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ADB Provides US$30 Million Supplementary Grant for Community-Based Infrastructure Service Sector Project

BISHKEK, THE KYRGYZ REPUBLIC (August 7, 2008) - ADB’s Fact-finding Mission for the Supplementary financing in amount of US$30 million in grant is currently in Bishkek. Main tasks of the Mission are to finalize with the Government of Kyrgyz Republic (the Government) the scope, estimated cost, financing and implementation arrangements, and terms and conditions of the project under the proposed Supplementary Financing.

The Mission has already conducted field visits and consultations are underway with concerned government agencies including officials of the Administration of the President of Kyrgyz Republic; the Ministry of Finance (MOF); National Agency for Local Self-Governance; the Department of Rural Water Supply (DRWS); community representatives, international donor organizations engaged in the sector and the Joint Project Management Unit (PMU).

Main objective of the proposed supplementary financing is to expeditiously provide a relief to most deserving population of the project area who had been waiting for the implementation of the water supply and sanitation facilities since long, together with fixing the identified shortcomings noted in the completed subprojects.

Project Background: The Asian Development Bank approved in June 2000 the financial assistance for the Community Based Infrastructure Services Sector Project. The Project was scheduled to close in December 2006 but due to start-up delays of about two years, the loan closing date was extended to 31 December 2008. In view of significant increase in construction cost, the scope of the rural water supply and sanitation component was reduced from the originally planned 240 subprojects in 730 villages to 118 subprojects in 301 villages. Further, the urban component was completely dropped and funds were reallocated to only the rural water supply component to meet the desperate demand of basic need of the rural population.

The ADB in April/May 2008 fielded a special loan review mission to comprehensively undertake field assessment of the completed subprojects to (a) assess their quality and propose prospective solutions to urgently address any shortcoming; and (b) work out a plan with the Government to urgently cover the areas omitted from the original scope of the Project. The mission prepared a detailed implementation plan to address the existing shortcomings and a work plan to process the supplementary funds for convery the omitted subprojects.

ADB began its operations in the Kyrgyz Republic in 1994 and established the Kyrgyz Resident Mission in April 2000. In keeping with its overarching objective and that of the Government, ADB operations in the Kyrgyz Republic give particular emphasis to poverty reduction. ADB has approved for the Kyrgyz Republic 26 loans and five grants for project financing, with a total amount of $670 million equivalent, and 68 TA grants amounting to about $40 million (as of 30 June 2008). The country also received 7 Japan Fund for Poverty Reduction (JFPR) grants amounting to $7 million. Out of ongoing projects, three loans, one ADF grant, one TA, and three JFPR grant projects.

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