Regional Economic Development Project (REDP) in Osh oblast and Osh city

The Regional Economic Development
project will support regional economic development, acceleration economic activities and promotion of urban centers as growth engines. Accessibility and connectivity between rural and urban areas and within regional markets will also be improved, and regional and local capacity will be increased. Together, these initiatives will contribute to poverty reduction and shared prosperity in the Kygyz Republic.

The project development objective of the RED is to support the Government of the Kyrgyz Republic (GoKR) in enhancing regional economic development through targeted activities in selected sectors in Osh oblast and Osh City. Through this, the project will support the economic and regional development of Osh oblast, helping to create jobs for growth and poverty reduction.

Coordinating state body is a Ministry of Economy of the KR, Ministry of Agriculture, Food Processing and Land Improvement of the KR and Ministry of Culture, Information and Tourism of the KR acting as executive state bodies. The implementing agency is Community Development and Investment Agency of the KR.

Project Financing Agreement, signed on May 12, 2020, become effective on December 7th of this year.

Project implementation areas

The RED will cover all villages, ayil aimaks, small towns, raions of Osh oblast and Osh city: 

  • All 7 rayons of Osh oblast – develop agriculture and tourism;
  • Osh and Uzgen cities – develop urban infrastructure and tourism sectors;
  • All 7 rayons of Osh oblast – small grants program.

The total cost of the project is US $ 60.0 million to be financed through US $ 30.0 million equivalent IDA Credit and US $ 30.0 million equivalent IDA Grant.

Project Components

Component 1: Strengthening Regional Economic Planning and Regulatory Functions.

The activities proposed under this component are aimed at building capacity for planning national and regional economic development at the central and regional levels and enabling the relevant departments of the appropriate ministries and agencies in Osh Oblast to fulfill their authority to provide key public services and facilitate enabling environment for private sector investments.

Sub-component 1.1:    Enhancing Regional Economic Planning.
Sub-component 1.2:    Improving basic agricultural services and regulatory functions.

Component 2: Strengthening Agri-Food Supply Chains and SMEs.

This component will facilitate the development of partnerships between agri-businesses and small agricultural producers to finance targeted investments of subprojects that improve quality and expand production/processing volumes. The component will utilize a value chain development approach (productive partnerships) that is based on facilitating and organizing producer groups to meet specific market requirements and link with buyers/aggregators or processing enterprises.

Component 3: Catalyzing investments for tourism and urban development.

This component will make it possible to use the unique natural and cultural assets of Osh Oblast and its cities and finance fundamental and stimulating investments that support: (i) comprehensive packages of improvements to priority tourist sites and clusters; (ii) regional infrastructure, services and amenities to address major bottlenecks or improve the quality and conditions of tourism; (iii) urban amenities that will enhance the vitality of urban centers to attract tourists and reduce migration; and (iv) a pilot public-private cooperation to attract private investment to tourism sector.

Sub-component 3.1:    Upgrading Osh and Uzgen Urban Cores and Tourism Circuits in Osh oblast.
Sub-component 3.2:    Tourism Product Development, Marketing and Promotion.

Component 4: Supporting Tourism and Rural SME Development through Small Grants.

This component will support the development of small and medium-sized enterprises (SMEs) through a Small Grants Program and small grants designed for tourism and SMEs and startups.

Component 5: Implementation Support, Monitoring and Evaluation.

This component will support project implementation, including the project’s monitoring and evaluation system, communication strategy, application of safeguard instruments, training and financing of incremental operating costs.