Cabinet of Ministers Regulations No. 1051 Riga 2004 December 21 (Mon. No 74 28) For the contract of guarantee between the Republic of Latvia and the Nordic investment bank regarding the investment project loans and guarantees for investment projects in accordance with the Statute of loan articles 7 and 8, which 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 of 14 law equipment of the first paragraph of article 3, paragraph 1 the guarantee agreement between the Republic of Latvia and Nordic investment bank regarding the investment project loans and guarantees for investment projects in accordance with the Statute of loan articles 7 and 8, which 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, the Regulation No 1051 guarantee agreement between the Republic of Latvia and the Nordic Investment BANK regarding the investment project loans and guarantees for investment projects in accordance with the Statute of loan articles 7 and 8, which 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. WHEREAS the Nordic investment bank (the "Bank") loans ("loans" of investment projects) and gives guarantees loans for investment projects ("project investment loan guarantees") outside the Member countries of the Bank in accordance with the Bank's Statute, articles 7 and 8; WHEREAS the Republic of Latvia ("guarantor") has decided to issue a guarantee (the "guarantee") in favor of the Bank in respect of its investment projects granted loans and guarantees for investment projects; 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 guarantee 1.1. Guarantee covers all loans that a Bank designated as project investment loans, and all the guarantees that the Bank designated as project investment guarantees in accordance with article 8 of the Statute of the Bank. Guarantee covers any disincentive at a time project investment loans and any given moment existing project 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 under the relevant project investment loan, 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 project investment guarantees subject to the following provisions: (i) the total limit of liability of the guarantor's maximum amount is EUR 1 800 million but at no time does not exceed 90% of the Bank's claims regarding the project investment loans outstanding in a particular moment as Ares by the Bank the amount guaranteed under the given moment existing project investment guarantees; (ii) the Bank shall bear the risk of at least 10% with respect to the project investment loans and beneficiary after a project investment guarantees assumes additional risk of at least 10% with respect to the project investment guarantees; (iii) the guarantor's liability shall not exceed the total amount of EUR 19 057 647 of the total liability of the guarantor, i.e. EUR 1 800 million. 1 the liability of the Guarantor is successively reduced by payments made to the Bank by the guarantor under this guarantee agreement. 1.3. the Bank in any particular case, in its sole discretion, may decide to cover more than 10% of any amounts outstanding and eligible to receive in connection with project investment loan or part of its liability with respect to the project investment guarantee, using the available finances, allocated to a special credit risk Fund (the "Fund") project investment loans, in accordance with article 8 of the Statute of the Bank, and this Fund Bank contribution to the extent as the Bank considers appropriate. 2 article 2 2.1 the Bank guarantee execution may require fulfilment of obligations according to the contract of guarantee, if the borrower is not wholly or partly fulfilled obligations guaranteed under article 1, or if the Bank has received payment in accordance with a request of the project investment guarantees. 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 fails to fulfil its obligations arising from the project investment loan or if the Bank receives a payment request for project investment guarantees (see. 2.1. and 2.2.), the Bank must take all possible measures to collect the amount receivable. 2.6. project investment loans and guarantees for investment projects of the Administration when the guarantor has paid the Bank by this Guarantee contract, subject to the provisions of article 5. 2.7. The guarantee agreement is effective until it is fully guaranteed amount paid or all project investment loans are fully repaid and all project investment guarantees have expired or for any other reason, the result is no longer in effect. Article 3 of the project investment loan administration 3.1 the Bank on December 31 each year and 31 august provide report guarantor of amounts outstanding from issued loans for investment projects, and galvotaj sums arising from the project 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 make any project investment loan principal repayment, or any event or circumstances that can cause a Bank to make a payment for a project investment guarantees. 3.3. in addition, the Bank shall submit to the guarantor any requested information on project investment loans and guarantees for investment projects. 3.4. the Bank is administered by each project investment loans and guarantees for investment projects 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 the project investment loans or project 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 project investment loans and guarantees for investment projects. 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 the investment Project concerned loans or, as the case may be, by the project 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: Ministry of finance Nordic investment bank sand Street 1, P.O. Box 249, Fabianikat-34, Riga LV-1919 FIN-00171 Helsinki Finland Latvia fax: + 371 7 095503 fax: + 358 9 622 1504


Article 7 settlement of disputes 7.1. any dispute, controversy or claim arising out of 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, Nordic Investment BANK on behalf of the Government of Denmark (1 EUR 20.99%) 377,821,491 apt.

Estonia EUR 0.73%) 13,139,366 (apt.

Finland EUR 344,859,832 (19.16%) apt.

Iceland EUR 0.87%) 15,586,072 (apt.

Latvia € 1.06%) 19,057,647 (apt.

EUR 29,471,632 Lithuania (1.64%) around.

Norway (329,308,526 € 18.29%) around.

Sweden EUR 670,755,434 (37.26%) around.


1,800,000,000 (100%)

2 in accordance with the decision of the Board of Directors in 2003. on December 19, which entered into force in 2004. 1. in July, the Bank assumes 100% of any losses arising from individual project investment loans or project investment guarantees up to the amount that is currently available in the Fund. Only after the Bank has the right to use the guarantees under article 2.

GUARANTEE AGREEMENT BETWEEN THE REPUBLIC OF LATVIA AND THE NORDIC INVESTMENT BANK

relating to project investment Loan and project 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 ("project investment Loan") and issues a loan guarantee (" Project Investment Guarantee ") for investments outside the Member countries of the Bank to their Section 7 pursuan and 8 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 project investment Loan and project 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 project investment loans and all guarantee by the Bank as the designated project Investment Guarantee in accordanc with Section 8 of the Statute of the Bank. The guarantee shall cover all project investment loans, which are outstanding from time to time and all project 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 project 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 Guarantee of the project investment on the following terms : (i) the aggregate amount of the liability of the Guarantor shall be limited to a total of a maximum amount of EUR 1.800 million but shall at the time of the aggregate amount exceeds 100 of 90 per cent of the Bank's claims in relations to project investment loans outstanding from time to time, plus the aggregate amount guaranteed by the Bank under the project Investment Guarantee in force from time to time; (ii) the Bank shall bear (a) the risk of at least 10 per cent in connection with project investment Loan and the beneficiary under the Guarantee of the investment Project shall bear an excess risk of at least 10 per cent in connection with project Investment Guarantee; (iii) the aggregate amount of the liability of the Guarantor shall not exceeds 100 EUR 19,057,647 of the total liability of the Guarantor, i.e. any other EUR 1.800 million. 1. The liability of the Guarantor shall be successively decreased by the payments made by the Guarantor to the Bank under this guarantee agreement. 1.3 the Bank may in any particular case at its sole discretion decide to cover a larger portions than 10 per cent of any amount due and outstanding in relations to a project investment Loan portions of it in or a liability in connection with a project investment guarantee by making use of available funds allocated to a special credit risk fund (the "Fund") for project investment loans , in accordanc with Section 8 of the Statute of the Bank, which Funds the Bank makes allocations to the exten the Bank not cessary deemas. 2 article 2 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 a guarantee of project investment. 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 a project investment Loan, or should the Bank receive a demand for payment under a guarantee of project investment (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 project investment Loan and project Investment Guarantee in cases in which the Guarantor has made a payment to the Bank under this guarantee shall be subject to agreement article 5 below. 2.7 this guarantee agreement shall remain in force until the aggregate amount guaranteed has been paid in full or all project investment loans have been repaid in full and all project Investment Guarantee-have lapsed or for some other reason ceased to be in force. Article 3 the administration of project investment Loan and project investment of the Bank shall Guarantee 3.1 as of December 31 and 31 August each year report to the Guarantor the non is outstanding under the project investment loans and the non guaranteed under the project of the Investment Guarantee. The report shall include a short assessment by the Bank of the borrower's 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 project, investment Loan, or of any occurrence or of which may cause an circumstanc obligation for the Bank to make a payment under a guarantee of project investment. 3.3 the Bank shall, in addition to the above, furnish the Guarantor with any requested information regarding the project investment Loan and project Investment Guarantee. 3.4 the Bank shall administer each project investment Loan and project 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 project investment Loan or project 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 project investment Loan and project 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 project investment loans or, as the case may be, project 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 Agreement shall guarantee enter into force when (i) the agreement of 11 February 2004 concerning signed 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 and on behalf For one For and behalf of of the Government of the REPUBLIC OF Latvia, the NORDIC investment BANK 377,821,491 (1 Denmark EUR 20.99%).

Estonia EUR 0.73%) 13,139,366 (app.

Finland EUR 344,859,832 (app. 19.16%)

Iceland 15,586,072 (0.87%) to EUR app.

Latvia (1.06%) to EUR 19,057,647 app.

Lithuania (1.64%) to EUR 29,471,632 app.

Norway 18.29%) to EUR 329,308,526 (app.

Sweden, EUR 670,755,434

(37.26%).


1,800,000,000 (100%)

2 According to a resolution by the Board of Directors on 19 December 2003, which entered into force as of 1 July 2004, the Bank will assume 100 per cent of any loss under the individual project investment loans or project Investment Guarantee, up to the amount at any given time available in the Fund. Only thereafter would be entitled to call the Bank on the Guarantee in accordanc with article 2.