Regions and Countries

	Table of Contents
p. 4 of 4 BACK | NEXT I. Development Situation II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Lending Levels

Country Strategy and Program Update 2002-2004: Kazakhstan

---

IV. Country Performance and Lending Levels

A. Proposed Lending Level

26. Kazakhstan continues to need ADB assistance since the Government’s resources for long-term development financing in the public sector remain inadequate. However, ADB lending to Kazakhstan in the near future becomes more uncertain due to the country’s ability to access global capital markets, and, particularly, its recent policy of limiting external borrowing. It is proposed that ADB annual country lending for 2002-2004 be tentatively set at $120 million. The proposed lending level will be reviewed during the CSP formulation in 2001-2002.

B. Loan Program

27. The loan program for 2002-2004, as agreed upon by the Government, is shown in Appendix 4 (project selection briefs and TA concept papers are in Appendix 6). The program aims to reduce poverty and focuses on: agriculture and rural development, transport, education, early childhood and women’s development, and water supply and sanitation, which are selected based on the following:

1. ADB support is critical to combat poverty, as most of the poor live in rural areas with unsafe water supply, and children and women are among the most vulnerable groups.
2. The areas are priorities in the Government’s development strategy.
3. Other donors are active in other sectors.
4. ADB has gained valuable experience in the agriculture, transport, and education sectors, and the government agencies concerned have made progress in becoming familiar with ADB’s operational policies and procedures and in developing necessary capacities for project implementation.

28. The loan program contains seven public sector loans totaling $355 million. Three loans will directly benefit the poor, accounting for 40.8 percent of the total lending volume for 2002-2004. The program will be reviewed and may need to be adjusted during the preparation of the full-fledged CSP in 2001-2002.

29. In conjunction with its lending program, ADB will continue to pursue loan and grant cofinancing from official sources to address thematic priorities in Kazakhstan. As appropriate, commercial cofinancing and guarantee opportunities will also be explored for viable projects.

C. Technical Assistance and Economic and Sector Work Program

30. The TA and economic and sector work (ESW) program for 2002-2004 is aimed at supporting lending operations and strengthening the capacities of the Government and EAs (see Appendix 5). The TA program covers 18 projects totaling $9.85 million. The TA program may need to be adjusted to fit the ADB annual TA resource envelope.

31. During 2002-2004, three types of ESW will be undertaken: (i) macroeconomic analysis to better understand the country’s economic situation and strengthen policy dialogue with the Government (country economic review and update); (ii) update of the sectors where ADB has been involved to provide more effective assistance (education sector update²³ ); and (iii) study on new sectors for possible support (insurance study and urban sector study).

D. Summary of Changes²⁴

32. The main changes in the loan program shown in the Country Assistance Plan (2001-2003) are indicated below:

____________________

Back III. Portfolio Management Issues	Country Strategy and Program Update 2002-2004: Kazakhstan