2008. pants

Such estimate is made by taking into account the unaudited

figures currently available for 2007, and it is understood that

the actual EIF Standard Cost Rate applicable for 2008 shall

result from the audited accounts for 2008, as soon as the latter

will be available.

Staff

Category

Expected

EIF JEREMIE Employees

(first 3

years)

EUR/man-month

Administrative Staff

0.5

18,900

Professional Staff

3

33,000

Annex 2 to Costs

Appendix

Form of Costs

Payment Statement

--------------------------------------------------------------------------------------------------------

To: [•]

From: European

Investment Fund

Luxembourg, date

JER-003

Dear Sir, Madam,

Pursuant to the funding agreement

between the Republic of Latvia and the European Investment Fund

("EIF") dated 16 July, 2008 ("Funding Agreement"),

and Clause 13 of the costs appendix to the Funding Agreement

("Costs Appendix"), EIF provides you with the Cost Payment

Statement (as defined in the Costs Appendix).

Capitalised terms and expressions

defined in the Funding Agreement and in the Costs Appendix shall

have the same meaning when used herein, unless otherwise defined

or the context otherwise requires.

We kindly request you to provide

us within 1month with your approval of the below costs for the

year 200[•]:

Costs

Annual

Budget or adjusted

Actual

Variation

EIF

Direct Cost

EIF Standard Costs

rate

month / JEREMIE Staff

EIF Travel Costs

EIF Local Office Costs

Associated Expenses

costs related to

consultants

costs related to tenders

costs related to

secondments

costs related to

translations

costs related to

termination

costs related to bank

accounts

costs related to external

audit

costs related to

litigation

costs related to marketing

and campaigning

other costs

In accordance with Clause 11(b) of

the Costs Appendix, on the 1st of May of [•] or, should that day

not be a Business Day, on the first successive Business Day, the

amount of EUR [•] will be [in case of positive amount:

debited to the EIF Direct Costs Bank Account and credited in

favour of EIF] [in case of negative amount: set-off

against the quarterly amount of EIF Direct Costs Advance due on

the same date].

Annex 3 to Costs

Appendix

This Annex 3 to the Costs Appendix

details the estimated costs expected to be incurred by the EIF in

the first three years of operation of the JEREMIE Holding Fund.

This estimation is provided only as a non-binding guideline, and

is subject to change in consultation with the Project Steering

Committee.

A contingency factor equal to

12.5% of non-EIF Standard Cost Rate has been applied.

ESTIMATED

COSTS BUDGET

PHASE

ONE

Year 1

Year 2

Year 3

Av. %

Mandate Size

183,000,000

183,000,000

183,000,000

EIF Prof. Resources in

Latvia

2

2

2

EIF Admin Resources in

Latvia

0.5

0.5

0.5

EIF Prof. Resources from

Luxembourg

1

1

1

Seconded Resources in

Latvia

3

3

3

EIF

COSTS

Units

EIF Full Cost Rate Pro

Staff

EUR/month

3

1,188,000

1,235,520

1,284,941

EIF Full Cost Rate Admin

Staff

EUR/month

0.5

118,800

123,552

128,494

Total

Annual Staff Costs

1,306,800

1,359,072

1,413,435

Travel Costs

EUR/mission/staff

36

54,000

58,860

64,157

Cost of Latvia Office

EUR/month

12

60,000

65,400

71,286

Sub-total

1,420,800

1,483,332

1,548,878

0.78%

0.81%

0.85%

0.81%

ASSOCIATED

EXPENSES

Consultancy Fees

EUR/day

60

63,000

68,670

74,850

Legal Advice

EUR/operation p.a.

7

175,000

190,750

207,918

Cost of Conducting Calls for

Expression of Interest

EUR/call

6

45,000

49,050

53,465

Secondment Costs

EUR/pp/pa

3

120,000

130,800

142,572

Cost of Legal Translation

EUR/page

250

12,500

13,625

14,851

Cost of

Termination/Transition

EUR/termination

0

25,000

25,000

100,000

Auditor Costs

EUR/year

1

30,000

32,700

35,643

Capability Audit

EUR/case

0

105,000

0

155,000

Reserve for Inv. Board

Meetings

EUR/year

4

4,000

4,360

4,752

Cost of Marketing

EUR/campaign

3

45,000

49,050

53,465

Contingency at 12.5%

12.5% per annum

92,313

86,033

122,245

TOTAL ANNUAL COSTS

2,137,613

2,133,370

2,513,639

Av. %

ANNUAL PERCENTAGE

1.17%

1.17%

1.37%

1.24%

EIF Prof. Staff Rate 2008

(approx. figure based on 2007 agreement with EC)

33,000

34,320

35,693

EIF Admin. Staff Rate 2008

19,800

20,592

21,416

Annual Increase (EIF rates)

4.00%

Anticipated annual change

Latvian Inflation

9.00%

Anticipated average inflation

rate

Riga, Latvia, 16 July, 2008.

For the Government of the

Republic of Latvia

Minister of Economics

For the European Investment

Fund

Chief Executive

_____________________________________

/ Kaspars

Gerhards/

___________________________________

/Richard

Pelly /

Ministru kabineta 2008.gada 10.jūlija noteikumi Nr.534 "Par

Latvijas Republikas valdības un Eiropas Investīciju fonda līgumu

par Eiropas Savienības struktūrfondu ieguldījumu fonda ieviešanu"

publicēti laikrakstā "Latvijas Vēstnesis" 01.08.2008.,

118.nr. - "LV" red.