ADB Helping to Rehabilitate Key Irrigation System Serving 400,000 in Uzbekistan

MANILA, PHILIPPINES (19 December 2003) - ADB is supporting priority repairs to prevent the imminent collapse of an aging irrigation system in Uzbekistan serving a population of about 400,000, through a loan approved today for US$73.2 million.

The project will help rehabilitate the nearly 30-year-old Amu Zang irrigation system, servicing five districts in Surkandarya Province, at the southern most tip of the country, where poverty levels are higher than the national average at more than 30%.

Besides physical repair works, the project includes support to improve irrigation management of the system and the development of a private farm system in the districts.

The irrigation system comprises a cascade of pumping stations from the Amu Darya River servicing about 96,800 hectares. Most of the 400,000 living in the project area depend primarily on irrigated agriculture for their livelihood.

Lack of maintenance and age has reduced the reliability and capacity of the pumping cascade, leading to increasing inefficiency and high levels of sediment in the pumped water. Due to the state of the canals, there is a high rate of seepage, with only about half of the water reaching farmers' fields. The sediment is also damaging the equipment and increasing the operation and maintenance costs.

"Unless there is a major overhaul, key parts of the irrigation system could collapse in as little as five years, with devastating effects on the local population who are directly dependent on it," says Tumurdavaa Bayarsaihan, an ADB Project Economist.

"The project will help break a cycle of poverty in which deteriorating performance of the irrigation system is leading to falling production and incomes, and increasing land degradation."

The repairs are expected to reverse the decline and boost production of cotton from an average of 2.8 to 3.4 tons per hectare and wheat from 3.1 to 3.9 t/ha.

The repair works will target pumps, motors and other equipment in the three main pumping stations, improvement of maintenance facilities, and rehabilitation of selected sections of the main irrigation and drainage network.

To ensure sustainability, the project will also provide training in operation and maintenance for the water management agencies, install water resource management systems, and support the establishment of water users associations. At present, water users have virtually no participation in managing irrigation and drainage systems.

Improved irrigation and drainage will be demonstrated in selected farms of the five districts as pilot areas to demonstrate on-farm water use efficiencies. Training will be provided in new technologies on water saving, soil improvement, and crop diversification.

Existing agricultural support services do not meet the needs of an increasing number of private farmers. Therefore, private sector-driven agriculture service centers will be set up to provide access to essential farm machinery, input supply and output marketing services, to be supported by a credit line totaling about $3.2 million.

Funded by a complementary technical assistance (TA) grant of $500,000, the project will also promote ongoing policy and institutional reforms. The TA will strengthen water management and planning capacities of the government agencies at national and regional levels, develop and implement cost recovery policy and operational guidelines for water users associations, and introduce water delivery fees in the project area.

The grant comes from ADB's Japan Special Fund, financed by the Government of the Japan. The Government will contribute $240,000 toward the TA.

ADB's loan, from its ordinary capital resources, covers $73.2 million or 65% of the total project cost of $112.6 million. The rest will be provided by the Government ($37.0million) and beneficiaries ($2.4 million).

The loan has a 25-year term, including a grace period of five years. Interest is determined in accordance with ADB's LIBOR-based lending facility.

The Ministry of Agriculture and Water Resources is the executing agency for the project, which is due for completion in March 2009.