PROJECT "ENERGY EFFICIENCY FACILITY FORINDUSTRIAL ENTERPRISES" CREDIT N25241-UZ

INDEPENDENT AUDITORS' REPORTAND SPECIAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2015

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IProfeet "Inet i Ic e/~nr Iy /ra JIdustrid/ IÅnteipnses"Crei N ý24 1 -Z

CONTENTS

INDEPENDENT AUDITORS' REPORT 1

ST ATEMENT OF SOURCES AND USES OF FUNDS 3

REPORT ON THE USE OF FUNDS BY TYPES _

BALANCE SHEET 6

I S) DESIGNATED ACCOUNT STATEMENT OFJSCB «ASAKA» 7

[;SD DESIGNATED ACCOUNT STATEMENT OFJSCB «HAMKORBANK» 8

1,SD DESIGNATED ACCOUNT STATEMENT OFJSCB «UZPROMSTROYBANK» 9

STTEMIINT OF WITHDRAWAL OF FUNDS FROM IDA ACCOUNT BY FUND REQUEST 10

PROJ ECT 1)ESCRIPTION 11

ACCOUNTING POLICY 13

PR ESENTATION OF FINANCIAL STATEMENTS 14

CASH AND CASH EQUIVALENTS 15

STAT LMENT OF EXPENDITURE (SOE) PROCEDURES 16

S1B-LOANS- 17

I,IGAL STATUS, TAXES AND LEVIES 18

RECONCILIATION OF IDA CREDIT FINANCING 18

øp

O GrantThorntonAn instinct for growth

AO 000 «Grant Thornton»Pecny6nMKa Y36eKLICTaH,

100128, TawKeHT,

yn. A6an 1A

Ten. +998 (71) 244-47-45/46

OaKc: +998 (71) 244-47-43

INDEPENDENT ALDITORS' REPORT"Grant Thornton" AO LLC

To Management of Project Coordination Unit 1A, Abay Str.,

Under Ministry of Economy of Republic of Uzbekistan Tashkent, 100128,Republic of Uzbekistan

Tel.: +998 (71) 244-47-45/46

Fax: +998 (71) 244-47-43

W: wwwgti org

\ a eh audlited the attaehed Special Financial Statements (hereinafter - "1linancial Statements") of the Prmject

1nery Liffciency Jacility for Industrial Enterprises" (hereinafter - "the Project") financed of the funds od

redii .\"5241-1/. by International Development Association (hereinafter - the "association", 11\"),ACCfrdingr tohe inaning \greement as of july 18, 2013 .\5241-17 (herenafter - the "1 inancing

\rement) fOr the perio)d fron january 1, 2015 to December 31, 2015. Vinancial Staiemems include:

tenement df S4urues and Vses of Funds, Statement of ses of Lunds by Implementing gencies 0n

l p1ediu epes, Special Purpose Balance Sheet, Statements of Designated Aceonrs, SO1 \Vithdrawal

S(hedile and \oes to inancial Statements.

1inii1eal sIatements are prepared by management of Project (oordination Unit (hereinafter - "the P1CI) in

he ca,sh 1 i basis in accordance with International Public Sector .\ccoting Standards (hereinafiter -I~ PS \S') issued by the Internatminal Public Sector Accou>inting Standards Board ofthe International ederatin

l \ccutants.

Manageen t's responsibilin for financial statements

Slinagement f the Project is responsible for preparation and fair presentation of these 1,inancial Statei lmms in

accrtdance with 1mernational Public Sector Accounting Standard (IPSAS): "inancial reporting under the cash

tlC)w lasis o accoun ting". Tihe Project's policv assumes that attached report is prepared on the basis f recipts

id disbursements of cash items. Under this principle financing is recognized when it is received rather than

whun accrued, while expenses are recognized when they are paid rarher than when incurred.

A uditor's Responsibilitv

(Kir responsibility is lo express an opinion on these ttnancial statemen ts based on our audit. \e conducted ur

:udh in accrdance with International Standards on Auditing (ISA). Those standards reqIuire that we coiply

ih ethical requirements and plan and perform the audit to obitain reasonable assurance whether the linancial

statenments are tree trom material misstaternent. An audit involves performing procedures to obtain audi1v\ inlice aboum the amnrimlts and disclosures in the financial statements. The procedures seleeted depend on the

tuditir's judgment, including the assessment of the risks of material misstatement of the financial statements,

whthler due to fraud or ermr. Iin making those risk assessnients the auditor considers internal control relevant

i 1he preparation and fair presentation of the Project' financial statements in order to design audit procdures

1ii .re appropriate in the cirCumstances, but not for the purpo>se of expressing an opinion on the effectiveIIess

f ihe Prject's internal comntrol. An audit also includes evaluating the appropriateness of accounting policiesIIud and the ireasnaLeness of accounting estimates made by the Project's management, as well as evalualtingl

ihe -verall presentation of the financial statements.

\\e elieve that the andi evidence we have obtained is sufficient and appropriate to provide a bass ts

CERT

Memer o Grainit Thornmon Intematiial Ltd

Opinion

In ,ur pnien, th th bv-stated Special Purpose Financial Sttclcnts; give a true ald ir1 iew f th silu rs

'nd uses if IK «inlcnr Kfficiency Facility for Industrial P)iterpiss» P ccrc's fIdIIS f0r the pri frim l

tma\ 2015 m 31 I)cceiber 20115 and complies with conditionso t Financing \greemntI and IPS \S.

\Ilncreixver, a with rIesprcc t SoVs, adequatc supping dint cumetatio has becn mintained to support

11ims tt t \moi ti 1t"r reiuimbrtsiiement of expendiitrcs ilncurl; and (b) the expenditures c mpl h ithbif [i\e i p laited iii l Vinanving \greeiient.

Restriction on u,se

Ti rupo t is intendcd solcly for pr-esenttion of inrifrmatioin and use b Mlanagement tf the Prcct, ID \ and

the Goveriii(n df the Republic (f Uzbekistan, and cinnot be used bv any thirl party otlir than

Ib tillt i, n1 ed .

T i,ie t t /bekisia

IP~rot ct ~i I ffiriecyg Iacilly3 jr !ddiedIin tripi: s

Credi .1? 524 -1 (in US Dollwar)

STATEMENT OF SOURCES AND USES OF FUNDSFOR THE YEAR ENDED 31 DECEMBER 2015

Actual Planned Deviation

Current CumUlatlVe Current Cumulative Current Cumulative

perIad total period total period total

Opening Cash Balance on January 01,2015

USD Designated Account of JSCB eAsaka 4 000 000

ISD Deyignated Account o' JSCB 4000 000~H-nkorBenksUSD Designated Account of JSCB 4000000

UzpronistroyBank)

Total 12 000 000

Increase:

Sources of funds

JSCB eAsaka)Replershment of Designated Account 7 972906 15175667 8 000000 13000000 (27094 2 175 667

eibursemet 2960000 2960000 - - (2960000) (2960 00C)Co-fnancing by he Bank 2 733 226 3533 917 2 000 000 3 250 000 733 226 283 917

JSCB HamkorbankReplerishment of Designated Account 4 932 594 10 709 107 9700 000 14 700 000 (47 406) (3 990 893

Reimbursement - ---

Co Financing ty the Bank 1 233 149 1 677 277 2425000 3675000 (1 191 851) (1 997 723)JSCB qUzpromstroyba n k))Replenishment of Designated Account 11 271 921 19271 921 8 000000 13 000000 3 271 921 6271 921Reim"bursement - - - - -

Co-financing by the Bank 2776 484 3817 980 2 000 000 3 250000 776 484 9567 980Financed by Bank in 2014, reimbursed by (165 985) - ' - - -IDA in 2015Total 33714295 57145869 32 125000 5 875000 (4164720) 350869

Difference due to currency exchange - -

Total -_-

Decrease:Project expensesJSCB oAsakaiSub-loans 13666132 7 669584 10 000 000 16250000 36 132 1 419584

JSCB MHamkorbankoSuh-loans 6 165 743 8 386 383 11 700000 17950000 (5534 257) (9 563 617)

JSCB aUzpromstroybanksSub-loans 13882421 190B9902 12 125 000 18375000 1 757421 714 92

Total 33 714 295 45145 869 33825000 52 575 000 (110 705) (7429 131)

do

an

all

Prjc "i'E nn /iie FaiityI /or Industria/ E n/erpnsesCredii 2' 524I Z

-- (in US Dollars) X

STATEMENT OF SOURCES AND USES OF FUNDSFOR THE YEAR ENDED 31 DECEMBER 2015 (CONTINUATION)

Actual Planned Deviation

Cufrrent Cumulative Current CUmnulative Current eumulativeperiod total period total period total

Closing Cash Balance

US2 Designated Account of JSCB «Asaka 4000000

USD Desigrnated Account of JSCB 4000 000«HamkorBank»

USD Designated Account of JSCB 4 000 ODO«UzpromstroyBank»

Bcero 12000000

ned n bealf f ithe>Projct 'Lmnagement unlJune 20, 2H06.

rectr o PI llli under .\linistry oft

\M. Sirova

Hri Depury ( hirma of111 theu Boaird of Mnae

h{l NnIi I MI Spec ast

uK y ( li rman iard \låÍnager

I m i rba nk» _______________________________

P " nn j 1itienr FacikVly for Induti,ra/ 1nitprisCrr/l Ä '24I 17

(in US D1)ol1ars)

REPORT ON THE USE OF FUNDS BY TYPESFOR THE YEAR ENDED 31 DECEMBER 2015

Actual Planned Deviation'

Cumuiklative Cumlvtlative CuuativeCurrent period tal Currenlt period toa Current period toa

JSCB Asaka» 13666 132 17 669584 10000000 16250000 3 666 132 1 419584

Å-ons 1 3666 132 17 669 584 10000l000 16253 000 3 666 132 1 419 554J SCB «Hamko)rbank» 6 165 743 8 386 383 11 700 000 17 950 000 (5 534 257) (9 563 617)

Sýr-ons 6 165 743 8 386 383 11 7:00000 17 90 3000 (5 534 257) (9 563 617;

JSCB «Uzpromstroybank» 13 882421 19089902 12 125 000 18375000 1 757 421 714 902sje-iolns 13 882421 19089902 12 125000 18375 300 1 757421 714902

Total costs of the Project 33714 295 45 145 869 33825 000 52575000 (110705) (7 429 131)

,1 1)n beh r 1 oth[l e Prop ccrt\jeict Maiiaemetii on June 20, 211l 6.

)rctfr t A L 1 Il luder Ministry of F , Spcilstcon 11my Kf rhe Repub f Lxbekisran

rI t Deputyv Chir-man td th1 Btad 4 JSCB Manager

D I ( hairm t1n S( JSCB «L 1m imtr ty bank» I nagerl

P\1 Spucialis

K I~Pr9cCd 'Enngy I fliiency' Failt /r industr iad Enwipre"

CredI .' 524/-1 Z(in US Dollars) 8

BAIANCE SHEETFOR THE YEAR ENDED 31 DECEMBER 2015

Title as of December 31, 2015

ASSETS

Cash and cash equivalents, including: 1200000eicnated Account000

Total Uses of funds, including:

JSCB <Asaka1JSCB Hamkorbank3

JSC8 <Upronstrybak) 12 000 000

4TOTAL ASSETS 57145869FUNDING

IDA Credit allocated to Participating Banks, including:JSCB ,Asaka1JSCB ,Hamkcrbank, 10 709 107JSCB rUzpromstrcybank>

Co-financing by Participating Banks, including: 9029 174JSCB ,Asaka 3533917JSCB <Hamkcrbank16JSCR Uzpromstroybank 3

1TOTAL FUNDING 57145869

I n hchlfjt ric P~roiccr Nlain,ucnctit on junc -'J, 16.

I ._\I._Slitow_w'

I I( 1I)LII1 hidrmiim 4 the Boarid of____S('B_____\hn____igcr___

I iN1 6p7c7 277

I DX pull phliran o()Md the SBrofjS1Bi \l gr

Ik(whi nhkBnIS1unkrbank

Proja -1 : w y I ,fflcitn Pi cilit'd /Indusfrial I -ntelprisesCditP 524 1 /4 Z

(in US DollarsI

USD DESIGNATED ACCOUNT STATEMENT OF JSCB <<ASAKA>

For thc pcriod from January 01, 2015 to December 31, 2015

Account No 20 20 3,840( 7 0 01 0 10 2 '104

Depositary bank Centrl Bank of RU.

Address 100001 Tashkon! riy. Uzbokis;tanr Avenue, 6

Type of accounI Special ar; urn of JSCB1 "ASAKA" nr USD

Correspondvng loan i owl N1241 UZ

Currency US Dollars

Balance as oJanuary 1, 20105 4000000

Increase:

MA firianuing 7972 906

Total incr e-e 7 972906

Decrease:

u.-1 ors issued 7 972 906

Total decrease: 7 972 906

Balance as of December 31, 2015 4 000 000

(in W o bhlflt tit: Pr1-ecCt :lal etnjue20, '116W

I irt-; I )I)ut% ( h)it1r Of IIhC B0;trd of SCHB LManage"r

I,K L1114 N p cll

Proget "I nmy I /iriener Facilit for bndustria! I nfnpris"

C.redî,' '\ 52411 Z

iin US Doliars_

USD DESIGNATED ACCOUNT STATEMENT OF JSCB «HAMKORBANK»For the period from Januarv 01, 2015 to December 31, 2015

Account Ng 21i3 2840 9000 0 008 300

Depositary bank C-,,rri Bank t Ruz

Address 100051 Tashkent city Uzbekistan Avenue 6

Tyeof ac-count Special aiccount of JSC8 I HAMKORBANK"' in USD

Correspo)nding loan1 Ltoan N,,5241-UZ

Currencv Us DoILlars

Balance as of January 1, 2015 4 000 000

:increase:DA ý.nancing 4 932 594

Total increase 4 932 594

Decrease:

-ans issued 4 932 594

Total decrease: 4932594

Balance as of December 31. 2015 4 000000

Iune 2o 2I16

DIuy(himno heBadojC aaeI akrak

|IluMSpcls

Proca IE I[finj I Aillo for Industial I :,w,nprie,("

Cre di! l 524 / Z(in (IS Dollars)

USD DESIGNATED ACCOUNT STATEMENT OF JSCB oUZPROMSTROYBANK>For the period from January 01, 2015 to December 31, 2015

Account NW 2,I1( mfjl20 00041 01003

Depositary b.Ank PrlL IkEdm

Address10017hkniyU snl n6

Type of accountJ "t i1 IHAa Ie ofJC "?HM T F)YBANK" in USD

Correspornding lonL N, 241 UZ

Currency US Dolals

Balance as of January 31, 2015 4000000

Increase:IDA financing 11271921F.nanced by participating bank in 2014, reimbursed by (165 985)IDA in 2015Financing by participating banks, that is to reimburse by IDATotal increase 11 105936Decrease:Sub-loans issued 11 105936Total decrease: 11 105936Balance as of December 31, 2015 4000000

ignal kCbhAl IdthU 1'r(jeCCt %MAnageme nt 44n jUnc 2R 2(116,

Ikpomy ( hiurnmn o4ISCi <L'zpronmstrmobankn 'allnagcr

I0-1N pc:lsIo

Pjret "flnny I 4/icie néJ Faciityfr b,Jid/i n!etpriss

Cre/di! 524 1 7(in Is Dollars) i

STATEMENT OF WITHDRAWAL OF FUNDS FROM IDA ACCOUNT BY FUND REQUESTFor the period from January 01, 2015 to December 31, 2015

Nurrber f th ReqestCategories of disbursemnents of funds Total amouint to be Reimbursed in

5reimbursed 2015

Comnponent A Comiponent B

JSB Aak- 9 -3 972 905 3 972906 3 972 90617 4 f100 000 4 0000002 4 000 000

18 -2 960 000 2 9600600 2 960 000

Total 10932 906 10932906 10932906

JSCB "Harmkorbank"1 1 342 3ý9 342 319 342 31915 2 738 551 2 738 551 2 738 55!19 1 851 -725 1 851 /25 1 851 725

Total 4 932 594 4 9325694 4 932594JSCB "Uzpromrstroybank"

8- 165985 165 98510 243540 243 540 243 54012 - 9000 0 G C 0 4000 OOC

13 2474435 2474435 2474 435

14 651 568 551 568 551 568

16 -, 36 393 38536 393 3 336 393

Total 1 105 937 11 271 921 11 271 921.

TOT AL 26 9714 436 27 137 421 27i137421

Fmnvid iw MfIc ipaling Bonk in 201-4, reini,ud bi 1DA in 201Ied o ln bilf 4) ft Priject Nlnagem en nune 2(, 201i (

I r t ,111f P( Fl -.111. unider inistiv 4 I conomy

i iL Rupu[lie if [/bekil I Sp:ciaii

Is: Dptu ( hiairman of thc Boa1rd JSCB NI:nger

I pot y ChKlil rman jCB ('prmstrya l:nk», Ulaager

1)e pgi h ( Ii1rm-an od tIe Boar d o fJSCi3 [anager

h Nm S1pciahSt

P¾p(/ " tm !$ iiiriea, 1/iliyfo IndyusotrrI 1 nlaIxs"i l(mli \i i241 -17

PROJECT DESCRIPTION

(ln J Ki , 21 3 1 u nite rat i( fial D c\e Coperit Association (iecrenater- te Xssoc(i ali, IDA) \and tle

i mnet i of Reupublic f Ezbekistan (hereinafter - the G ernmem c ae si gncd \greetmcint tor for Lnding

ih Rt-epuilofic i z bkitan (hcreinafter - · inancing Ag mnri) ini he amnount of 66.1 million Spectal

Dr,i\ing RIihs lteriri[ter - SDR) uquivalenit to USD 100-0 million for impý-lemeitnta,tioni ot öhe Project

1ergl c; cI acit for InidLustrial iterprises" (heiniiiatr - fie Protl with thc repavlent terii f 25

-1 ding 5 ear grace eitodI Tle ob ccti\e ol tie ProIjCt is w> iproC enervgyut eiency in indlustrial

rr b designing and estabilisling a tinacing miechanis for energy saving investntvs.

\cordling t th 1Financing \gr(iment, tbc Projcct ill b financullod le accolut of ID\ -ftulltl credhit' and

n1 te account )fI -a by the participating banks-JsCB 1Asaka",JCB1 lamkorbank" aind JSC tB1 pmstrofbank (herciatr- lthc Participating Banks". To facilitate Project iplmntation ald each

P: I rClipai ing Bank (,n IIyI 18, 2013 liave signed iancing \grceliecnt t on Project iiipleeniiteati ion. (i julv 1 8,11 Ilh Republic lIf Ebekistanl rep resented by Ministry (If Vinancc t>f tle Republti of EIzk stanuli (riat

\1 W , \Illiitry of l CI cnomy and Participating Banks signed an \greement nl sub-lunding arrangemlcsl

t,I ) \ filnds for teit Project inplementati>n.

Setfinlancing p)111:

u nds t DA 100 000 000

unds oft Parcipial ng imks 24 750 000

Tottal 124 756 OUO

I n ihi ReSiluttion (fl 168 frim Junc 12, 2113 of tc Cabinei it NI P Mi rs of rhicfb Replublic of Vzbckisrtan -n

metuitts ailitatil implelntation of tlic Energy lit-cic tiFacil i for Industrial V ntcrpriscs Proict wIih

pmicipationl if X ID) \" (chrinater - "C()M Resolution") identities thc follo)wing exectuivc bidies elsponsibe

[l i1t Projectn ptlmtuin lhereinafte - "mplementing Agencies"):

• inisr of I "conotm of RUz, which is imposed a responsibility for overall Project coordination and

implemnenitarion oif thie component «Developmnent of Knrgy I: fficiency Capacit and Projct

mana11,gerncnt»;

SPartcipalting bankS , JS CB «H amk(>rhank» and JSCB «E zpn istroybnk», which art

inposed a ris bility for puIrposeful and effect\i implementationt tf retinanced part of ID \ cred1t

and implemntation of lte componelt ~Credit line to Participating Baiks~.

l_ Lnur effe1- ckclveý imlementacIiýtic>ni ifd the projCct, a ProjeCtCo(ordmnation 11nit (heeinallýfter- - -the PCI )

m11111c in iiy of I Lconolim of the Republic of Lbekistan wscreated, while a Project liiipleiititation Vni

hinta f -tr - te 1 1") was crcatcd in each of Participating Banks.

ed hL Il on rt|c1iietellts of thel e I ReSlution, CMMinistr\ lif V.conoi (if R V7 jointlk wuiti MO andanILipaing Banks dcveloped and approvtd with IDA a 1Prjctl ( )peraminal Manual (PO), which specie

hIle mamnner of isnug c itllria tiolr slectilon and assessment of sub-projuets, as well as procedurs for

iomcial manay:gceent, pro,)cicreent, monitoring and assessmecm id Projeck implemuntation progress.

I accxdalc t ith Vinancing Agreement, repayment of ID\ credit is carried o on Ilite accoit of

ipating tBanks in part kf refinanced credit portion. Rcpame\nht of tcedit in part of lte Pro ccttCompnLnt

\ Develllpmen[ ltf 1,1ntergy C Capacity and Projct llanagement" is carried out 1oin the tcctoull tf

puhlicbugt

Pm/ir/ "I:nety/ I /datry 1 d///b 1r Indauial I nupil s(dd in\ 24i

PROJECT DESCRIPTION (CONTINUATION)

The Project consists of the following components:

Part A: Capacity building in the sphere of energy efficiency

L I Enhncinj te energY ctficicncy capaci \ of selecred ndustric;, LankS, IndurrI aoirian S and cn rgprouito>NIi na l(Otluh the prOVisiOn o cOnsulants services .nd

-iiLlrrhnin" 1t Cpacitv of Mhol and the PC for PrOjct mnIIhalUgnLC, cOJOrdination and mninitringt

1Md 0:aluiOn fitu1h IIt provision Of goOds, c0nstanrs srvcls;andlraining;11n )\ in"_ 1he .tamstical rcpOrting capacitv Of thc Recip1ien In the aruas t cilnri consuitmpriOn Antl

Part B: Credit line for Participating Banks

i stshmemnt and OperatiOn f a credit Facility fr the Participatinr hanks for the prov ision If SuIb-loans' t

. f niciFieS, ilWIinLg suchi BIificiaics to financ the ic osts rCiatcd to the carrying wut of iIdLISHl CtIC\,I-clunc\ SuIb-prOJecCtS.

\ [0ding I thet I inancing Igrmccnint, IDA funds allOciaed for thuPt POcct niplnmenration are intcndtd forinltncing the follin Ig compOnenl s:

Allocated Loan Allocated Loan Pretg ffnneComponent aonISR amutexpenditures (less

taxes)

Part A. Capacity building in the sphere of energyefficiency and project management

Goods, consultants' serVices, training and operating expenses 660 000 1 000 000 100%

Part B: Credit line for Participating BanksSub-loans for sub-pojects 65 440 000 99 000 000 80%

Total 66100000 100000000

Nq Component 2014 2015 2016 2017 2018 Total

1 Part A. Capacity building in the sphere of energy efficiency and 0,25 0,30 0,30 0,13 0,02 1'0project management

2 Part B: Credit line for following Participating Banks: 15,00 24,00 30,00 30,00 - 99,002. JSCB 'Uzpromnstroybank" 5.00 8,00 10,00 10,00 - 33.0

2.2 JSCB "Asaka" 5,00 8,00 10,00 10,00 - 33.02,3 JSCB "Hamnkorbank" 5,00 8,00 10,00 10,00 - 33 0

Total 15,25 24,30 30,30 30,13 0,02 100

Continuing activity

upose dt" Wo Clour atI- 4nan11 inl accordantce with the 1-inanlcing \"-Cr-I-ment is d1ctinlud Lto bu Onl janluary "1,

..........

P)ayer</" 1n i kr~ i 1acii/ for Industria/ E ntapnsrs"/

6redi » V,i4 1 -1 -\V s ä'Pö i, 1 /H 11! , cP<M '] V i] >i1i

ACCOUNTING POLICY

Basis for presentation of financial statenients

T 1K'L ý'pecial Purpo?sc Hiancial Statements have been preipard, in accolance with rsquiroemnts 4f

I mrnata it PblPå Sectir \ccuntimng Standards (hereiafter - IPS \S) isnued by the intrnational Public Secior

\cc(unting Stancilrds N,art if the International eccerattion cof \ccointants, fll]owing the cash dw hasi5 an 1

mplianit ith elu \Vorld Bank recornmcndarions.

aemem ofIt S()urces and Uscs of Funds, Staimnit 0 ses of lunds by Implenentning \encies n

I t Tpes, Special Purp,se Balancc Shcet, Dcsignatrd ,\ccouns Statmnnts and tbe acompani ng

nns am devcelped 1n cash ow, basis to reflect operatiuns cnidtiictei within nit Prjcct's franis in

"codac"ith beo-ttdprinciples.

Financing

1 mnancing fkr Designated accouns is recognized when funds are rasee 111 1D \ 0credit acc(int ) (I tePrjk et's Dcsignatcd accoents nd in Central Bank of R I' liciaiier -"the CBc ").

Snuncing by te ld Prticjiping Banks is rcognizcd when loans are disbursed to the brrokcr froi the

ParicpatngBanks äccmounts («<Co-financing accounts»,).

Expenditure

l>i o ct exidiiLircs are rec(Oid and entred in tbe Pnoect länancial Statemenints gencrated on the cash basis

" pancrnent 44t nicans to suppliers (if material restirces, (nr services is ilde tfrom the Special priject

accounAts opnlid in t JSCAB lp4oteka Bank' lckhnat brancli (f the cinto Tashkent;

• Sub lians to tbhe h -rrNwers are disbursed from the Project Designatcl acco,unts hped by the

Participating Banks in CBU, in line with the ID \ reqiuireent1s;

• Sub ans 1 the honmrrwers are disbursed frim the Proect ci-tinaicing accunts pencil in t1hC

Pariciparing Banks.

Reporting currency and currency conversion niethod

\' iac froni ID \ is carried out in Unired States D)llars (licinatier referred ti as 1 SD"), the Special

Purps nancia StVtimniits ilsx> presented in USD shich is the functionil and present:tilIn curiency (t

Projcct. itc1ms includled in tlic Vinancial Statemnts are icasudccl usilng thitluctional currency.

hik d evhping th Prijcct Hnancial Statenents the following cxchang rate principles were used:

SFr I) \) X indcl crcdt: all revenucs and expenditurs ni Nationial currcncy (U%S) are conveted in

S) at the appropriatHe (U exchange rate n thei dtec 0 a rcceipt Ir cxpcnditur and disbursed sub-b>ans;

" Vmr financing of the Participating Banks: sub-leans dhisbcurs in national currency (U%S) arc conmerted

in USI) at the approprte (U exchangc ratc on t datc e od isbihursument.

l /S balances in Prjcci',, bank acciounts atre reAalucel at the ratc o)f (HB effeetiv c at the rep rting ditc. , at 31D2ce r 15 tbhe CI " I 7%S/USD ex\change rate was U%S 2 8(0.98 / US) 1

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PRESENTATION OF FINANCIAL STATEMENTS

Statement of Sources of Financing

>sti munt f Sourcs and I ss of lunds includes dia on both IDA aind Participaxting Banks finmcing. In ILrpring per i aol Project wxas financed by IDA (redt for taml -mun 2~~ 13- 421 USD. roicct financing tni

Ih ccounit f Parrtpting Banks unds was 6 ~42 8) t SD. ( )taind funds were used Kw finncing IhP cjec t e1penditurcs, in particular:

• 1inaning ofsil Isuoans under the Project's coiponnt «1» am-rounted io 33 714 295 VSD, includingth1se financud fronm (vw.n runds of Participating Banks in tc anjolint of 6 -'42 859 USD;

• \ccr ding t> the withdrawal applictimon Nå 8 the amun reimbursed hy ID.\ in 2015 on sulåans

prnmd in 214 from ow-n funds of Partcipatng Banks in thi amunt of 165 985 VSD.

Ti SMUnU includes data on thc opening and closimg cAi balancc for tc reported period. Gosing balancea th ID \ nicming for tutal IUSD 12 OM) 10).

Staternent of Uses of Funds by Implementing Agencics on Expenditure Types

Reýporr n te usL. ed Jic å implcnting agencics by- cxpenmditurc catu ciegorn includes inforillation on project costnitcud by c åimnpwmting Boad, cst categories, as well as tbc project budget for kth period and the

JUi,uin of rL acltual costs o f tbc planned. The project budger is drawn up t in accordancc wii the1ricuiirment plan appro\ ed byx thc hcad of the \Trld Bank Prnjemc.

Balance Sheet

MAncc Muht is bIsed on wt cash mictlod and includes following data:

" \sets - "Cs and cash euivalents" and. "Total Uses ot [eunds" by tic 1mplctetinrilg Agencics;

1 cIunig cuminr c rjct financing ron MJ[ surcces b te Inplemenring Agencics.

1 u".c1ash ad u11casli valents includes reining cash from I) \-funded credit. Itet "Total Uss of unds"ikludes all e\piditurs rulted to the Projct implemnntarion and funded from al soccircus.

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CASH AND CASH EQUIVALENTS

1 )1 he p p s o P rojct ipleientaioit n, the Project 1mplmning \gncies have opuned nuiber ofcunts bh iin S/ad USD. In line with the IDA requirumeits tihe Participating Banks i penud accomm iii

r implemening .\gencies have opened the foilloigng acchun e>tts:

In Central Bank of the Republic of Uzbekistan:

Title Account numberSpecial account of JSCB ASAKA" in USD 2130 2840 7000 0087 3003Special account of JSCB "HAMKORBANK in USD 2130 2840 9000 0008 3005Special account of JSCB "UZPROMSTROYBANK" in USD 2130 2840 2000 0044 0003

iu-nhermtre there arc co-financing accoiunrts of the Participating Banks. ,\ccrdIing t he inancing\greement, Participaing Banks on the account of own funds aru respnsible for financing 20"-, )tf t ihal

'h1 lons. 15Bh iwi th cricing purpose ()f the Prmjeet AccIts.

Designated accounts of Participating Banks

Prjec maintains eillcu VSD Designated accounts of tle 1airticipatiiig Banks in CB. Folm 01 jantary i 1Deucmber 2 use thesu signated acc>unrs were used for dishursemntof sub-anis for impluetlti oil hlie

PrIect compenent «B» «Crudit Line to Participaing Banks».

Dring the reportin period, tlie special icu[lts of paticipating banks in te forni f fl nanucig frm IiD \ucmii reculed 24 1- 421 VS dollars. The funds used for th isuanc ot sub-loans to borrowers

in 2105, paricipanng Bank "Asaka" issued sub-loans from its own funds in thC amiunlult of19 milhn11 Sll,' fol wedt hf rimbursmnitite IDA, and that reimuirsd in 2015.

In 2014, partping hank JSCB 'zpromstroybank" issuet sub[ans from irs Iwn funis iii the liimiLu it

l _95 I- dlar otll we by recovery of the IDA, and that reiibursei in 2015.

Duinug tle reportig perid due n> the credit of IDA isstied Iihe SuIb IOIns amouIneting to 26,971,436 S dV lllars

Co-financing accounts of Participating Banks

t CM Aiancig aonts areOWnd by i the Participating Banks aid Ised 1f0or disbursumenct of sub-loans formpleiicnltalioin of tlhe Project component «»1«Crer dit Lm in iartiipaing Banks». Duringi t reported ptriodI -Participating Banks liave disbursed co-financed sub-latns ttr total of 6 -42 85t) 17SD.

lances of ic t Prject's bank accounts are summarized in the flloing table

in US Dollars in thousands UZS,

Balance as of January 01, 2015USD Designated Account of JSCB "ASAKA" 4000000 9 689 600USD Designated Account of JSCB "HAMKORBANK" 4000000 9689600USD Designaed Account of JSCB "UZPROMSTROYBANK' 4000000 9 689 600Total 12000 000 29068800

Balance as of December 31, 2015USD Designated Account of JSCB "ASAKA" 4000000 11 239920USD Designated Account of JSCB "HAMKORBANK" 4 000 000 11 239 920USD Designated Account of JSCB "UZPROMSTROYBANK" 4 000 000 11 239 920Total 12 000000 33719760

Cmü/t~ .\e 24 I 7

STATEMENT OF EXPENDITURE (SOE) PROCEDURES

ieni (d Ewependiture ()p ure is used b% the Projecr t> reple-nish funds ni ihc Designated

\ n, i ine \% it th Ic i11cing\ greement and Project ()perational .lanu.

1blIw is II- Iae with c1nuulative data on nctted-( ff and reinlburs,ed excpendiures according to th e'( S :

Total expenditure amount under SOE procedure 27 137421Expenditures for 2015 claimed and reimbursed in 2016 -Total expenditures: 27 137421Reirnbursed on special account 24177421IDA reimbursement of financing from PB own funds 2 950 000Total reimbursed: 27 137 421Deviation .

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SUB-LOANS

I rdI r rn I 1 cili(u][ ImpmIric IalMia(n of the Prorct comp nent 1H" r redit linc to Parricipaing Banks" ftr ilhc1Ind ti 1 from- :Jantur ()11, to Dcccmber 3 1, 21115 the ProIcr haS lenIt sub kl,ans For toral aimouit F 33 '14 21)l >1 ), 1 ncluding II) \ funded parr 26 971 436 LSD and Pticiparin., Banks fundcd part ( 42 S859 D.

\v, is prc SL nit ItI sub lans b each f Paricipa rin Banks:

Allocated funds at the expense ofParticipating Bank/Borrowen Purpose of Sub-loons

IDA ParticipatingBanks

JSCB <AsakasaMubarak Gas Processing Plant, Acquisition of frequency converters 2 865 207 716302

( Mubarakneftegaz)) Acquisition of frequency converters and 4185191 1046298microturbine installation on natural gas

JSCB aHamkorbank

High voltage Powerflex 7000 system forAGMK management and frequency regulation with five 1 725 600 431 40

electric motors with power of 2,5mvt

JSC O zbekiston Metallurgiya Kombinati Water Supply improvement Project 308086 770217

JSC Kvarts Far industrial radial, linear induction smooth 126125 31531complex

Total for JSCB (Hamkorbank): 4932594 123149JSCB uUzpromstroybank)):JSC aFerganaazote Modemi7ation f am turbine o 1 955414 488 854

compressor gas synthesis pos. 401Replacement of ceiling injector torches of the

JSC ((Fergarmazot), furnace of a reforming by more economic 1 880 979 470 245torches of injector type

Replacement of the motor on the modern highvoltage motor with control gearThe transfer of natural gas fired heater Pos. 103JSC Maxam Chirchiq 5158179to BTA reformer pos. 107

Purchase of mobile compressor stations in theUztransgaz amount of 2 sets to reduce the amount of bleed 1 720035 430009

gas into the atmosphere during the fire works

Uztransgaz ~~The introduction of the tubular regenerators4740 1860

Uzilarigaz47154091 18 04629

stationary gas turbines for gas pumping uinitsTotal for JSCB aUzpromstroybankn.: 11105936 2776485TOTAL FOR PARTICIPATING BANKS: 26 971 436 6 742 860

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LEGAL STATUS, TAXES AND LEVIES

PI under \ (inistr of I Anomy of he Repubi of Izbekistan and PIl s under Parricipanng Banks are mirSentitic Ind, subsl-ntly are not business ta payers, paying nil sociil and pension fees and

nm-libuions and also incom rax fir individuds cunracted bv the PCL-. PI> under Parncipanring iki mplo flime biank sitf and ter is no co st of paytroll budge.ted in t Proect for them1.

RECONCILIATION OF IDA CREDIT FINANCING

[t n nA" &f Inancing between IDA aind (ient (nnecAumn data (generated (n A U3, 2 aund fh daaShe Pr 'cet n DecUember1 31, 2H 5 is shown in the table belkw.

Data of Clent Connection Projec Data Deviations

IDA funds 27 137421 27 137421