The World Bank 1818 HStreeFICIAL (202) 477-1234 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT a Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION . CUM EN TS ble Address: INDEVAS September 7, 2016 Mr. Rustam Azimov First Deputy Prime-Minister Minister of Finance Ministry of Finance Tashkent, REPUBLIC OF UZBEKISTAN Dear Mr. Azimov, Re: ECAPDEV Grant (TF0A3025-UZ) for the Preparation of the Livestock Sector Development Project In response to the request for financial assistance made on behalf of the Republic of Uzbekistan ("Recipient"), I am pleased to inform you that the International Bank for Reconstruction and Development/International Development Association (collectively, the "World Bank"), acting as administrator of grant funds provided under the Multi-Donor Programmatic Trust Fund for Europe and Central Asia Region Capacity Development, proposes to extend to the Recipient, a grant in an amount not to exceed five hundred thousand United States Dollars (US$500,000) ("Grant") on the terms and conditions set forth or referred to in this Letter Agreement ("Agreement"), which includes the attached Annex, to assist in the financing of the project described in the Annex ("Project"). This Grant is funded out of the abovementioned trust fund for which the World Bank receives periodic contributions from the Donors. In accordance with Section 3.02 of the Standard Conditions (as defined in the Annex to this Agreement), the World Bank's payment obligations in connection with this Agreement are limited to the amount of funds made available to it by the Donors under the abovementioned trust fund, and the Recipient's right to withdraw the Grant proceeds is subject to the availability of such funds. Please confirm the Recipient's agreement to the foregoing by having an authorized official of the Recipient sign and date the enclosed copy of this Agreement, and returning it to the World Bank. Upon receipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date of the countersignature; provided, however, that the offer of this Agreement shall be deemed withdrawn if the World Bank has not received the countersigned copy of this Agreement within ninety (90) days after the date of signature of this Agreement by the World Bank, unless the World Bank shall have established a later date for such purpose. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Lilia Burunciuc Regional Director Central Asia AGREED: REPUBLIC OF UZBEKISTAN By: onzedf esentative Name: Shukhrat Teshaev Title: Minister of MAWR Date: November 3, 2016 Enclosures: (1) Standard Conditions for Grants Made by the World Bank Out of Various Funds, dated February 15, 2012. (2) Disbursement Letter of the same date as this Agreement, together with World Bank Disbursement Guidelines for Projects, dated May 1, 2006. (3) Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated October 15, 2006 and revised in January 2011. (4) Procurement Guidelines dated January 2011 and revised July 2014. (5) Consultants Guidelines dated January 2011 and revised July 2014. 2 ECAPDEV PPG Grant No. TF0A3025-UZ ANNEX Article I Standard Conditions; Definitions 1.01. Standard Conditions. The Standard Conditions for Grants Made by the World Bank out of Various Funds dated February 15, 2012 ("Standard Conditions"), constitute an integral part of this Agreement. 1.02. Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Standard Conditions or in this Agreement; and the below additional terms have the following meanings: (a) "LSDP" means the proposed Livestock Sector Development Project. (b) "MAWR" means the Recipient's Ministry of Agriculture and Water Resources or any legal successor thereto. (c) "Project Operational Manual" means the manual to be prepared under Part II (b) of the Project for the purposes of the proposed LSDP. (d) "RRA" means the Rural Restructuring Agency, an independent administrative body operating under the Recipient's Ministry of Agriculture and Water Resources, or any successor thereto. Article II Project Execution 2.01. Project Objectives and Description. The development objective of the proposed grant is to support the preparation and readiness for implementation of the LSDP in Uzbekistan. The Project consists of the following parts: Part I: Project Design Studies Carry out a series of studies and assessments for project design, specifically: a veterinary services assessment including an evaluation of performance, a gap analysis and review of the legal and regulatory framework; a food safety assessment including a review of the legal and regulatory framework and an assessment of farmers' and processors' needs; seeds and breeding studies as well as a fodder seeds sector study and study of animal genetics and artificial insemination; and supply chain studies on dairy, beef and sheep. Part II: Project Feasibility Studies and Operating Manuals Provision of support for: (a) carrying out studies for financial and economic analysis, environmental assessment, social assessment and technical feasibility study for the proposed LSDP; 3 (b) preparing Project Operational Manual, designing and further developing of the baseline survey; and (c) strengthening the capacity of MAWR, RRA and local institutions to undertake preparation, feasibility studies and project start up through their participation in the above activities. 2.02. Project Execution Generally. The Recipient declares its commitment to the objectives of the grant funds. To this end, the Recipient shall carry out the Project, through RRA, in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) the Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated October 15, 2006 and revised in January 2011 ("Anti-Corruption Guidelines"); and (c) this Article II. 2.03. Institutional and Other Arrangements. (a) The Recipient shall ensure, that the RRA within MAWR is maintained throughout the implementation of the Project with terms of reference and composition acceptable to the World Bank. 2.04. Donor Visibility and Visit The Recipient shall take, or cause to be taken, all such measures as the World Bank may reasonably request, to identify publicly the Donors' support for the Project. 2.05. Project Monitoring, Reporting and Evaluation. (a) The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Conditions and on the basis of the indicators acceptable to the World Bank. Each Project Report shall cover the period of 6 months, and shall be furnished to the World Bank not later than one month after the end of the period covered by such report. (b) The Recipient shall prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than six (6) months after the closing date. 2.06. Financial Management (a) The Recipient shall ensure that a financial management system is maintained in accordance with the provisions of Section 2.07 of the Standard Conditions. (b) The Recipient shall ensure that interim unaudited financial reports for the Project are prepared and furnished to the World Bank not later than forty five (45) days after the end of each calendar semester, covering the semester, in form and substance satisfactory to the World Bank. (c) The Recipient shall, upon the World Bank's request, have its Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Each audit of the Project Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the World Bank not later than six months after the end of such period. 2.07. Procurement All consulting services required for the Project and to be financed, fully or partially, out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers", dated January 2011, revised in July 2014 ("Consultant Guidelines"). 4 2.08. Any contract for Eligible Expenditures to be financed in full or in part out of the proceeds of the Grant shall be included in the procurement plan prepared by the Recipient and approved by the Bank in accordance with the Procurement Guidelines and the Consultant Guidelines, prior to initiating the procurement process for any such contract. Article IH Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. (a) The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (i) Article III of the Standard Conditions; (ii) this Section; and (iii) such additional instructions as the World Bank may specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the World Bank and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the following table. The table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant ("Category"), the allocations of the amounts of the Grant to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Amount of the Grant Percentage of Expenditures Category Allocated to be Financed (expressed in USD) (inclusive of Taxes) (1) Consultants' services 498,000 100% including audit (2) Training and Workshops 1,000 100% (3) Incremental Operating 1,000 100% Costs TOTAL AMOUNT 500,000 (b) Unless otherwise agreed by the World Bank, the Recipient shall ensure that the amounts allocated to finance the Eligible Expenditures under Categories (2), (3) and (4) do not exceed financing thresholds established for said Eligible Expenditures pursuant to the Rules of Operation. (c) For the purposes of this paragraph, the following terms have the meanings ascribed to them in this Agreement: (i) "Incremental Operating Costs" means the incremental expenses incurred by RRA on account of Project implementation, management, monitoring and supervision, including office supplies, office equipment maintenance, rental of office space, utility bills, communication, and any other incremental expense incurred by RRA on account of Project implementation, provided that all said expenses are deemed acceptable to the World Bank. (ii) "Rules of Operation" means the Bank's set of rules and procedures dated July 2014 applicable to the Multi-donor Programmatic Trust Fund for Europe and Central Asia Region Capacity Development (ECAPDEV), containing, inter alia, the criteria for eligible countries, the approval process for grants, the financing thresholds of Eligible Expenditures and the applicable governance 5 arrangements; as the same may be amended from time to time by agreement between the Donor(s) of ECAPDEV and the Bank. (iii) "Training" means the reasonable costs, as shall have been approved by the World Bank, for training and workshops conducted under the Project, including tuition and subsistence costs for training and workshop participants, costs associated with securing the services of trainers and workshop speakers, rental of training and workshop facilities, preparation and reproduction of training and workshop materials, and other costs directly related to training course and workshop preparation and implementation (but excluding goods, consultants' services and Study Tours). 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawal shall be made for payments made prior to the date of countersignature of this Agreement by the Recipient. 3.03. Withdrawal Period The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is either: (a) 12 months after the Effectiveness Date; or (b) the date on which the World Bank declares the LSDP effective whichever comes first. Article IV Recipient's Representative; Addresses 4.01. Recipient's Representative. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is the Minister of Finance. 4.02. Recipient's Address. The Recipient's Address referred to in Section 7.01 of the Standard Conditions is: Minister of Finance Mustakillik Square 5 Tashkent 100008 Republic of Uzbekistan Telex: Facsimile: 1163601KBOL (998-71)244 5643 6 4.03. World Bank's Address. The World Bank's Address referred to in Section 7.01 of the Standard Conditions is: International Bank for Reconstruction and Development International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable: Telex: Facsimile: INTBAFRAD INDEVAS 248423 (MCI) or 1-202-477-6391 Washington, D.C. 64145 (MCI) 7