Page  1
CONFORMED COPY 
 
LOAN NUMBER 4709-UA 
 
Project Agreement 
 
(Rural Land Titling and Cadastre Development Project) 
 
between 
 
INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT 
 
and 
 
STATE LAND CADASTRE CENTER   
 
Dated October 17, 2003 
 
Page  2
LOAN NUMBER 4709-UA 
 
PROJECT AGREEMENT 
 
AGREEMENT, dated October 17, 2003, between INTERNATIONAL BANK 
FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and the STATE LAND 
CADASTRE CENTER (the Center), a state enterprise under the State Committee of 
Ukraine for Land Resources. 
 
WHEREAS 
(A) by the Loan Agreement of even date herewith between 
Ukraine (the Borrower) and the Bank, the Bank has agreed to make a loan to the 
Borrower in the amount of one hundred ninety-five million one hundred thirty thousand 
dollars ($195,130,000), on the terms and conditions set forth in the Loan Agreement, but 
only on condition that the Center agree to undertake such obligations toward the Bank as 
are set forth in this Agreement; 
 
(B) 
by a subsidiary loan agreement to be entered into between the Borrower, 
the SCLR, and the Center, a portion of the proceeds of the loan provided for under the 
Loan Agreement will be made available to the Center through the SCLR on the terms and 
conditions set forth in said Subsidiary Loan Agreement; and 
 
WHEREAS the Center, in consideration of the Bank’s entering into the Loan 
Agreement with the Borrower, has agreed to undertake the obligations set forth in this 
Agreement; 
 
NOW THEREFORE the parties hereto hereby agree as follows: 
 
ARTICLE I 
 
Definitions 
 
Section 1.01. 
Unless the context otherwise requires, the several terms defined 
in the Loan Agreement, the Preamble to this Agreement and the General Conditions (as 
so defined) have the respective meanings therein set forth, and the following additional 
terms have the following meanings: 
 
(a) 
“Center Performance Indicators” means the agreed performance 
indicators set forth in a letter of even date herewith to be utilized by the Center under the 
Project to measure the progress in the implementation of Part E of the Project and the 
degree to which the objectives thereof are being achieved; and 
 
(b) 
“Registration Manual” means the Registration Manual satisfactory to the 
Bank defining the operational basis and principles for the Center’s legal registration of 
Page  3
-
2
-
land and other immovable property and maintenance of cadastre records and stipulating 
the procedures therefor which are efficient for clients and cost effective. 
 
ARTICLE II 
 
Execution of Part E of the Project 
 
Section 2.01. 
(a)  The Center declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, shall carry out 
Part E of the Project with due diligence and efficiency and in conformity with appropriate 
administrative, agricultural, cadastre, economic, engineering, environmental, forest, land 
use and titling and technical practices, and shall provide, or cause to be provided, 
promptly as needed, the funds, facilities, services and other resources required for Part E 
of the Project. 
 
(b) 
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Bank and the Center shall otherwise agree, the Center shall carry out 
Part E of the Project in accordance with the Implementation Program set forth in the 
Schedule to this Agreement. 
 
Section 2.02. 
Except as the Bank shall otherwise agree, the procurement of the 
works, goods and technical services and the selection and employment of the consultants’ 
services required for Part E of the Project and to be financed out of the proceeds of the 
Loan shall be governed by the provisions of Schedule 4 to the Loan Agreement. 
 
Section 2.03. 
(a)  The Center shall carry out the obligations set forth in 
Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating to 
insurance, use of goods and services, plans and schedules, records and reports, 
maintenance and land acquisition, respectively) in respect of the Project Agreement and 
Part E of the Project. 
 
(b) 
For the purposes of Section 9.07 of the General Conditions and without 
limitation thereto,  the Center shall: 
 
(i) 
prepare, on the basis of guidelines acceptable to the Bank, and 
furnish to the Bank not later than six (6) months after the Closing 
Date or such later date as may be agreed for this purpose 
between the Bank and the Center, a plan for the future operation 
of Part E of the Project; and 
 
(ii) 
afford the Bank a reasonable opportunity to exchange views with 
the Center on said plan. 
 
Page  4
-
3
-
Section 2.04. 
The Center shall duly perform all its obligations under the 
Subsidiary Loan Agreement.  Except as the Bank shall otherwise agree, the Center shall 
not take or concur in any action which would have the effect of amending, abrogating, 
assigning or waiving the Subsidiary Loan Agreement or any provision thereof. 
 
Section 2.05. 
(a) The Center shall, at the request of the Bank, exchange views 
with the Bank with regard to progress of Part E of the Project, the performance of its 
obligations under this Agreement and under the Subsidiary Loan Agreement, and other 
matters relating to the purposes of the Loan. 
 
(b) 
The Center shall promptly inform the Bank of any condition which 
interferes or threatens to interfere with the progress of Part E of the Project, the 
accomplishment of the purposes of Loan, or the performance by the Center of its 
obligations under this Agreement and under the Subsidiary Loan Agreement. 
 
ARTICLE III 
 
Management and Operations of the Center 
 
Section 3.01. 
The Center shall carry on its operations and conduct its affairs in 
accordance with sound administrative, cadastre, financial and land use and titling 
practices under the supervision of qualified and experienced management assisted by 
competent staff in adequate numbers. 
 
Section 3.02. 
The Center shall at all times operate and maintain its plant, 
machinery, equipment and other property, and from time to time, promptly as needed, 
make all necessary repairs and renewals thereof, all in accordance with sound 
engineering, financial and registration service practices. 
 
Section 3.03. 
The Center shall take out and maintain with responsible insurers, 
or make other provision satisfactory to the Bank for, insurance against such risks and in 
such amounts as shall be consistent with appropriate practice. 
 
Page  5
-
4
-
ARTICLE IV 
 
Financial Covenants 
 
Section 4.01. (a)  The Center shall establish and thereafter maintain a financial 
management system, including records and accounts, and prepare financial statements, all 
in accordance with accounting standards acceptable to the Bank, consistently applied, 
adequate to reflect its operations and financial condition and to register separately the 
operations, resources and expenditures related to Part E of the Project. 
 
(b) The 
Center 
shall: 
 
(i) 
have its records, accounts and financial statements (balance 
sheets, statements of income and expenses and related 
statements) for each Fiscal Year audited, in accordance with 
auditing standards acceptable to the Bank, consistently applied, 
by independent auditors acceptable to the Bank;  
 
(ii) 
furnish to the Bank as soon as available, but in any case not later 
than six (6) months after the end of each such Year: (A) certified 
copies of the financial statements referred to in paragraph (a) of 
this Section, for such Year as so audited; and (B) an opinion on 
such statements and report of such audit, by said auditors, of 
such scope and in such detail as the Bank shall have reasonably 
requested; and 
 
(iii) 
furnish to the Bank such other information concerning such 
records, accounts and financial statements, and the audit thereof, 
and concerning said auditors, as the Bank may from time to time 
reasonably request. 
 
Section 4.02.   (a) 
The Center shall prepare and furnish to the Bank a 
financial monitoring report, in form and substance satisfactory to the Bank, which: 
 
(i)  
sets forth sources and uses of funds for Part E of the Project, both 
cumulatively and for the period covered by said report, showing 
separately funds provided under the Loan, and explains variances 
between the actual and planned uses of  such funds; 
 
(ii) 
describes physical progress in Project implementation of 
Part E of the Project, both cumulatively and for the period 
covered by said report, and explains variances between the 
actual
 
and planned Project implementation; and 
 
Page  6
-
5
-
(iii)  
sets forth the status of procurement under Part E of the Project, as 
at the end of the period covered by said report. 
 
(b) 
The first FMR shall be furnished to the Bank not later than forty-
five (45) days after the end of the first calendar quarter after the Effective Date, 
and shall cover the period from the incurrence of the first expenditure under the 
Project through the end of such first calendar quarter; thereafter, each FMR shall 
be furnished to the Bank not later than forty-five (45) days after each subsequent 
calendar quarter, and shall cover such calendar quarter.
 
ARTICLE V 
 
Effective Date; Termination; 
Cancellation and Suspension 
 
Section 5.01. 
This Agreement shall come into force and effect on the date 
upon which the Loan Agreement becomes effective. 
 
Section 5.02. 
This Agreement and all obligations of the Bank and of the 
Center thereunder shall terminate on the date on which the Loan Agreement shall 
terminate in accordance with its terms, and the Bank shall promptly notify the Center 
thereof. 
 
Section 5.03. 
All this provisions of this Agreement shall continue in full force 
and effect notwithstanding any cancellation or suspension under the General Conditions. 
 
ARTICLE VI 
 
Miscellaneous Provisions 
 
Section 6.01. 
Any notice or request required or permitted to be given or made 
under this Agreement and any agreement between the parties contemplated by this 
Agreement shall be in writing.  Such notice or request shall be deemed to have been duly 
given or made when it shall be delivered by hand or by mail, telex or facsimile to the 
party to which it is required or permitted to be given or made at such party’s address 
hereinafter specified or at such other address as such party shall have designated by 
notice to the party giving such notice or making such request. Deliveries made by 
facsimile transmission shall also be confirmed by mail. The addresses so specified are: 
 
For the Bank: 
 
International Bank for 
Page  7
-
6
-
Reconstruction and Development 
 
1818 H Street, NW 
 
Washington, DC 20433 
 
United States of America 
 
Cable 
address: 
 Telex: 
  Facsimile: 
 
 
INTBAFRAD  
248423 (MCI) or 
(1-202) 477-6391 
 
Washington, D.C. 
64145 (MCI) 
 
For the State Land Cadastre Center: 
 
State Land Cadastre Center  
Khestchatyk 32-a,  
01001, Kyiv, Ukraine 
 
Facsimile: 
 
(380-44) 228 4478 
 
Section 6.02. 
Any action required or permitted to be taken, and any document 
required or permitted to be executed, under this Agreement on behalf of the Center,  may 
be taken or executed by the General Director or such other person or persons as the 
Director shall designate in writing, and the Center shall furnish to the Bank sufficient 
evidence of the authority and the authenticated specimen signature of each such person. 
 
Section 6.03. 
This Agreement may be executed in several counterparts, each of 
which shall be an original, and all collectively but one instrument. 
Page  8
-
7
-
IN WITNESS WHEREOF, the parties hereto, acting through their duly 
authorized representatives, have caused this Agreement to be signed in their respective 
names in Kyiv, Ukraine, as of the day and year first above written. 
 
INTERNATIONAL BANK FOR 
 
RECONSTRUCTION AND DEVELOPMENT 
 
By 
/s/  Luca Barbone 
Director 
Ukraine, Belarus and Moldova 
 
Europe and Central 
Asia 
 
STATE LAND CADASTRE CENTER  
 
By 
/s/  Sergiy Momotenko 
Authorized Representative 
 
Page  9
-
8
-
SCHEDULE 
 
Implementation Program
 
Section I:
Organizational Principles
1. 
For the purposes of ensuring a successful implementation of the Project 
and the sustainability and profitability of the Center, the Center shall at all times 
apply and observe the following principles in its organization and operations:  
 
(a) 
the Center shall be a single organization with a consolidated 
balance sheet; 
 
(b) 
(i)   
the Center shall be one hundred percent (100%) government-
owned and shall be headed by a General Director who shall report 
directly to the Chairman of SCLR;  
 
(ii)  
the Borrower’s Cabinet of Ministers, on the recommendation of 
the SCLR, shall be responsible for the appointment and removal 
of the General Director of the Center; and 
 
(iii)  
the main responsibilities of the said General Director shall 
encompass the preparation of an annual budget for the approval of 
the SCLR and the day-to-day operation of the management of the 
Center; and (iv) all regional (O
blast) 
offices of the Center shall 
report to the General Director of the Center, with city and district 
(
Rayon) 
offices reporting exclusively to the respective regional 
(
Oblast
)
offices.   
 
(c) 
The Center shall be a state-owned monopoly established to provide 
certain public services at the lowest possible cost, with types of services and the 
prices that it charges for such monopoly services regulated, and services limited 
to those areas that provide a public service which the private sector is not capable 
of providing.   
 
(d) 
(i)  
The Center shall be self-financing after it is fully established;  
 
(ii) 
on an annual basis the Center shall propose a schedule of fees and 
an annual budget to the SCLR, which shall review the proposed 
budgets and schedule of fees, and if satisfactory, shall seek the 
necessary approvals from the Borrower’s Cabinet of Ministers or 
other government agencies;  
 
Page  10
-
9
-
(iii) 
the Center shall provide services to the public and to other 
government agencies at the lowest possible cost, while at the same 
time remaining financially self-supporting; therefore, budgets and 
price schedules shall be adjusted every year to achieve this goal;  
 
(iv) 
if the surplus revenues become too high, the Center shall be 
required to reduce the fees so that the services are provided to the 
public and the Borrower at a lower cost; contrariwise, if there are 
net losses, the fees shall be increased; and  
 
(v) 
the Center shall be able to retain all the fees that it earns for 
services, remaining however within the price limits set by the 
Borrower.      
 
(e) 
(i)  
The Center shall be required by law to meet certain standards for 
the services it provides, among others, that it issue new titles to 
people within a clearly defined time period after the application is 
submitted; and  
 
(ii)  
the list of services which the Center is authorized to provide and 
the standards set for each such service shall be agreed between the 
Center and the SCLR and/or the Borrower’s Cabinet of Ministers, 
as part of the annual budget discussions. 
 
(f) 
All equipment or property acquired by the Center shall remain fully under 
its control until such time as it disposes of such equipment or property with the approval of 
Borrower, or the Center is liquidated under conditions specified in its Charter.  
 
(g) 
(i)   
All data collected by the Center shall remain under the control of 
the Center and shall be managed under the terms and conditions 
specified by an agreement with the SCLR and the Borrower’s 
Cabinet of Ministers;  
 
(ii) 
such data shall be owned by the Borrower (controlled by its 
Cabinet of Ministers), under the custody of the Center; and  
 
(iii)  
back-ups of this information, or parts thereof, can be provided to 
other state institutions as required under the aforementioned 
agreement between the Borrower’s Cabinet of Ministers and 
SCLR.  
 
2. 
In order to further the objectives of the Project and support the development of 
the monitoring and geodetic capacity of the Center, the Center shall take all action 
adequate and necessary to phase itself out of and cease its present commercial survey 
work not later than two (2) years after the Effectiveness Date. 
Page  11
-
10 - 
 
Section II:
Implementation Modalities
1. 
The Center shall take all measures necessary to carry out the Environmental 
Action Plan in a timely manner, ensuring that adequate information on the 
implementation of said measures is suitably included in the progress reports under the 
Project. 
 
2. 
The Center shall ensure that all action required is taken in order to ensure that the 
Procedure Manual is applied and followed at all times in the implementation, monitoring 
and evaluation of Part D of the Project.  
 
3. 
The Center shall develop and adopt, not later than one (1) year after the 
Effectiveness Date, the Registration Manual and, thereafter, shall ensure that all action 
required is taken in order to ensure that the Registration Manual is applied and followed 
at all times in the implementation, monitoring and evaluation of Part E of the Project. 
 
Section III:
Mid-Term Review
1. The 
Center 
shall: 
 
(a) 
maintain policies and procedures adequate to enable it to monitor and 
evaluate on an ongoing basis, in accordance with the Center Performance Indicators, the 
carrying out of Part E of the Project and the achievement of the objectives thereof; 
 
(b) 
prepare, under terms of reference satisfactory to the Bank, and furnish to 
the Borrower and the Bank, on or about December 31, 2006, a report integrating the 
results of the monitoring and evaluation activities performed pursuant to paragraph (a) of 
this Section, on the progress achieved in the carrying out of Part E of the Project during 
the period preceding the date of said report and setting out the measures recommended to 
ensure the efficient carrying out of Part E of the Project and the achievement of the 
objectives thereof during the period following such date; and 
 
(c) 
review with the Borrower and the Bank, by April 30, 2007, or such later 
date as the Bank shall request, the report referred to in paragraph (b) of this Section, and, 
thereafter, take all measures required to ensure the efficient completion of Part E of the 
Project and the achievement of the objectives thereof, based on the conclusions and 
recommendations of the said report and the Bank’s views on the matter. 
 
Page  12
-
11 - 
 
M:\BACKUP\UKRAINE\CONFORM\L4709 PA.doc 
6/30/2003 11:56 AM 
 
M:\BACKUP\UKRAINE\w-2078-PA Final.doc