OFFICIAL ; THE WORLD BANK (DOCUMENTS J IBRD * IDA I WORLD ANK GROUP International Business Center, 15'h Floor, 107 B, Amir Timur Street, Tashkent 100084, Uzbekistan Tel: (99871) 238 59 50 (10 lines); Fax: (99871) 238 59 51 (52) July 18, 2014 Mr. Achilbai Ramatov Uzbekistan Temir Yollari Shevchenko St. 7 Tashkent RECEIVED AUG 077014 Republic of Uzbekistan 700060 Af63 40, Ohl-4 Re: Preparation of the Angren - Pap Railway Project ("APRP") Grant No. TF017692 Dear Mr. Ramatov: In response to the request for financial assistance made on behalf of the Uzbekistan Temir Yollari (hereinafter referred to as the "Recipient" or "UTY"), I am pleased to inform you that the International Bank for Reconstruction and Development/International Development Association (the "World Bank"), acting as administrator of grant funds provided by the Europe and Central Asia Region Capacity Building Development Trust Fund, proposes to extend to the Recipient for the benefit of the Republic of Uzbekistan ("Member Country"), a grant in an amount not to exceed seven hundred thousand United States Dollars (US$700,000) ("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 Donor. 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 Donor under the abovementioned trust fund, and the Recipient's right to withdraw the Grant proceeds is subject to the availability of such funds. The Recipient represents, by confirming its agreement below, that it is authorized to enter into this Agreement and to carry out the Project in accordance with the terms and conditions set forth or referred to in this Agreement. The Member Country, through its First Deputy Prime Minister, has confirmed through a separate letter dated April 30, 2014, that it has no objection and agrees to take all action necessary or appropriate to enable the Recipient to carry out the Project in the territory of the Member Country and to perform its obligations under this Agreement. 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 return it to the World Bank. Upon receipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date on which the World Bank dispatches to the Recipient notice of its acceptance of the evidence that the execution and delivery of this Agreement on behalf of the Recipient has been duly authorized by all necessary corporate actions; provided, however, that the offer of this Agreement shall be deemed G WORLD BANK GROUP Mr.Achilbay Ramatov -2- July 18, 2014 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. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION AGREED: RER1U11MsG_OF-UZBEKISTAN By Authiied Representative Name: d ?1a& ov Title: ehatif'Y'rnan 0/e'l Date: a.0- . 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) Procurement Guidelines dated January 2011. (4) Consultant Guidelines dated January 2011. (5) Anti-corruption Guidelines dated October 15, 2006 and revised in January 2011. Mr.Achilbay Ramatov -3- July 18, 2014 Grant No. TF017692 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) "APRP" means the proposed Angren - Pap Railway Project. (b) "Project Operational Manual" means a manual to be prepared by the Recipient under Part I of this Grant for the purposes of the APRP. (c) "PIU" means project implementation unit within UTY. (d) "UTY" means the implementing entity, State-owned joint stock company Uzbekistan Temir Yollari ("Uzbekistan Railways"). Article II Project Execution 2.01. Project Objectives and Description. The objectives of the Project is: (i) to support the Recipient in preparing a feasible project aiming at reducing costs and providing connectivity to and from the portion of the Fergana Valley located in the territory of the Recipient; and (ii) to build capacity of local institutional and the Project Implementation Unit ("PIU") to implement the Project. The Project consists of the following parts: Part I: Technical, Economic, Financial, Social and Environment Assessment and Institutional Strategy and Roadmap Provision of consultants' services to: (i) prepare technical, economic, financial, fiduciary, social and environmental assessments for the proposed APRP; (ii) carry out necessary Trainings for UTY staff, and prepare an institutional assessment and institutional roadmap reports (iii) prepare grant implementation documents, procurement plan for the proposed APRP; Project Operational Manual; and carry out audit for the Grant. Part II: Capacity Building Provision of consultants' services, Incremental Operating Costs, and Training for the PIU staff. 2.02. Project Execution Generally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient, through PIU, shall carry out the Project in accordance with the Mr.Achilbay Ramatov -4- July 18, 2014 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"). 2.03. Institutional and Other Arrangements. The Recipient shall ensure that the PIU is maintained in operational and organizational form, with staff, resources and under terms of reference, all satisfactory to the World Bank. 2.04. Donor Visibility and Visit. (a) 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. (b) For the purposes of Section 2.09 of the Standard Conditions, the Recipient shall, upon the World Bank's request, enable the representatives of the Donors to visit any part of the Recipient's territory for purposes related to 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 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 quarter, covering the quarter, in form and substance satisfactory to the World Bank. (c) The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Such audit of the Financial Statements shall cover the entire period during which withdrawals from the Grant Account were made. The audited Financial Statements for such period shall be furnished to the World Bank not later than six months after the end of such period 2.07. Procurement (a) General All non-consulting services and consultants' services required for the Project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in: (i) Section I of the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Procurement Guidelines"), in the case of non- consulting services; Mr.Achilbay Ramatov -5- July 18, 2014 (ii) Sections I and IV of the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Consultant Guidelines") in the case of consultants' services; and (iii) the provisions of this Section, as the same shall be elaborated in the procurement plan prepared and updated from time to time by the Recipient for the Project in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines ("Procurement Plan"). (b) Definitions The capitalized terms used in the following paragraphs of this Section to describe particular procurement methods or methods of review by the World Bank of particular contracts, refer to the corresponding method described in Sections II and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. (c) Particular Methods of Procurement of Non-consulting Services (i) Except as otherwise provided in sub-paragraph (ii) below, non-consulting services (including logistical services for "the training") shall be procured under contracts awarded on the basis of Shopping. (ii) The following methods, other than Shopping, may be used for procurement of non-consulting services for those contracts which are specified in the Procurement Plan: (A) Direct Contracting. (d) Particular Methods of Procurement of Consultants' Services (i) Except as otherwise provided in item (ii) below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. (ii) The following methods, other than Quality- and Cost-based Selection, may be used for the procurement of consultants' services for those assignments which are specified in the Procurement Plan: (A) Selection under a Fixed Budget; (B) Least Cost Selection; (C) Selection based on Consultants' Qualifications; (D) Single-source Selection of consulting firms; (E) Selection of Individual Consultants; and (F) Single-source procedures for the Selection of Individual Consultants. (e) Review by the World Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the World Bank's Prior Review. All other contracts shall be subject to Post Review by the World Bank. Article III Mr.Achilbay Ramatov -6- July 18, 2014 Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of: (a) the Standard Conditions; (b) this Section; and (c) 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, and the percentage of expenditures to be financed for Eligible Expenditures: Category Amount of the Grant Allocated Percentage of Expenditures (expressed in USD) to be Financed (inclusive of Taxes) Consultants' services 700,000 100% (including audit), Training and Incremental Operating Costs under the Project TOTAL AMOUNT 70000 For purposes of this paragraph (a) the term "Incremental Operating Costs" means reasonable expenditures (none of which would have encountered absent the Project) incurred by the Recipient on account of management of Grant implementation including office supplies, rent, utilities, communication, local transportation and study visits, minimum office equipment, interpretation costs, and such other expenditures as may be agreed upon by the World Bank; and (b) the term "Training" means the reasonable costs, as shall have been approved by the World Bank, for training and workshops conducted under the Project, including tuition, travel 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 consultants' services). 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 November 30, 2014. Article IV Recipient's Representative; Addresses Mr.Achilbay Ramatov -7- .ILII\ 18.2014 4.01. Recipient's Representative. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is the Chairman of the Board. 4.02. Recipient's Address. The Recipient's Address referred to in Section 7.01 of the Standard Conditions is: SJSRC "Uzbekiston Ternir Yollari" Shevchenko St. 7 Tashkent Republic of Uzbekistan 100060 World Bank's Address: The World Bank's Address referred to in Section 7.01 of the Standard Conditions is: The World Bank 1818 H Street, N.W. Washington. D.C. 20433 United States of America Cable: Telex: Facsimile: INDEVAS 248423 (MCI) or I-202-477-6191 Washington, D.C. 64145 (MCI)