OFFICIAL DOCUMENTS CREDIT NUMBER 6219-KG GRANT NUMBER D294-KG Financing Agreement (CASA 1000 Community Support Project) between KYRGYZ REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , O 2019 CREDIT NUMBER 6219-KG GRANT NUMBER D294-KG FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between KYRGYZ REPUBLIC ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form 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 - FINANCING 2.01. The Association agrees to extend to the Recipient a grant and a credit, both deemed by the Association to be on concessional terms, as set forth or referred to in this Agreement (collectively, "Financing") in the following amounts to assist in financing the project described in Schedule I to this Agreement ("Project"): (a) an amount equivalent to three million five hundred thousand Special Drawing Rights (SDR 3,500,000) ("Grant"); and (b) an amount equivalent to three million five hundred thousand Special Drawing Rights (SDR 3,500,000) ("Credit"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Financing Balance. 2.04. The Service Charge is three-fourths of one percent (3/4 of 1%) per annum on the Withdrawn Credit Balance. -2- 2.05. The Payment Dates are November 15 and May15 in each year. 2.06. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.07. The Payment Currency is Dollar. ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objective of the Project. To this end, the Recipient shall cause the Project to be carried out by the Project Implementing Entity in accordance with the provisions of Article V of the General Conditions, Schedule 2 to this Agreement, and the Project Agreement. ARTICLE IV - REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension consists of the following, namely, that the Project Implementing Entity Legislation has been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the ability of the Project Implementing Entity to perform any of its obligations under the Project Agreement. 4.02 The Additional Event of Acceleration consists of the following, namely that any event specified in Section 4.01 of this Agreement occurs. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) the Grant Agreement has been executed and delivered and all conditions precedent to its effectiveness (other than the effectiveness of this Agreement) have been fulfilled; (b) the Subsidiary Agreement has been executed on behalf of the Recipient and the Project Implementing Entity; (c) the Project Operations Manual has been prepared and adopted by the Project Implementing Entity satisfactory to the Association; (d) the Recipient, through the Project Implementing Entity, has executed the Cooperation Agreement with the respective Electricity Company; -3- (e) the Recipient has established a PCC with terms of reference, composition and resources satisfactory to the Association; and (f) the Recipient has issued a legal opinion, acceptable to the Association, indicating that the Subsidiary Agreement has been duly authorized by the Recipient and the Project Implementing Entity and is legally binding upon the Recipient and the Project Implementing Entity in accordance with its terms. 5.02. The Effectiveness Deadline is the date one hundred eighty (180) days after the Signature Date. 5.03. For purposes of Section 10.05 (b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the Signature Date. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its Minister of Finance. 6.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Finance 58 Erkindik Blvd. Bishkek City, 720040 Kyrgyz Republic; and (b) the Recipient's Electronic Address is: Telex: Facsimile: 245-156 NUR KH (996-312) 661645 6.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: -4- Telex: Facsimile: 248423 (MCI) 1-202-477-6391 -5- AGREED as of the Signature Date. KYRGYZ REPUBLIC By Authorized Representative Name: E t L1 J Title: l i it*% 1ste-o Date: O OS, . Z- 19 INTERNATIONAL DEVELOPMENT ASSOCIATION By Abthorized Representative Name: AtOVA 4 A4 zAs- Title: Date: '_ -6- SCHEDULE 1 Project Description The objective of the Project is to engage communities in the development of social and economic infrastructure in order to enhance services, livelihoods and inclusion in target villages near the CASA 1000 Transmission Line. The Project consists of the following parts: Part A: Support for Community-led Investments in Social and Economic Infrastructure 1. Provide support for electricity improvements within target villages through the provision of Sub-grants to selected Beneficiaries for Sub-projects for: (i) village- level electricity improvements; and (ii) alternative energy sources. 2. Provide support for social infrastructure and services in target villages through the provision of Sub-grants to selected Beneficiaries for Sub-projects for priority social infrastructure and services. 3. Support the construction of livelihood facilities in selected Aiyl Aimaks through the provision of Sub-grants to selected Beneficiaries. Part B: Support for Community Mobilization, Youth Engagement and Communications 1. Provide support for community mobilization and youth engagement, through, inter alia, provision of capacity building, technical assistance and Training to build local institutional capacity and engage communities in needs assessment, planning, implementation, management, monitoring, and operations and maintenance of the Sub-project. 2. Carrying out of Project communication activities and information-sharing activities, including, inter alia: (i) designing and disseminating Project communication materials; (ii) ensuring ongoing information sharing and feedback; and (iii) providing Training for communication staff to take part in communication activities. Part C: Project Management, and Monitoring and Evaluation 1. Provide support to: (i) carry out Project management activities, including, coordination and supervision of Project implementation, Project audits, financing of Incremental Operating Costs; (ii) organize the PCC's meetings; and (iii) manage a Beneficiary Feedback Mechanism, including a GRM. 2. Provide support to carry out the Project monitoring and evaluation activities. -7- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. The Recipient shall establish and thereafter operate and maintain during the Project implementation, a Project Coordination Committee with terms of reference, composition and resources acceptable to the Association, including, inter alia, the responsibility of Project coordination with the CASA 1000 Project and other key Project institutional partners. 2. The Recipient shall cause the Project Implementing Entity to maintain throughout the implementation of the Project, adequate staff with experience, qualifications, responsibilities and resources acceptable to the Association. B. Project Manuals 1. The Recipient shall cause the Project Implementing Entity to implement the Project with the assistance of the Electricity Companies (in respect of Part A. 1 of the Project) in accordance with the Project Manuals. 2. Except as the Association shall otherwise agree in writing, the Recipient shall cause the Project Implementing Entity not to amend, waive, suspend or abrogate any provision of the Project Manuals and in case of any inconsistency between any of the provisions of the Project Manuals and those of this Agreement, the provisions of this Agreement shall prevail. C. Subsidiary Agreement 1. To facilitate the carrying out of the Project, the Recipient shall make the proceeds of the Financing available to the Project Implementing Entity under a subsidiary agreement between the Recipient and the Project Implementing Entity, under terms and conditions approved by the Association ("Subsidiary Agreement"). 2. The Recipient shall exercise its rights and carry out its obligations under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate, waive or fail to enforce the Subsidiary Agreement or any of its provisions. -8- D. Sub-projects 1. For the implementation of Part A of the Project, the Recipient shall cause the Project Implementing Entity to make Sub-Grants to selected Beneficiaries in accordance with detailed criteria set forth in the Sub-Grants Manual and pursuant to the pertinent Sub-Grant Agreement. 2. The Recipient shall cause the Project Implementing Entity to exercise its rights and carry out its obligations under each Sub-Grant Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Recipient shall cause the Project Implementing Entity to not assign, amend, abrogate, terminate, waive or fail to enforce any Sub-Grant Agreement or any of its provisions. E. Cooperation Agreements 1. To facilitate the carrying out of the activities under Part A. 1 of the Project, the Recipient shall cause the Project Implementing Entity to enter into a Cooperation Agreement with each selected Electricity Company, and each said Cooperation Agreement to be entered into prior to the commencement of activities under Part A.1 of the Project that involve the respective Electricity Company. 2. The Recipient shall cause the Project Implementing Entity to exercise its rights and carry out its obligations under each Cooperation Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing, and, except as the Association shall otherwise agree, the Recipient shall cause the Project Implementing Entity to not assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the aforementioned, or any provision thereof. F. Safeguards 1 . The Recipient shall cause the Project Implementing Entity to carry out the Project in accordance with the Safeguard Documents. 2. Without limitation upon its other reporting obligations under this Agreement, the Recipient shall cause the Project Implementing Entity to regularly collect, compile and submit to the Association, in accordance with Section II of this Schedule, reports on the status of compliance with Safeguard Documents, giving details of: (a) measures taken in furtherance of the Safeguard Documents; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguard Documents; and -9- (c) remedial measures taken or required to be taken to address such conditions. 3. The Recipient shall cause the Project Implementing Entity to not amend the Safeguard Documents without the prior written approval of the Association. 4. In the event of any conflict between the provisions of the Safeguard Documents and this Agreement, the provisions of this Agreement shall prevail. Section II. Project Monitoring, Reporting and Evaluation The Recipient, through the Project Implementing Entity, shall furnish to the Association each Project Report not later than one month after the end of each calendar semester, covering the calendar semester. Section III. Withdrawal of the Proceeds of the Financing A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to: (a) finance Eligible Expenditures; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Percentage of Amount of the Amount of the Expenditures to be Credit Allocated Grant Allocated Financed (expressed in SDR) (expressed in SDR) (inclusive of Taxes) Category (1) Goods, works, non- 3,140,000 3,140,000 100% consulting services, consulting services and Sub-Grants under Part A of the Project (2) Goods, works, non- consulting services, consulting services, Training and 360,000 360,000 51% Incremental Operating Costs under Parts B and C of the Project TOTAL AMOUNT 3,500,000 3.500,000 -10- B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made: (a) for payments made prior to the Signature Date; or (b) under Category (1) until the Project Implementing Entity has adopted the Sub-Grants Manual under terms and conditions acceptable to the Association. 2. The Closing Date is June 30, 2023. -11- SCHEDULE 3 Repayment Schedule Principal Amount of the Date Payment Due Credit repayable (expressed as a percentage) * On each May 15 and November 15, commencing May 1.5625% 15, 2024 to and including November 15, 2055 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.05 (b) of the General Conditions. -12- APPENDIX Definitions 1. "Aiyl Aimak" or "AA" means an administrative territorial unit within the boundaries of which the local community exercises local self-government, consisting of one or more settlements; "AiylAimaks" means the plural thereof. 2. "Aiyl Okmotu" or "AO" means an executive local self-government body established and operating pursuant to the Recipient's Law "On Local Self- government" No.101 of July 15, 2011 (as amended); "Aiyl Okmotus" means the plural thereof. 3. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, 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 and as of July 1, 2016. 4. "ARIS" means the Community Development and Investment Agency of the Kyrgyz Republic established as a legal entity pursuant to President's Edict of the President of the Kyrgyz Republic # 330 dated October 15, 2003. 5. "Beneficiary" means any C-VIA, established as a legal entity, which has met the criteria set forth in the Sub-Grants Manual to receive a Sub-Grant; "Beneficiaries" means the plural thereof. 6. "Beneficiary Feedback Mechanism" or "BMF" means a system for obtaining and responding to comments, questions, and grievances from any Project beneficiary, including any grievances made regarding Resettlements. 7. "Category" means a category set forth in the table in Section III.A of Schedule 2 to this Agreement. 8. "CASA-1000 Multi-Donor Trust Fund" means the Central Asia South Asia Transmission Multi-Donor Trust Fund TF No.072240, effective August 12, 2015, as amended. 9. "CASA 1000 Project" means Central Asia South Asia Electricity Transmission and Trade Project set forth in Schedule 1 to the Financing Agreement between the Recipient and the Association, dated April 24, 2015 (IDA Credit No.5438-KG; IDA Grant No. H942-KG). 10. "CASA 1000 Transmission Line" means, jointly, the electricity transmission lines described under Central Asia South Asia Electricity Transmission and Trade Project. -13- 11. "C-VIA" means a Corridor-Village Investment Association, a local level government legal entity to be established, pursuant to the Recipient's national legislation, in each AA to represent the corridor villages located in the respective AA with, inter alia, the following responsibilities: (i) to represent the villages in the Project implementation process; (ii) to inform ARIS of village priorities and Sub-project selections; (iii) to coordinate with ARIS on the technical designs of the selected investments; (iv) to instruct ARIS to procure contractors or suppliers (or carrying out the procurement function as noted below); (v) to supervise contractors; (vi) to coordinate with ARIS over contract payments or carrying out the payment function where individual payments to contractors are less than the threshold to be defined in the Sub-Grants Manual; and (vii) to propose and implement operation and maintenance plans. 12. "Cooperation Agreement" means any of the agreements referred to in SectionI.E of the Schedule to the Project Agreement; "Cooperation Agreements" means the plural thereof. 13. "Displaced Person" means a person who, on account of the execution of the Project, has experienced or would experience direct economic and social impacts caused by: (i) the involuntary taking of land, resulting in; (A) relocation or loss of shelter; (B) loss of assets or access to assets; or (C) loss of income sources or means of livelihood, whether or not such person must move to another location; or (ii) the involuntary restriction to access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such person; "Displaced Persons" means, collectively, the plural thereof. 14. "Electricity Company" means any of the following: (i) JalalAbad-Electro; and (ii) Osh-Electro; "Electricity Companies" means, collectively, both these Electricity Companies. 15. "Environmental and Social Management Framework" or "ESMF" means the Recipient's environmental and social management framework for the Project, acceptable to the Association and disclosed by the Recipient on November 20, 2017, and on the Association website on November 29, 2017 setting forth the mitigating, monitoring and institutional measures to be taken during the implementation and operation of the Project to offset or reduce adverse environmental, natural habitats and cultural property impacts to levels acceptable to the Association, and the guidelines for the preparation and implementation of the ESMPs (as hereinafter defined) as such framework may be updated from time to time with the Association's prior written concurrence. 16. "Environmental and Social Management Plan" or "ESMP" means the any site- specific environmental and social management plan, acceptable to the Association to be prepared during the Project implementation in accordance with the ESMF, approved by the Association, describing, inter alia, environmental mitigation, -14- monitoring and institutional measures to offset or eliminate any negative impact or reduce them to acceptable levels, related to any Project activity; and "ESMPs" means the plural thereof. 17. "General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated July 14, 2017. 18. "Grant Agreement" means the grant agreement for the Project between the Recipient and the World Bank, acting as acting as administrator of the CASA- 1000 Multi-Donor Trust Fund of the Signature Date, providing a grant to finance the Project. "Grant Agreement" includes all appendices, schedules and agreements supplemental to the Grant Agreement. 19. "GRM" means Grievance Redress Mechanism as part of the Recipient's BMF. 20. "Incremental Operating Costs" means the incremental operating expenditures incurred by the Project Implementing Entity on account of the Project implementation, management, monitoring and evaluation, including salaries of contractual staff (but excluding salaries of officials of the Recipient's civil service) and the associated Social Charges, office rent, office materials and supplies, utilities, communication costs, transport and vehicle maintenance costs, support for information systems, translation costs, bank charges and travel and per diem costs of the Project Implementing Entity's staff and other reasonable expenditures directly associated with implementation of the Project activities, as well as small administrative budget expenditures incurred by the Beneficiaries in connection with the carrying out of Sub-projects, all based on an annual budget acceptable to the Association. 21. "JalalAbad-Electro" means JalalAbad-Electro Open Joint Stock Company, publicly-traded power distribution company established as a legal entity pursuant to the Registration Certificate No. 106011-3300-AO dated June 5, 2001 issued by the Recipient's Ministry of Justice and functioning according to its charter approved by the shareholders' general meeting dated July 1, 2001, or any successor thereto. 22. "Osh-Electro" means Osh-Electro Open Joint Stock Company, publicly-traded power distribution company established as a legal entity pursuant to the Registration Certificate No.3503-3306-AO dated May 28, 2001 issued by the Recipient's Ministry of Justice and functioning according to its charter approved by the shareholders' general meeting dated July 1, 2001, or any successor thereto. 23. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated July 2016, revised November 2017. -15- 24. "Project Coordination Committee" or "PCC" means the coordination committee to be established pursuant to Section 5.01 (e) of this Agreement, or any successor thereto acceptable to the Association. 25. "Project Implementing Entity" means ARIS, or its legal successor thereto. 26. "Project Implementing Entity's Legislation" means the Decree of the President of the Recipient No. 330, dated October 15, 2003, establishing the Project Implementing Entity, including any amendments thereto or any succeeding legislation. 27. "Project Manuals" means collectively the Project Operations Manual and the Sub- Grants Manual. 28. "Project Operations Manual" means the manual prepared by the Project Implementing Entity, satisfactory to the Association, and adopted pursuant to Section 5.01 (c) of this Agreement, and setting forth rules, methods, guidelines and procedures for the carrying out of the Project, including, inter alia: (a) detailed description of the Project and institutional arrangements for its implementation; (b) monitoring, evaluation, reporting, and governance procedures for the Project; (c) disbursement, financial management, auditing and safeguards procedures for the Project; (d) procurement rules, procedures, and standard bidding documents for the Project; (e) the content of the Project anti-corruption plan; (f) modalities for documentation and information management; and (g) criteria for verification, in form and substance acceptable to the Association, as said manual may be amended from time to time with the agreement of the Association. 29. "Resettlement" means: (i) the involuntary (i.e., an action that may be taken without a person's informed consent or power of choice) taking of land, including anything growing on or permanently affixed to such land, such as buildings and crops, resulting in: (A) relocation or loss of shelter; (B) loss of assets or access to assets; or (C) loss of income sources or means of livelihood, whether or not the affected persons must move to another location; or (ii) the involuntary restriction of access to legally designated parks and protected areas resulting in adverse impacts on the livelihoods of the affected persons, and encompassing restrictions on the use of resources imposed on people living outside a park or protected area, or on those who continue living inside the park or protected area during and after Project implementation. 30. "Resettlement Action Plan" or "RAP" means any site-specific resettlement action plan to be prepared by the Recipient and containing, inter alia, a program of actions, measures and policies for compensation of Displaced Persons, including budget and cost estimates, and sources of funding, together with adequate institutional, monitoring and reporting arrangements capable of ensuring proper implementation of, and regular feedback in compliance with its terms for each site. -16- 31. "Resettlement Policy Framework" or "RPF" means the Recipient's resettlement policy framework, acceptable to the Association, and disclosed by the Recipient on December 4, 2017, and on the Association website on January 11, 2018, said framework setting out, inter alia, the policies and procedures for the acquisition of land and other assets, compensation, resettlement and rehabilitation of, inter alia, Displaced Persons, as the case may be, and for the preparation of site-specific RAPs as may be required for Project activities, as said framework may be revised from time to time with the prior written concurrence of the Association; such term includes all schedules and agreements supplemental to said framework. 32. "Safeguard Documents" means collectively or individually the Environmental Management Framework (EMF), the Resettlement Policy Framework (RPF), as well as, the Environmental and Social Management Plans (ESMPs) and the Resettlement Action Plans (RAPs) prepared in connection with the Project, as applicable. 33. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to "the date of the Financing Agreement" in the General Conditions. 34. "Social Charges" means any payments or contributions for health benefits, unemployment benefits, disability insurance, workers' compensation benefits, retirement (pension or social security) benefits, and life insurance, or any other benefits according to the Recipient's legislation. 35. "Sub-Grant" means a grant made or to be made (out of the proceeds of the Financing) available to an eligible Beneficiary, in accordance with the criteria set forth in the Sub-Grants Manual to finance the cost of any given Sub-Project; "Sub- Grants" means the plural thereof. 36. "Sub-Grant Agreement" means any of the agreements referred to in Section I.D.1 of the Schedule to the Project Agreement. 37. "Sub-Grants Manual" means the manual prepared by the Project Implementing Entity, satisfactory to the Association, setting forth rules, methods, guidelines and procedures for the carrying out the activities under Part A of the Project, including, inter alia, the eligibility criteria, detailed rules and procedures for identification, registration and selection of eligible Beneficiaries to receive Sub-Grants, as said manual may be amended from time to time with the agreement of the Association. 38. "Sub-project" means any of the investments and/or activities under Part A of the Project; "Sub-projects" means the plural thereof. 39. "Subsidiary Agreement" means the agreement referred to in Section I.C.1 of Schedule 2 to this Agreement. -17- 40. "Training" means expenditures (other than those for consulting services) incurred by the Project Implementing Entity in connection with study tours, training courses, seminars, workshops and other training activities, not included under goods or service providers' contracts, including costs of training materials, space and equipment rental, travel, per diem costs for trainees and trainers and trainers' fees (as applicable), all based on an annual budget satisfactory to the Association.