingencies (US$lOO million, about 17% of the cost) is included in the financial plan. As mentioned earlier, this does not really affect the EIRR. Past missions found no significant 9

16 issues of either procurement or financial management. Although there are concerns about fiduciary risks in large infrastructure projects of this nature, the rigorous approach to procurement already being implemented in the original project will be applied equally to the portion with the additional financing. With the mitigation measures already in place, the residual fiduciary risk is moderate (please refer to the fiduciary annexes 7 & 8 of the original AH2P PAD), VIII. Financial terms and conditions for the additional financing 3 1. The additional financing will be provided under standard IBRD lending terms. The Loan type is a dollar denominated fixed-spread loan (FSL) with repayments linked to commitment and with a 17 year maturity, including a 4 year grace period. 1

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18 - B v1 s 2 W b e, l$ Le s E W b e, r=, m e 9 2 d m e 9 2 e e 2 2 e e e m QI d 2 yi e, A yi K m e N e '", 2 g N 8 2 m!i Y.-.- C 3.- E w - e, a 8 a (c b c, 5 z