Regions and Countries

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p. 3 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: Uzbekistan

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III. Portfolio Management Issues

A. Portfolio Performance Implementation

20. As of 31 December 2000, cumulative lending to Uzbekistan consisted of eight loans for seven projects for a total amount of $387 million, and 30 TA projects for a total amount of $17.7 million. Contract awards totaled $49.7 million in 2000, bringing the cumulative figure to $102.2 million. The contract award ratio during the year was 10.5 percent, significantly below the ADB-wide average of 21 percent. Disbursements for 2000 totaled $60.9 million, bringing cumulative disbursements to $78.8 million. The disbursement ratio for 2000 was 31.7 percent, higher than the ADB-wide average of 20.5 percent. Detailed portfolio performance indicators are given in Appendix 3.

21. After encountering initial difficulties with project implementation, there is some improvement of the portfolio as a result of the Government and ADB’s joint efforts. However, the country’s absorptive capacity is still limited by weak project management capability and inadequate experience with ADB’s operational policies and procedures. Continuing efforts are required to strengthen the implementation capacities of the Government and executing agencies in all aspects of project implementation. Additional staff have been assigned to the Uzbekistan Resident Mission (URM) to strengthen project implementation and supervision capacities, and improve portfolio management.

22. Among eight ongoing loan projects⁹ , the Road Rehabilitation Project (approved in December 1998, for $50 million) is rated unsatisfactory in reaching its development objectives, in view of the lack of progress in the necessary institutional reforms. ADB and the Executing Agency have formed a task force to identify and implement remedy measures.

B. Counterpart Funding

23. Counterpart funding has not yet emerged as a major issue as most of the projects are at the initial stage of implementation, and disbursements are relatively slow. Two loan projects at an advanced stage of implementation are: the SME line of credit, and the railway project where the Executing Agency can so far generate sufficient income to assure counterpart funding. However, once disbursements pick up and projects dependent on the Government budget (e.g., education projects) are further implemented, availability and timely release of counterpart funding may become a concern. Availability of such funds should be scrutinized in the context of how the Government plans and manages the budget and public investment program.

24. Following ADB’s graduation policy for developing member countries, Uzbekistan is categorized as a group C country. ADB’s cost-sharing limits will be 40 percent of the total project cost in 2002. Implementing the policy requires intensified efforts to ensure availability of counterpart funds because the financing share to be borne by the Borrower is increasing.

C. Monitoring and Evaluation

25. ADB is closely monitoring portfolio performance through regular review missions and project implementation supervision by URM. The country portfolio reviews have been undertaken annually to assess portfolio performance, identify issues, and develop an action plan. No post-evaluation of loan projects has been completed because ADB’s loan portfolio is relatively young.

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