Regions and Countries

	Table of Contents
p. 20 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Kyrgyz Republic

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IX. Local Cost Financing

50. The adverse effects of the Russian crisis and the consequential downturn in the Kyrgyz economy have resulted in an acutely constrained budget situation. The growing debt service burden will put further pressures on the budget because in the period until 2005 a significant portion of all non-concessional debt (equivalent to over 40 percent of the total) will need to be repaid. Further, there are inherent weaknesses in the tax administration and budget systems of the Government. These are being addressed with the help of the IMF and other agencies but the results will only be apparent over the medium term. The focus of the Government has therefore been on reducing public expenditure, which has resulted in a serious limitation of funds available for agriculture, social sector needs, and public infrastructure. In view of these factors, ADB will finance up to 80 percent of total project costs, including the provision of local cost financing. To date, ADB financing has been limited to 30-58 percent of the total cost of individual projects, including a relatively modest amount of local cost. This is largely because of the availability of cofinancing for the concerned projects.

Back VIII. Economic and Sector Work Program	Country Assistance Plans - Kyrgyz Republic