LOAN AGREEMENT (PROJECT SCIENCE) BETWEEN THE REPUBLIC OF SERBIA AND EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Off. Herald of RS - Treaties", No. 4/2023)

(Operation Number 54083)

Dated 16 June 2023

TABLE OF CONTENTS

ARTICLE I – STANDARD TERMS AND CONDITIONS; DEFINITIONS	3
Section 1.01. Incorporation of Standard Terms and Conditions	3
Section 1.02. Definitions	4
Section 1.03. Interpretation	6
ARTICLE II – PRINCIPAL TERMS OF THE LOAN	7
Section 2.01. Amount and Currency	7
Section 2.02. Other Financial Terms of the Loan	7
Section 2.03. Drawdowns	8
ARTICLE III – EXECUTION OF THE PROJECT	8
Section 3.01. Other Affirmative Project Covenants	8
Section 3.02. Project Implementation Unit	9
Section 3.03. Procurement	10
Section 3.04. Environmental and Social Compliance Covenants	10
Section 3.05. Consultants	11
Section 3.06. Reporting Frequency and Submission Requirements 1	1
ARTICLE IV – FINANCIAL COVENANTS	14
Section 4.01. Financial Records and Reports	14
ARTICLE V – SUSPENSION; ACCELERATION; CANCELLATION	15
Section 5.01. Suspension	15
ARTICLE VI – EFFECTIVENESS	15
Section 6.01. Conditions Precedent to Effectiveness	15
Section 6.02. Legal Opinion	15
Section 6.03. Termination for Failure to Become Effective	16
ARTICLE VII – MISCELLANEOUS	16
Section 7.01. Notices	16
SCHEDULE 1 – DESCRIPTION OF THE PROJECT	1
SCHEDULE 2 – CATEGORIES AND DRAWDOWNS	4

 

LOAN AGREEMENT

AGREEMENT dated 16 june 2023 between THE REPUBLIC OF SERBIA (the "borrower") AND EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (the "bank").

PREAMBLE

WHEREAS, the Bank has been established to provide financing for specific projects to foster the transition towards open market-oriented economies and to promote private and entrepreneurial initiative in certain countries committed to and applying the principles of multiparty democracy, pluralism and market economics;

WHEREAS, the Borrower intends to implement the Project as described in Schedule 1 which is designed to assist the Borrower in the construction and expansion of modern science, technology and innovation parks in the Republic of Serbia;

WHEREAS, the Project will be carried out by the Borrower, acting through the Responsible Ministries, and the Project Entities;

WHEREAS, the Bank has agreed to make available technical cooperation funds in an amount of up to EUR 325,000 to fund consultancy services for the purpose of implementing the technical cooperation project in accordance with the Terms of Reference;

WHEREAS, the Borrower has requested assistance from the Bank in financing part of the Project; and

WHEREAS, the Bank has agreed on the basis of, inter alia, the foregoing to make a loan to the Borrower in the amount of EUR 80,000,000, subject to the terms and conditions set forth or referred to in this Agreement and in the project agreement dated the date hereof among the Borrower, the Project Entities and the Bank (the "Project Agreement" as defined in the Standard Terms and Conditions).

NOW, THEREFORE, the parties hereby agree as follows:

ARTICLE I

STANDARD TERMS AND CONDITIONS; DEFINITIONS

Section 1.01. Incorporation of Standard Terms and Conditions

All of the provisions of the Bank’s Standard Terms and Conditions dated 5 November 2021 are hereby incorporated into and made applicable to this Agreement with the same force and effect as if they were fully set forth herein (such provisions are hereinafter called the "Standard Terms and Conditions").

Section 1.02. Definitions

Wherever used in this Agreement (including the Preamble and Schedules), unless stated otherwise or the context otherwise requires, the terms defined in the Preamble have the respective meanings given to them therein, the terms defined in the Standard Terms and Conditions have the respective meanings given to them therein and the following terms have the following meanings:

"Authorisation" means any consent, registration, filing, agreement, notarisation, certificate, license, approval, permit, authority or exemption from, by or with any Governmental Authority, whether given or withheld by express action or deemed given or withheld by failure to act within any specified time period and all corporate, creditors’ and shareholders’ approvals or consents.

"Borrower’s Authorised Representative" means the Minister of Finance of the Republic of Serbia and other officers designated as such in accordance with Section 10.2 of the Standard Terms and Conditions.

"ClientNet" means the Bank’s online portal for the transmission of documents and information between the Bank and its clients, and any replacement website as the Bank may from time to time notify the Borrower.

"Designated Performance Requirements" means Performance Requirements 1 through 8 and 10 (or, as the context may require, any one of such Performance Requirements) of the Performance Requirements dated April 2019 and related to the Bank’s Environmental and Social Policy dated April 2019.

"Enforcement Policy and Procedures" means the Bank’s Enforcement Policy and Procedures dated 4 October 2017.

"Environmental and Social Action Plan" means the plan of environmental and social mitigation and improvement measures dated 9 May 2023 and agreed by the Borrower and the Bank, as such plan may be amended from time to time with the prior written consent of the Bank in accordance with Section 3.04(c).

"Environmental and Social Law" means any applicable law in any relevant jurisdiction, concerning the protection of the environment, workers, communities or project affected people.

"Environmental and Social Matter" means any matter that is the subject of any Environmental and Social Law, any Designated Performance Requirement or the Environmental and Social Action Plan.

"Fiscal Year" means the Borrower’s fiscal year commencing on 1 January of each year.

"Governmental Authority" means the government of the Borrower, or of any political subdivision thereof, whether state, regional or local, and any agency, authority, branch, department, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government or any subdivision thereof (including any supra-national bodies), and all officials, agents and representatives of each of the foregoing.

"Loan Currency" means EUR.

"PIU" means the project implementation unit referred to in Section 3.02.

"Procurement Plan" means a plan in respect of the procurement of goods, works and services for the purposes of the Project dated 30 May 2023 and agreed by the Borrower and the Bank, as such plan may be amended from time to time subject to no-objection from the Bank.

"Project Entities" means Project Entities Group I and Project Entities Group II.

"Project Entities Group I" means:

(a) Science and Technology Park Čačak d.o.o., a limited liability company organised in the Republic of Serbia, identification no. 20793112, with registered seat at Dr Dragiše Mišovića 169, Čačak, the Republic of Serbia ("STP Čačak");

(b) Science and Technology Park Niš d.o.o., a limited liability company organised in the Republic of Serbia, identification no. 21559148, with registered seat at Aleksandra Medvedeva 2a, Niš - Crveni krst, the Republic of Serbia ("STP Niš"); and

(c) Business Incubator d.o.o. Kruševac, a limited liability company organised in the Republic of Serbia, identification no. 20401176, with registered seat at Jasički put 9a, Kruševac, the Republic of Serbia ("BI Kruševac").

"Project Entities Group II" means each entity that accedes to the Project Agreement as a Project Entity Group II for the purpose of carrying out the Project and will manage the science, technology and innovation parks under Sub-Project II which Project Entity Group II shall be acceptable to the Bank.

"Responsible Ministries" means:

(a) the Ministry of Science, Technological Development and Innovation of the Republic of Serbia; and

(b) the Ministry for Public Investments of the Republic of Serbia.

"Sub-Project I" means the part of the Project the scope of which is described in Schedule 1 and is so designated therein as "Sub-Project I".

"Sub-Project II" means the part of the Project the scope of which is described in Schedule 1 and is so designated therein as "Sub-Project II".

"Terms of Reference" means the terms of reference in respect of supporting the science, technology and innovation parks and strengthening the innovation eco-system dated 21 April 2023 and agreed by the Borrower and the Bank for the purposes of the Project.

"Tranche" means either of Tranche 1 or Tranche 2.

"Tranche 1" means the maximum principal amount of the loan provided for in Section 2.01(b)(1) or, as the context may require, the principal amount thereof from time to time outstanding.

"Tranche 2" means the maximum principal amount of the loan provided for in Section 2.01(b)(2) or, as the context may require, the principal amount thereof from time to time outstanding.

Section 1.03. Interpretation

(a) In this Agreement, a reference to a specified Article, Section or Schedule shall, except where stated otherwise in this Agreement, be construed as a reference to that specified Article or Section of, or Schedule to, this Agreement.

(b) For the purposes of Section 3.01 (other than Sections 3.01(a) and 3.01(b)) to Section 3.06, the Borrower will act through the Responsible Ministries.

(c) For the purposes of Section 4.01, the Borrower will act through the Ministry of Finance of the Republic of Serbia and the Responsible Ministries, as applicable.

ARTICLE II

PRINCIPAL TERMS OF THE LOAN

Section 2.01. Amount and Currency

(a) The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of EUR 80,000,000 (eighty million Euros).

(b) The Loan shall consist of two Tranches, as follows:

(1) Tranche 1 in the amount of EUR 70,000,000 (seventy million Euros); and

(2) Tranche 2 in the amount of EUR 10,000,000 (ten million Euros).

Section 2.02. Other Financial Terms of the Loan

(a) The Minimum Drawdown Amount shall be EUR 100,000 (one hundred thousand Euros).

(b) The Minimum Prepayment Amount shall be EUR 2,000,000 (two million Euros).

(c) The Minimum Cancellation Amount shall be EUR 2,000,000 (two million Euros).

(d) The Interest Payment Dates shall be 20 June and 20 December of each year.

(e) (1) The Borrower shall repay Tranche 1 in fifteen equal (or as nearly equal as possible) semi-annual instalments on 20 June and 20 December of each year, with the first Loan Repayment Date being 20 December 2025 and the last Loan Repayment Date being 20 December 2032.

(2) The Borrower shall repay Tranche 2 in thirteen equal (or as nearly equal as possible) semi-annual instalments on 20 June and 20 December of each year, with the first Loan Repayment Date being 20 December 2026 and the last Loan Repayment Date being 20 December 2032.

(3) Notwithstanding the foregoing, in the event that the Borrower does not draw down the entire amount of a Tranche prior to the first Loan Repayment Date specified for that Tranche in this Section 2.02.(e), then the amount of each drawdown made on or after the first Loan Repayment Date for that Tranche shall be allocated for repayment in equal amounts to the several Loan Repayment Dates for that Tranche which fall after the date of such drawdown (with the Bank adjusting the amounts so allocated as necessary so as to achieve whole numbers in each case). The Bank shall, from time to time, notify the Borrower of such allocations.

(f) (1) The Last Availability Date for Tranche 1 shall be 20 June 2026, or such later date that the Bank may in its discretion establish and notify to the Borrower.

(2) The Last Availability Date for Tranche 2 shall be 20 June 2027, or such later date that the Bank may in its discretion establish and notify to the Borrower.

(g) The rate of the Commitment Charge shall be 0.5% per annum.

(h) The Loan is subject to a Variable Interest Rate. Notwithstanding the foregoing, the Borrower may, as an alternative to paying interest at a Variable Interest Rate on all or any portion of the Loan then outstanding, elect to pay interest at a Fixed Interest Rate on such portion of the Loan in accordance with Section 3.04(c) of the Standard Terms and Conditions.

Section 2.03. Drawdowns

(a) The Available Amount may be drawn down from time to time in accordance with the provisions of Schedule 2 to finance expenditures made (or, if the Bank so agrees, to be made) in respect of the reasonable cost of goods, works and services required for the Project.

(b) Notwithstanding Section 3.05(c) of the Standard Terms and Conditions, the Borrower has opted not to have the Front-end Commission paid out of the Available Amount and shall instead pay the Front-end Commission out of its own resources. The payment of the Front-end Commission by the Borrower shall be made pursuant to Section 3.05(d) of the Standard Terms and Conditions.

ARTICLE III

EXECUTION OF THE PROJECT

Section 3.01. Other Affirmative Project Covenants

In addition to the general undertakings set forth in Article IV of the Standard Terms and Conditions, the Borrower shall, unless the Bank otherwise agrees:

(a) Take all action necessary to provide adequate funds for the completion of the Project;

(b) Exempt from VAT and customs duties all goods, works and services (including consultancy services), procured for the Project and financed from the proceeds of the Loan, or provide for their reimbursement;

(c) Cause all goods, works and services financed out of the proceeds of the Loan be used exclusively for the purposes of (i) with respect to Tranche 1, Sub-Project I; and (ii) with respect to Tranche 2, Sub-Project II, in each case, in accordance with the Procurement Plan;

(d) To the extent that is adequate, delegate to the Project Entities the day-to-day management of the relevant Part of the Project, including, but not limited to, the financial and operational management;

(e) Implement, and procure that each Project Entity shall implement, the technical cooperation project in accordance with the Terms of Reference;

(f) Procure that the management of the Project facilities that are financed out of the proceeds of the Loan shall be transferred to the relevant Project Entity promptly after the technical completion of the Project and remain under management of such Project Entity;

(g) Procure that at least 90% of the general leasable area of each of the Project facilities that are financed out of the proceeds of the Loan and managed by each Project Entity shall be rented out to, or secured for use by, private sector entities;

(h) Procure that each Project Entity shall manage and operate the Project in accordance with the Project monitoring benchmarks set out in the Terms of Reference;

(i) Cause each Project Entity to perform all of its obligations under the Project Agreement, including without limitation its obligations relating to:

(1) implementation of the technical cooperation project as provided for in Section 2.01(a) of the Project Agreement;

(2) management and operation of the Project facilities as provided for in Section 2.01(a) of the Project Agreement;

(3) environmental and social matters as provided for in Section 2.02 of the Project Agreement;

(4) maintenance of procedures, records and accounts, preparation and submission to the Bank of financial statements and furnishing to the Bank any other relevant information relating to the Project or each Project Entity’s operations as provided for in Section 3.01 of the Project Agreement; and

(5) compliance with all covenants regarding financial and operational aspects of the Project and each Project Entity as provided for in Sections 3.02 to 3.04 of the Project Agreement.

Section 3.02. Project Implementation Unit

In order to coordinate, manage, monitor and evaluate all aspects of Project implementation, including the procurement of goods, works and services as well as consultancy services for the Project, the Borrower shall, unless otherwise agreed with the Bank, establish and at all times during execution of the Project operate a project implementation unit with adequate resources and suitably qualified personnel, under terms of reference acceptable to the Bank.

Section 3.03. Procurement

For purposes of Section 4.03 of the Standard Terms and Conditions, the following provisions shall, except as the Bank otherwise agrees, govern procurement of goods, works and services as well as consultancy services required for the Project and to be financed out of the proceeds of the Loan:

(a) Goods, works and services as well as consultancy services shall be procured through open competitive procedures, except as follows:

(1) contracts for consultancy services of an advance procurement support consultant, in an aggregate amount not exceeding the equivalent of EUR 70,000, may be procured through direct contracting.

(b) For purposes of Section 3.03(a), the procedures for open competitive procedures, direct contracting, procurement of commodities, procurement under national laws and procurement by utilities are set out in Section III, Article 3 of the EBRD Procurement Rules.

(c) All contracts shall be subject to the review procedures set out in the EBRD Procurement Rules and shall be subject to prior review by the Bank.

Section 3.04. Environmental and Social Compliance Covenants

Without limiting the generality of Sections 4.02(a), 4.04(a)(iii), and 5.02(c)(iii) of the Standard Terms and Conditions, and unless the Bank otherwise agrees:

(a) The Borrower shall, and shall cause any contractor to, carry out the Project in accordance with the Designated Performance Requirements.

(b) Without limiting the foregoing, the Borrower shall diligently implement and adhere to the Environmental and Social Action Plan and monitor the implementation of such plan in accordance with the monitoring provisions contained in such plan.

(c) The Borrower and the Bank may from time to time agree to amend the Environmental and Social Action Plan in response to changes in the circumstances of the Project, the Borrower or the Project Entities, unforeseen events and the results of monitoring. Without limiting the generality of the foregoing,

(1) if there is any adverse environmental or social impact or issue that was not foreseen by or contemplated in the Environmental and Social Action Plan either entirely or as to its severity,

(2) if any impact mitigation measure set out in the Environmental and Social Action Plan is not sufficient to eliminate or reduce any environmental or social impact to the level contemplated by the relevant Designated Performance Requirements within the time frame set out in the Environmental and Social Action Plan, or

(3) if any material non-compliance with the Environmental and Social Action Plan or with any Environmental and Social Law has been identified by the Borrower, the Bank or an inspection from any regulatory or enforcement authority,

the Borrower shall, as soon as reasonably practicable and subject to the consent of the Bank, develop and incorporate into the Environmental and Social Action Plan such additional or revised mitigation measures as may be necessary to achieve compliance with the Designated Performance Requirements, the Environmental and Social Action Plan or Environmental and Social Laws, in each case in a manner satisfactory to the Bank.

Section 3.05. Consultants

(a) In order to assist in the implementation of the Project, the Borrower shall, unless otherwise agreed with the Bank, employ or cause to be employed, as required, and use consultants whose qualifications, experience and terms of reference are satisfactory to the Bank, including:

(1) consultants to assist with the supervision of construction works for the Project;

(2) advance procurement support consultants; and

(3) consultants to assist the PIU.

(b) The Borrower shall provide, without charge, to any consultants engaged to assist in matters relating to the Project or the operations of the Borrower all facilities and support necessary for the carrying out of their functions, including office space, photocopying equipment and supplies, secretarial services and transportation, as well as all documents, materials and other information that may be relevant to their work.

Section 3.06. Reporting Frequency and Submission Requirements

(a) Commencing from the Effective Date, until the full amount of the Loan has been repaid or cancelled, the Borrower shall submit to the Bank annual reports, in form and substance satisfactory to EBRD, on Environmental and Social Matters arising in relation to the Borrower, the Project Entities or the Project, as referred to in Section 5.02(c)(iii) of the Standard Terms and Conditions, within 60 days after the end of the year being reported on. Such reports shall include information on the following specific matters:

(1) information on compliance by the Borrower and the Project Entities with the Designated Performance Requirements as described in Section 3.04(a), Section 2.02 of the Project Agreement and the implementation of the Environmental and Social Action Plan;

(2) information on how the Borrower has monitored the compliance with the Designated Performance Requirements and the Environmental and Social Action Plan by any contractor engaged for the Project and a summary of any material non-compliance by such contractor with the Designated Performance Requirements and the Environmental and Social Action Plan and of any measures taken to remedy such non-compliance;

(3) information on implementation of the stakeholder engagement plan and grievance mechanism required by Designated Performance Requirement 10, including a summary of any grievances received and how such grievances were resolved;

(4) information on compliance by the Borrower and each Project Entity with Environmental and Social Laws in relation to the Project, including a description of any claim, proceeding, order or investigation commenced or threatened against the Borrower or any Project Entity, the status of any Authorisation required for the Project, the results of any inspection carried out by any regulatory authority, any violation of applicable laws, regulations or standards and any remedial action or fine relating to such violation, a summary of any material notice, report and other communication on Environmental and Social Matters relating to the Project submitted by the Borrower or any Project Entity to any regulatory authority and any other circumstances giving rise to liability of the Borrower or any Project Entity for any Environmental and Social Matter;

(5) information on occupational health and safety management and the occupational health and safety record of the Project including the rates of accidents, lost time incidents and near-misses, any preventive or mitigative measures taken or planned by the Borrower and each Project Entity, any staff training on occupational health and safety and any other initiatives in relation to occupational health and safety management which have been implemented or planned by the Borrower and each Project Entity;

(6) a summary of any change in Environmental and Social Laws which may have a material effect on the Project; and

(7) copies of any information on Environmental and Social Matters periodically submitted by the Borrower and each Project Entity to its shareholders (if applicable) or the general public;

(b) Commencing from the Effective Date, the Borrower shall submit the periodic Project reports referred to in Section 4.04(a)(v) of the Standard Terms and Conditions quarterly, within 60 days after the end of the period being reported on, until the Project has been completed. Such reports shall include the following specific features:

(1) The following general information:

(A) the physical progress accomplished in the implementation of the Project to the date of report and during the reporting period;

(B) actual or expected difficulties or delays in the implementation of the Project and their effect on the implementation schedule, and the actual steps taken or planned to overcome the difficulties and avoid delays;

(C) expected changes in the completion date of the Project;

(D) key personnel changes in the staff of the PIU, the consultants or the contractors;

(E) matters that may affect the cost of the Project; and

(F) any development or activity likely to affect the economic viability of any Part of the Project.

(2) A bar-type progress chart, based on the Project implementation schedule as set out in the Procurement Plan, showing the progress in each Part of the Project and including a planned and actual expenditure graph.

(3) Financial project reports showing details of the expenditures incurred under each Part of the Project and the Drawdowns, together with a statement showing:

(A) original cost estimates;

(B) revised cost estimates, if any, with reasons for changes;

(C) original estimated expenditures and actual expenditures to date;

(D) reasons for variations of actual expenditures to date from original estimated expenditures to date; and

(E) estimated expenditures for the remaining quarters of the year.

(4) A brief statement of the status of compliance with each of the covenants contained in this Agreement.

(c) Immediately upon the occurrence of any incident or accident relating to the Borrower, any Project Entity or the Project which has or is likely to have a significant adverse effect on the environment, workers, or on public or occupational health or safety, the Borrower shall inform the Bank and promptly thereafter give the Bank notice thereof specifying the nature of such incident or accident and any steps the Borrower is taking to remedy the same. Where an incident involves sensitive information in relation to a person or any risk of retaliation, the initial notice to the Bank shall not include any details of the identity of the persons involved. Without limiting the generality of the foregoing,

(1) an incident or accident relates to the Project if it occurs on any site used for the Project or, if it is caused by Project workers and/or facilities, equipment, vehicles or vessels used for or relating to the Project (whether or not being used on any site of the Project and whether or not being used by authorised or unauthorised persons);

(2) an incident or accident is considered to have a significant adverse effect on the environment or on public or occupational health or safety if:

(A) any applicable law requires notification of such incident or accident to any governmental authority,

(B) such incident or accident involves fatality of any person (whether or not such person is employed by the Borrower or any Project Entity),

(C) more than one person (whether or not such persons are employed by the Borrower or any Project Entity) has received serious injury requiring hospitalisation,

(D) such incident involves violence and harassment, bullying, intimidation, and/or exploitation, including any form of gender-based violence;

(E) such incident involves forced and child labour relating to the Project; or

(F) such incident or accident has become, or is likely to become, public knowledge whether through media coverage or otherwise.

(d) The Borrower shall promptly notify the Bank of any significant protest or petition by workers or members of the public directed at or relating to the Borrower, any Project Entity or the Project which might have a material adverse effect on the Borrower, the relevant Project Entity or the Project or which has become, or is likely to become, public knowledge through media coverage or otherwise. Within ten days following any such notification, the Borrower shall submit a report satisfactory to the Bank specifying the outcome of the Borrower’s investigation into such protest, and any steps taken, or proposed to be taken, by the Borrower to resolve the issues raised in the protest or petition.

ARTICLE IV

FINANCIAL COVENANTS

Section 4.01. Financial Records and Reports

(a) The Borrower shall, in respect of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof, maintain procedures, records and accounts adequate to reflect, in accordance with accounting standards generally accepted and consistently applied in the Republic of Serbia, the operations, resources and expenditures relating to the Project and to monitor and record the progress of the Project (including its costs and the benefits to be derived from it).

(b) The Borrower shall furnish to the Bank:

(1) as soon as available, but in any case not later than six months after the end of each Fiscal Year, the report of such scope and in such detail as the Bank may reasonably request; and

(2) such other information concerning such records and accounts as the Bank may from time to time reasonably request.

ARTICLE V

SUSPENSION; ACCELERATION; CANCELLATION

Section 5.01. Suspension

The following are specified for purposes of Section 7.01(a)(xvii) of the Standard Terms and Conditions:

(a) the legislative and regulatory framework applicable to the science, technology and innovation sector in the territory of the Borrower shall have been amended, suspended, abrogated, repealed or waived in a manner that, in the Bank’s reasonable opinion, would have a material adverse effect on the Project or the ability of any of the Borrower or the Project Entities to perform their obligations under this Agreement or the Project Agreement other than as approved by the Bank in writing; or

(b) Control of any Project Entity shall have been transferred to a party other than the Borrower unless the Bank has given its prior written approval to such transfer.

ARTICLE VI

EFFECTIVENESS

Section 6.01. Conditions Precedent to Effectiveness

The following are specified for purposes of Section 9.02(c) of the Standard Terms and Conditions as additional conditions to the effectiveness of this Agreement:

(a) The Loan Agreement shall have been ratified by the Parliament of the Republic of Serbia;

(b) The Project Agreement shall have been executed and delivered to the Bank, and all conditions to the effectiveness of the Project Agreement shall have been satisfied, in each case, in form and substance satisfactory to the Bank; and

(c) The PIU with adequate resources and suitably qualified personnel, acceptable to the Bank, shall have been established by the Borrower, acting through the Responsible Ministries, and is operational.

Section 6.02. Legal Opinion

(a) For purposes of Section 9.03(a) of the Standard Terms and Conditions, the opinion or opinions of counsel shall be given on behalf of the Borrower by the Minister of Justice.

(b) For purposes of Section 9.03(c) of the Standard Terms and Conditions, the opinion or opinions of counsel shall be given on behalf of each Project Entity Group I by the head of the legal department of that Project Entity Group I.

Section 6.03. Termination for Failure to Become Effective

The date 180 days after the date of this Agreement is specified for purposes of Section 9.04 of the Standard Terms and Conditions.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Notices

(a) The following addresses are specified for purposes of Section 10.01 of the Standard Terms and Conditions, except that any notice shall be deemed to be delivered if by hand, mail, or in pdf or similar format by electronic mail:

For the Borrower:
Ministry of Finance of the Republic of Serbia
Kneza Milosa 20
11000 Belgrade
Serbia
Attention: Minister of Finance
Email: kabinet@mfin.gov.rs
For EBRD:
European Bank for Reconstruction and Development
5 Bank Street
London E14 4BG
United Kingdom
Attention: Operation Administration Department/Operation No. 54083
Telephone: +44 20 7338 6000
Email: oad@ebrd.com

(b) The Bank may invite the Borrower to register to use ClientNet or another form of electronic communication and, if the Borrower and the Bank agree to use ClientNet or such other form of electronic communication, any notice, application or other communication from the Borrower to the Bank or from the Bank to the Borrower (other than any notice, application or other communication that is required by this Agreement to be in an original, certified or hard copy), may, subject to the terms and conditions of ClientNet or such other form of electronic communication, be given or made by posting such notice, application or other communication on ClientNet or sent in accordance with the terms agreed concerning such other form of electronic communication.

(c) Any notice, application or other communication delivered by hand, airmail or facsimile transmission or via ClientNet or another agreed form of electronic communication will only be effective when actually received (or made available) in readable form, provided that any notice, application or other communication that is received (or made available) after 5:00 p.m. in the place in which the party to whom the relevant notice, application or communication is sent has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

(d) The following are the names, titles and email addresses of the persons designated as the initial contacts of the Borrower for purposes of any invitation the Bank may send to the Borrower regarding ClientNet:

Name	Title	E-mail address	Language - English, Russian, French
Public Debt Administration (Kabinet Uprave za javni dug)		kabinet@javnidug.gov.rs	English

IN WITNESS WHEREOF, the parties hereto, acting through their duly authorised representatives, have caused this Agreement to be signed in five copies in the English language as of the day and year first above written.

THE REPUBLIC OF SERBIA

By: ______________________________
Name: Siniša Mali
Title: Minister of Finance

EUROPEAN BANK
FOR RECONSTRUCTION AND DEVELOPMENT
By: ______________________________
Name: Matteo Colangeli
Title: Director

Schedule 1

DESCRIPTION OF THE PROJECT

1. The purpose of the Project is to assist the Borrower in the construction and expansion of modern science, technology and innovation parks that will be managed by the Project Entities (the "STPs").

2. The Project consists of Sub-Project I and Sub-Project II as follows:

Sub-Project I: (i) expansion and development of new business facilities for science, technology and innovation parks located at the Sub-Project I Sites that will be managed by the Project Entities Group I; and (ii) relevant procurement and implementation support and works supervision.

Sub-Project II: (i) expansion and development of new business facilities for science, technology and innovation parks located at the Sub-Project II Sites that will be managed by the Project Entities Group II; and (ii) relevant procurement and implementation support and works supervision.

For the purposes of this Agreement:

"Sub-Project I Sites" means:

(a) (i) land parcel no. 4606/17 located at Kulinovačko polje in Čačak; and (ii) land parcel no. 784/1 located at Dragiše Mišovića 169 (Kulinovačko polje in Čačak), in each case, managed and used by STP Čačak;

(b) (i) land parcel nos. 1929/3 (partially), 1929/6, 1929/7 and 1929/8 located at Aleksandra Medvedeva 2; and (ii) land parcel no. 1929/6 located at Aleksandra Medvedeva 2, in each case, managed and used by STP Niš; and

(c) (i) land parcel no. 2884 located at Kavgala, Kruševac; (ii) land parcel no. 1335/4 located at Šandora Petefija, Kruševac; and (iii) land parcel no. 2378/7 located at 14. Oktobra Kruševac, in each case, managed and used by BI Kruševac.

"Sub-Project II Sites" means the land plots that will be managed and used by the Project Entities Group II for the purposes of Sub-Project II with the details of such land plots to be notified to and agreed by the Bank.

3. The Project consists of the following Parts, subject to such modifications thereof as the Bank and the Borrower may agree upon from time to time:

Part A: Capital expenditures for the purposes of the Project (including (i) construction works for the expansion of the STPs; (ii) purchase of furniture for the STPs; and (iii) purchase of scientific equipment and other goods for the operation of the STPs).

Part B: Consultancy services for the purposes of the Project (including (i) supervision of construction works for the expansion of the STPs; (ii) engagement of an advance procurement support consultant; and (iii) engagement of PIU support consultant).

4. Sub-Project I

(a) Ownership of the Project Entities Group I

STP Niš is owned by the City of Niš (40%), the Republic of Serbia (40%) and University of Niš (20%).

STP Čačak is owned by the City of Čačak (40%), the Republic of Serbia (40%), University of Kragujevac (8%), Fruit Research Institute (4%) and two Business Associations (8%).

B) Kruševac is owned by the City of Kruševac (100%).

(b) Approximate usage area for Sub-Project I

Sub-Project II

The details of the Project Entities Group II, the Sub-Project II Sites and usage area for Sub-Project II shall be provided by the Borrower to the Bank before the first Drawdown under Tranche 2.

5. Key elements of the Project performance

New buildings for the Project shall achieve an internationally recognised voluntary green building certification or an improved EPC rating. Refurbished buildings shall achieve at least 30% improvement in energy efficiency in the case of refurbishments as will be documented in the EPC contract. The Project shall achieve:

- reduction in CO2e emissions by at least 19.7n per year; and

- reduction in primary energy consumption by at least 174 GJ per year.

6. Provisional timeline of the Project

Sub-Project I shall be completed no later than 31 December 2025 in accordance with the milestones and timeline set forth below subject to a total cumulative delay of 6 months. The Project implementation will be monitored through the project implementation reports prepared by the PIU and annual visits to the Sub-Project I Sites by the Bank until the completion date.

	Milestones	Timeline
1.	Activities prior to start of actual construction of the facilities that need to be completed before contract award (including, among other things, hiring PIU Support Consultant and Construction Supervision Consultant, tendering process and project preparation activities)	No later than 31 December 2023
2.	Start of the actual construction and construction completion	No later than 31 December 2025
3.	Project completion (including purchase of furniture and equipment)	No later than 28 February 2026

The timeline of Sub-Project II shall be agreed by the Borrower and the Bank as a condition to the first Drawdown under Tranche 2.

Schedule 2

CATEGORIES AND DRAWDOWNS

1. The table attached to this Schedule sets forth the Categories, the amount of the Loan allocated to each Category and the percentage of expenditures to be financed in each Category. As of the date of the Loan Agreement, the table attached to this Schedule provides for the relevant details in respect of Sub-Project I.

2. Notwithstanding the provisions of paragraph 1 above, no Drawdown shall be made in respect of expenditures incurred prior to the date of the Loan Agreement.

3. The Borrower may not deliver a drawdown application following fifty (50) Drawdowns.

4. The Borrower may not deliver a drawdown application in respect of the first Drawdown under Tranche 1 unless the following conditions precedent have been fulfilled, in form and substance satisfactory to the Bank, or at the sole discretion of the Bank waived, whether in whole or part and whether subject to conditions or unconditional:

(a) the Borrower, acting through the Responsible Ministries, shall have appointed the advance procurement support consultants for the purposes of the implementation of the Project in accordance with Section 3.05(a).

5. The Borrower may not deliver a drawdown application in respect of the first Drawdown under Tranche 2 unless the following conditions precedent have been fulfilled, in form and substance satisfactory to the Bank, or at the sole discretion of the Bank waived, whether in whole or part and whether subject to conditions or unconditional:

(a) technical, environmental and social due diligence on Sub-Project II and Project Entities Group II shall have been completed in a manner satisfactory to the Bank and each of the Environmental and Social Action Plan and the Procurement Plan shall have been amended with the prior written consent of the Bank to reflect any changes in relation to Sub-Project II;

(b) the Bank shall have received executed originals of an amendment agreement to the Loan Agreement in relation to Sub-Project II, in form and substance satisfactory to the Bank, setting forth, among other things, amendments to Schedule 1 and the Attachment to this Schedule which amendment agreement shall be acknowledged and agreed by the Project Entities;

(c) the Bank shall have received executed originals of an accession letter to the Project Agreement from the Borrower and Project Entities Group II, in form and substance satisfactory to the Bank;

(с) the Bank shall have received legal opinion(s) of the head of the legal department of each Project Entity Group II (in form and substance satisfactory to the Bank) confirming, among other things, that the Project Agreement has been duly authorised by the relevant Project Entity Group II and constitutes valid and legally binding obligations of the relevant Project Entity Group II; and

(d) the Bank shall have received such other documents and legal opinions as the Bank may reasonably request.

Attachment to Schedule 2

Category	Amount Allocated in the Loan Currency	Percentage of Expenditures to be Financed
Sub-Project I
(1) Goods for the STPs (including furniture, scientific equipment and other goods for the operation of the STPs)	7,950,000	100% of contract value excluding VAT and custom duties
(2) Works for the STPs	53,500,000	100% of contract value excluding VAT and custom duties
(3) Consulting services	2,400,000	100% of contract value excluding VAT and custom duties
(4) Contingencies	6,150,000
Total amount of Tranche 1	70,000,000
Sub-Project II
To be set forth in an amendment agreement to the Loan Agreement in relation to Sub-Project II that shall be provided as a condition precedent to the first Drawdown under Tranche 2 in accordance with paragraph 5(b) of Schedule 2.
Total amount of Tranche 2	10,000,000
Total amount of the Loan	80,000,000