THE WORLD BANKiBROD* IDA WOR.DBANK RouP

His ExcellencyBakhyt SultanovMinister of FinanceMinistry of Finance11 Pobedy StreetAstana 010000Republic of Kazakhstan

Re: IBRD Loan No. ;463-KZ (Fostering Productive Innovation Project)Add tional Instructions: Disbursement

Excellency:

I refer to the Loan Agreemen .between the International Bank for Reconstruction and Develc i: atthe "Bank") and the Republic of Kazakhstan (the "Borrower") for the above-referenced project,

II. Withdrawal of Loan Proceeds

(i) Authorized Signatures (subsec ion 3.1). An authorized signatory letter in the Form at a:: A(Attachment 2) should be furnished to the Bank at the address indicated below providing the nameis idspecimen signature(s) of the official(s) authorized to sign Applications:

The World Ilank1818 H Stret, N.W.Washington DC 20433United States of AmericaAttention: E aroj Kumar Jha, Regional Country Director, Central Asia

(ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed: (a) applicatic i 3rwithdrawal, together with supportinl; documents; and (b) applications for special commitments, tc :p tl erwith a copy of the commercial bank etter of credit, to the address indicated below:

The World 1lankRadnicka cestL 80, 9th floorZagreb, HR - 0 000

CroatiaAttention: I oan Department

(iii) Electronic Delivery (subsection 3.4) The Bank may permit the Borrower to electronically del : tothe Bank Applications (with suppoiting documents) through the Bank's Client Connection, web lia,dportal. The option to deliver Appli.ations to the Bank by electronic means may be effected if: a) 1 ieBorrower has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its 01 Fc Iswho are authorized to sign and deliver Applications and to receive secure identification cred t Is("SIDC") from the Bank for the purpose of delivering such Applications by electronic means; and i) ilsuch officials designated by the Borrower have registered as users of Client Connection. If the Bank r s,the Bank will provide the Borrower m ith SIDC for the designated officials. Following which, the desi !i.ai Aofficials may deliver Applications e ectronically by completing Form 2380, which is accessible tl r ;hClient Connection (https://clientconi ection.worldbank.org). The Borrower may continue to exere s ieoption of preparing and delivering Aplications in paper form. The Bank reserves the right and may, r tssole discretion, temporarily or per nanently disallow the electronic delivery of Applications I i eBorrower.

(iv) Terms and Conditions of Use oj SIDC to Process Applications. By designating officials to use E I Cand by choosing to deliver the Applications electronically, the Borrower confirms through the auti -Yi dsignatory letter its agreement to: (a) abide by the Terms and Conditions of Use of Secure Identifi a ?nCredentials in connection with U, e of Electronic Means to Process Applications and Supl i igDocumentation ("Terms and Conditions of Use of Secure Identification Credentials") provi e d inAttachment 3; and (b) to cause such )fficial to abide by those terms and conditions.

(v) Minimum Value of Applications (subsection 3.5). The Minimum Value of Applications for Dii.!,:tPayment, Reimbursement and issuance of Special Commitments is US$ 500,000.(vi) Advances (sections 5 and 6).

* Type of Designated Accob nt (subsection 5.3): Segregated.

* Currency of Designated Account (subsection 5.4): US dollar (US$).

* Financial Institution at m hich the Designated Account Will Be Opened (subsection 5 ) acommercial bank / financil institution acceptable to the Bank.

o Ceiling (subsectio 1 6.1): US$ 3,000,000.

III. Reporting on Use of Loan Pro eeds

(i) Supporting Documentation (section 4). Supporting documentation should be provided wit ie happlication for withdrawal as set out below:

* For requests for Reimbi rsement and for reporting eligible expenditures paid fro . teDesignated Account:

o Records evidencin eligible expenditures (e.g., copies of receipts, supplier invoic >> orpayments against tontracts valued at: US$ 100,000 equivalent or more for serv : fconsulting firns; ind US$ 50,000 equivalent or more for individual consultant-;

o Statement of Expeiiditure in the form attached (Attachment 4a) for all other expen, lil, _s/ contracts, includi ig operating costs;

o Statement of Exp.nditure in the form attached (Attachment 4b), showing the 3. 3-projects approved ind amounts disbursed by the ESVC Fund under those Sub-p c j tsduring the reported period, including the related costs, and evidence satisfactory t I ieBank that the with Irawal conditions related to category no. 4 have been satisfied, x; IrSchedule 2, Sectio i IV.B.1.(c) of the Loan Agreement;

o Statement of Expe iditure in the form attached (Attachment 4c) for grants;

o List of payments against contracts that are subject to the Bank's prior review, in th ' mattached (Attachmi nt 5); and

o A designated account reconciliation statement (Attachment 6) and related :kstatement.

* For requests for Direct iayment: records evidencing eligible expenditures, e.g., cor i freceipts, supplier invoices.

(ii) Frequency of Reporting Eligiblc Expenditures Paid from the Designated Account (subsectio) 5..):Quarterly.

IV. Other Important Information

For additional information on disbursement arrangements, please refer to the Disburs n. atHandbook available on the Bank's public website at https://www.worldbank.org and its secure \ e: te"Client Connection" at https://clientc )nnection.worldbank.org. Print copies are available upon requ:!i:

If you have not already done so, the Bank recommends that you register as a user of the IiI, ntConnection website (https://clientcon iection.worldbank.ori). From this website you will be able to p cp reand deliver Applications, monitor the near real-time status of the Loan, and retrieve related policy, fin r'ci l,and procurement information. All Borrower officials authorized to sign and deliver Applicatii >yelectronic means are required to register with Client Connection before electronic delivery can be efl; .:t d.For more information about the webs te and registration arrangements, please contact the Bank by ei 1il at.

If you have any queries in rc lation to the above, please contact Jasna Mestnik, Finance Off atjmestnik@worldbank.org using the a bove reference.

Yours sincerely,

By--/Ludmilla ButenkoCountry Manager

Kazakhstan

Attachments:1. World Bank Disbursembnt Guid lines for Projects, dated May 1, 20062. Form for Authorized Signatures3. Terms and Conditions of Use of ecure Identification Credentials in connection with Use of

Electronic Means to Process Applications and Supporting Documentation, dated March 1, 20124. Forms of "Statement of Expendi ure"5. Form of Payments Against Conti acts Subject to the Bank's Prior Review6. Form of Designated Account Reconciliation Statement

Prepared by: Jasna Mestnik, Finance Officer - CTRLA

Cleared with and cc: Ramiro Igna io Jauregui-Zabalaga, Country Lawyer - LEGLEKaren Grigc rian, Task Team Leader - GTCDR

Cc with copies: Ministry of Edu:ation and ScienceDom Ministerst toAstana, 010000Kazakhstan

Attachr 1o11 2

For n of Authorized Signatory Letter[Letterhead]

Ministry of Finance[Street address][City] [Country]

The World Bank1818 H Street, N.W.Washington, D.C. 20433United States of America

Attention: Mr. Saroj Kumar Jha, I Zegional Director, Central Asia.

Re: Loan No. 8, 463-KZ (Fostering Productive Innovation Project)Dear Mr. Jha:

I refer to the Loan Agi eement ("Agreement") between the International Bar k )rReconstruction and Development (the "Bank") and the Republic of Kazakhstan (the "Borrowv, '),dated -, providing the atove Loan. For the purposes of Section 2.03 of the G 'n n alConditions as defined in the Agreement, any '[onel of the persons whose authenticated spe .im -nsignatures appear below is aut torized on behalf of the Borrower to sign applicatioi i rwithdrawal [and applications for a special commitment] under this Loan.

For the purpose of delivoring Applications to the Bank, 2[each] of the persons v v seauthenticated specimen signaturE s appears below is authorized on behalf of the Borrower, At ig3[individually] 4[jointly], to delive r Applications, and evidence in support thereof on the I: isand conditions specified by the B ink.

I Instruction to the Borrower: Stipulate f more than one person needs to sign Applications, and how many or v h hpositions, and if any thresholds apply. P ease delete this footnote in final letter that is sent to the Bank.

2 Instruction to the Borrower: Stipulate f more than one person needs to jointly sign Applications, if so, plea:indicate the actual number. Please deleto this footnote in final letter that is sent to the Bank.

3 Instruction to the Borrower: Use this t racket if any one of the authorized persons may sign; if this is notapplicable, please delete. Please delete his footnote in final letter that is sent to the Bank.

4 Instruction to the Borrower: Use this t racket only if several individuals must jointly sign each Application; f t] Iis not applicable, please delete. Please i'elete this footnote in final letter that is sent to the Bank.

5[This confirms that the Borrower is authorizing such persons to accept 5 e::Identification Credentials (SIDC) and to deliver the Applications and supporting documE n tothe Bank by electronic means. In full recognition that the Bank shall rely upon ;1 :hrepresentations and warranties, in Lcluding without limitation, the representations and warr 1,1 ?scontained in the Terms and Conditi)ns of Use of Secure Identification Credentials in connection wi 1 i seof Electronic Means to Process App ications and Supporting Documentation ("Terms and Conc i i c isof Use of SIDC"), the Borrower represents and warrants to the Bank that it will cause such pt rsc isto abide by those terms and cond tions.]

This Authorization replaces and supersedes any Authorization currently in the 1; dkrecords with respect to this AgreE ment.

[Name], [position] 3pecimen Signature:

[Name], [position] 3pecimen Signature:

[Name], [position] 3pecimen Signature:

Yours truly,

/ signed /

[Position]

5 Instruction to the Borrower: Add this )aragraph if the Borrower wishes to authorize the listed persons to ac pSecure Identification Credentials and to leliver Applications by electronic means; if this is not applicable, pie i Zdelete the paragraph. Please delete this, ootnote in final letter that is sent to the Bank.

Attach re ::3

Terms and Condit ons of Use of Secure Identification Credentialsin conn action with Use of Electronic Means

to Process Applicationsand Supporting Documentation

March 1, 2013

The World Bank (Bank)' will provide secure identification credentials (SIDC) to I r litthe Borrower 2 to deliver applications for withdrawal and applications for special commit e tsunder the Agreement(s) and supporting documentation (such applications and supp .Iti igdocumentation together referred t) in these Terms and Conditions of Use as Applications) I:i I leBank electronically, on the terms md conditions of use specified herein.

SIDC can be either: (a) hardware-based (Physical Token), or (b) software-based i, ftToken). The Bank reserves the riE ht to determine which type of SIDC is most appropriate.

A. Identification of Users.

1. The Borrower will be rec uired to identify in a completed Authorized Signatory - zr(ASL) duly delivered to aid received by the Bank each person who will be authori 'Ac todeliver Applications. The Bank will provide SIDC to each person identified in th : L(Signatory), as provided btelow. The Borrower shall also immediately notify the Bai 1 aSignatory is no longer auth Lorized by the Borrower to act as a Signatory.

2. Each Signatory must register as a user on the Bank's Client Connection (CC) w: te(https://clientconnection.wN orldbank.or1) prior to receipt of his/her SIDC. Registrat :1 >nCC will require that the Signatory establish a CC password (CC Password). The Sigi., -yshall not reveal his/her C, Password to anyone or store or record the CC Passw :i d inwritten or other form. U1 on registration as a CC user, the Signatory will be assil ii aunique identifying accoun= name.

B. Initialization of SIDC.

1. Prior to initialization of SI )C by a Signatory, the Signatory will acknowledge having e c,understood and agreed to I he bound by these Terms and Conditions of Use.

2. Where a Physical Token i; to be used, promptly upon receipt of the Physical Tokcn leSignatory will access CC u sing his/her account name and CC Password and register f L -rPhysical Token and set a personal identification number (PIN) to be used in conn,( t. n

'"Bank" includes IBRD and IDA.2 "Borrower" includes the borrower of at IBRD loan, IDA credit, or Project Preparation Facility advance andrecipient of a grant.

with the use of his/her Ph, sical Token, after which the Physical Token will be initi i : adfor use by the Signatory ex clusively for purposes of delivering Applications. Where IS ftToken is to be used, the 3ignatory will access CC using his/her account name at d CPassword and set a person il identification number (PIN) to be used in connection w 11 ieuse of his/her Soft Token, after which the Soft Token will be initialized for use 1,v teSignatory exclusively for purposes of delivering Applications. Upon initialization teSIDC, the Signatory will te a "SIDC User". The Bank will maintain in its database :t araccount (Account) for each SIDC User for purposes of managing the SIDC of the 3 II CUser. Neither the Borrowo er nor the SIDC User will have any access to the Account.

3. Prior to first use of the SI] )C by the SIDC User, the Borrower shall ensure that the 3 II CUser has received training materials provided by the Bank in use of the SIDC.

C. Use of SIDC.

1 Use of the SIDC is strictly limited to use in the delivery of Applications by the SID( J. .rin the manner prescribed b i the Bank in the Agreement(s) and these Terms and Cond J: cI s.Any other use of the SIDC is prohibited.

2. The Bank assumes no resp ansibility or liability whatsoever for any misuse of the SII IH ythe SIDC User, other reprc sentatives of the Borrower, or third parties.

3. The Borrower undertakes to ensure, and represents and warrants to the Bank ,.t hrepresentation and warran y being expressly relied upon by the Bank in granting l 1)that each SIDC User understands and will abide by, these Terms and Conditions o U J,including without limitatic n the following:

4. Security

4.1. The SIDC User shalt not reveal his/her PIN to anyone or store or record the I IN nwritten or other form.

4.2. The SIDC User shall not allow anyone else to utilize his/her SIDC to delic r nApplication to the Bank.

4.3. The SIDC User shall always logout from CC when not using the system. Fail tc ologout properly can create a route into the system that is unprotected.

4.4. If the SIDC User b lieves a third party has learned his/her PIN or has lost h i/1 -rPhysical Token he/she sha .1 immediately notify clientconnection@worldbank.org.

4.5. The Borrower shall immediately notify the Bank itclientconnection@worldb nk.or of any lost, stolen or compromised SIDC, and take id :rreasonable steps to ensure such SIDC are disabled immediately.

5. Reservation of Right to D'sable SIDC

5.1. The Borrower shall reserve the right to revoke the authorization of a SIDC L si't ouse a SIDC for any reason.

5.2. The Bank reserves the right, in its sole discretion, to temporarily or perma i.t r lydisable a SIDC, de-activat ea SIDC User's Account or both.

6. Care of Physical Tokens

6.1. Physical Tokens will remain the property of the Bank.

6.2. The Bank will phyically deliver a Physical Token to each Signatory designz 1:tc toreceive one in a manner to be determined by and satisfactory to the Bank.

6.3. Physical Tokens contain delicate and sophisticated instrumentation and the vf ieshould be handled with (.ue care, and should not be immersed in liquids, expo: ed1 toextreme temperatures, cru hed or bent. Also, Physical Tokens should be kept mor [1 infive (5) cm from devices hat generate electromagnetic radiation (EMR), such as r ot, lephones, phone-enabled PDAs, smart phones and other similar devices. Physical T > isshould be carried and stor d separate from any EMR device. At close range (less I h; 5cm), these devices can o-itput high levels of EMR that can interfere with the Iro oroperation of electronic eqi ipment, including the Physical Token.

6.4. Without derogatin g from these Terms and Conditions of Use, other tec Lni alinstructions on the proper use and care of Physical Tokens are availat athttp://www.rsa.com.

7. Replacement

7.1. Lost, damaged, cor ipromised (in terms of 4.5, above) or destroyed Physical i. 0: iswill be replaced at the exp -se of the Borrower.

7.2. The Bank reserves :he right, in its sole discretion, not to replace any Physical ' 'il. -nin the case of misuse, or not to reactivate a SIDC User's Account.

Attachment 4aStatement of Expenditures (SOE)

Payments made during the period from to Loan No.:Application No.:

Category No.:

SOE No.:

2 3 4 5 6 1 7d A 8 9 10 11

Sunnlier's WB Tvne of Good or Currency and Total Currency and % Financed Amount Currencv and Fxchanpe Date of Remark-Name Contract Service Amount of Contract Total Amount by Eligible Amount Paid Rate Payment

Number in (CW/GO/CS/OP/TR) of Invoice IBRD/IDA/TF for fromClient / Brief Description Covered by Financing Designated

Connection Application (5 x 6) Account (ifApplicable)

TOTALS

Supporting documents for this SOE retained at(location)

Attachment 4b

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN NO.:DATE:

STATEMENT OF EXPENDITURE - SOE APPLICATION NO.:(No Supporting Documents) PAGE NO.:

ESVC FUND SUB-PROJECTS AND RELATED COSTS, incl. MANAGEMENT FEES, AUDIT CATEGORY NUMBER:

1 2 3 4 5 6 7 8 9 10100% of Amount

Name or Amount and Description Amounts paid % requested in Date of Rate US$ Amount RemarksNumber ot Currency ot ot in mis i-inancea tnis Application Payment ot withdrawn

Sub-project Sub-project Costs Application by IBRD (Col 3 X 4) Exchange from DA

-- -- -- -- -- --

Attachment 4c

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN NO.:DATE:

STATEMENT OF EXPENDITURE - SOE APPLICATION NO.:(No Supporting Documents) PAGE NO.:

GRANTS CATEGORY NUMBER:

1 2 3 4 5 6 7 8 9 10 11 12100% of Amount

Name or Name Code of Amount of INo. lAmounts paid % requested in Date of Rate Date of US$ AmountNumber of of Currency Grant of in tnis t-inanc tnIs Application i-ayment OT witnarawai witnarawn

Grant Benefic of Invoice Application by IBRD (Col 6 X 7) Exchange from DA from DAGrant

I I I __ ____ __ __ [ __ _______ ______I _ E-1_ I I_ _ _ _I__ _ _ _

Attachment 5

Payme nts Made during Reporting PeriodAgainst Contracts Subject to the Bank's Prior Review

Date of WV ;iha,reofWB's Non Amount Paid to A i: Iald to

Contract Contract Contract Objection Supplier during Su[ i i -duringNumber Supplier Date Amount to Contract Period I iod

Attachm rit

DESIGNATED ACCOUNT RECONCLIATION STATEMENT

LOAN/CREDIT/PPF/COFINANC ER NUMBERACCOUNT NUMBER WITH (BANK)

1. TOTAL ADVANCED BY WORLD IANK (OR COFINANCIER) $

2 LESS: TOTAL AMOUNT RECOVE RED BY WORLD BANK - $

3. EQUALS PRESENT OUTSTANDING AMOUNT ADVANCED TOTHE SPECIAL ACCOUNT (NUMB ER I LESS NUMBER 2) = $

4. BALANCE OF SPECIAL ACCOUN r PER ATTACHED BANKSTATEMENT AS OF DATE $

5. PLUS: TOTAL AMOUNT CLAIME D IN THISAPPLICATION NO. _ + $

6. PLUS: TOTAL AMOUNT WITHDF AWN AND NOT YET CLAIMEDREASON: +$

7. PLUS: AMOUNTS CLAIMED IN P EVIOUS APPLICATIONSNOT YET CREDITED AT DATE 01 BANK STATEMENTS

APPLICATION NO. AMOUNT *

SUBTOTAL OF PREVIOUSAPPLICATIONS NOT YET CREDITED + $

8. MINUS: INTEREST EARNED - $

9. TOTAL ADVANCE ACCOUNTED :OR (NO. 4 THROUGH NO. 9) = $

10. EXPLANATION OF ANY DIFFERENCE BETWEEN THE TOTALS APPEARING ON LINES 3 AND 9:

11. DATE: _ SIGNATURE:

ITLE: