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I. Current Development Trends and Issues
II. Implementation of the Country Strategy and Program
>>III. Portfolio Management Issues
IV. Country Performance and Lending Level
Country Strategy and Program Update 2003-2005: Uzbekistan

III. Portfolio Management Issues

A. Portfolio Performance

20. The portfolio indicators and implementation status are given in Appendix 1, Tables A1.6– A1.8. Overall, portfolio performance has been satisfactory as per project performance report of 31 December 2001, except for the Road Rehabilitation Project,23 which was recently cancelled. The other 9 loans are all rated satisfactory in terms of both implementation progress (IP rating) and development objectives (DO rating). Cumulative contract awards and commitments as of 31 December 2001 for the entire portfolio total $141.6 million (31% of total portfolio amount),24 while cumulative disbursements amount to $119.0 million (26% of total loan amount and 84% of contract awards and commitments) in the following sectors: transport, agriculture, social infrastructure, and finance.

21. The country's difficult fiscal and external debt position has led to concern among all IFI’s about availability of counterpart funding. The present cost-sharing limit prescribed by ADB's policy (40% in 2002) has placed ADB at a considerable disadvantage compared with the World Bank and other assistance agencies.25 The ADB share under the two most recently approved loans26 was 55% and 58.5%, respectively. The need to raise ADB shares in loans is likely to remain during 2003-2005 in view of the expected difficulties arising from implementing foreign exchange unification and other structural reforms. The World Bank's country assistance strategy approved last March concluded after rigorous analysis that Uzbekistan's creditworthiness has weakened and proposed a 50/50 World Bank-IDA blend for 2002-2004. As further reforms would likely exacerbate the Government’s fiscal and external debt positions, ADB is currently reviewing the classification of Uzbekistan at the request of the Government.

B. Performance Monitoring and Evaluation

22. ADB monitors portfolio performance in Uzbekistan through regular review missions and on-the-ground project implementation supervision and advice by URM. To date, two loan projects, one JFPR project, and two TAs have been delegated to URM. Country portfolio reviews are being carried out annually by URM to assess portfolio performance, identify issues, and update an annual action plan. No evaluation of loan projects has taken place since ADB’s loan portfolio is relatively young. A joint World Bank-ADB country procurement assessment mission was fielded in February 2002 to review current procurement procedures and practices by the Government, assess their cost-effectiveness and the institutional set-up, assess procurement performance under World Bank and ADB projects, and submit recommendations for reform and development in selected areas.27 The Government has carried out ADB requests in regard to monitoring and evaluation under the two projects currently being processed.

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  1. ADB. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to Uzbekistan for the Road Rehabilitation Project. Manila.
  2. This seemingly low figure is not really surprising, considering the timing and amounts of the loans: $160 million was approved during 1996-1998, $50 million is inactive, and $287 million was approved in 2000 or later. In fact, another $76.912 million in contract awards and commitments is projected for 2002.
  3. World Bank’s cost sharing has been 75% on average during 2000–2002. While EBRD has no formal policy on cost-sharing in public sector lending, its financing shares during 2000–2001 range from 43% to 100%, averaging 71%.
  4. ADB. 2001. Report and Recommendation of the President to the Board of Directors on the Proposed Loan to Uzbekistan for Basic Education. Manila; ADB. 2002. Report and Recommendation of the President to the Board of Directors on the Proposed Loan to Uzbekistan for Western Uzbekistan Rural Water Supply. Manila.
  5. The mission's report is being finalized.

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IV. Country Performance and Lending Level

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