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CONFORMED COPY
(Berke Hydro Power Project)
between
REPUBLIC OF TURKEY
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
as Administrator of Grant Funds
provided by JAPAN
Dated December 11, 1991
JAPANESE GRANT AGREEMENT
AGREEMENT, dated December 11, 1991, between the REPUBLIC OF TURKEY (the 
Recipient) and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) 
acting as Administrator (the Administrator) of grant funds provided by JAPAN (Japan).
WHEREAS (A) pursuant to a letter agreement dated July 30, 1990 between Japan and 
the Bank and International Development Association (the Association), the Bank and the 
Association have agreed to administer grant funds to be made available by Japan for 
the financing of certain programs and projects supported by the Bank and the 
Association, as the case may be, in accordance with the provisions of such letter 
agreement;
WHEREAS (B) Japan has agreed to make available to the Recipient a grant out of 
said grant funds (the Grant) to finance the cost of carrying out the technical 
assistance described in Schedule 1 to this Agreement (the Technical Assistance) on the 
terms and conditions hereinafter set forth;
NOW THEREFORE the parties hereto hereby agree as follows:
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ARTICLE I
General Conditions; Definitions
Section 1.01. (a) The following provisions of the General Conditions Applicable 
to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the 
modifications set forth in paragraph (b) of this Section (the General Conditions) 
constitute an integral part of this Agreement:
(i)
Article I;
     (ii)
Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (18) 
and (20), 2.02 and 2.03;
    (iii)
Section 3.01;
     (iv)
Section 4.01 and the first sentence of Section 4.09;
(v)
Article V;
     (vi)
Sections 6.01, 6.02 (a), (c), (d), (e), (f), (i) and (k), 6.03, 
6.04 and 6.06;
    (vii)
Section 8.01 (b);
   (viii)
Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09;
     (ix)
Sections 10.01, 10.03 and 10.04; and
(x)
Article XI.
(b)
The General Conditions shall be modified as follows:
(i)
the term "Bank", wherever used in the General Conditions, other 
than in Sections 2.01 (8) and 6.02 (f) thereof and the last use of 
such term in Section 5.01 thereof, means the International Bank 
for Reconstruction and Development acting as Administrator of the 
Grant pursuant to the letter agreement between Japan and the Bank 
and the Association referred to in Recital (A) of this Agreement, 
except that in Section 6.02, the term "Bank" shall also include 
the International Bank for Reconstruction and Development acting 
in its own capacity;
     (ii)
the term "Borrower", wherever used in the General Conditions, 
means the Recipient;
    (iii)
the term "Loan Agreement", wherever used in the General 
Conditions, means this Agreement;
     (iv)
the term "Loan", wherever used in the General Conditions, means 
the Grant;
(v)
the term "Loan Account", wherever used in the General Conditions, 
means the Grant Account, an account opened by the Administrator on 
its books in the name of the Recipient to which the amount of the 
Grant is credited;
     (vi)
the term "Project", wherever used in the General Conditions, means 
the technical assistance described in Schedule 2 to this 
Agreement; and
    (vii)
Section 4.01 shall be modified to read:
"Withdrawals from the Grant Account shall be made in yen; provided, 
however, that if the expenditures to be financed out of the Grant have been 
paid or are payable in another currency, the Administrator shall, at the 
request of the Recipient, purchase such currency with the proceeds of such 
withdrawal."
Section 1.02. Wherever used in this Agreement, unless the context otherwise 
requires, the several terms defined in the General Conditions and in the Recitals to 
this Agreement have the respective meanings therein set forth; and the terms "yen" and 
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"¥" mean the currency of Japan.
ARTICLE II
The Grant
Section 2.01. The Administrator agrees to make available to the Recipient, on 
the terms and conditions set forth or referred to in this Agreement, the Grant in an 
amount of one hundred seventeen million four hundred thousand yen (¥117,400,000).
Section 2.02. (a) The amount of the Grant may be withdrawn from the Grant 
Account to cover 100% of the cost incurred on or after June 1, 1991 on account of 
consultants' services and other related services and facilities required for the 
carrying out of the Technical Assistance.
(b)
The Recipient shall, for the purposes of the Technical Assistance 
Project, open and maintain in dollars a special deposit account in a commercial bank 
on terms and conditions satisfactory to the Administrator, including appropriate 
protection against set-off, seizure or attachment. Deposits into, and payments out of, 
the Special Account shall be made in accordance with the provisions of Schedule 2 to 
this Agreement.
Section 2.03. The Closing Date shall be June 30, 1994, or such later date as the 
Administrator shall establish. The Administrator shall promptly notify the Recipient 
of such later date.
ARTICLE III
Execution of the Project
Section 3.01. The Recipient shall carry out the Technical Assistance with due 
diligence and efficiency and in conformity with appropriate engineering, financial and 
administrative practices, and shall provide, promptly as needed, the funds, 
facilities, services and other resources required for the Project.
Section 3.02. In order to assist the Recipient in the carrying out of the 
Technical Assistance, the Recipient shall employ con- sultants whose qualifications, 
experience and terms and conditions of employment shall be satisfactory to the 
Administrator. Such consultants shall be selected in accordance with principles and 
procedures satisfactory to the Administrator on the basis of the "Guidelines for the 
Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" 
published by the Bank in August 1981.
Section 3.03. (a) The Recipient shall maintain or cause to be maintained records 
and accounts adequate to reflect in accordance with sound accounting practices the 
operations, resources and expenditures in respect of the Technical Assistance of the 
departments or agencies of the Recipient responsible for carrying out the Technical 
Assistance or any part thereof.
(b)
The Recipient shall:
(i)
have the records and accounts referred to in paragraph (a) of this 
Section for each fiscal year audited, in accordance with 
appropriate auditing principles consistently applied, by 
independent auditors acceptable to the Administrator;
     (ii)
furnish to the Administrator as soon as available, but in any case 
not later than four months after the end of each such year, the 
report of such audit by said auditors, of such scope and in such 
detail as the Administrator shall have reasonably requested; and
    (iii)
furnish to the Administrator such other information concerning 
said records and accounts and the audit thereof as the 
Administrator shall from time to time reasonably request.
(c)
For all expenditures with respect to which withdrawals from the Grant 
Account were made on the basis of statements of expenditure, the Recipient shall:
(i)
maintain or cause to be maintained, in accordance with paragraph 
(a) of this Section, records and accounts reflecting such 
expenditures;
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     (ii)
retain, until at least one year after the Administrator has 
received the audit report for the fiscal year in which the last 
withdrawal from the Grant Account was made, all records 
(contracts, orders, invoices, bills, receipts and other documents) 
evidencing such expenditures;
    (iii)
enable the Administrator'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 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.
ARTICLE IV
Effectiveness; Termination
Section 4.01. This Agreement shall become effective upon its execution by the 
parties hereto.
Section 4.02. This Agreement shall continue in effect until the Grant has been 
fully disbursed and the parties to this Agreement have fulfilled all their obligations 
hereunder.
ARTICLE V
Representation
Section 5.01. The Undersecretary of the Treasury and Foreign Trade of the 
Recipient is designated as representative of the Recipient for the purposes of Section 
11.03 of the General Conditions.
Section 5.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Recipient:
Undersecretariat of the Treasury
   and Foreign Trade
Basbakanlik Hazine Ve Dis Ticaret
Mustesarligi
Ankara-Eskisehir Karayolu
Inonu Bulvari
Balgat/Ankara
Turkey
Cable address:
Telex:
MALIYE-HAZINE       821-42285 (MLYE-TR) or
                                          821-42689 (ANK-TR)
For the Administrator:
International Bank for
  Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INTBAFRAD
197688 (TRT),
Washington, D.C.
248423 (RCA),
 64145 (WUI) or
 82987 (FTCC)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
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representatives, have caused this Agreement to be signed in their respective names as 
of the day and year first above written.
REPUBLIC OF TURKEY
By /s/ M. Egilmez
Authorized Representative
INTERNATIONAL BANK FOR RECONSTRUCTION
  AND DEVELOPMENT
as Administrator of the Grant
By /s/ F. Batzella
Authorized Representative
SCHEDULE 1
Description of Technical Assistance
The purpose of the Technical Assistance is to assist in the development of the 
Recipient's hydro power potential and in expanding the role of the private sector in 
power generation. The Technical Assistance is designed to finance the following 
activities, in connection with the preparation of a project for the installation of 
hydroelectric capacity downstream of the Sir Hydropower Project:
(a)
environmental assessment study;
(b)
preparation of the regulatory framework for the private power utility 
(Cukurova Elektrik A.S.), operating in the Cukurova Region; and
(c)
review and evaluation, by an independent panel of experts, of the concept 
and design for the construction of a dam on the Ceyha River at Berke.
SCHEDULE 2
Special Account
1.
For the purposes of this Schedule:
(a)
the term "eligible expenditures" means expenditures in respect of the 
reasonable cost of goods and services required for the Technical Assistance and to be 
financed out of the amount of the Grant in accordance with Section 2.02 (a) of this 
Agreement; and
(b)
the term "Authorized Allocation" means an amount equivalent to 
¥45,000,000 to be withdrawn from the Grant Account and deposited into the Special 
Account pursuant to paragraph 3 (a) of this Schedule.
2.
Payments out of the Special Account shall be made exclusively for eligible 
expenditures in accordance with the provisions of this Schedule.
3.
After the Administrator has received evidence satisfactory to it that the 
Special Account has been duly opened, 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 Recipient shall furnish 
to the Administrator a request or requests for a deposit or deposits which do not 
exceed the aggregate amount of the Authorized Allocation. On the basis of such request 
or requests, the Administrator shall, on behalf of the Recipient, withdraw from the 
Grant Account and deposit in the Special Account such amount or amounts as the 
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Recipient shall have requested.
(b)
(i)
For replenishment of the Special Account, the Recipient shall 
furnish to the Administrator requests for deposits into the 
Special Account at such intervals as the Administrator shall 
specify.
     (ii)
Prior to or at the time of each such request, the Recipient shall 
furnish to the Administrator the documents and other evidence 
required pursuant to paragraph 4 of this Schedule for the payment 
or payments in respect of which replenishment is requested. On the 
basis of each such request, the Administrator shall, on behalf of 
the Recipient, withdraw from the Grant Account and deposit into 
the Special Account such amount as the Recipient 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. All such deposits shall be withdrawn by the 
Administrator from the Grant Account in such amounts as shall have 
been justified by said documents and other evidence.
4.
For each payment made by the Recipient out of the Special Account, the Recipient 
shall, at such time as the Administrator shall reasonably request, furnish to the 
Administrator such documents and other evidence showing that such payment was made 
exclusively for eligible expenditures.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the 
Administrator shall not be required to make further deposits into the Special Account:
(a)
if, at any time, the Administrator shall have determined that all further 
withdrawals should be made by the Recipient directly from the Grant Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement; or
(b)
once the total unwithdrawn amount of the Grant, less the amount of any 
outstanding special commitment entered into by the Administrator pursuant to Section 
5.02 of the General Conditions, shall equal the equivalent of the amount of the 
Authorized Allocation. Thereafter, withdrawal from the Grant Account of the remaining 
unwithdrawn amount of the Grant shall follow such procedures as the Administrator 
shall specify by notice to the Recipient. Such further withdrawals shall be made only 
after and to the extent that the Administrator 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.
6.
(a)
If the Administrator shall have determined at any time that any payment 
out of the Special Account: (i) was made for an expenditure or in an amount not 
eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the 
evidence furnished to the Administrator, the Recipient shall, promptly upon notice 
from the Administrator: (A) provide such additional evidence as the Administrator may 
request; or (B) deposit into the Special Account (or, if the Administrator shall so 
request, refund to the Administrator) an amount equal to the amount of such payment or 
the portion thereof not so eligible or justified. Unless the Administrator shall 
otherwise agree, no further deposit by the Administrator into the Special Account 
shall be made until the Recipient has provided such evidence or made such deposit or 
refund, as the case may be.
(b)
If the Administrator shall have determined at any time that any amount 
outstanding in the Special Account will not be required to cover further payments for 
eligible expenditures, the Recipient shall, promptly upon notice from the 
Administrator, refund to the Administrator such outstanding amount.
(c)
The Recipient may, upon notice to the Administrator, refund to the 
Administrator all or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Administrator made pursuant to paragraphs 6 (a), (b) and 
(c) of this Schedule shall be credited to the Grant Account for subsequent withdrawal 
or for cancellation in accordance with the relevant provisions of this Agreement, 
including the General Conditions.
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