IOFFICIAL TFo 11 00CUMMTI The World Bank 1818 H Stre N.W. (202)477-1234 INTERNAllONAL BANK FOR RECONS-RUCTION kND DE4 a lAhnntn C. 20433 Cable Address: INTBAFRAD INTERNAT10NAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS November 28, 2012 Ms. Olga Lavrova Minister of Finance Ministry of Finance 58 Erkindik Blvd. Bishkek 720040 KYRGYZ REPUBLIC Dear Ms. Lavrova, Re: DID Co-financing Trust Fund for the Second Ru. -al V'ater Supply and Sanitation Project 3rant No TF013105 In response to the request l'or financial assistance made on behalf of the Kyrgyz Republic ("Recipient"), I am pleased to info -m you that the International Development Association ("World Bank"), acting as adriinistrator of grant funds provided by the Government of the ULnited Kingdom of Great 13riiain md Northern Ireland acting through the Department for International Development ("Donc r'), proposes to extend to the Recipient a grant in an aonount not to exceed eight fund ed seventy-one thousand six hundred Pounds Sterling (f871,600) ("Grant") on tOe term3 and conditions set forth or referred to in this letter agreement ("Agreement"), wh: ch i icludes the attached Annex, to assist in the financing of the project described in the kniex ("Project"). This Grant is funded out of :he tbovementioned trst fund for which the World Bank receives periodic contribut[oni frcm the Donor. In accordance with Section 3.02 of the Standard Conditiors (as c.efined in the Annex to this Agreement), the World Bank's piyment obligations in connection with this Agreement are limited to the amount of funds imade available to it by the Donor i nder the abovementioned trust fund, and the Recipient's right to withdraw the Grant proceec s is subject to the availability of such funds. The Recipient represents, by confi ming its agreement below, that it is authorized to enter into this Agreement and to :any ot t the Project in accordance with the terms and conditions set forth or referred to in this Agree rent. Please confirm the Recipient's greement to the foregoing by having an authorized official of the Recipient sign and ( ate the enclosed copy of this Agreement, and returning it to the World Bank. Upon -ece pt by the World Bank of this countersigned copy, this Agreement shall become effecti-e as of the date of the countersignature; provided, however, that the offer of t1is Ms. Olga Lavrova - 2 - November 28, 2012 Agreement shall be deemed w thdrawn if the World Bank has not received the countersigned copy of this Agreei.ient within ninety (90) days after the date of signature (f this Agreement by the WIc rld 3ank, unless the World Bank shall have established a later date for such purpose Very truly yours, INTERNATION, AL DEVELOPMENT ASSOCIATION By Saroj Kumar Jha Regional Director Central Asia AGREED: KYRGYZ REPUBLIC By: Authorized Represelntalive Name: ,1 ft. 02 ____ Title: f~VC ~'~C Date: 26 02 /3 Enclosures: (1) Standard Conditio-is f)r Grants Made by the World Bank Out of Various Funds, dated FcbrLary 15, 2012 (2) Disbursement Letter ol the same date as this Agreement, together with World Bank Disbursemrent GL idelines for Projects, dated May 1, 2006 Ms. Olga Lavrova - 3 - November 28, 2012 DFID Grant No TF013105 ANNEX Article I Standi rd Conditions; Definitions .01. Standard Conditions. The Standard Conditions for Grants Made by the World Bank out of Various Funcs dated February 15, 2012 ("Standard Conditions") constitute an integral part of this Agreement. .02. Definitions, Unle,-s the context requires otherwise, the capitalized terms used in this Agreement have the ieaning s ascribed to them in the Standard Conditions, in this Agreement, or in the Fin anc ing Agreement for the Second Rural Water Supply and Sanitation Project betwee:1 the 1 .yrgyz Republic and the World Bank dated May 21, 2009, as amended on Octob)er 28, !011. Article II Project Execution 2.01. Project Objectives and D!scription. The objective of the Project is to assist the Recipient in: (i) improving ac-,ess to potable water for the participating communities; (ii) improving hygiene, saniti!tio i and water-related practices at individual, family and institutional levels in the rural area;; and (iii) strengthening the institutional framework and capacity for the rural drinking wat,er supply and sanitation sector. The Project consists of the following parts: Part A: Sanitation md- H3 giene Promotion Program. Provision of technical assistance to the Recipient to promote healthy hygiene and sanitation practices in the rural areas, including t e Participating Communities. Part B: Instituticnal Development. Provision of technical assistance to the Recipient to strengthen ihe sustainability of its rural water supply system, including: (a) supp:)rting tie development and implementation of the strategy for sustainable supply of sz fe drinking water; (b) improving the institutional framework, as well as stnngthening capacity to develop normative acts, for the sustainable supply .)f safe drinking water; (c) the provision of training, workshops and seminers to enhance the capacity of CDWUUs, Local Self-Government, DRWS, and ARIS in the area of water supply as well as matters pertaining to sanitation and hygiene; an( (d) strengthening the management information system of the Projet. 2.02. Project Exccution Generilly. The Recipient declares its commitment to the objectives of the PRoject. ro this end, the Recipient shall cause the Project to be carried out by the Project Implemntiig Entity in accordance with the provisions of: (a) Article II of the Standard Conditions; (b) th- "Guidelines on Preventing and Combating Fraud and Corruption in Projects Fianced :y IBRD Loans and IDA Credits and Grants", dated Ms. Olga Lavrova - 4 - November 28, 2012 October 15, 2006 and revised in January 2011 ("Anti-Corruption Guidelines"); and (c) ihis Article II. 2.03 The Recipient shal at all times, throughout the implementation of the Project, maintain the Proje.t Implernmtir g Entity with funds, resources, functions and powers necessary to enable it to carry out the Project activities, and with qualified and experienced management find other staff, all as agreed by the Association. 2.04. Donor Visility atid Visit. (a) The Recipi;:nt sha'l take or cause to be taken all such measures as the World Bank may reasonably request to identify publicly the Donor's support for the Project. (b) For the purposis ol Section 2.09 of the Standard Conditions, the Recipient shall, upon the World Bank's reqi est, take all measures required on its part to enable the representatives of :he Donor to N isit any part of the Recipient's territory for purposes related to the Project. 2.05. Project Moaitoring, Repoi ting and Evaluation. (a) The Recipient shal monitor and evaluate the progress of the Project and prepare Project Reports in accordz nce with the provisions of Section 2.06 of the Standard Conditions and on the basis of i-adicators agreed with the Association. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the World Bank not later than foily-fr e (45) days after the end of the period covered by such report. (b) The Recipicnt :;hall prepare the Completion Report in accordance with the provisions of Section 2.06 of the standard Conditions. The Completion Report shall be firnished to the World Barik rot hiter than six months after the Closing Date. 2.06. Financial Manageineat (a) The Recipient sh ll ensure that a financial management system is maintained in accordance with the provisions of Section 2.07 of the Standard Conditions. (b) The Recipient shal' ensure that interim unaudited financial reports for the Project are prepared and f :irn shec 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 B ai:. (c) The Recipiont shall have its Financial Statements audited in accordance w%ith the provisions of Section 2 07(b) of the Standard Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for bidder or potential bidder shall be declared ineligible for contracts financed by tie Association for reasons other than those provided in Section I of the Procurem nt Guidelines. Exclusion from participation as a result of debarment should resilt from violation of clearly identified grounds of misconduct and in iccorda ice with a fair and transparent process. 2. Procuring entities shall use the appropriate standard bidding documents acceptable to the B ink. 3. An extension of bid valid ty, if justified by exceptional circumstances, shall be requested in writing frori all bidders before the expiration date and for a minimum pe,riod requi-ed to complete the evaluation or award contract. 4. No national prefercnccs may be applied on the basis of the origin of products or labor. 5. Entities in which tie 3tatt owns a majority shareholding shall not be invited to participate in tende,rs Ibr tl e Government unless they are and can be shown to be legally and financiklly autc nomous and they operate under commercial law. 6. Pre-qualification sfall be c nducted for large works contracts and shall be applied upon the Bank's agree nen; 7. The pre- and post- qual fication criteria shall only pertain to past contract performance, finaniial, ma iagerial and technical capabilities of bidders. 8. Joint venture partners shall be jointly and severally liable for their obligations. 9. State unit cDsts shall not t e used for contract budgeting and evaluation for civil works contracts. 1 Bids shall be opened in public, immediately after the deadline for their submission. No biIs can he rejected at bid opening and under the circumstances referred to Article 6 of the Public Procurement Law. 11. No bids shall be rej ectAd solely because they exceed the estimated price. Bids can be cancelled and rew bid; invited, only if the conditions of clause 2.62 of the Procuremer t Guidc linos ar,- met. 2. All bid evaluation criteria, hall be quantifiable in monetary term. 3. Qualification criteria fr bid evaluation shall be applied on a pass or fail basis. 4. Contracts shall bc award .d to qualified bidder having submitted the lowest evaluated substantially responsive bid and no negotiation shall take place. his. Olga Lavrova - 9 - November 28, 2012 5. There shou d be ar. ef Fecti ie and independent protest mechanist allowing bidders and interes:.ed panies to )rotest and to have their protest handled in a timely manner. 6. Advance Bank no otject on is required for any modifications in the contract scope/condi tions di.irir g cc ntract implementation;