Central and West Asia

ADB’s Central and West Asia Department was established on 1 May 2006. It includes members from the Caucasus, Central Asia, and two countries from the previous South Asia Department.

These countries lie at the heart of an increasingly integrated Eurasian continent. Surrounded by opportunity, the area is growing rapidly. Its countries are also examining how best to work together to turn potential into shared and sustainable economic prosperity.

The area’s strong economic growth comes amid efforts to develop the private sector, further the transition toward a market system, and deal with conflict. A large percentage of the population in many countries also continues to live on less than $2 a day.

ADB assistance supports actions to encourage productive economic ctivity, provide and promote public goods and services, and facilitate private sector development. ADB finance covers financial market development, energy security, connectivity, urban services improvement, and agriculture productivity.

ADB approved 23 loans for Central and West Asia totaling $1.9 billion, an increase of 57% from the annual average of $1.2 billion during 2001–2005. Total lending to the subregion comprised $1.6 billion from ADB’s ordinary capital resources (OCR), and $274.8 million in Asian Development Fund (ADF) loans (Table 12). ADF grants in 2006 totaled $106.5 million. In addition, 43 technical assistance grants totaling more than $33.0 million and 7 projects financed from the Japan Fund for Poverty Reduction totaling $49.5 million were approved in 2006.

Of the assistance, 80% went to Pakistan, for which 13 loans totaling $1.5 billion were approved. Two public sector investments and one nonsovereign loan totaling $153.2 million were approved for Afghanistan. Two loans totaling $125.0 million were approved for Kazakhstan, two loans totaling $27.0 million for Tajikistan, two loans totaling $60.2 million for Uzbekistan, and one loan amounting to $10.0 million for Azerbaijan.

Lending to Pakistan included seven blended loans (OCR and ADF) under multitranche financing facilities. These transactions accounted for $758.8 million in lending in 2006 and involved total anticipated lending of $3.0 billion in the coming years. Cumulative lending for the region amounted to $20.1 billion (Table 11).

in line with the priorities set out in the second mediumterm strategy and the regional cooperation and integration strategy, the Central and West Asia Department continued its active support for the Central Asia Regional Economic Cooperation Program, an alliance of eight countries and six multilateral institutions that promotes cooperation and integration in transport, energy, and trade. The program adopted a comprehensive action plan, marking a transition to a results-oriented program with tangible targets and outputs, based on strong country ownership, pragmatic approaches, and mutual accountability.

One regional project was approved during the year. The $56.5 million Regional Power Transmission interconnection Project will tap Tajikistan’s power surplus to meet serious shortfalls in neighboring Afghanistan. The project will construct a 220-kilovolt double-circuit transmission line linking the hydropower stations on Tajikistan’s Vakhsh River to Kunduz and, ultimately, to Kabul, Afghanistan. The total net economic benefits from the project are estimated at $114.0 million, split fairly evenly between the two countries.

Portfolio Management
Contract awards topped $1.2 billion and disbursements reached $1.0 billion in 2006, both up substantially from 2005. Program loan tranche releases to Pakistan in the last quarter contributed to this performance. Pakistan accounts for 85% of the department’s total contract awards and 79% of disbursements (Table 10). The department took a number of initiatives to improve project supervision and portfolio management, including a special review of the portfolio, establishment of a project administration unit network, and the initiation of regular portfolio review meetings at the division and department levels.

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Contract awards topped $1.2 billion and disbursements reached $1.0 billion in 2006, both up substantially from 2005