Regions and Countries

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p. 4 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program Update 2005-2006: Kyrgyz Republic

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IV. Country Performance and Assistance Levels

A. Lending Level Proposed

24. The proposed grant component in ADF IX resources will provide greater operational flexibility. Pending finalization of the extent of grant element, regulations governing grants, and size of ADF annual commitment, both sides agreed to fix the size of annual assistance program at $40 million. The program will be reviewed, based on the availability of ADF funds and the rules governing grants, to make it consistent with the Government’s debt reduction strategy and the limits on the PIP. Future allocation of ADF funds will depend on the revised performancebased allocation policy, expected to be finalized in 2004. Both sides also agreed on a standby project. It will be approved in case processing of one of the firm projects for the year is delayed. This policy will help protect aggregate investment by ensuring that the agreed-on size of ADB’s annual assistance is maintained.

25. The lending program for 2004 is based on the ADB-wide ADF resource envelop of $1.1 billion. With the expected increase in the envelop to $1.3 billion, adjustments to the 2004 lending program and spillover adjustments in the 2005 lending program are likely. Under the ADB-wide ADF resource envelop of $1.3 billion, the maximum annual base case allocation for the Kyrgyz Republic for 2004 would increase to $32.8 million. The proposed program also provides for a regional cooperation project, which would receive funding up to $10 million from the ADF resources earmarked for regional cooperation projects. For reference, the 2004 Assistance Program for Lending Products and the 2004 Assistance Program for Nonlending Products and Services are provided in Table A4.1 and Table A4.2, respectively.

B. Non-Lending Program

26. The annual allocation for TAs has been reduced from $2.0 million to $1.9 million for 2005–2007. Changes in non-lending program are indicated below. The 2005–2006 non-lending products as agreed on with the Government is in Appendix 1, Table A1.11

C. Summary of Changes⁸

27. The 2005–2006 assistance pipeline for lending products as agreed on with the Government is in Appendix 1, Table A1.10. Anticipating a grant element under ADF IX, a higher indicative annual assistance of $40 million has been programmed while keeping the lending level within sustainable limits. Changes in the lending program are indicated below.

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