OFFICIAL
DOCUMENTS
LOAN NUMBER 8781-TR
Loan Agreement
(Resilience, Inclusion and Growth Development Policy Loan)
between
REPUBLIC OF TURKEY
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
Dated Sep6ev,er   ,2017


LOAN NUMBER 8781-TR
LOAN AGREEMENT
Agreement dated Sty  )w-We-      I          , 2017, entered into between
REPUBLIC OF TURKEY ("Borrower") and INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT ("Bank") for the purpose of providing
financing in support of the Program (as defined in the Appendix to this Agreement). The
Bank has decided to provide this financing on the basis, inter alia, of(i) the actions which
the Borrower has already taken under the Program and which are described in Section I of
Schedule I to this Agreement; and (ii) the Borrower's maintenance of an adequate
macroeconomic policy framework. The Borrower and the Bank therefore hereby agree as
follows:
ARTICLE I - GENERAL CONDITIONS; DEFINITIONS
1.01.  The General Conditions (as defined in the Appendix to this Agreement) constitute
an integral part of this Agreement.
1.02.  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
2.01.  The Bank agrees to lend to the Borrower, on the terms and conditions set forth or
referred to in this Agreement, the amount of three hundred and fifty million nine
hundred thousand Euros (EUR350,900,000), 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").
2.02.  The Borrower may withdraw the proceeds of the Loan in support of the Program
in accordance with Section II of Schedule I to this Agreement.
2.03.  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.
2.04  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.
2.05.  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,


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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.
2.06.  The Payment Dates are January 15 and July 15 in each year.
2.07.  The principal amount of the Loan shall be repaid in accordance with the
amortization schedule set forth in Schedule 2 to this Agreement.
2.08. (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.
(b)    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.
2.09.  Without limitation upon the provisions of Section 5.08 of the General Conditions
(renumbered as such pursuant to paragraph 5 of Section II of the Appendix to this
Agreement and relating to Cooperation and Consultation), the Borrower shall
promptly furnish to the Bank such information relating to the provisions of this
Article 11 as the Bank may, from time to time, reasonably request.


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ARTICLE III - PROGRAM
3.01.  The Borrower declares its commitment to the Program and its implementation. To
this end, and further to Section 5.08 of the General Conditions:
(a)    the Borrower and the Bank shall from time to time, at the request of either
party, exchange views on the progress achieved in carrying out the
Program;
(b)    prior to each such exchange of views, the Borrower shall furnish to the
Bank for its review and comment a report on the progress achieved in
carrying out the Program, in such detail as the Bank shall reasonably
request; and
(c)    without limitation upon the provisions of paragraphs (a) and (b) of this
Section, the Borrower shall exchange views with the Bank on any
proposed action to be taken after the disbursement of the Loan which
would have the effect of materially reversing the objectives of the Program
or any action taken under the Program, including any action specified in
Section I of Schedule I to this Agreement.
ARTICLE IV - REMEDIES OF THE BANK
4.01.  The Additional Event of Suspension consists of the following, namely, a situation
has arisen which shall make it improbable that the Program, or a significant part
of it, will be carried out.
ARTICLE V - EFFECTIVENESS; TERMINATION
5.01.  The Additional Condition of Effectiveness consists of the following, namely, that
the Bank is satisfied with the progress achieved by the Borrower in carrying out
the Program and with the adequacy of the Borrower's macroeconomic policy
framework.
5.02.  The Effectiveness Deadline is the date one hundred twenty (120) days after the
date of this Agreement.
ARTICLE VI- REPRESENTATIVE; ADDRESSES
6.01.  The Borrower's Representative is its Undersecretary of Treasury.


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6.02.  The Borrower's Address is:
Basbakanlik
Hazine Mustesarligi
Inonu Bulvari No. 36
Emek - Ankara
Republic of Turkey
Facsimile:
(312) 204-7366
6.03.  The Bank's Address is:
International Bank for Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Telex:              Facsimile:
248423(MCI) or      1-202-477-6391
64145(MCI)


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AGREED at Ankara, Republic of Turkey, as of the day and year first above written.
REPUBLIC OF URKEY
By
Autho zed Representative
Name:      'K. a atay IMIRGI
Title:
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
By
o                   epraT esettv
Name:e:____
Title:   <M0L             (


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SCHEDULE 1
Program Actions; Availability of Loan Proceeds
Section I.   Actions under the Program
The actions taken by the Borrower under the Program include the following:
Pillar A. Increasing Domestic Savings and Enhancing Fiscal Transparency
1. The Borrower enacted the Law on Amending the Private Pension Savings and
Investment System Law, specifically with respect to the introduction of auto-
enrollment in the private pension system.
2.     The Borrower, through the Turkish Court of Accounts, submitted to Parliament in
2016, audit reports (for the year ending in December 2015) comprising individual
financial statements for all general budget institutions in accordance with the Law
on Turkish Court ofAccounts.
Pillar B. Supporting the Economic Inclusion of Vulnerable Groups
3.     The Borrower enacted the Law on Supporting Investments on Project Basis and
Amending Various Laws and Decrees, specifically with respect to the introduction
of tax incentives for private nursery schools (crches) through amendments to the
Income Tax Law.
4.     The Borrower enacted the Law on Amending the Labor Law and ISKUR Law,
specifically with respect to making labor market programs more flexible through
the introduction of various work contract modalities.
5.     The Borrower, through its Council of Ministers, issued a communique on the
introduction of work permits for foreigners under temporary protection, pursuant
to the Council of Ministers' Decision No. 2016/8375, to support the inclusion of
said persons in the Turkish labor market.
Pillar C. Addressing Structural Bottlenecks to Sustainable Growth
6.     The Borrower enacted the Law on Industrial Property, specifically with respect to
the establishment of a more sophisticated system for the protection and
enforcement of industrial property rights through incentives for inventors to obtain
patents for inventions, the provision of improved support for research and
development activities, and the regulation of patents, utility models, trademarks,
industrial designs and geographical indications.


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7.     The Borrower enacted the Law on Moveable Collateral in Commercial Operations,
specifically with respect to the enablement of small- and medium-sized enterprises
to obtain access to credit through the use of moveable assets as collateral.
8.     The Borrower, through the Board of Directors of the Turkish Railways Company,
issued the first network statement to complement the Law on Liberalization of
Turkish Railway Transportation, as part of the legal framework for unbundling the
railway company and enabling private train operators to operate in the Republic of
Turkey.
9.     The Borrower, through the Ministry of Energy and Natural Resources issued the
Regulation on the Renewable Energy Resources Areas to establish large scale
renewable energy resources areas.
Section II.   Availability of Loan Proceeds
A.     General. The Borrower may withdraw the proceeds of the Loan in accordance
with the provisions of this Section.
B.     Allocation of Loan Amounts. The Loan is allocated in a single withdrawal
tranche, from which the Borrower may make withdrawals of the Loan proceeds.
The allocation of the amounts of the Loan to this end is set out in the table below:
Allocations                   Amount of the Loan
Allocated
(expressed in EUR)
(1) Single Withdrawal Tranche               350,900,000
TOTAL AMOUNT
C.     Payment of Front-end Fee. No withdrawal shall be made from the Loan Account
until the Bank has received payment in full of the Front-end Fee.
D.     Withdrawal Tranche Release Conditions.
No withdrawal shall be made of the Single Withdrawal Tranche unless the Bank
is satisfied: (a) with the Program being carried out by the Borrower; and (b) with
the adequacy of the Borrower's macroeconomic policy framework.
E.     Deposits of Loan Amounts. Except as the Bank may otherwise agree:
I.     all withdrawals from the Loan Account shall be deposited by the Bank into
an account designated by the Borrower and acceptable to the Bank; and


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2.    the Borrower shall ensure that upon each deposit of an amount of the Loan
into this account, an equivalent amount is accounted for in the Borrower's
budget management system, in a manner acceptable to the Bank.
F.     Excluded Expenditures. The Borrower undertakes that the proceeds of the Loan
shall not be used to finance Excluded Expenditures. If the Bank determines at any
time that an amount of the Loan was used to make a payment for an Excluded
Expenditure, the Borrower shall, promptly upon notice from the Bank, refund an
amount equal to the amount of such payment to the Bank. Amounts refunded to
the Bank upon such request shall be cancelled.
G.     Closing Date. The Closing Date is August 29, 2018.


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SCHEDULE 2
Amortization Schedule
Subject to the provisions of paragraph 2 of this Schedule, the Borrower shall repay
each Disbursed Amount in semiannual installments payable on each January 15
and July 15, the first installment to be payable on the eight (8th) Payment Date
following the Maturity Fixing Date for the Disbursed Amount and the last
installment to be payable on the twentieth (20th) Payment Date following the
Maturity Fixing Date for the Disbursed Amount. Each installment except for the
last one shall be equal to one-thirteenth (1/13) of the Disbursed Amount. The last
installment shall be equal to the remaining outstanding amount of the Disbursed
Amount.
2.    If any one or more installments of principal of the Disbursed Amount would,
pursuant to the provisions of paragraph I of this Schedule, be payable after January
15, 2028, the Borrower shall also pay on such date the aggregate amount of all
such installments.
3.     The Bank shall notify the Loan Parties of the amortization schedule for each
Disbursed Amount promptly after the Maturity Fixing Date for the Disbursed
Amount.
4.     Notwithstanding the provisions of paragraphs I through 3 of this Schedule, in the
event of a Currency Conversion of all or any portion of a Disbursed Amount 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.


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APPENDIX
Section I. Definitions
1.    "Council of Ministers" means the cabinet of the Republic of Turkey.
2.     "Decision No. 2016/8375" means the Council of Ministers' decision of the same
number, titled Council of Ministers' Decision on Work Permits of Foreigners
under Temporary Protection, published in Official Gazette No. 29594, dated
January 15, 2016.
3.     "Excluded Expenditure" means any expenditure:
(a)    for goods or services supplied under a contract which any national or
international financing institution or agency other than the Bank or the
Association has financed or agreed to finance, or which the Bank or the
Association has financed or agreed to finance under another loan, credit,
or grant;
(b)    for goods included in the following groups or sub-groups of the Standard
International Trade Classification, Revision 3 (SITC, Rev.3), published by
the United Nations in Statistical Papers, Series M, No. 34/Rev.3 (1986)
(the SITC), or any successor groups or subgroups under future revisions
to the SITC, as designated by the Bank by notice to the Borrower:
Group          Sub-group     Description of Item
112                          Alcoholic beverages
121                          Tobacco, un-manufactured, tobacco
refuse
122                          Tobacco, manufactured (whether or
not containing tobacco substitutes)
525                          Radioactive and associated materials
667                          Pearls, precious and semiprecious
stones, unworked or worked
718            718.7         Nuclear reactors, and parts thereof;
fuel elements (cartridges), non-
irradiated, for nuclear reactors
728            728.43        Tobacco processing machinery
897            897.3         Jewelry of gold, silver or platinum
group metals (except watches and
watch cases) and goldsmiths' or
silversmiths' wares (including set
gems)
971                          Gold, non-monetary (excluding gold
ores and concentrates)


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(c)    for goods intended for a military or paramilitary purpose or for luxury
consumption;
(d)    for environmentally hazardous goods, the manufacture, use or import of
which is prohibited under the laws of the Borrower or international
agreements to which the Borrower is a party);
(e)    on account of any payment prohibited by a decision of the United Nations
Security Council taken under Chapter VII of the Charter of the United
Nations; and
(f)    with respect to which the Bank determines that corrupt, fraudulent,
collusive or coercive practices were engaged in by representatives of the
Borrower or other recipient of the Loan proceeds, without the Borrower
(or other such recipient) having taken timely and appropriate action
satisfactory to the Bank to address such practices when they occur.
4.     "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.
5.     "Income Tax Law " means the Borrower's Law No. 193, published in Official
Gazette No. 10700, dated January 6, 1961, as amended.
6.     "ISKUR" means the Turkish Labor Agency of the Republic of Turkey.
7.     "Law on Amending the Labor Law and I$KUR" means the Borrower's Law No.
6715, published in Official Gazette No. 29717, dated May 20, 2016.
8.     "Law on Amending the Private Pension Savings and Investment System Law"
means the Borrower's Law No. 6740, published in Official Gazette No. 29812,
dated August 25, 2016.
9.     "Law on Industrial Property" means the Borrower's Law No. 6769, published in
Official Gazette No. 29944, dated January 10, 2017.
10.    "Law on Liberalization of Turkish Railway Transportation" means the Borrower's
Law No. 6461, published in Official Gazette No. 28634, dated May 1, 2013.
1.    "Law on Moveable Collateral in Commercial Operations" means the Borrower's
Law No. 6750, published in Official Gazette No. 29871, dated October 28, 2016.
12.    "Law on Supporting Investments on Project Basis and Amending Various Laws
and Decrees" means the Borrower's Law No. 6745, published in Official Gazette
No. 29824, dated September 7, 2016.


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13.   "Law on Turkish Court of Accounts" means the Borrower's Law No. 6085,
published in Official Gazette No. 27790, dated December 19, 2010.
14.   "Ministry of Energy and Natural Resources" means the Borrower's Ministry of
Energy and Natural Resources or any successor thereto.
15.    "Official Gazette" means the official gazette of the Republic of Turkey.
16.   "Program" means the program of actions, objectives and policies designed to
promote growth and achieve sustainable reductions in poverty and set forth or
referred to in the letter dated July 14, 2017, from the Borrower to the Bank
declaring the Borrower's commitment to the execution of the Program, and
requesting assistance from the Bank in support of the Program during its execution,
as well as or including the actions set forth in Schedule 1 to this Agreement.
17.    "Regulation on the Renewable Energy Resource Areas" means the Ministry of
Energy and Natural Resources' Regulation published in Official Gazette No.
29852, dated October 9, 2016.
18.   "Single Withdrawal Tranche" means the amount of the Loan allocated to the
category entitled "Single Withdrawal Tranche" in the table set forth in Part B of
Section II of Schedule 1 to this Agreement.
19.   "Turkish Court of Accounts" means the Borrower's supreme audit institution
established pursuant to the Law on Turkish Court of Accounts.
20.    "Turkish Railways Company" means the State Railways of the Republic of Turkey
or Tarkiye Cumhuriyeti Deviet Demiryollari, which is the Borrower's state-owned
national railway carrier.
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.     The last sentence of paragraph (a) of Section 2.03 (relating to Applications for
Withdrawal) is deleted in its entirety.
3.     Sections 2.04 (Designated Accounts) and 2.05 (Eligible Expenditures) are deleted
in their entirety, and the remaining Sections in Article 11 are renumbered
accordingly.
4.     Section 3.01.  (Front-end Fee) is modified to read as follows:


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"Section 3.01. 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").
(b)    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
Account or cancelled. The Commitment Charge shall be payable semi-
annually in arrears on each Payment Date."
5.     Sections 5.01 (Project Execution Generally) and 5.09 (Financial Management;
Financial Statements; Audits) are deleted in their entirety, and the subsequent
Sections in Article V are renumbered accordingly.
6.     Paragraph (a) of Section 5.05 (renumbered as such pursuant to paragraph 5 above
and relating to Use of Goods, Works and Services) is deleted in its entirety.
7.     Paragraph (c) of Section 5.06 (renumbered as such pursuant to paragraph 5 above)
is modified to read as follows:
"Section 5.06. Plans; Documents; Records
...    (c)   The Borrower shall retain all records (contracts, orders,
invoices, bills, receipts and other documents) evidencing expenditures
under the Loan until two years after the Closing Date. The Borrower shall
enable the Bank's representatives to examine such records."
8.     Paragraph (c) of Section 5.07 (renumbered as such pursuant to paragraph 5 above)
is modified to read as follows:
"Section 5.07. Program Monitoring and Evaluation
...    (c)   The Borrower shall prepare, or cause to be prepared, and
furnish to the Bank not later than six months after the Closing Date, a
report of such scope and in such detail as the Bank shall reasonably
request, on the execution of the Program, the performance by the Loan
Parties and the Bank of their respective obligations under the Legal
Agreements and the accomplishment of the purposes of the Loan."
9.    In the Appendix, Definitions, all references to Section numbers and paragraphs
are modified, as necessary, to reflect the modifications set forth above.


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10.   The Appendix is modified by inserting a new paragraph 19 with the following
definition of "Commitment Charge", and renumbering the remaining paragraphs
accordingly:
"19.   "Commitment Charge" means the commitment charge specified
in the Loan Agreement for the purpose of Section 3.01(b)."
1.    Renumbered paragraph 37 (originally paragraph 36) of the Appendix ("Eligible
Expenditure") is modified to read as follows:
"37.   "Eligible Expenditure" means any use to which the Loan is put in
support of the Program, other than to finance expenditures excluded
pursuant to the Loan Agreement."
12.   Renumbered paragraph 44 (originally paragraph 43) of the Appendix ("Financial
Statements") is deleted in its entirety.
13.   In 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).
14.   In paragraph 67 of the Appendix, the definition of the term "Loan Payment" is
modified to read as follows:
"67.   "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."
15.   In 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".
16.   The defined term "Project" in paragraph 75 of the Appendix is modified to read
"Program" and its definition is modified to read as follows (and all references to
"Project" throughout these General Conditions are deemed to be references to
"Program"):
"75.   "Program" means the program referred to in the Loan Agreement
in support of which the Loan is made."