Third Village Investment Project (VIP) 

The Village Investment Project (VIP) is the first and one of the most successful ARIS projects. In 2007, Mr. Roger Robinson, the head of the World Bank office in the Kyrgyz Republic, noted that the Village Investment Project financed from funds allocated by the World Bank to the Kyrgyz Republic was among the top 3 projects financed by the World Bank around the world in 2006, and also emphasized that ARIS can serve as a model for many organizations in the republic. “There would be no success in the implementation of such a project as the Village Investment Project if there were no such agency as ARIS in the Kyrgyz Republic”, said Mr. R. Robinson.

Village Investment Project (VIP-1, VIP-2)

The ARIS completed the implementation of the First Village Investment Project in 2008. 4344 microprojects for a total amount of US $ 15 million were implemented in Phase I, while the share of community co-financing exceeded 40 % with the required 25 %, which shows the high mobilization of communities and the relevance of the microprojects chosen by them.

As of the end of 2012, 9883 microprojects were implemented throughout the country (educational institutions, hospitals, first-aid points, information resource centers, bridges, kindergartens, public baths, water, gas and power systems, sports facilities, etc.) under the Village Investment Project (VIP-1, VIP-2), of which 5539 microprojects have been implemented in Phase II. Communities disbursed US $ 15 million (grant) from IDA and £ 6.86 million (grant) from DFID, resulting in increased rural employment and income levels, improved rural infrastructure, improved governance at local communities level and strengthening the decision-making skills of local communities.

Third Village Investment Project (VIP-3)

To support the achievement of rural communities' goals and key local development objectives, ARIS with funding from the German Development Bank in Batken, Jalal-Abad and Osh oblasts and the funding from the International Development Association (World Bank) in Issyk-Kul, Naryn, Talas and Chuy oblasts began to implement the third phase of the Village Investment Project (hereinafter ‘VIP-3’).

Sources of Financing 


KfW German Development Bank

International Development Association (IDA)

Funding amount and project implementation area:

EUR 5.5 million (KfW grant)
EUR 0.850 million (contribution of the Government of the KR)
Batken, Jalal-Abad and Osh oblasts

US $ 12 million - IDA Loan
US $ 6.6 ,illion - IDA Grant
US $ 5.4 million IDA - Community Contribution
Issyk-Kul, Naryn, Talas and Chuy oblasts

The contribution of local communities participating in the VIP-3 is 3.75% of the ARIS allocated grant to the community.

Implementation period:


Project Objectives: (i) building the capaity of local communities for joint development and (ii) improving access to quality social infrastructure in the target areas of the project.

Achievement of the project development objectives is carried out through the implementation of three project components:

Component 1: Capacity Building for local communities and local government institutions in participatory local governance and development planning, training on local budget planning for local governments.

Subcomponent 1: Community Mobilization - is a process of working with local communities and local self-governing bodies to introduce them the principles of the project activities. This subcomponent is important for strengthening local self-governing bodies, which will encourage their involvement in making decisions on the development needs independently identified by village residents, and strengthening accountability to the population.

Subcomponent 2: Training - Three types of capacity building are offered to AO staff and community representatives under the VIP-3: 

  1. Special training for identifying and implementing social mobilization and investment under the VIP-3 (known as ‘specialized training’);
  2. General information about local government in the Kyrgyz Republic (known as ‘general training’); and
  3. Training and mentoring for women who take on leadership roles (known as ‘peer-to-peer training’).

Component 2: Village investment.

Within this component, two financing options are available, namely: 

  • Subgrants for the implementation of subprojects (SPs) included in the relevant Local Investment Plan and costing at least US $ 20,000 or more; and
  • Small grants for the implementation of microprojects (MPs) or pooled microprojects included in the relevant Local Investment Plan costing less than US $ 20,000.

Component 3: Project Management includes project management activities including project audits, provision of training to project executive body on project management, monitoring and evaluation, and the financing of operating costs.


Third Village Investment Project (COVID-19 Response) Additional Financing



International Development Association (IDA)

Total financing:

US$ 17,000,000 (12,200,000 SDR)

Loan amount:

US$ 8,500,000 (6,100,000 SDR)

Grant amount:

US$ 8,500,000 (6,100,000 SDR)

Contribution of the Cabinet of Ministers of the Kyrgyz Republic:

Not provided

Loan terms:

November 15, 2026 - May 15, 2058 (1.5%)

Geographic coverage:

Villages of Chuy, Talas, Naryn, and Issyk-Kul regions

Date of negotiations:

August 28, 2020

Date of signing:

March 4, 2021

Date of ratification:

July 22, 2021, No.86

Effective date:

October 14, 2021

Executing agency:


Implementing agency:


Life of the project:

2022 – 2024

Date of closure:

December 31, 2024

Closing date of project financing:

April 30, 2025


The objective of the project is (i) to build local capacity for participatory development; (ii) to improve access to quality community facilities in the Project target areas.


Additional Financing (AF) will directly improve economic opportunities and increase access to primary health care and hygiene in those rural communities that are not covered by such services. It will also empower vulnerable women, youth, migrants, the elderly and persons with disabilities to actively participate in project activities that help them reestablish their livelihoods under new conditions and achieve significant improvements in rural social infrastructure in higher risk environment caused by the COVID-19 pandemic. The AF will also focus on climate benefits and energy efficiency, as well as addressing key gender disparities in access to social infrastructure and opportunities to establish/reestablish livelihoods.


The project consists of the following components:

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

Component 1 in the AF will finance community mobilization activities similar to those implemented under the parent project, tailoring the mobilization and capacity building to the COVID-19 context needed to connect vulnerable groups (including but not limited to young women, vulnerable young men, older people and people with disabilities) to viable livelihood opportunities and to sustain their efforts.

This component will include capacity building for community members under the Livelihoods Support Program (LSP), in addition to continuing the peer-to-peer learning activities initiated by the parent project. The LSP will include technical assistance (TA) from qualified entities to create a support system (market and needs assessment, business proposal development, training and coaching) that promotes viable businesses and ensures sustainable livelihoods.

Value chain assessments and action plans will provide a basis for making decisions on the best way to revitalize current and new businesses, and on the most effective investments in markets, products and sectors needed in the post-COVID-19 context.

Project processes will be adapted to COVID-19 context. The AF will deepen community mobilization, build community resilience and strengthen monitoring systems. The Project will establish a two-way communication and community feedback mechanism that combines traditional and new media and expands the use of civil technology.

Component 2: Village Investments (US$13.3 million)

Types of subprojects

Social projects are social infrastructure facilities of primary health care institutions (FAPs, GFDs), public sanitation and hygiene facilities (water supply and sanitation systems in educational institutions, including preschool); and the application of technologies for climate change adaptation and environmental sustainability.

Economic/livelihoods projects are projects of economic activities of local self-governing bodies agreed with the community and implemented by the Community Livelihoods Business Partners (CLBPs). The main goal of livelihoods projects is to create jobs and develop the economic base of local self-governing bodies. The types of sub-projects will vary depending on market analysis and potential value chains, the results of which will be presented by an external research firm in the following areas: (i) agricultural production and processing, and supporting sectors such as transport services;  (ii) crafts and garment production; (iii) digital and new service sectors (including, for instance, recycling or other environmental enterprises); and (iv) new COVID-19-response products and services.

Component 3: Project Management (US$1.2 million)

This component finances the costs of coordination, control over the implementation of project activities, financial management, annual audits and monitoring and evaluation.

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

Component 4: Contingent Emergency Response Component

A Contingent Emergency Response Component (CERC) is added to enable the Cabinet of Ministers (CoM) of the Kyrgyz Republic to reallocate project funds to response efforts in the event of an urgent need for assistance to respond to an eligible crisis or emergency. This provisional zero value component is designed to allow for rapid access to project funds for response and recovery in the face of a crisis. Activities would be targeted to mitigate and respond to the socioeconomic impacts of the crisis.