Additional Financing for the Third Village Investment Project


International Development Association

Total Financing:

US$ 17 000 000 (12 200 000 SDR), of which:

Loan Amount:

US$ 8 500 000 (6 100 000 SDR)

Grant amount:

US$ 8 500 000 (6 100 000 SDR)

Contribution of KR Cabinet of Ministers:

Not envisaged

Loan Terms and Conditions:

November 15, 2026 – May 15, 2058 (1,5%)

Geographic scope:

Villages of Chui, Talas, Issyk-Kul Oblasts

Date of negotiation:

August 28, 2020

Date of signature:

March 4, 2021

Date of ratification:

July 22, 2021, № 86

Date of entry into force:

October 14, 2021

Executive Agency:

Ministry of Finance of KR

Implementing Agency:


Project Implementation Date:

2022 – 2024

Project Closing Date:

December 31, 2024

Project Funding Closing Date:

April 30, 2025


The Project Development Objectives are to:

  1.  build local capacity for participatory development; and
  2.  improve access to quality community infrastructure services in targeted project areas.

The Additional Financing (AF) will directly improve economic opportunities and enhance access to primary health care and hygiene in villages without services. It will also empower thousands of vulnerable women, youth, migrants, the elderly, and disabled to actively engage in project activities that help reestablish their livelihoods and make vital improvements to village infrastructure, all within the high-risk context created by the COVID-19 pandemic. The AF will also sharpen the focus on climate benefits and energy efficiency, and on closing key gender gaps in access to infrastructure and livelihoods opportunities.

The project consists of the following components:

Component 1: Capacity Building of Local Self-Governments and Communities (US$ 2.5 million)

Component 1 of the AF will finance community mobilization activities similar to those under the parent project, tailoring the mobilization and capacity building to the COVID-19 context and focusing capacity building on livelihoods development. To address vulnerabilities through this community-based response, greater emphasis will be placed on mobilization approaches and peer-to-peer learning that are inclusive of vulnerable groups (young women, marginalized young men, the elderly, and the disabled).

Under Component 1, the AF will expand the scope of the capacity-building activity to help vulnerable men and women establish or reestablish their livelihoods. An LSP will comprise TA from qualified organizations to create a support system (market and needs assessment, business proposal development, training and coaching) that promotes viable businesses and ensures the sustainability of livelihoods.

The assessments and value chain action plans will provide a framework for deciding how best to revitalize existing and new enterprises, and the most effective investments in the markets, products, and sectors required in a post-COVID-19 environment.

Project processes will be adapted to the COVID-19 context. The AF will deepen community mobilization, enhance community resilience, and strengthen monitoring systems. The project will establish a two-way information and community feedback mechanism that blends traditional and new media and scales up the use of civic technology.

Component 2: Village Investments (US$ 13.3 million)

The AF will allocate US$ 13.3 million to support additional health- and livelihoods-related investments in target Ayil Aimaks (AAs) in four northern oblasts of the Kyrgyz Republic. A total of 241 AAs will participate in the VIP-3 AF.

Subgrant distribution to AAs for these investments will take into account each AA’s (i) population; (ii) poverty level and (iii) remoteness. These criteria will be applied for each target Oblast separately.

Subgrants to each AA will range from US$ 20,000 to US$ 130,000. To enable all 241 rural AAs to benefit from Component 2 financing, they will not compete for project support.

Types of subprojects:

The social projects include social infrastructure facilities of primary healthcare facilities (FAP, Family Group Practitioners), public sanitation and hygiene facilities, as well as water supply and wastewater disposal systems in educational institutions, including preschools. We're also looking into implementing technologies for climate change adaptation and promoting environmental sustainability.

Livelihoods projects are aimed at enhancing economic activities of LSG in collaboration with the community and Community Livelihoods Business Partners (CLBPs). The primary goal of these projects is job creation and the development of the economic base of LSGs. The specific subprojects will be determined based on market assessment and potential value chains analysis conducted by external research firms. This may include various sectors such as agricultural production and processing, transportation services, handicrafts, garment production, digital services, including recycling and other environmental enterprises, and new products and services related to COVID-19 response.

Component 3: Project Management (US$ 1.2 million)

The Component will cover the costs of coordination, supervision of project activities, financial management, annual audits, monitoring and evaluation (M&E).

The AF will help strengthen project management and M&E to implement the expanded scope of Components 1 and 2.

Component 4: CERC – The proposed operation will include a CERC, which in the event of an urgent need for assistance to respond to an eligible crisis or emergency 19 will enable the Cabinet of Ministers to reallocate project funds to response efforts.

This provisional zero-value component is designed to facilitate rapid access to project funds for response and recovery during a crisis. Activities would be targeted to mitigate and respond to the socioeconomic impacts of the crisis.

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