Cabinet of Ministers Regulations No. 1052 Riga 2004 December 21 (Mon. No 74 29) For the contract of guarantee between the Republic of Latvia and the Nordic investment bank in regard to environmental investment project loans and guarantees on loans for investment projects of under 7 and 9 of the Statute article that are attached to the agreement on the Nordic investment bank, signed on 11 February 2004, between the Kingdom of Denmark, the Republic of Estonia, the Republic of Finland, the Republic of Iceland, the Republic of Latvia, the Republic of Lithuania, the Kingdom of Norway and the Kingdom of Sweden, Issued in accordance with the Cabinet of Ministers Act article 14 equipment, first paragraph, point 3 of the agreement between the Office of guarantee 1. The Republic of Latvia and the Nordic investment bank in regard to environmental investment project loans and guarantees on loans for investment projects of under 7 and 9 of the Statute article that are attached to the agreement on the Nordic investment bank, signed on 11 February 2004, between the Kingdom of Denmark, the Republic of Estonia, the Republic of Finland, the Republic of Iceland, the Republic of Latvia, the Republic of Lithuania, the Kingdom of Norway and the Kingdom of Sweden (hereinafter the agreement), these rules are adopted and approved. 2. the agreement shall enter into force laid down in article 8 at the time and in order. Prime Minister a. Halloween Finance Minister o. Spurdziņš adopted and approved by the Cabinet of Ministers of 21 December 2004, regulations no 1052 guarantee agreement between the Republic of Latvia and the Nordic Investment Bank AS the Nordic investment bank (the "Bank") loans ("environmental investment loans") and gives guarantees loans for environmental investment projects ("environmental investment loan guarantees") outside the Member countries of the Bank in accordance with the Bank's Statute, article 7 and 9; WHEREAS the Republic of Latvia ("guarantor") has decided to issue a guarantee (the "guarantee") in favor of the Bank in relation to its environmental investment issued loans and environmental investment guarantees; WHEREAS the Kingdom of Denmark, the Republic of Estonia, the Republic of Finland, the Republic of Iceland, the Republic of Lithuania, the Kingdom of Norway and the Kingdom of Sweden ("the others" or with a guarantor guarantor "guarantors") has decided to issue the relevant guarantees in favor of the Bank; SO NOW the undersigned parties have entered into the following contracts of guarantee (the "guarantee agreement"): article 1 the guarantee 1. Guarantee covers all loans that a Bank designated as environmental investment loans, and all the guarantees that the Bank designated as environmental investment guarantees in accordance with article 9 of the Statute of the Bank. Guarantee covers any disincentive at a time of environmental investment loans and any given moment existing environmental investment guarantees. 1.2. The guarantor guarantees upon request and jointly and severally with the other guarantors to the Bank proper and accurate each borrower's financial obligations in accordance with relevant environmental investment loans, including interest for late payment, legal fees and other costs in connection with the Bank's requirements to the borrowers, as well as the Bank's financial obligations in accordance with the environmental investment guarantees subject to the following provisions: (i) the guarantor liability limit is the total amount of the Bank's total outstanding claims in regard to environmental investment loans in the moment plus the total amount guaranteed by the Bank according to a particular point in the existing environmental investment guarantees; (ii) the guarantor's liability shall not exceed the total amount of EUR 3 176 275 of the total liability of the guarantor the total, namely EUR 1 300 million. the liability of the Guarantor is successively reduced by payments made to the Bank by the guarantor under this guarantee agreement. Article 2 execution of the guarantee 2.1. the Bank may require the fulfillment of obligations under the contract of guarantee, if the borrower is not wholly or partly fulfilled obligations that guaranteed in accordance with article 1 of the Treaty of guarantee, or if the Bank has received a request for payment under a guarantee of environmental investment. 2.2. the Bank may also require the fulfilment of the obligations under the contract of guarantee, the payment made by the borrower is not the Bank's benefit. 2.3. the Bank may not require payment under the guarantee contract, while not requiring payment from the other guarantors. 2.4. payment shall be made to the guarantor during the two months following the request of the Bank. 2.5. If the borrower does not meet its obligations resulting from the environmental investment loan or if the Bank receives a payment request for environmental investment guarantees (see. 2.1. and 2.2.), the Bank shall take all possible measures to collect the amount receivable. 2.6. the environmental investment loans and environmental investment guarantees in the Administration when the guarantor has paid the Bank guarantee, this Agreement shall take place in accordance with the provisions of article 5. 2.7. The guarantee agreement is effective until it is fully guaranteed amount paid or all environmental investment loans are fully repaid and all environmental investment guarantees have expired or for any other reason, the result is no longer in effect. Article 3 environmental investment loan administration 3.1 the Bank on December 31 each year and submit a report on august 31, the guarantor of amounts outstanding from issued environmental investment loans, and galvotaj sums arising from environmental investment guarantees. The report should include a brief assessment of the Bank borrowers ' ability to repay the loan, information about any request to delay repayment or change the principal and/or interest payment schedule and the status of such requests, as well as information on delayed payments (not including technical delays). 3.2. in addition, the Bank shall without undue delay inform the Guarantor of any circumstances, which the Bank believes may adversely affect the borrower's ability to pay interest or take any environmental investment loan principal repayment, or any event or circumstances that can cause a Bank to make a payment of liabilities for environmental investment guarantees. 3.3. in addition, the Bank shall submit to the guarantor any requested information about environmental investment loans and environmental investment guarantees. 3.4. the Bank is administered by each environmental investment loans and environmental investment guarantees in accordance with the generally accepted banking principles. 3.5. Guarantor's obligations and commitments do not in any way affect the rules of the Bank. 4. Article assignment 4.1 the Bank without the prior consent of the Guarantor may not cede or pledge their rights after the guarantee agreements. Article 5 transfer of rights 5.1 the extent, as the guarantor of the payment has been carried out by the Bank in accordance with the contract of guarantee, the guarantor acquires all of the Bank's rights, including the right to any guarantee of environmental investment loans or environmental investment guarantee, as the case may be. 5.2. If the guarantor undertakes any of the Bank's rights in the manner described above, the Bank shall, on request, provide the guarantor a certified copy of the document on the environmental investment loans and environmental investment guarantees. 5.3. If the guarantor has undertaken to Bank right, Bank after signed a contract Guaranteeing a demand for payment of the guarantor for the Administration and collection of relevant environmental investment loans or, as the case may be, by the environmental investment guarantees. Article 6 notification 6.1. Statements in connection with this Agreement shall be sent to the Office of the guarantor and/or Bank, depending on the case in question to the following addresses: guarantor: Bank: Finance Ministry Northern investment bank P.O. Box 249, sand Street 1, Riga, LV-34 Fabianikat-FIN-00171 Helsinki 1919 Latvia Finland fax: + 371 7 095503 fax: + 358 9 622 1504 7. Article 7.1. Settlement of disputes any dispute, disagreement or claim arising from or relating to this agreement, the interpretation, application or implementation, including its existence, validity or termination, and which is not settled by negotiation or other mutually agreed form of dispute resolution in 60 days, will draw final and binding arbitration under the arbitration of permanent operation, check the rules for disputes involving international organisations and States in force from the date of entry into force of the Treaty. 7.2. the number of arbitrators shall be three. Each of the parties, as set out in detail in article 7.1 the arbitration rules referred to, appoint one arbitrator and the two arbitrators so appointed shall appoint a third arbitrator who will act as the Chairman of the Arbitration Board. If the arbitrator fails to appoint, appointment is made by the President of the International Court of Justice. 7.3. The arbitration language is English. Article 8 entry into force This 8.1 guarantee shall enter into force when (i) has entered into force in 2004, 11 February, signed the agreement on the Nordic investment bank and; (ii) all guarantee agreements with the other guarantors are duly signed and completed. The Treaty of guarantee signed in English in two copies, one of which is the guarantor and the other for the Bank. Signed at Helsinki, on 17 December 2004.

The Republic of LATVIA, the Nordic Investment BANK on behalf of the Government of Denmark EUR 1 70,112,698 (23.37%) around.

Estonia EUR 0.73%) 2,189,894 (apt.

Finland EUR 51,377,349 (17.13%) around.

Iceland € 1.06%) 3,186,941 (apt.

Latvia € 1.06%) 3,176,275 (apt.

EUR 4,911,939 Lithuania (1.64%) around.

Norway

EUR 61,324,467 (20.44%) around.

Sweden EUR 103,720,437 (34.57%) around.


300,000,000 (100%)


Guarantee agreement BETWEEN the REPUBLIC OF Latvia AND the NORDIC investment BANK relating to Environmental investment loans and Environmental Investment Guarantee in accordanc with sections 7 and 8 of the Statute of the attached to the agreement concerning the Nordic Investment Bank, signed on 11 February 2004 between the Kingdom of Denmark, the Republic of Estonia, the Republic of Finland, the Republic of Iceland, the Republic of Latvia -the Republic of Lithuania, the Kingdom of Norway and the Kingdom of Sweden whereas the Nordic Investment Bank (the "Bank") makes loans ("Environmental Investment Loan") and issues a loan guarantee ("Environmental Investment Guarantee") for environmental investments in the neighbouring region of the Member countries of the Bank to their Section 7 pursuan and 9 of the Statute of the Bank; Whereas the Republic of Latvia (the "Guarantor") has decided to issue, a guarantee (the "guarantee") in favour of the Bank in the relations it Environmental investment loans and Environmental Investment Guarantee; Whereas the Kingdom of Denmark, the Republic of Estonia, the Republic of Finland, the Republic of Iceland, the Republic of Lithuania, the Kingdom of Norway and the Kingdom of Sweden (the "Guarantor" or Others, together with the Guarantor the Guarantor ") have decided the issue in favour of the òàæó guarantee of the Bank; NOW THEREFORE the undersigned parties have entered into the following guarantee agreement (the "guarantee agreement"): article 1 scope of the guarantee the guarantee shall cover 1.1 all loans by the Bank designated as Environmental investment loans and all guarantee by the Bank as the designated Environmental Investment Guarantee in accordanc with Section 9 of the Statute of the Bank. The guarantee shall cover all Environmental investment loans, which are outstanding from time to time and all Environmental Investment Guarantee in force from time to time. 1.2. The Guarantor's guarantee jointly and severally on demand and with the Other Guarantor, to the Bank the due and punctual performance of observanc and each borrower of it financial obligations under the relevant Environmental Investment Loans, including default interest and legal fees and other costs in connection with enforcing the Bank's claims against the borrower, as well as the Bank's financial obligation under the Environmental Investment Guarantee on the following terms : (i) the aggregate amount of the liability of the Guarantor shall be limited in aggregate to the amount of the Bank's outstanding claims in the relations it Environmental investment loans from time to time, plus the aggregate amount guaranteed by the Bank under the Environmental Investment Guarantee in force from time to time; (ii) the aggregate amount of the liability of the Guarantor shall not exceeds 100 EUR 3,176,275 of the aggregate amount of the total liability of the Guarantor, i.e. any other 300 million EUR 1. The liability of the Guarantor shall be successively decreased by the payments made by the Guarantor to the Bank under this guarantee agreement. Article 2 the performance of the guarantee 2.1 the Bank may demand performance under this guarantee agreement if the borrower has failed to perform all or part of the obligation is guaranteed under article 1 above or if the Bank has received a demand for payment under an Environmental investment guarantee. 2.2 the Bank may also demand performance under this guarantee agreement if a payment made by the borrower is not at the free disposal of the Bank. 2.3 the Bank may not demand payment under this guarantee agreement without simultaneously demanding payment by the Other Guarantor. 2.4 the payment by the Guarantor shall be made within two months from the Bank's demand. 2.5 Should the borrower file to meet its obligation under Environmental Investment Loan, or should the Bank receive a demand for payment under an Environmental investment guarantee (see 2.1 and 2.2 above), the Bank shall make its best efforts to recover the due and payable non. 2.6 the administration of Environmental investment loans and Environmental Investment Guarantee in cases in which the Guarantor has made a payment to the Bank under this Guarantee shall be subject to agreement to the provision in article 5 below. 2.7 this guarantee agreement shall remain in force until the aggregate amount guaranteed has been paid in full, or all Environmental investment loans have been repaid in full and all Environmental Investment Guarantee-have lapsed or for some other reason ceased to be in force. Article 3 the administration of Environmental investment loans 3.1 the Bank shall as of December 31 and 31 August each year report to the Guarantor the non is outstanding under the Environmental investment loans and the guaranteed under the Environmental of non Investment Guarantee. The report shall include a short assessment by the Bank of the borrower ' ability to repay the Loan, information on any requests for deferring or rescheduling of a payment of principal and/or interest and the status of such requests as well as information on delayed payments (excluding technical delay). 3.2 the Bank shall, in addition to the above, without delay inform the Guarantor is unreasonabl of any of which in the opinion circumstanc of the Bank may adversely affec the borrower's ability to pay interest on, or make repayments of principal on any Environmental investment, Loan, or of any occurrence or of which may cause an circumstanc obligation for the Bank to make a payment under an Environmental investment guarantee. 3.3 the Bank shall, in addition to the above, furnish the Guarantor with any requested information regarding Environmental investment loans and Environmental Investment Guarantee. 3.4 the Bank shall administer each Environmental Investment Loan and Environmental investment guarantee in accordanc with generally accepted banking principles. 3.5 the obligation and of the Guarantor shall liabilit to in no way whatsoever be affected by any failure on the Bank's behalf in complying with the provision of this article. Article 4 assignment 4.1 the Bank shall not without the prior consent of the Guarantor assign or pledge its rights under this guarantee agreement. Article 5 Transfer of rights 5.1 To the exten the Guarantor has made a payment to the Bank under the guarantee agreement, the Guarantor shall acquir all òàæó rights of the Bank, including the right to any security for such Environmental Investment Loan or Environmental investment guarantee, as the case may be. 5.2 Should the Guarantor assume any of the Bank's rights in the manner described above, the Bank shall on request furnish the Guarantor with certified to all documents concerning the cop of the appropriate Environmental investment loans and Environmental Investment Guarantee. 5.3 If the Guarantor has assumed the rights of the Bank, the Bank shall at the request of the Guarantor enter into an agreement with the Guarantor regarding the administration and collection of payments under the appropriate Environmental investment loans or, as the case may be, the Environmental Investment Guarantee. Article 6 notices 6.1 notices in connection with this guarantee agreement shall be sent to the Guarantor and/or the Bank, as the case may be under the following address: the Guarantor: the Bank: the Ministry of finance Nordic Investment Bank P.O. Box 249, Smils Street 1, Riga LV-Fabianinkat of 34 FIN-00171 Helsinki 1919 Latvia Finland Fax: + 371 7 095503 Fax: + 358 9 622 1504 article 7 dispute resolution 7.1 Any dispute , controversy or claim arising out of or relating to the interpretation, application or performance of this agreement, including its validity, or termination, the existenc which is not settled by negotiation or other agreed mode of settlement within 60 days, shall be settled by final and binding arbitration in accordanc with the Permanent Court of Arbitration Optional Rules for Arbitration involving International organizations and States as in effect on the date of this agreement. 7.2 the arbitrator shall be the number of three. Each party shall, as set out in detail in the arbitration rules referred to in article 7.1, appoin one arbitrator and the two appointed arbitrator shall be appoin is so the third arbitrator who shall act as the presiding arbitrator of the tribunal. In the case of failure it to appoin (an) arbitrator (s) in the manner described, the by afors appointing authority shall be the President of the International Court of Justice. 7.3 the language to be used in the CAs proceedings shall be English. Article 8 Entry into force 8.1 this guarantee shall enter into force when (i) the agreement signed on 11 February 2004 concerning NIB, has entered into force and; (ii) all guarantee agreements with the Other Guarantor will have been duly signed and executed. This guarantee agreement has been signed in English in two, Guarantor counterpart one for and one for the Bank. Done in Helsinki on 17 December 2004 For and on behalf of the Government and on behalf of the For of the REPUBLIC OF Latvia, the NORDIC investment BANK 1 Denmark EUR 70,112,698 (app. 23.37%)

Estonia EUR 0.73%) 2,189,894 (app.

Finland (17.13%) to EUR 51,377,349 app.

Iceland 1.06%) to EUR 3,186,941 (app.

Latvia (1.06%) to EUR 3,176,275 app.

Lithuania (1.64%) to EUR 4,911,939 app.

Norway 20.44%) to EUR 61,324,467 (app.

Sweden (34.57%) to EUR 103,720,437 app.


300,000,000 (100%)