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CONFORMED COPY
CREDIT NUMBER 3389 KG
Development Credit Agreement
(Technical Assistance Project)
between
KYRGYZ REPUBLIC
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated June 23, 2000
CREDIT NUMBER 3389 KG
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated June 23, 2000, between KYRGYZ REPUBLIC (the 
Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to the 
feasibility and priority of the Project described in Schedule 2 to this 
Agreement, has requested the Association to assist in the financing of 
the Project; and
(B)
the Association has received from the Borrower a letter 
dated May 20, 2000, describing a program of actions, objectives and 
policies designed to achieve structural adjustment of the Borrower’s 
economy (hereinafter called the Program), declaring the Borrower’s 
commitment to the execution of the Program, and requesting assistance 
from the Association in support of the Program during the execution 
thereof; and
WHEREAS the Association has agreed, on the basis, inter alia, of 
the foregoing, to extend the Credit to the Borrower upon the terms and 
conditions set forth in this Agreement;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
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General Conditions; Definitions
Section 1.01. The “General Conditions Applicable to Development 
Credit Agreements” of the Association, dated January 1, 1985 (as amended 
through October 6, 1999) (the General Conditions), constitute an integral 
part of this Agreement. 
Section 1.02. Unless the context otherwise requires, the several 
terms defined in the General Conditions and in the Preamble to this 
Agreement have the respective meanings therein set forth and the 
following additional terms have the following meanings:
(a)
“Eligible Categories” means categories 1, 2 and 3 set forth 
in the table in Part A.1 of Schedule 1 to this Agreement;
(b)
“Eligible Expenditures” means the expenditures for goods and 
services referred to in Section 2.02 (a) of this Agreement;
(c)
“Kyrgyzgas” means the Joint Stock Company of the Borrower 
established according to the Decree of the President of Kyrgyz Republic 
No. 29, dated February 6, 1999, or any successor thereto;
(d)
“Kyrgyzgasmunaizat” means the State Joint Stock Company of 
the Borrower established according to the Decree of the President of 
Kyrgyz Republic, dated September 23, 1998, or any successor thereto;
(e)
“Project Management Report” means each report prepared in 
accordance with Section 4.02 of this Agreement;
(f)
“Project Preparation Advance” means the project preparation 
advance granted by the Association to the Borrower pursuant to the letter 
agreement signed on behalf of the Association on April 24, 2000, and on 
behalf of the Borrower on May 2, 2000;
(g)
“Special Account” means the account referred to in Part B of 
Schedule 1 to this Agreement; 
(h)
“SCC” means State Customs Committee of the Borrower or any 
successor thereto;
(i)
“SEA” means State Agency on Energy of the Government of the 
Borrower or any successor thereto;
(j)
“SOF” means State Property Fund of the Borrower or any 
successor thereto; and
(k)
“STI” means State Tax Inspectorate of the Borrower or any 
successor thereto.
ARTICLE II
The Credit
Section 2.01. The Association agrees to lend to the Borrower, on 
the terms and conditions set forth or referred to in the Development 
Credit Agreement, an amount in various currencies equivalent to three 
million eight hundred thousand Special Drawing Rights (SDR 3,800,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from 
the Credit Account in accordance with the provisions of Schedule 1 to 
this Agreement for expenditures made (or, if the Association shall so 
agree, to be made) in respect of the reasonable cost of goods and 
services required for the Project and to be financed out of the proceeds 
of the Credit.
(b)
Promptly after the Effective Date, the Association shall, on 
behalf of the Borrower, withdraw from the Credit Account and pay to 
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itself the amount required to repay the principal amount of the Project 
Preparation Advance withdrawn and outstanding as of such date and to pay 
all unpaid charges thereon. The unwithdrawn balance of the authorized 
amount of the Project Preparation Advance shall thereupon be canceled.
Section 2.03. The Closing Date shall be July 31, 2004, or such 
later date as the Association shall establish. The Association shall 
promptly notify the Borrower of such later date.
Section 2.04. (a) The Borrower shall pay to the Association a 
commitment charge on the principal amount of the Credit not withdrawn 
from time to time at a rate to be set by the Association as of June 30 of 
each year, but not to exceed the rate of one-half of one percent (1/2 of 
1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty 
days after the date of this Agreement (the accrual date) to the 
respective dates on which amounts shall be withdrawn by the Borrower from 
the Credit Account or canceled; and (ii) at the rate set as of the June 
30 immediately preceding the accrual date and at such other rates as may 
be set from time to time thereafter pursuant to paragraph (a) above. The 
rate set as of June 30 in each year shall be applied from the next date 
in that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as 
the Association shall reasonably request; (ii) without restrictions of 
any kind imposed by, or in the territory of, the Borrower; and (iii) in 
the currency specified in this Agreement for the purposes of Section 4.02 
of the General Conditions or in such other eligible currency or 
currencies as may from time to time be designated or selected pursuant to 
the provisions of that Section.
Section 2.05. The Borrower shall pay to the Association a service 
charge at the rate of three-fourths of one percent (3/4 of 1%) per annum 
on the principal amount of the Credit withdrawn and outstanding from time 
to time.
Section 2.06. Commitment charges and service charges shall be 
payable semiannually on April 15 and October 15 in each year.
Section 2.07. (a)  Subject to paragraphs (b), (c) and (d) below, 
the Borrower shall repay the principal amount of the Credit in semiannual 
installments payable on each April 15 and October 15 commencing October 
15, 2010 and ending April 15, 2040. Each installment to and including the 
installment payable on April 15, 2020 shall be one percent (1%) of such 
principal amount, and each installment thereafter shall be two percent 
(2%) of such principal amount.
(b)
Whenever: (i) the Borrower’s per capita gross national 
product (GNP), as determined by the Association, shall have exceeded for 
three consecutive years  the level established annually by the 
Association for determining eligibility to access the Association’s 
resources; and (ii) the Bank shall consider the Borrower creditworthy for 
Bank lending, the Association may, subsequent to the review and approval 
thereof by the Executive Directors of the Association and after due 
consideration by them of the development of the Borrower’s economy, 
modify the repayment of installments under paragraph (a) above by: (A) 
requiring the Borrower to repay twice the amount of each such installment 
not yet due until the principal amount of the Credit shall have been 
repaid; and (B) requiring the Borrower to commence repayment of the 
principal amount of the Credit as of the first semiannual payment date 
referred to in paragraph (a) above falling six months or more after the 
date on which the Association notifies the Borrower that the events set 
out in this paragraph (b) have occurred, provided, however, that there 
shall be a grace period of a minimum of five years on such repayment of 
principal.
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(c)
If so requested by the Borrower, the Association may revise 
the modification referred to in paragraph (b) above to include, in lieu 
of some or all of the increase in the amounts of such installments, the 
payment of interest at an annual rate agreed with the Association on the 
principal amount of the Credit withdrawn and outstanding from time to 
time, provided that, in the judgment of the Association, such revision 
shall not change the grant element obtained under the above-mentioned 
repayment modification.
(d)
If, at any time after a modification of terms pursuant to 
paragraph (b) above, the Association determines that the Borrower’s 
economic condition has deteriorated significantly, the Association may, 
if so requested by the Borrower, further modify the terms of repayment to 
conform to the schedule of installments as provided in paragraph (a) 
above.
Section 2.08. The currency of the United States of America is 
hereby specified for the purposes of Section 4.02 of the General 
Conditions.
ARTICLE III
Execution of the Project
Section 3.01. The Borrower declares its commitment to the 
objectives of the Project as set forth in Schedule 2 to this Agreement, 
and, to this end, shall carry out the Project with due diligence and 
efficiency and in conformity with appropriate administrative, technical 
and financial practices, and shall provide, promptly as needed, the 
funds, facilities, services and other resources required for the Project.
Section 3.02. The Borrower shall:
(a)
maintain policies and procedures adequate to enable it to 
monitor and evaluate on an ongoing basis, in accordance with indicators 
satisfactory to the Association, the carrying out of the Project and the 
achievement of the objectives thereof;
(b)
prepare, under terms of reference satisfactory to the 
Association, and furnish to the Association, on or about January 15, 
2002, 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 the Project during the period 
preceding the date of said report and setting out the measures 
recommended to ensure the efficient carrying out of the Project and the 
achievement of the objectives thereof during the period following such 
date; and
(c)
review with the Association, by April 15, 2002, or such 
later date as the Association shall request, the report referred to in 
paragraph (b) of this Section, and, thereafter, take all measures 
required to ensure the efficient completion of the Project and the 
achievement of the objectives thereof, based on the conclusions and 
recommendations of the said report and the Association’s views on the 
matter.
Section 3.03. Except as the Association shall otherwise agree, 
procurement of the goods, works and consultants’ services required for 
the Project and to be financed out of the proceeds of the Credit shall be 
governed by the provisions of Schedule 3 to this Agreement.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Borrower shall maintain a financial 
management system, including records and accounts, and prepare financial 
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statements in a format acceptable to the Association, adequate to reflect 
the operations, resources and expenditures related to the Project.
(b)
The Borrower shall:
(i)
have the records, accounts and financial statements 
referred to in paragraph 
(a) of this Section and the 
records and accounts for the Special Account for 
each fiscal year audited, in accordance with auditing standards 
acceptable to 
the Association, consistently applied, 
by independent auditors acceptable to 
the Association;
(ii)
furnish to the Association as soon as available, but 
in any case not later 
than six 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, records and 
accounts and report 
of such audit, by said auditors, of such scope and in such 
detail as the Association shall have reasonably requested; 
and
(iii)
furnish to the Association such other information 
concerning such records and 
accounts, and the audit 
thereof, and concerning said auditors, as the 
Association may from time to time reasonably request.
(c)
For all expenditures with respect to which withdrawals from 
the Credit Account were made on the basis of Project Management Reports 
or statements of expenditure, the Borrower shall:
(i)
maintain or cause to be maintained, in accordance 
with paragraph (a) of this 
Section, records and 
separate accounts reflecting such expenditures;
(ii)
retain, until at least one year after the Association 
has received the audit 
report for the fiscal year in 
which the last withdrawal from the Credit 
Account was made, all records (contracts, orders, invoices, bills, 
receipts 
and other documents) evidencing such 
expenditures;
(iii)
enable the Association’s representatives to examine 
such records; and
(iv)
ensure that such records and accounts are included in 
the annual audit 
referred to in paragraph (b) of 
this Section and that the report of such audit 
contains a separate opinion by said auditors as to whether the 
Project 
Management Reports or statements of 
expenditure submitted during such fiscal 
year, 
together with the procedures and internal controls involved in their 
preparation, can be relied upon to support the 
related withdrawals.
Section 4.02. (a) Without limitation upon the provisions of Section 
4.01 of this Agreement, the Borrower shall carry out a time-bound action 
plan acceptable to the Association for the strengthening of the financial 
management system referred to in paragraph (a) of said Section 4.01 in 
order to enable the Borrower, not later than June 30, 2001, or such later 
date as the Association shall agree, to prepare quarterly Project 
management reports, acceptable to the Association, each of which:
(i) 
(A) sets forth actual sources and applications of 
funds for the Project, both 
cumulatively and for the 
period covered by said report, and projected sources 
and applications of funds for the Project for the six-month period 
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following 
the period covered by said report, and (B) 
shows separately expenditures 
financed out of the 
proceeds of the Credit during the period covered by said 
report and expenditures proposed to be financed out of the 
proceeds of the 
Credit during the six-month 
period following the period covered by said 
report;
(ii)
(A) describes physical progress in Project 
implementation, both cumulatively 
and for the period 
covered by said report, and (B) explains variances between 
the actual and previously forecast implementation targets; 
and
(iii)  sets forth the status of procurement under the 
Project and expenditures under 
contracts financed out of 
the proceeds of the Credit, as at the end of the 
period covered by said report.
(b)
Upon the completion of the action plan referred to in 
paragraph (a) of this Section, the Borrower shall prepare, in accordance 
with guidelines acceptable to the Association, and furnish to the 
Association not later than 45 days after the end of each calendar quarter 
a Project Management Report for such period.
ARTICLE V 
Remedies of the Association
Section 5.01. Pursuant to Section 6.02 (l) of the General 
Conditions, the following additional event is specified, namely, that a 
situation has arisen which shall make it improbable that the Program, or 
significant part thereof, will be carried out.
ARTICLE VI
Effective date; Termination
Section 6.01. The following event is specified as an additional 
condition to the effectiveness of the Development Credit Agreement within 
the meaning of Section 12.01 (b) of the General Conditions, namely, that 
independent auditors, acceptable to the Association, have been contracted 
for the purposes of Section 4.01 (b) of this Agreement.
Section 6.02. The date ninety (90) days after the date of this 
Agreement is hereby specified for the purposes of Section 12.04 of the 
General Conditions.
ARTICLE VII
Representative of the Borrower; Addresses
Section 7.01. The Minister of Finance of the Borrower is designated 
as representative of the Borrower for the purposes of Section 11.03 of 
the General Conditions.
Section 7.02. The following addresses are specified for the 
purposes of Section 11.01 of the General Conditions:
For the Borrower:
Ministry of Finance
Erkindik Boulevard, 58
Bishkek 720874
Kyrgyz Republic
Telex:
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Facsimile:
245156 NUR KH
(996-312) 66-16-45
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
(202) 
477-6391
Washington, D.C. 
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly 
authorized representatives, have caused this Agreement to be signed in 
their respective names in the District of Columbia, United States of 
America, as of the day and year first above written.
KYRGYZ REPUBLIC
By /s/ Baktybek Abdrissaev
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Kiyoshi Kodera
Acting Regional Vice President
Europe and Central Asia 
SCHEDULE 1
Withdrawal of the Proceeds of the Credit
A.
General
1.
The table below sets forth the Categories of items to be financed 
out of the proceeds of the Credit, the allocation of the amounts of the 
Credit to each Category and the percentage of expenditures for items so 
to be financed in each Category:
Amount of the
Credit Allocated
   % of
(Expressed in
Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Goods
    730,000
100% of foreign
expenditures,
100% of local
expenditures 
(ex-factory
cost) and 85% of 
local 
expenditures for other
items procured 
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locally
(2)
Consultants’
  2,300,000
100%
services and training
(3)
Incremental 
    200,000
95% of expenditures
Operating incurred 
through
costs
December 31, 2001,
and 85% thereafter
(4)
Refunding of
    380,000
Amount due pursuant
Project Preparation
to Section 2.02 (b) 
of
Advance
this Agreement
(5)
Unallocated
    190,000
TOTAL
  3,800,000
2.
For the purposes of this Schedule:
(a)
the term “foreign expenditures” means expenditures in the 
currency of any country other than that of the Borrower for goods or 
services supplied from the territory of any country other than that of 
the Borrower; 
(b)
the term “local expenditures” means expenditures in the 
currency of the Borrower or for goods or services supplied from the 
territory of the Borrower; and
(c)
the term “incremental operating costs” means operating 
expenses of PIU which would not have been incurred absent the Project, 
including expenses in respect of its local staff salaries, other than 
civil servants’ salary, local travel, communications, operation and 
maintenance of office equipment, consumable office materials and 
supplies, based on an annual budget acceptable to the Association.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals 
shall be made in respect of payments made for expenditures prior to the 
date of this Agreement. 
4.
The Association may require withdrawals from the Credit Account to 
be made on the basis of statements of expenditure for expenditures for: 
(a) goods under contracts costing less than $100,000 equivalent each; (b) 
services under contracts costing less than $50,000 equivalent each for 
consulting firms and less than $20,000 equivalent each for individual 
consultants; and (c) incremental operating costs and training under 
contracts costing less than $15,000 equivalent each, under such terms and 
conditions as the Association shall specify by notice to the Borrower.
B.
Special Account
1.
The Borrower shall open and maintain in Dollars a special deposit 
account in a commercial bank, on terms and conditions satisfactory to the 
Association, including appropriate protection against set-off, seizure 
and attachment.
2.
After the Association has received evidence satisfactory to it that 
the Special Account has been opened, withdrawals from the Credit Account 
of amounts to be deposited into the Special Account shall be made as 
follows:
(a)
until the Association shall have received: (i) the first 
Project Management Report referred to in Section 4.02 (b) of this 
Agreement; and (ii) a request from the Borrower for withdrawal on the 
basis of Project Management Reports, withdrawals shall be made in 
accordance with the provisions of Annex A to this Schedule 1; and
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(b)
upon receipt by the Association of a Project Management 
Report pursuant to Section 4.02 (b) of this Agreement, accompanied by a 
request from the Borrower for withdrawal on the basis of Project 
Management Reports, all further withdrawals shall be made in accordance 
with the provisions of Annex B to this Schedule 1.
3.
Payments out of the Special Account shall be made exclusively for 
Eligible Expenditures. For each payment made by the Borrower out of the 
Special Account, the Borrower shall, at such time as the Association 
shall reasonably request, furnish to the Association such documents and 
other evidence showing that such payment was made exclusively for 
Eligible Expenditures.
4.
Notwithstanding the provisions of Part B.2 of this Schedule, the 
Association shall not be required to make further deposits into the 
Special Account:
(a)
if the Association determines at any time that any Project 
Management Report does not adequately provide the information required 
pursuant to Section 4.02 of this Agreement;
(b)
if the Association determines at any time that all further 
withdrawals should be made by the Borrower directly from the Credit 
Account; or
(c)
if the Borrower shall have failed to furnish to the 
Association within the period of time specified in Section 4.01 (b)(ii) 
of this Agreement, any of the audit reports required to be furnished to 
the Association pursuant to said Section in respect of the audit of (A) 
the records and accounts for the Special Account, or (B) the records and 
accounts reflecting expenditures with respect to which withdrawals were 
made on the basis of Project Management Reports.
5.
The Association shall not be required to make further deposits into 
the Special Account in accordance with the provisions of Part B.2 of this 
Schedule if, at any time, the Association shall have notified the 
Borrower of its intention to suspend in whole or in part the right of the 
Borrower to make withdrawals from the Credit Account pursuant to Section 
6.02 of the General Conditions. Upon such notification, the Association 
shall determine, in its sole discretion, whether further deposits into 
the Special Account may be made and what procedures should be followed 
for making such deposits, and shall notify the Borrower of its 
determination.
6.
(a)
If the Association determines at any time that any payment 
out of the Special Account was made for an expenditure which is not an 
Eligible Expenditure, or was not justified by the evidence furnished to 
the Association, the Borrower shall, promptly upon notice from the 
Association, provide such additional evidence as the Association may 
request, or deposit into the Special Account (or, if the Association 
shall so request, refund to the Association) an amount equal to the 
amount of such payment.  Unless the Association shall otherwise agree, no 
further deposit by the Association into the Special Account shall be made 
until the Borrower has provided such evidence or made such deposit or 
refund, as the case may be.
(b)
If the Association determines at any time that any amount 
outstanding in the Special Account will not be required to cover payments 
for Eligible Expenditures during the six-month period following such 
determination, the Borrower shall, promptly upon notice from the 
Association, refund to the Association such outstanding amount.
(c)
The Borrower may, upon notice to the Association, refund to 
the Association all or any portion of the funds on deposit in the Special 
Account.
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(d)
Refunds to the Association made pursuant to sub-paragraph 
(a), (b) or (c) of this paragraph 6 shall be credited to the Credit 
Account for subsequent withdrawal or for cancellation in accordance with 
the provisions of the Development Credit Agreement.
Annex A to SCHEDULE 1
Operation of Special Account When 
Withdrawals Are Not Made On the Basis 
of Project Management Reports
1.
For the purposes of this Annex the term “Authorized Allocation” 
means an amount equivalent to $200,000 to be withdrawn from the Credit 
Account and deposited into the Special Account pursuant to paragraph 2 of 
this Annex; provided, however, that, unless the Association shall 
otherwise agree, the Authorized Allocation shall be limited to an amount 
equivalent to $100,000 until the aggregate amount of withdrawals from the 
Credit Account, plus the total amount of all outstanding special 
commitments entered into by the Association pursuant to Section 5.02 of 
the General Conditions shall equal or exceed the equivalent of 
$2,000,000.
2.
Withdrawals of the Authorized Allocation and subsequent withdrawals 
to replenish the Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Borrower 
shall furnish to the Association a request or requests for deposit into 
the Special Account of an amount or amounts which in the aggregate do not 
exceed the Authorized Allocation.  On the basis of each such request, the 
Association shall, on behalf of the Borrower, withdraw from the Credit 
Account and deposit into the Special Account such amount as the Borrower 
shall have requested.
(b)
For replenishment of the Special Account, the Borrower shall 
furnish to the Association requests for deposit into the Special Account 
at such intervals as the Association shall specify. Prior to or at the 
time of each such request, the Borrower shall furnish to the Association 
the documents and other evidence required pursuant to Part B.3 of 
Schedule 1 to this Agreement for the payment or payments in respect of 
which replenishment is requested. On the basis of each such request, the 
Association shall, on behalf of the Borrower, withdraw from the Credit 
Account and deposit into the Special Account such amount as the Borrower 
shall have requested and as shall have been shown by said documents and 
other evidence to have been paid out of the Special Account for Eligible 
Expenditures. Each such deposit into the Special Account shall be 
withdrawn by the Association from the Credit Account under one or more of 
the Eligible Categories.
3.
The Association shall not be required to make further deposits into 
the Special Account, once the total unwithdrawn amount of the Credit 
minus the total amount of all outstanding special commitments entered 
into by the Association pursuant to Section 5.02 of the General 
Conditions, shall equal the equivalent of twice the amount of the 
Authorized Allocation. Thereafter, withdrawal from the Credit Account of 
the remaining unwithdrawn amount of the Credit shall follow such 
procedures as the Association shall specify by notice to the Borrower.  
Such further withdrawals shall be made only after and to the extent that 
the Association shall have been satisfied that all such amounts remaining 
on deposit in the Special Account as of the date of such notice will be 
utilized in making payments for Eligible Expenditures.
Annex B to SCHEDULE 1
Operation of Special Account When Withdrawals 
Are Made On the Basis of Project Management Reports
1.
Except as the Association may otherwise specify by notice to the 
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Borrower, all withdrawals from the Credit Account shall be deposited by 
the Association into the Special Account in accordance with the 
provisions of Schedule 1 to this Agreement. Each such deposit into the 
Special Account shall be withdrawn by the Association from the Credit 
Account under one or more of the Eligible Categories.
2.
Each application for withdrawal from the Credit Account for deposit 
into the Special Account shall be supported by a Project Management 
Report.
3.
Upon receipt of each application for withdrawal of an amount of the 
Credit, the Association shall, on behalf of the Borrower, withdraw from 
the Credit Account and deposit into the Special Account an amount equal 
to the lesser of: (a) the amount so requested; and (b) the amount which 
the Association has determined, based on the Project Management Report 
accompanying said application, is required to be deposited in order to 
finance Eligible Expenditures during the six-month period following the 
date of such report; provided, however, that the amount so deposited, 
when added to the amount indicated by said Project Management Report to 
be remaining in the Special Account, shall not exceed the equivalent of 
$300,000.
SCHEDULE 2
Description of the Project
The objective of the Project is to strengthen the Borrower’s 
institutional capacity to implement the measures under the Program.
The Project consists of the following parts, subject to such 
modifications thereof as the Borrower and the Association may agree upon 
from time to time to achieve such objectives:
Part A:
Business Environment Improvement
Provision of technical assistance and training (i) to review and 
analyze the existing business start-up regulations and licensing and 
inspection procedures, and (ii) to prepare and to implement an action 
plan to improve these regulations and procedures.
Part B:
Revenue Mobilization
Provision of technical assistance, training and office equipment to 
strengthen the capacity of, and coordination between, SCC and STI to 
improve tax and customs duties collection.
Part C:
Energy Sector Reform
(1)
Provision of technical assistance and office equipment to assist 
SEA in preparation and implementation of market-oriented regulations and 
procedures for the electricity sector.
(2)
Provision of technical assistance and office equipment to assist 
SPF with privatization of the Borrower’s electricity distribution 
companies and for Kyrgyzgas.
(3)
Provision of technical assistance and office equipment to improve 
Kyrgyzgas’s financial management capacity and its billing and payment 
collection procedures.
(4)
Provision of technical assistance for audit of Kyrgyzgas and of 
Kyrgyzgasmunaizat.
(5)
Provision of technical assistance and office equipment to assist 
the Borrower in design and implementation of a social compensation system 
in connection with energy tariff increases.
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(6)
Provision of gas meters and provision of parts, materials and 
equipment for the installation of gas meters and of an electronic 
correction and measuring system.
(7)
Provision of technical assistance and equipment to design and 
implement a pubic relations campaign in relation to energy privatization 
program and tariff increase strategy.
Part D:
Project Management Support
Provision of technical assistance, training and equipment to the 
Project Implementation Unit, and financing of its incremental operating 
costs.
* * *
The Project is expected to be completed by January 31, 2004.
SCHEDULE 3
Procurement and Consultants’ Services
Section I.
Procurement of Goods 
Part A:
General
Goods shall be procured in accordance with (a) the provisions of 
Section I of the “Guidelines for Procurement under IBRD Loans and IDA 
Credits” published by the Bank in January 1995 and revised in January and 
August 1996, September 1997 and January 1999 (the Guidelines) and the 
provisions of the following Parts of this Section I.
Part B:
International Competitive Bidding
1.
 Except as otherwise provided in Part C of this Section, goods 
shall be procured under contracts awarded in accordance with the 
provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 
thereto.
2.
 The following provisions shall apply to goods to be procured under 
contracts awarded in accordance with the provisions of paragraph 1 of 
this Part B.
Preference for domestically manufactured goods
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and 
Appendix 2 thereto shall apply to goods manufactured in the territory of 
the Borrower. 
Part C:
Other Procurement Procedures
1.
International Shopping
Goods estimated to cost less than $100,000 equivalent per contract, 
up to an aggregate amount not to exceed $330,000 equivalent may be 
procured under contracts awarded on the basis of international shopping 
procedures in accordance with the provisions of paragraph 3.5 and 3.6 of 
the Guidelines.
2.
  National Shopping
Goods estimated to cost less than $50,000 equivalent per contract, 
up to an aggregate amount not to exceed $220,000 equivalent may be 
procured under contracts awarded on the basis of national shopping 
procedures in accordance with the provisions of paragraph 3.5 and 3.6 of 
the Guidelines.
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Part D:
Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to bid for contracts, the 
proposed procurement plan for the Project shall be furnished to the 
Association for its review and approval, in accordance with the 
provisions of paragraph 1 of Appendix 1 to the Guidelines. Procurement of 
all goods and works shall be undertaken in accordance with such 
procurement plan as shall have been approved by the Association, and with 
the provisions of said paragraph 1.
2.
 Prior Review
 (a)
With respect to each contract for goods procured under the 
provisions of Part B of this Section I estimated to cost the equivalent 
of $100,000 or more, the procedures set forth in paragraphs 2 and 3 of 
Appendix 1 to the Guidelines shall apply.
 (b)
With respect to the first two contracts for goods to be 
procured in accordance with the procedures referred to in Part C.1 and 
Part C.2 of this Section I, the following procedures shall apply:
(i)
prior to the selection of any supplier under shopping 
procedures, the Borrower 
shall provide to the Association 
a report on the comparison and evaluation of 
quotations received;
(ii)
prior to the execution of any contract procured under 
shopping procedures, the 
Borrower shall provide to the 
Association a copy of the specifications and the 
draft contract; and
(iii)
the procedures set forth in paragraphs 2 (f), 2 (g) 
and 3 of Appendix 1 to the 
Guidelines shall apply.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this 
Part, the procedures set forth in paragraph 4 of Appendix 1 to the 
Guidelines shall apply.
Section II.
Employment of Consultants
Part A:
General
Consultants’ services shall be procured in accordance with the 
provisions of the Introduction and Section IV of the “Guidelines: 
Selection and Employment of Consultants by World Bank Borrowers” 
published by the Association in January 1997 and revised in September 
1997 and January 1999, subject to the modifications thereto set forth in 
paragraph 2 of this Part A (the Consultant Guidelines), and the 
provisions of the following Parts of this Section II.
Part B:
Quality- and Cost-based Selection
 
Except as otherwise provided in Part C of this Section, 
consultants’ services shall be procured under contracts awarded in 
accordance with the provisions of Section II of the Consultant 
Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 thereto, and 
the provisions of paragraphs 3.13 through 3.18 thereof applicable to 
quality- and cost-based selection of consultants.
Part C:
Other Procedures for the Selection of Consultants
1.
Least-cost Selection
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Services of auditing firms up to an aggregate amount of $40,000 may 
be procured under contracts awarded in accordance with the provisions of 
paragraphs 3.1 and 3.6 of the Consultant Guidelines.
2.
Selection Based on Consultants’ Qualifications
Services for survey on private sector regulations under Part A of 
the Project up to an aggregate amount of $50,000 may be procured under 
contracts awarded in accordance with the provisions of paragraphs 3.1 and 
3.7 of the Consultant Guidelines.
3.
Individual Consultants
Services for tasks that meet the requirements set forth in 
paragraph 5.1 of the Consultant Guidelines shall be procured under 
contracts awarded to individual consultants in accordance with the 
provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines.
Part D:
Review by the Association of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, 
the proposed plan for the selection of consultants under the Project 
shall be furnished to the Association for its review and approval, in 
accordance with the provisions of paragraph 1 of Appendix 1 to the 
Consultant Guidelines.  Selection of all consultants’ services shall be 
undertaken in accordance with such selection plan as shall have been 
approved by the Association, and with the provisions of said paragraph 1.
2.
 Prior Review
 (a)
With respect to each contract for the employment of 
consulting firms estimated to cost the equivalent of $100,000 or more, 
the procedures set forth in paragraphs 1, 2 (other than the third 
subparagraph of paragraph 2(a)) and 5 of Appendix 1 to the Consultant 
Guidelines shall apply.
 (b)
With respect to each contract for the employment of 
consulting firms estimated to cost the equivalent of $50,000 or more, but 
less than the equivalent of $100,000, the procedures set forth in 
paragraphs 1, 2 (other than the second subparagraph of paragraph 2(a)) 
and 5 of Appendix 1 to the Consultant  Guidelines shall apply.
 (c)
With respect to each contract for the employment of 
individual consultants estimated to cost the equivalent of $20,000 or 
more, the qualifications, experience, terms of reference and terms of 
employment of the consultants shall be furnished to the Association for 
its prior review and approval.  The contract shall be awarded only after 
the said approval shall have been given.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this 
Part, the procedures set forth in paragraph 4 of Appendix 1 to the 
Consultant Guidelines shall apply.