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Urban Development Project (UDP)

 
Aims to improve access to basic services, such as water, solid waste management and other urban infrastructure, along with energy efficiency and seismic resistance technologies.

The objective of the urban development project is to improve the quality of municipal services and pilot energy efficiency and seismic resilience retrofits of urban infrastructure in participating towns.

This will be achieved through (i) improvement of the quality of municipal services such as water supply, solid waste management, and street lighting; (ii) piloting energy efficiency and seismic resilience retrofits of existing social infrastructure such as schools; and (iii) strengthening the capacity of SAACCS in urban planning as well as the capacity of participating towns to deliver local services.

The main project beneficiaries are the residents of participating towns, service providers and State Agency of Architecture, Construction and Communal Services (SAACCS). At the project preparation stage the Government of Kyrgyz Republic selected four priority towns – Sulyukta, Kerben, Balykchy and Toktogul – to include into UDP on the basis of the following criteria, (i) municipal service access gaps, (ii) population and population growth, (iii) geographical distribution, (iv) level of poverty; and (v) existing donors’ involvement in the sector. It is expected that 59 000 residents will benefit from the project as a result of improving water supply services, solid waste management, street lighting, and financing social infrastructure improvement.

The total funding for the Project is $ 13, 5 million, which includes $ 6.6 million in loan funds and $ 5.4 million in grant funds from IDA (International Development Association), and co-financing of the Government of the Kyrgyz Republic in the amount of $ 1.5 million. 

Donor

World Bank

The total amount of financing is:

13,597,630 US dollars, including:
5,400,000 US dollars - a grant,
6,600,000 US dollars - a loan,
1,597,630 US dollars - co-financing of the Government of the Kyrgyz Republic

Geographical coverage of the City:

Kerben, Sulukta, Balykchy, Toktogul

The planned implementation period is:

2017-2021

Implementing Agency:

Community Development and Investment Agency of the Kyrgyz Republic (ARIS)

The project is financed by a grant from the Trust Fund for Capacity Building in the Europe and Central Asia Region (ECAPDEV), in the amount of USD 580 thousand, as part of a multi-donor trust fund for natural disaster reduction and risk management, (GFDRR), a grant of $ 207,000 was also granted, which allowed them to hire consultants to carry out preparatory work for the Project: 

The preparation of the Project was supported by studies carried out with the financing of GFDRR and ESMAP.

Urban development project is aimed at the improvement of access to basic services such as water supply, solid waste management and other urban infrastructure along with the use of energy efficiency and seismic resilience retrofit technologies.

Urban development project (UDP) is included into the current Partnership Strategy between the Kyrgyz Republic and the World Bank for 2014 – 2107 financial years.

Total amount of project financing is USD 14,4 million with financing from the International Development Association (IDA) of respectively USD 6.6 million as a loan and USD 5.4 million as a grant and co-financed by the Government of the Kyrgyz Republic in the amount of USD 2,4 million.

Under project preparation stage, basic surveys were conducted in the towns, consultations were held with the population, representatives of municipalities and city councils of the towns, selected towns were analyzed and assessed for the financing.

Project components

Component A: Urban development (USD 12,8 million)

This component finances activities aimed at improving service provision in participating towns. This component is composed of the following sub-components:

Sub-component А1: Municipal Services. This sub-component will finance activities for the upgrading and/or expansion of municipal infrastructure in the areas of water supply, solid waste management, and street lighting (USD 9 million).

Sub-component A2: Safe and Energy Efficient Social Infrastructure Pilot (USD 3,8 million).

Component B: Institutional Strengthening (USD 0,7 million).

This component supports the Government’s broad-based urban policy reform agenda at the national level with specific interventions at the local level aimed at strengthening service provision capacity in participating towns.

Component C: Implementation Support (USD 0,9 million).

This component supports implementation of the project including: (i) contracting of local experts to assist the implementation unit and participating towns in the implementation of the project activities; (ii) the maintenance of the Monitoring and Evaluation System (M&E); (iii) the project-related operating costs of the implementing unit including consulting fees and in-country travel expenditures; (iv) project operating costs; and (v) an annual audit of project accounts.

The proposed Urban Development Project (UDP) is included in the current Partnership Strategy between the Kyrgyz Republic and the World Bank for 2014-2017 fiscal years.

After receiving the necessary approval from the Government of the Kyrgyz Republic and the World Bank, negotiations were held on December 15, 2015 on the Urban Development Project.On April 25, 2016, a financial agreement was signed between the International Development Association and the Government of the Kyrgyz Republic, represented by the Ministry of Finance of the Kyrgyz Republic.The draft resolution of the Government of the Kyrgyz Republic and the draft law on the ratification of the financial agreement have been agreed with the interested ministries and departments. The draft law on the ratification of the financing agreement for the Urban Development Project was approved in the third reading by the Gogorku Kenesh of the Kyrgyz Republic.On December 14, 2016, the Law on the ratification of the Project was signed by the President of the Kyrgyz Republic. On December 29, the Urban Development Project come into force.

Project restructuring

According to the Financing agreement signed between the IDA and the GoKR (Ministry of Finance), the share of the IDA is 37% and the share of the GoKR is 63 %. According to the schedule of implementation of the construction work, the contracts should be finished by March 31, 2020. However, due to the situation with COVID -19 and the delay of co-funding from the share of the GoKR the contracts with contractors are extended.

After negotiations and agreement with the WB, the process of project restructuring has started so to redistribute the financial means to increase the share of expenses to be funded from the IDA from 37 % to 100 %. In this way, the share of GoKR for 100 % will be completely covered from the IDA funds. The project restructuring is took place also in order to extend the project period for another 9 months to finish current and planned works which were suspended due to the emergency situation because of the COVID-19 pandemic.

On June 25, 2020 the Parliament of the Kyrgyz Republic in three readings adopted a law of the KR on ratification of the Letter-agreement on Urban Development Project between the Kyrgyz Government and the International Development Association. The law on ratification was signed by the President of the Kyrgyz Republic on July 22, 2020, # 87, published in the Erkin-Too newspaper on July 28, 2020.