Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 74785-KG

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

FINANCIAL SECTOR DEVELOPMENT PROJECT

IDA CREDIT #50670 AND IDA GRANT # H7600

APPROVED ON MARCH 8, 2012

TO THE

KYRGYZ REPUBLIC

May 2, 2013

Private and Financial Sectors Development Unit Europe and Central Asia Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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ABBREVIATIONS AND ACRONYMS

CLMU FA

Credit Line Management Unit (in the MoF) Financing Agreement

FSDP Financial Sector Development Project IDA International Development Association IFR Interim Un-audited Financial Report KPO Kyrgyz Post Office MoF Ministry of Finance of the Kyrgyz Republic NBKR National Bank of the Kyrgyz Republic PBSM Payment and Banking System Modernization PCU Project Coordination Unit SECO State Secretariat for Economic Affairs (Switzerland)

Regional Vice President: Philippe Le Houérou Country Director: Saroj Kumar Jha

Sector Director: Sector Manager:

Gerardo Corrochano Paloma Anos Casero

Task Team Leader: Samuel Munzele Maimbo

iii

KYRGYZ REPUBLIC

FINANCIAL SECTOR DEVELOPMENT PROJECT

CONTENTS

Page

A. SUMMARY ............................................................................................................................ 1 B. PROJECT STATUS .............................................................................................................. 2 C. PROPOSED CHANGES ....................................................................................................... 2 D. APPRAISAL SUMMARY .................................................................................................... 6 ANNEX 1: RESULTS FRAMEWORK AND MONITORING ................................................. 8 ANNEX 2: REVISED INTERIM FINANCIAL REPORTING FORMAT ……………………..13 ANNEX 3: REVISED PROCUREMENT PLAN ………………………………….…………………..18

iv

Restructuring Restructuring Type: Level one Last modified on date : 02/07/2013

1. Basic Information Project ID & Name P125689: Kyrgyz Financial Sector Development Project Country Kyrgyz Republic Task Team Leader Samuel Munzele Maimbo Sector Manager/Director Paloma Anos Casero Country Director Saroj Kumar Jha Original Board Approval Date 03/08/2012 Original Closing Date: 06/30/2017 Current Closing Date 06/30/2017 Proposed Closing Date [if applicable] 06/30/2018 EA Category FI-Financial Intermediary Revised EA Category C-Not Required EA Completion Date Revised EA Completion Date

2. Revised Financing Plan (US$m) Source Original Revised BORR 0.00 0.00 IDA 13.00 8.85 Total 13.00 8.85

3. Borrower

Organization Department Location Ministry of Finance Kyrgyz Republic

4. Implementing Agency

Organization Department Location National Bank of the Kyrgyz

Republic

Kyrgyz Post Office

v

5. Disbursement Estimates (US$m) Actual amount disbursed as of 05/04/2012 0.00

Fiscal Year Annual Cumulative 2014 0.50 0.50 2015 2.00 2.5 2016 2.00 4.50 2017 2.50 7 2018 1.85 8.85 Total 8.85

6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured project trigger any new safeguard policies? If yes, please select from the checklist below and update ISDS accordingly before submitting the package.

N

7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes Project Development Objectives are to: (i) enhance financial sector stability, and (ii) increase access to financial services.

7b. Revised Project Development Objectives/Outcomes N/A

1

KYRGYZ REPUBLIC

FINANCIAL SECTOR DEVELOPMENT PROJECT (Credit No 50670 and Grant No. H7600, P125689)

RESTRUCTURING PAPER

A. SUMMARY

1. The Financial Sector Development Project (FSDP) was approved by the World Bank’s Board of Directors on March 8, 2012. In May 2012, the Ministry of Finance (MoF) of the Kyrgyz Republic submitted the negotiated Financing Agreement (FA) to the Parliament for approval prior to signature (in accordance with the internal procedures in the country). However, the signing of the FA has been delayed due to opposition within the Parliamentary Budget and Finance Committeeto the concept of Aiyl Bank’s privatization as stipulated in one of the components of the project (Component 3). In a letter dated December 29, 2012, the MoF requested that the project be restructured in response to the parliamentarians’ concerns. 2. It is therefore proposed that the following changes be introduced to the project prior to its resubmission to Parliament for ratification: (i) remove Component 3 (Support to Aiyl Bank for privatization and deposit mobilization); (ii) cancel related IDA Credit and Grant allocation in the amount of SDR2.7 million(US$4.15 million equivalent or 30 percent of total project costs) for this component from the project; (iii) drop the outcome and component level indicators related to Aiyl Bank from the result framework; (iv) change the environmental category “Financial Intermediary (FI)” to Category C and remove the Environmental Assessment originally required for Component 3; and (v) extend the project closing date from June 30, 2017 to June 30, 2018 to compensate for the implementation time lost due to delayed effectiveness for the above reason. The Project Development Objectives (PDO) would remain as per the original project to: (i) enhance financial sector stability; and (ii) increase access to financial services. The cancellation of component 3 will substantially reduce the scale of intended impact, but the type of impact intended by the original PDO remains valid, because the remaining components will still have a meaningful development impact on access to finance. The Kyrgyz Post Office (KPO) has the largest branch network in the country and revamping its operations will still have a meaningful impact on increasing access to financial services. Although such a component cancellation would ordinarily be processed as a Level II restructuring, given the significance of the component cancelled, and especially prior to the signing of the Financing Agreement, it is therefore recommended that it is processed as a Level 1 Restructuring.

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B. PROJECT STATUS 3. The project development objective of the FSDP is to enhance financial sector stability and to increase access to financial services. The project was designed to: (i) improve the legal, regulatory, and supervisory framework for the banking sector and to increase the National Bank of the Kyrgyz Republic’s (NBKR) capacity to monitor and address vulnerabilities; (ii) transform Kyrgyz Post Office’s (KPO) existing operation into a more cost effective distribution channel for basic financial services to increase access by poor and rural communities; (iii) support Aiyl Bank to improve its governance and financial performance through privatization, deposit mobilization and the provision of a credit line for its agricultural portfolio; and (iv) strengthen the regime for moveable collateral registration and execution. C. PROPOSED CHANGES Results/Indicators

4. As a result of cancellation of the original Component 3, the project will contribute less to increasing to deposit growth and access to finance because the planned technical assistance and credit line will not materialize through Aiyl Bank’s country-wide rural branch network. The PDO indicators “deposits/GDP” and “increase in individual deposits in Aiyl Bank”, as well as the intermediate indicator “tender announced for privatization of Aiyl Bank” related to Component 3 will be dropped. The project will also not be required to report on the finance core indicators for credit line and institutional development operations and therefore all the related core indicators will be dropped. The project will report only on the volume of IDA financing for enabling environment. No other changes will be made to the result framework. The modified results and indicators of the project are provided in the revised Results Framework (see Annex 1).

Components

5. The original project included five components: Component 1: Strengthening the legal, regulatory, and supervisory framework for banks, micro finance organizations (MFOs), and credit unions; Component 2: Expanding financial services via the KPO network, Component 3: Supporting Aiyl Bank for privatization and deposit mobilization, Component 4: Modernizing the moveable collateral and debt resolution regimes, and Component 5: Project coordination and monitoring. As per the Government’s request, Component 3: Supporting Aiyl Bank for privatization and deposit mobilization will be removed. The restructured project will consist of the remaining four components: Component 1: Strengthening the legal, regulatory, and supervisory framework for banks, MFOs, and credit unions (to be implemented by the NBKR), Component 2: Expanding financial services via the KPO network(to be implemented by the KPO), Component 3: Modernizing the moveable collateral and debt resolution regimes (to be implemented by the Central Collateral Registration Office (“Collateral Registry”); and Component 4: Project coordination and monitoring.

3

Safeguards 6. The original Component 3 included a credit line that triggered the safeguards category “Financial Intermediary” (FI) and an Environmental Assessment. Following the cancellation of the credit line to Aiyl Bank, there is no need for an Environmental Management Framework. There are no safeguard triggers, and this should be treated as a Category C project. Partnership Arrangements 7. The proposed restructuring will not affect any of the project’s existing partnership arrangements. Alongside the implementation of this project, the State Secretariat for Economic Affairs of Switzerland (SECO) will be providing US$1 million in parallel financing in support of the activities listed under Component 1 of the project. (Strengthening the legal, regulatory, and supervisory framework for banks, micro-finance organizations and credit unions). The activities to be financed by SECO will be sequenced in a manner that takes into account the delay in implementation. The trust fund arrangement, i.e. the World Bank managing the funds on behalf of SECO, will be unaffected by this project restructuring. Institutional arrangements 8. The project implementation arrangements for the project remain the same. The only change is the deletion from the current proposals of any reference to the arrangements that had been proposed for the implementation of the Aiyl Bank activities. Specifically, the institutional arrangements under the project will be changed to remove Aiyl bank from the list of implementing agencies along with the Credit Line Management Unit (CLMU) in the MoF. As originally designed, the Project Coordination Unit (PCU) will be established in the KPO and will manage the KPO component, the collateral registry component, and will coordinate with the Project Implementation Unit in the NBKR. A high-level Project Steering Committee will still be established to oversee project implementation. Due to removal of Aiyl Bank from the list of implementing agencies, the CLMU and State Property Management Fund shall be excluded from the list of members of the Committee that will be comprised of representatives of key stakeholders including the MoF, the Ministry of Transport and Communication, the Ministry of Justice, NBKR, KPO and the Collateral registry. The MoF will conclude Subsidiary Agreements with the NBKR, KPO, and the Collateral registry. There are no other changes in institutional and implementation arrangements. Financing

(a) Project Costs 9. The proposed project costs reflect the cancellation of the original Component 3, as shown in the below table. Retroactive financing of up to US$50,000 will be provided to hire PCU consultants and purchase computers for the PCU to enable project effectiveness. The date after which expenditures are eligible for reimbursement is December 20, 2011.

4

Project Components Project Costs (US$ million)

Current Proposed Current Proposed

Component 1: Strengthening the legal, regulatory, and supervisory framework for banks, MFOs, and credit unions

Same as before 1.5 1.5

Component 2: Expanding financial services via KPO’s network

Same as before 5.55 5.55

Component 3: Support to Aiyl Bank for privatization and deposit mobilization Cancel 4.15 0

Component 4: Modernizing the moveable collateral and debt resolution regimes

Component 3: Modernizing the moveable collateral and debt resolution regimes

1 1

Component 5: Project coordination and monitoring

Component 4: Project coordination and monitoring

0.8 0.8

Total Financing Required 13.0 8.85

Financing Plan: 10. The proposed Financing plan reflects cancellation of the original Component 3 (see the Datasheet). Cancellations: 11. The allocation for the original Component 3 (item (3) and (6) in the table below) in the amount of SDR2,080,000 under IDA Credit 50670 and SDR620,000 under IDA Grant H7600 (or total SDR2.7 million) will be cancelled as shown below. The revised total amount of the IDA financing is US$8.85 million1.

Category of Expenditure Allocation (SDR)

% of Financing Credit Grant

Current Revised Current Revised Current Revised Current Revised (1) Goods, non-consulting services, consultants’ services, and Training under Part 1 of the Project

No change 0 0 980,000 980,000 100% 100%

(2) Goods, non-consulting services, consultants’ services and Training under Part 2 of the

No change 2,620,000 2,620,000 1,130,000 1,130,000 100% 100%

1 All figures will be updated in SDR equivalent at negotiation

5

Project (3) Goods, non-consulting services, consultants’ services and Training under Part 3 (i)-(iii) of the Project

Cancelled 0 0 620,000 0 0 0

(4) Goods, non-consulting services, consultants’ services and Training under Part 4 of the Project

(3) Goods, non-consulting services, consultants’ services and Training under Part 3of the Project

0 0 650,000 650,000 100% 100%

(5) Goods, non-consulting services, consultants’ services and Training under Part 5 of the Project

(4) Goods, non-consulting services, consultants’ services and Training under Part 4of the Project

0 0 390,000 390,000 100% 100%

(6) Goods, non-consulting services, consultants’ services and Training under Part 3 (iv) of the Project

Cancelled 2,080,000 0 0 0 80% 0

(7) Incremental Operating Costs under Part 5 of the Project

(5) Incremental Operating Costs under Part 4 of the Project

0 0 130,000 130,000 100% 100%

Total amount 4,700,000 2,620,000 3,900,000 3,280,000

Financial management: 12. Due to the cancellation of the original Component 3 the following changes will be proposed to the agreed financial management arrangements:

13. Budgeting: Under the project, the PCU within KPO will be responsible for the preparation of the annual budget under KPO implemented components and consolidating annual project budgets based on procurement plans, and separate budgets received from the NBKR. Budgeted information is no longer to be submitted by the CLMU due to the cancellation of the credit line. Updated budgeting procedures will be described in the Financial Management Chapter of the Operational Manual.

14. Accounting: CLMU will not be involved in processing of the accounting data under the project due to the cancellation of the credit line sub-component. Updated accounting

6

policies and procedures will be described in the Financial Management Chapter of the Operational Manual.

15. Internal Control: The Financial Management Chapter of the Operational Manual will need to be revised to reflect alterations to internal controls policies and procedures caused by cancellation of Component 3.

16. Financial Reporting. The Interim Un-audited Financial Report (IFR) format has been revised due to the cancellation of the original Component 3. The revised IFR format is attached as an Annex 2 to this paper.

Procurement 17. The procurement framework remains the same except the arrangements related to the original Component 3. The initial procurement plan has been updated accordingly toreflect cancellation of the original Component 3 and extension of the closing date (see Annex 3). Closing date 18. The closing date will be extended from June 30, 2017 to June 30, 2018 to compensate for the delayed launch of implementation due to the fact that the Financing Agreement has not been signed and has not become effective because of the opposition to the concept of privatizing Aiyl bank. After the cancellation, the PDOs continue to be achievable and the Government has updated the procurement plan and implementation plan acceptable to the Bank. Implementation schedule: 19. The implementation schedule has been revised to reflect the removal of the original Component 3 and extension of the closing date to June 30, 2018.

D. APPRAISAL SUMMARY

20. The loss of the original Component 3 is a significant set-back to years of policy dialogue, and the implication of this cancellation will negatively affect the government’s efforts to improve access to finance in the agricultural sector. Aiyl Bank was created as the Kyrgyz Agriculture Finance Company (KAFC) with World Bank support in December 1996. The KAFC was envisaged as a temporary, stop-gap measure to address the collapse of the agricultural finance system in the early years of post-Soviet transition. In 2006, the NBKR approved a resolution to transform KAFC into OJSC Aiyl Bank, a rural bank solely owned by the government, but without a deposit-taking license. In 2009, Aiyl Bank’s license was expanded to allow it to: (i) accept deposits up to 25 percent of its capital (later increased to 50 percent), (ii) join the deposit insurance system, (iii) make loans in foreign currency, (iv)conduct leasing, and (v) lend up to 30 percent of its credit portfolio for non-agricultural activities. In 2011, the 50 percent of capital restriction for accepting deposits was substituted by regulatory ratio of time deposits of individuals to capital.

7

21. The efforts to privatize the bank commenced in earnest in 2008. On May 22, 2008, the Kyrgyz Parliament approved the sale of 67 percent of Aiyl Bank’s equity by the Resolution N 396-IV, supporting the Resolutions of the Government N 246 as of June 26, 2007 and revised Resolution N 232 as of May 19, 2008. The Country Development Strategy for 2009-2011 adopted by President’s decree N 183 as of March 31, 2009 refers to Aiyl bank and plans to reduce state participation in banking sector to promote competition. Subsequent to the approval by Parliament in May 2008, an Action Plan to privatize the bank was prepared under the Payment and Banking System Modernization (PBSM) Project, financed by the World Bank. The global financial crisis that began in September 2008, however, halted the momentum to privatize the bank as the economic downturn in the Kyrgyz Republic, as well as increased caution on the part of potential strategic investors, reduced interest in privatizing the bank. The Kyrgyz political crisis of 2010, which prompted a banking crisis, further focused the authorities’ attention elsewhere in the financial sector. However, with renewed stability and commitment to reducing the government’s involvement in commercial activities, the Kyrgyz authorities had again requested assistance to privatize Aiyl Bank.

22. Given this background the government’s decision to cancel the privatization component of the present project is therefore one that it made reluctantly; and is doing so in the interest of ensuring that the other components of the reform project are not delayed any further. This is a decision that the World Bank, with regret, has appraised as appropriate under the circumstances. The financial sector developments globally are such that further delays in strengthening the regulatory and supervisory capacity of the central bank would be detrimental to the financial system.

23. The economic, financial, technical, institutional and social aspects of the retained components remain as outlined in the FSDP PAD. These project changes will have no effect on the environment, and do not trigger any safeguard policies. Any potential environmental impacts that may have result from the implementation of the credit line in Component 3 are also eliminated. In addition, the restructuring does not involve any exceptions to Bank policies.

Risks 24. The overall risk for the project preparation and implementation continues to be moderate although the risk assessment includes an additional comment on the risk that due to political circumstances, the government may not succeed in securing ratification of the project by Parliament. The following risks are proposed to be changed: (i) Stakeholder risk: drop the risk that the government may resist reforms in Aiyl Bank

because of cancellation of this activity from the project and add the risk that the government may not succeed in obtaining ratification of the project by Parliament.

(ii) Design: drop the risk that market conditions could make it difficult to find strategic investors interested in purchasing Aiyl Bank since this activity was cancelled from the project (and reference to Aiyl Bank in other risks under Design).

(iii) Program and Donor: drop the risk that there will be delays in securing SECO parallel financing since this financing has been secured.

8

Annex 1: Results Framework and Monitoring Country: Kyrgyz Republic

Project Name: Financial Sector Development Project

Project Outcome Indicators Core D=Dropped

C=Continued N= New R=Revised

Baseline (Actual at the time of restructuring

Cumulative Target Values

YR 1 (2013)

YR2 (2014)

YR 3 (2015)

YR4 (2016)

YR5 (2017) UoM Value

Indicator One: Legal, regulatory, and supervisory framework following international good practice to enhance stability is developed, adopted, and implemented2

C Number 0 3 6 9 12 15

Indicator Two: Number of transactions through KPO related to financial services

C Number

(millions) 103

11 11 13 15 17

Indicator Three: Deposits/GDP

D % 15% 15% 16% 17% 18% 20%

Indicator Four: Increase in individual deposits in Aiyl Bank

D % Dec 31, 2011

individual deposits

50 100 200 250 300

Indicator Five: Number of new annual registrations in the moveable collateral registry, using moveable assets as collateral

C % increase

Number of new registrations in 2011 36,000

2% 2% 5% 10% 20%

Intermediate Results

Intermediate Result (Component one): Strengthening the legal, regulatory, and supervisory framework for the financial sector Revised Intermediate Result (Component one): No change

2Theareas to be covered under new or revised laws and regulations will, at the minimum, include:(i) implementation of risk based supervision and key aspects of Basel II and Basel III; (ii) review and revision of supervisory processes, bank supervision manual, and quality control framework for on-site bank examinations; (iii) strengthening the package of off-site returns and early warning systems; and (iv) introduction of formal contingency planning and crisis management frameworks. 3Unaudited estimate. The baseline and targets are subject to revision once accurate data are available. The indicator excludes government payments (e.g., pensions and social benefits).

9

Intermediate Result indicator One: Adoption of modern supervision methods

C Text Supervisory framework lacking modern supervision methods

Implementation of improved off-site reporting and analyses

Adoption of new bank supervision manual

Adoption of risk focused supervision

Adoption of consolidated supervision

Implementation of Pillar 2 and 3 of Basel II

Intermediate Result indicator Two: Effective supervision, measured in terms of number banks under special supervisory action for over 1 year

D Number 6 4 0 0 0 0

Intermediate Result indicator Three: Upgraded ICT system

C Text No Needs assessment completed, technical specifications developed, procurement launched for of ICT hardware & software.

Procurement of new hardware and software completed, new hardware and software installed.

New hardware and software fully operational. All supervisory and regulatory staff trained and working on computerized systems

Fewer than 5 incidents of supervisory setback for want of ICT support.

No incident of supervisory setback for want of ICT support.

Intermediate Result indicator Four: Contingency planning and crisis management framework

C Text No Formal framework developed

Formal framework in place

Simulation conducted to test the adequacy of the framework & improvement made

Simulations do not reveal any serious shortcoming

No systemic crisis that was not adequately addressed in time

Intermediate Result indicator Five: Improved staff capacity, measured in terms of number of years of staff experience in supervision departments

C Number 2 2.5 3 3.5 4 4.5

Intermediate Result (Component Two): Expanding financial services via KPO’s network

Revised Intermediate Result (Component Two): No change

10

Intermediate Result Indicator One:Number of ICT-equipped Post Offices (with installed, operational front office cash terminals) connected to the central hub

C Number 0

0 50 150 250 360

Intermediate Result Indicator Two: Revenues from non-government4 transactions as a share of total KPO revenues from financial services

C % 15% 15% 16% 17% 18% 20%

Intermediate Result Indicator Three: Improved quality, reliability and cost-efficiency of small value payments operations, measured in terms of same day Straight Through Processing (STP) as a share of total transactions to and from bank accounts

C % 0% 0% >5% >10% >20% >30%

Intermediate Result Indicator Four: Enhanced transparent financial performance

C Text

No No

Audit of 2012 IFRS accounts of published and management letter issued

Audit of IFRS/ Accounts of SE or Opening Balances sheet JSC5

Annual audited statements

Annual audited statements

Intermediate Result Indicator Five: Introduction of performance measurement, in terms of accounting reports with separated profitability and risk analysis for financial services and postal services

C Text 0 0 0 Monthly financial reports

Monthly financial reports

Monthly financial reports

Intermediate Result Indicator Six: Number ofcashiers, tellers, postmasters and other operational staff completed NBKR training to operate financial services at KPO

C Number 0 10 240 400 600

1200

Intermediate Result Indicator Seven:Enhanced competitive outreach for last mile delivery of

C % 0% 0% 0.5% 0.7% 1% 2%

4 Government payments to persons, such as pensions and social security, are a quasi-monopoly assigned by the State to subsidize the postal mail losses. This purpose of this indicator is that KPO needs to reduce its dependency on such revenue and transform its business based on market needs and opportunities. 5 JSC = Joint Stock Company

11

remittances, measured in terms of market share of KPO in total remittances Intermediate Result (Component Three): Support to Aiyl Bank for Privatization and Deposit Mobilization

Revised Intermediate Result (Component Three): Cancel

Intermediate Result indicator One: Tender announced for privatization of Aiyl Bank

D Text No No No Yes Yes Yes

Intermediate Result (Component Four): Modernizing the Moveable collateral and Debt Resolution Regimes

Revised Intermediate Result (Component Three): No change (except for the component number)

Intermediate Result indicator One: Amended legal framework for moveable collateral and debt resolution regimes

C Text No No Yes Yes Yes Yes

Intermediate Result indicator Two: Issued regulations for the well-functioning of the collateral registry

C Text No No No Yes Yes Yes

Intermediate Result indicator Three: Online system for registering collateral is operational

C Text No online system No No Yes Yes Yes

Intermediate Result Indicator Four: Number of dissemination and capacity-building and training events held

C Number 0 0 1 3 5 6

Intermediate Result indicator Five: Increase in lending based on new registration of security interests in the registry, using moveable assets as collateral

C %

increase

To be measured at end- 2011

2% 2% 2% 10% 20%

Intermediate Results indicator Six: Increase in the debt recovery rate for creditors

C Text To be measured at end-2011

No increase No increase No increase No increase 30 cents on the dollar of 4% of insolvent companies

Volume of Bank funding: Line of Credit- MSME X

D US$

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Volume of Bank funding: Institutional Development- MSME

X D US$

Volume of Bank funding: Enabling Environment- MSME

X C US$ X X X X X

Number of active loan accounts - MSME X

D Number To be measured at end-2011

Outstanding MSME loan portfolio X

D US$ To be measured at end-2011

Percentage of active loans to women - MSME X

D % To be measured at end-2011

Number of active individual savings accounts X

D Number To be measured at end-2011

Percentage of active individual savings accounts held by women

X D % To be measured

at end-2011

Portfolio at Risk – MSME (%) X

D % To be measured at end-2011

Return on Assets (%) X

D % To be measured at end-2011

Return on Equity (%) X

D % To be measured at end-2011

.

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Annex 2. Revised Interim Un-Audited Financial Reporting

Consolidated Interim Un-audited Financial Report (IFR) in USDReport for Current Period

Cash model

Project Name: Financial Sector Development Project (Kyrgyzstan)Project/Credit No. Implementing Agencies: PCU within KPO, NBKR, CLMU Reporting Period: from... to …

Table of contents

Financial report1A Project Sources and Uses of Funds1B Uses of Funds by Activity by Implementing Agenices1C Project Balance Sheet1D Designated Account (DA) Statement1E SOE Withdrawal Schedule

14

Quarterly IFRReport 1-A

Actual Planned VarianceCurrent quarter

Year to Date` YTD

Cumulative to Date Current quarter Year to Date`

YTDCumulative to

DateCurrent quarter

Year to Date` YTD

Cumulative to Date

Opening Cash BalanceDesignated Account at NBKRDesignated Account at PCU KPO

0.00 0.00 0.00Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Add:Sources of Funds IDA Credit:NBKR:Designated Account Replenishment Direct PaymentsReimbursementCo-financing PCU KPO:Designated Account Replenishment Direct PaymentsReimbursementCo-financing

0.00 0.00 0.00Other

Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Foreign Exchange Difference 0.00 0.00 0.00Total 0.00 0.00 0.00

Less:Uses of FundsNBKR:GoodsNon-consulting servicesConsultants’ services PCU:GoodsConsultant's servicesTrainingOperating Costs

Total Uses of Funds 0.00 0.00 0.00 0.00 0.00 0.000.00 0.00 0.00

Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Closing Cash BalanceDesignated Account at NBKRDesignated Account at PCU KPO

Co-Financing Account at PCU

Other

Total 0.00 0.00 0.00

Project Sources & Uses of Funds For the period from … to (in USD)

15

Quarterly IFRReport 1-B

Uses of Funds by actiovities by Implementing AgenciesFor the period from … to (in USD Currency)

Actual Planned Variance

Current quarterYear to Date`

YTDCumulative to

Date Current quarter

Year to Date` YTD

Cumulative to Date

Current quarter

Year to Date` YTD

Cumulative to Date

0.00 0.00 0.00 0.00 0.00 0.000.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00

Project Coordination and Monitoring 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2 On-line Registry 3 Capacity Building

1 (i) Strengthening of Financial Management

4. Collateral Registry: Modernizing the Secured Transactions and Debt Resolution Regimes

2 (ii) Business Process Modernization 3. (iii) Expansion of financial services

1 Legal and Regulatory Framework

Total

Total Project Expenditure

4. KPO PCU

Expanding financial services via KPO’s network

2. KPO

1.NBKR

Strengthening the legal, regulatory, and supervisory framework for banks, MFOs, and credit unions

16

Quarterly IFRReport 1-C

Cash and cash equivalents:

Designated Account x

Co-finance Account xTotal Uses of Funds 0.00Foreign exchange difference (if net loss) 0.00Total assets 0.00Funding:

IDA Credit Foreign exchange difference (if net income) 0.00Total Fundings -

NOTES: 0.000.00

as at …..Balance Sheet

17

Quarterly IFRReport 1-D

Designated Account (DA) Statement as at …

30-Sep-09

Opening Balance as at …

Add:

World Bank Replenishment -

Direct Payments 0.00Less: Refund to IDA from DA during the current quarter - Total Sources 0.00Deduct:

Expendutires 0.00

Total Expenditures/Payment 0.00

-

Closing Balance as of 0.00-

NOTES: 0.000.00

Quarterly IFRReport 1-E

0.000.000.000.000.000.00

0.00 0.00

W/A No. Total

SOE Withdrawal ScheduleFor the period from July 1 to September 30, …..

Expenditures (Uses of Funds)

18

Annex 3. Revised Procurement Plan

Kyrgyz Republic-Кыргызская Республика Financial Sector Development Project – Проект развития финансового сектора

PROCUREMENT PLAN - Summary (Date of PP: March 19, 2013; Update No. initial (after restructuring); Date of WB NOL: negotiated version)

№ Description Financing agreement (US $)

IDA 1 Goods 5,928,000 2 Consulting Services 2,670,000 3 Trainings 52,000

4 Additional Project Costs (Operational Expenses) - Non Procured

200,000

Total 8,850,000

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