MINISTRY OF TREASURY AND FINANCE BOARD OF TREASURY CONTROLLERS SUSTAINABLE CITIES PROJECT Implemented by ILLER BANKASI A.S. Financed Under World Bank Loan Agreement Numbered 86770 As of December 31, 2018 and For the Year Then Ended Prepared by Okan TUNSOY Selguk Erdal GUONAL Senior Treasury Controller Treasury Controller Report's Number o 248/6 -46/5 o0 *1 o SUSAINABENDCNTe ROJE 20 As o Decmber31, 018 nd Frute Year The0Ede CONTENTS EX ECUTIVE SUMMAR Y ....... ................................................................................................................................ 1 A . P roject S u m m ar y ............................................... ........................................ ................................................ 2 B . O b jectiv es of A u d it ...................................................................................................................................... 3 C . S co p e o f A u d it ................................................................................................................................. .............. 3 D . A u d it R es u l ts ........................... ...................................................................................................................... 4 E. Mana ge ment Rec om mendation ................ ............................................................................................. 4 INDEPENDENT AUDIT REPORT'S & FINANCIAL STATEMENTS OF THE PROJECT ................... 5 INDEPENDENT AUDITO R'S SREPORT T.................................................................... ................................... 6 0O p in io n ............................................................................................................................................................. 6 B asis of O p in io n ............................................................................................................................................ 6 Emphasis of Matter in the Financial Statement .................................... ....................................... 6 G o in g C o n cern . .............................................................................................................................................. 7 Responsibilities of Management and Those Charged with Governance or Other Appropriate Terms for the Financial Statements ............................................................................ 7 Auditor's Responsibilities for the Audit of the Financial Statements.....................................7 AN NEX I: Financi al St atemen ts .................................................................... .................................................. 9 EXECUTIVE SUMMARY REPUtBIJC OF TURKFY 'MINISTRY OF TRrASURY AND FINANCE Board oF Treasury Controllers EXECUTIVE SUMMARY A. Project Summary The Loan Agreement between the Iller Bankasi A.S. and International Bank for Reconstruction and Development (IBRD-World Bank) for Sustainable Cities Project, Loan Numbered 86770 was signed on 26.12.2016 and received a loan of 121.200.000,00 Euro. Project is implemented by Project Management Unit (PMU) under Iller Bankasi A.S, International Relations Department. The objective of the Project is to improve the planning capacity of, and access to targeted municipal services in, participating municipalities and utilities. The Project consists of the following parts: * Part A: Sustainable City Planning and Management System 1. Provision of technical assistance and goods to selected municipalities and their affiliated utilities to ensure comprehensive and integrated planning and management. 2. Provision of support to selected municipalities and their affiliated utilities in their preparation of feasibility studies, social and/or environmental impact assessments and engineering designs for Sub-projects. 3. Strengthening the capacity of the Borrower to implement the above described activities and to manage sustainable city systems, including in the areas of contract management, management and implementation of sustainable city investments through: a) Provision of support for embedding city-level actions for climate change, energy efficiency, water, urban transport, solid waste management, and urban planning, and in building awareness on international practices to promote and implement sustainable cities actions; b) Provision of training and capacity building to municipalities; c) Preparation of reports and studies that examine required reforms and propose changes with an aim to improving planning practices for integrated and comprehensive planning. 2 REPUBLIC 0F TIU:RKEY MINIS TRYOF TREASURY AND FINANCE Board of TrCasLry Controllors * Part B: Municipal Investments Establish and operate a municipality credit facility targeted to infrastructure investments, through the provision of Sub-loans to Sub-borrowers (including municipalities and their affiliated utilities) to finance the cost of goods, works, non-consultant services and consultant services required to carry out investments in Sub-projects, including in the public transport, water and sanitation, solid waste management, and energy sectors. * Part C: Project Management Provision of support to the Borrower for implementation of Part B of the Project including provision of goods and consultant services for supervision and monitoring and evaluation, as well as for public outreach and communication. Within the scope of Project, the following Special Designated Accounts were opened in T.C. Ziraat Bank; The account numbers of the bank accounts opened for this project are as follows; - TR 4400 0100 1745 9990 0248 5139: S5P-1 Special Account (EURO] - TR 1700 0100 1745 9990 0248 5140: S5P-1 Reimbursement Account (EURO) - TR 8700 0100 1745 9990 0248 5141: S5P-1 (TL Account) - TR 6000 0100 1745 9990 0248 5142: S$P-1 (USD Account) B. Objectives of Audit The objectives of our audit are; a) To give an opinion on whether the financial statements, prepared as of December 31, 2018 and for the period then ended, present fairly, in all material respects, the financial position of the project in accordance with the cash receipts and disbursements basis of accounting, b) To determine, as of December 31, 2018, whether the Iller Bankasi A.S., the Project Management Unit has complied, in all material respects, with the rules and procedures of the Loan Agreement numbered 86770, c) To examine whether adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditures incurred and evaluate eligibility of these expenditures for financing under the Loan Agreement. C. Scope of Audit We have performed an audit of financial statements of Sustainable Cities Project as of December 31, 2018 in accordance with the cash receipts and disbursements basis of 3 REPLBIC OF TIURKFY MiNIS FRY OF TRIASU RY AND FINANCF Board of Trcasur\ Controllers accounting. This report covers the period between January 01, 2018 and December 31, 2018. We have also performed a compliance audit on whether project activities are in line with the Loan Agreement. Our audit was conducted in accordance with International Standards on Auditing published by International Federation of Accountants (IFAC] applicable to the audit of financial statements and compliance auditing. There was no limitation in our scope for the Project's audit. D. Audit Results For the financial statements of project; our audit resulted with an unqualified opinion. As of December 31, 2018, Iller Bankasi A.S, the Project Management Unit has complied, in all material respects, with the rules and procedures of the Loan Agreement numbered 86770. In addition, with respect to expenditures, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditures incurred; and which expenditures are eligible for financing under the Loan Agreement numbered 86770. E. Management Recommendation Since we have not identified any findings during our audit, we have not issued a Management Letter. 4 INDEPENDENT AUDIT REPORT'S & FINANCIAL STATEMENTS OF THE PROJECT REPUBILIC OF TURKEY MT1NISTFRY OF TFRFASURY AND FINANCE Board of Treasury Controllers INDEPENDENT AUDITOR'S REPORT TO ILLER BANKASI A.S. Opinion We have audited the Statement of Sources and Uses of Funds, Statement of Cumulative Investments and Statement of Special Account of the Sustainable Cities Project as of December 31, 2018, and for the period between 01.01.2018-31.12.2018, and a summary of significant accounting policies and other explanatory information. The financial statements have been prepared by Iller Bankasi A.S., the Project Management Unit based on financial reporting provisions of the Loan Agreement Numbered 86770. In our opinion; a) The accompanying Statement of Sources and Uses of Funds, Statement of Cumulative Investments and Statement of Special Account present fairly, in all material respects, the financial position and cash flows of the Sustainable Cities Project as of December 31, 2018 and for the period then ended in accordance with the provisions of the Loan Agreement Numbered 86770. b) flier Bankasi A.S., the Project Management Unit, as of December 31, 2018 has complied with, in all material respects, the requirements of the Loan Agreement Numbered 86770. c) With respect to expenditures, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursement of expenditures incurred, and these expenditures are eligible for financing under the Loan Agreement Numbered 86770. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing [ISAs). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of this report. We are independent of the Iller Bankasi A.S., the Project Management Unit within the meaning of "IFAC Code of Ethics for Professional Accountants" and have fulfilled our other responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter in the Financial Statement Without modifying our opinion, we draw attention to Note "2" to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist Sustainable Cities Project Management Unit to comply with the financial reporting provisions of the loan agreement referred to above. As a result, the financial statements may not be suitable for another purpose. 6 RITPUBLIC OF TURKEY MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers Going Concern The Project's financial statements have not been prepared using the going concern basis of accounting. The project will end on July 31, 2024. Responsibilities of Management and Those Charged with Governance or Other Appropriate Terms for the Financial Statements Iller Bankasi A.S., the Project Management Unit is responsible for the preparation and fair presentation of these financial statements in accordance with Loan Agreement Numbered 86770, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Those charged with governance are responsible for overseeing the Iller Bankasi A.S., the Project Management Unit's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the planning and performance of the audit. We also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. 7 REILBLIC OF TURKEY MINISTRY OF TREASURY AND FINANCE Board of Trcasury Controllers * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. * We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. * We are also required to provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. AhmetTUTAL Acting Chairman of Board of Treasury Controllers Akif Biflent BOYACIOGLU (Audit Partner) Vice Chtirman Okan TUNSO'X Selyuk Erdal GONAL Senior Treasury Controller Treasury Controller Date: 19/06/2019 Address: Ministry of Treasury and Finance Board of Treasury Controllers 06510, Emek, ANKARA/TURKIYE 8 ANNEX I: Financial Statements ILLER BANKASI SUSTAINABLE CITIES PROJECT - 1 8677-TR STATEMENT OF SOURCES and USES of FUNDS As of December 31, 2018 and For The Year Then Ended. (In EURO) Actual Planned Variance Notes T TD Cumulative T I) Cumulative X"lb Cumulative I-SOURCES OF FUNDS A-Government Contributions 0,00 0,00 0,00 0,00 0,00 0,00 B-Other Sources of Funds 0,00 0,00 0,00 0,00 0,00 0,00 C-IBRD Loan 200.000,00 503,000,00 1,000.000,00 1.303.000,00 800.000,00 800.000,00 1-Direct Payments 0,00 0,00 0,00 0.00 0,00 0,00 2-Special Account 200.000,00 200.000,00 1,000.000,00 1,000.000,00 800.000,00 800.000,00 a) Advance 200,000,00 200.000,00 1.000.000,00 1.000.000,00 800.000,00 800.000,00 b) SOE Procedures 0,00 0,00 0,00 0.00 0.00 0,00 c) Summary Sheet 0,00 0,00 0,00 0,00 0,00 0.00 3-Front-end-Fee 0,00 303.000,00 0,00 303.000,00 0.00 0,00 D-Refunds to Special Account 0,00 000 0,00 000 0.00 0.00 Total Funds Received 200.000,00 503.000,00 1.000.000,00 1.303.000,00 800.000,00 800.000,00 II-USES OF FUNDS I-INVESTMENT COSTS A- Municipal Development: Municipal 178.970,14 178.970,14 35.453.527,70 35.453.527,70 35.274.557,56 35.274.55756 Technical Assistance Total Investment Costs 178.970,14 178.970,14 35.453.527,70 35.453.527,70 35.274.557,56 35.274.557,56 [I-RECURRING COSTS A- Front-End-Fee 0,00 303.000,00 0,00 303.000,00 0,00 0,00 Total Recurring Costs 0,00 303.000,00 0,00 303.000,00 0,00 0,00 Total Project Investments 178.970,14 481.970,14 35.453.527,70 35.756.527,70 35.274.557,56 35.274.557,56 Cash at the beginning of the period 0,00 01.01.2018 Cash at the end of the period 31.12,2018 21.029,86 21.029,86 Odeme tarihindeki ozel hesab[n bulundugu banka alit kurn kullanilmi$ur. ILLER BANKASI SUSTAINABLE CITIES PROJECT - 1 8677-TR STATEMENT OF CUMULATIVE INVESTMENTS As of December 31, 2018 and For The Year Then Ended (In EURO) I- INVESTMENTS Actual Planned Variance YTD Cumulative VTD Cumulative YTD Cumulative I-Investment Costs A- Municipal Development; Municipal Technical Assistance 178.970,14 178.970,14 35.453.527,70 35.453.527,70 35.274.557,56 35.274.557,56 Total Investment Costs 178.970,14 178.970,14 35.453.527,70 35.453.527,70 35.274.557,56 35.274.557,56 I-Recurring Costs A- Front-End-Fee 0,00 303.000,00 0,00 303.000,00 0,00 0,00 Total Recurring Costs 0,00 303.000,00 0,00 303.000,00 0,00 0,00 PROJECT INVESTMENTS 178.970,14 481.970,14 35.453.527,70 35.756.527,70 35.274.557,56 35.274.557,56 2- INVESTMENTS BY SUB-CATEGORIES Actual Planned Variance Category Name YTD Cumulative YTD Cumulative YTD Cumulative 1. Goods, works, non-consulting services. and consultants' services 178.970.14 178.970,14 35.453.527,70 35.453.527,70 35.274.557,56 35.274.557.56 2.Front end Fee 0,00 303.000,00 0,00 303.000,00 0,00 0.00 TOTAL 178.970,14 481.970,14 35.453.527,70 35.756.527,70 35.274.557,56 35.274.557,56 Odeme tarihindeki Ozel hesabin bulundugu banka ali§ kuru kullanlntir. V -а �г _ :_г, .. � � �' _ � z �' � � � � � - � ы� � = _ о � �� � с � ~ гл � . �, � �' � -� � . - ' � � �� � � 7� � � Т � 1+�.I Г � � 7l-� Й � � � � � 3 _ .� ✓ а .^.. ,. Г�у _ �а � � �, � r `'� � '� а с '-� _ ^ ° � +.�., � [:1 п 'у = � -+ Т1 с г�7 ^- � „�S ,� •- о � V7 � -З с й � � � � С 'а `�1 � "� ;� � � �... _ о �, �� �.:r r� ё � и' г, л С�=. `,�� � гQ .. � � � а � � ^ S ',� �..�' � � _ � Т4 � "� " `- `w' 7Э 4 -t !4 i ,r � х •�q � � ггол � � � � V1 i�i ,•, _ Э � г й � :3 ^} С' ,� : с о � � 3 �" � � � �' " �q n7 � i _ ° ° � � ° � � �, � � С ® �' � "' у та � �. '� � � Т � ? � i � � д � � W - " � _ „� � ��� �' �аа�'� - о с �? � а ы� n� С'+ � С С � � � � � l�i � � � � `�i °-� W � 1 п � � .3 у �--1 а � N � � О_ Ow ^J Q �... С10 а _7 � � � � р � �iI] �+уΡ� п �/ О 5 _ � � ° si 'о е 7 � ,:, �'-.' у� +�: у � � г� � г� `'i � ra ... =г • п "', � ILLER BANKASI SUSTAINABLE CITIES PROJECT - I 8677-TR SPECIAL ACCOUNT STATEMENT ACCOUNT NO: 99900248-5139 AT T.C. ZIRAAT BANK For the year ended. December 31, 2018 (In EURO) Opening Balance (0 1 .0 1.2018) 0,00 Reimbursements to SA 200 OW 00 200.000.00 a) Advance 200.000,00 -b) SOE Procedure 0 00 -c) Summary Sheet 0.00 Refunds to SA 0,00 Q 00 Available Funds A0.000,00 Payments Made for Expenditures 178.970,14 Service chafges for the account 0,00 Total Project Investments 178.970,14 178.970,14 Closing Balance (31.12.2018) 2L.029,861 Oderne tarihindeki ozel hesakin hulL]1ldL@U hvika nh, kalni kullanflillfstir. ILLER BANK Sustainable Cities Project - I No: TR-8677 NOTES TO THE PROJECT FINANCIAL TABLES As of 31.12.2018 1. THE OBJECTIVES AND STRUCTURE OF THE PROJECT Loan Agreement (TR-8677) is signed between the International Bank for Reconstruction and Development (the World Bank) and Iller Bank under the guarantorship of the Undersecretariat of Ministry Treasury and Finance on 26 December 2016. With the Sustainable Cities Project - 1; The three basic elements of environmental sustainabi ity, financial and social sustainability are aimed implementation of international experience in Turkey. This project includes financing of projects in water, wastewater. solid waste, urban transportation, energy efficiency and renewable energy sectors. Bank extended sub-loans to the Municipalities and/or Administrations for their infra- structure investments through Sub-Loan Agreements on the basis of an appraisal. carried out in accordance with the eligibility criteria and procedures set forth in the Operational Manual, the EF and the LARPF, and including the terms and conditions set forth in the Schedule 2 Item B of Loan Agreement (TR-8677). Bank is responsible from preparation of Environmental Assessment documents which are prepared within the scope of Environmental Framework and World Bank Environmental Policies. Iller Bank is responsible for the preparation and dissemination of the data related to the loan usage regularly and in a format to be agreed with the World Bank. The names and titles of personnel that have been working in PMU as of 2018 are as follows: 1. Necla AKGA - Project Director, Geological Engineer (MSc) and Economy (BSc) 2. Sevil UYSAL - Environmental Engineer, MSc, Technical and Environmental Coor. 3. Z. G;nUl EJDEROGLU - Geological Engineer and Economy. Technical Coordinator and responsible for reporting of the land acquisition issues. 4. Ozkan yOQEN - Civil Engineer, Technical Coordinator 1/5 5. Funda QETIN - Expert 6. Hasan Fehmi TIGLI - Expert 7 T. Atakan GCLLYURDU - Expert 8. $.Altup TA$DEMIR - Expert 9. Lerzan MUTLU - Expert 10. Gken TANRIOVEN -Expert The below table illustrates the starting and the ending dates of the PMU staff: Name-Surname Starting Date Ending Date G6khan GOK9E 27.072011 15.01.2018 PMU is responsible for coordination between the team responsible for Sustainable Cities Project -1 in World Bank and Iller Bank, execution of the preparatory work, cooperation with the assigned units of Iller Bank, the selection of the Municipalities and/or Administrations, relations with the Strategy and Budget Presidency and other public institutions. PMU executes the works related to procurement within the scope of projects, technical coordination of the sub-projects, and disbursement of loan proceeds and also repayment of the loan. 2. ACCOUNTING POLICIES PMU which is currently organized within the Iller Bank International Relations Department and established as per the provisions of the Loan Agreement recorded the amounts withdrawn from the Loan and the amounts paid to the municipalities/administrations on "cash basis" in the Iller Bank accounting system. On the other hand PMU: * The amount of World Bank loan. * The amount withdrawn from the loan, * The amount paid to the suppliers/contractors/consultants and to the Municipalities/Administrations to be paid to the tax offices on behalf of them as per the provisions of the Sub-Loan Agreements. 2/5 * Accrued amounts such as credit fees and interest. * 11Icr Bank Accounting and Financial Affairs Department has maintains records in accounting software in order to monitor in terms of credit categories and expenditure items in euro and contract currency. The Sustainable Cities Project bookkeeping is done within Iller Bank accounting system by Accounting and Financial Affairs Department. By the current software, the data of the progress payment are entered to the software by International Relations Department Staff and the system controls the calculations automatically. If the calculations are right, the staff enter the value dates and send the progress payment to the Accounting department for recognition. The following policies shall be followed in accounting records of Iller Bank: a) Iler bank will use cash based accounting related to the Project. According to cash basis accounting the withdrawals form the Loan to the Special Account are recorded as a "loan liability" in Euro. b) The amount of payments to the suppliers/contractors/consultants upon the demand of the Municipalities/Administrations" as per the Sub-Loan Agreements will be debited to the loan account opened for each one of the Municipalities/Administrations, i.e. as a receivable". c) The amount determined after the required deductions for tax- stamp duty, decision tax, VAT withholding. etc.- as per the local regulations and the conditions of the contract will be transferred directly to the account of the supplier/consultant/contractor providing the services/goods/works from the Special Account by International Relations Department PMU. The total amount of the deductions will be paid to the related account of the Municipality/Administrations who are responsible to pay to the tax offices on behalf of the contractor. d) The payments by Iller Bank PMU for the objectives of the Project will be recorded as "non-interest expenses" account in the Iller Bank's accounts in local currency. e) The amount of exchange rate gain or loss arising from the revaluation of the Euro dominated receivables and payables revalued using the Euro/TL exchange rate prevailing at the date of the balance sheet will be recorded as foreign exchange gain or loss. 35 f) The amount SUIb-loan used by the MLunicipalities/Administrations based on Sub-Loan Agreements will be recorded to the followinA account: I - Loans 143 - Mid-Tern and Long -Term Special Area Loan (Foreign Currency) 1430011 World Bank Sustainable Cities Project The total arnount of receivable from the Sustainable Cities Project - l is £481.970,14 at the end of the year of 2018. (Front-end-fee included) g) The disbursements related to the sub projects will be recorded into the legal books of fller Bank and the Municipality/Administrations which are using the loan proceeds. A copy of the disbursement is received and reviewed by Iller Bank upon submission by the Municipality/Administrations. Because the disbursements/expenses belong to the agency (ie., Municipality/Adrninistrations) they will be recorded as "loan receivable" in 111cr Bank's books by Municipality/Administrations. h) The Special Account with T.C. Ziraat Bank is in Euro. The prevailing selling exchange rate for Euro/TL of T.C. Ziraat Bank will applied for the above mentioned payments from the Special Account. i) Accounting transactions will be recorded in Euro as the currency of Loan Agreement. The collection in local currency is converted into Euro at the rate of T.C. Ziraat Bank prevailing at the date of collection for preparation of the source and use of the funds and cumulative investment table. The payments in Euro are recorded using the exchange rate of Euro/TI. prevailing at the date of payment. 3. STATEMENT OF FINANCE The use of the funds in Special Account is limited by only project objectives in conformity with the provisions of the Loan Agreement between the World Bank and Iller Bank. The unused project funds at the end of the project may be cancelled in accordance with the provisions of the related Loan Agreement. The assets obtained by using the Project funds are belong to the Municipality/Administrations and the usage of the assets limited by the project objectives until the project completion. The loan-user agencies keep the necessary records in accordance with the requirements of the Law no. 5018 to monitor/control the assets during period of the project and Sub-Projects. 4. WORLD BANK LOAN 4 /5 The debt service (principal. interest. front-end-fee) will be made by 111er Bank in accordance with the provisions of the Loan Agreement that concluded on 26 December 2016 between World Bank and l1ler Bank. Iller Bank required from all the Municipality/Administrations to open an "Escrow Account" to fulfill the debt service liability according to the provisions of the Sub Loan Agreeinents. The Municipality/Administrations are required to deposit the amounts determined by applying the rates as indicated in the Sub-Loan Agreements to the amount of the water bills collected by both their own collection offices and/or via the banks. The balance of the Escrow Accounts can not be withdrawn by the Municipality/Administrations without a written permission of Iller Bank yet the Municipality/Administrations can use the account balances to earn revenues from the investment areas as specified in the Sub-Loan Agreement. The required debt service shall be made by purchasing Euro with the amounts accumulated in the Escrow accounts and transferred to Iller Bank before the due date of the debt service. In other words in essence the revenues from the water bills of the Municipality/Administrations constitute the security of the loan. In the case in which the amount transferred to the Escrow Account is not sufficient to pay for the debt service Iller Bank has the right to appeal to the Municipality/Administrations' general budget tax shares. rent incomes, etc. respectively. 5. CASH POSITION AT DECEMBER 2018 The cash position at 31 December 2018 means the balance between the withdrawals from the loan to the Special Account and the amount of disbursement from Special Account and it is 21.029,86 Euro. Project funds are held only in the T.C. Ziraat Bank's Special Account. no other accounts or cash other than the Special Account is used. T.C. ZIRAAT BANK SPECIAL ACCOUNT 31.12.20158 Balance 21.029,86 EURO 5/5