ADB $220 Million Loan to Help Uzbekistan Reduce Poverty and Boost Agriculture

News Release | 25 September 2013

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will help overhaul a 45-year-old, inefficient water supply system in Bukhara and Navoi provinces in Uzbekistan, that will secure reliable irrigation to 6,500 farms and provide drinking water access to 725,000 consumers.

More than 70% of the water supplied to farms will be used to enhance their further diversification from cotton into higher value crops, fruits, and vegetables.

"About half the country's citizens live in rural areas where they depend on irrigated agriculture for their livelihoods," said Makoto Ojiro, a Director in ADB's Central and West Asia Department. "Poor irrigation means lower crop outputs and less income, so systems that are modern, energy-efficient, climate-proofed, and well managed will go a long way in helping to reduce poverty in the country."

ADB's Board of Directors has approved a loan of $220 million to upgrade irrigation infrastructure across Bukhara and in two districts in Navoi, where almost half the population live below the poverty line. The Government of Uzbekistan has requested co-financing of up to $100 million from the Japan International Cooperation Agency.

The Bukhara system's increasingly inefficient use of water in the main service area covering 250,000 hectares has caused a steady decline in agricultural productivity in the region. Pump breakdowns and the poor condition of canals mean up to 20% of canal water does not reach farms. Growing pressures on water from a rising population and climate change have given added urgency to the need for an overhaul.

ADB will help fund a new pump station and upgrade four existing ones. The measures will increase energy conservation and reduce greenhouse gas emissions. The planned introduction of a wireless radio communication system along the main canal will help to further reduce wasteful water discharge. To help farmers deal with a changing climate, they would also be taught how to use drought resistant seeds and the latest techniques in growing fruits and vegetables in greenhouses.

One in every four households in the area surveyed by ADB said they no longer used their land for crop production because of the unreliable supply of irrigated water. Improving irrigation will give households an economic boost, promote crop diversity, and will be especially beneficial to women who make up more than half of those working in agriculture in the surveyed areas.

Regarding ongoing concerns surrounding labor issues in Uzbekistan's agriculture sector, the project has strong and comprehensive loan covenants to enforce the government's compliance with core labor standards in relation to the project's implementation. In addition, ADB has sought and received firm assurances from the government that it will respect international labor principles. Uzbekistan has recently agreed to allow a delegation from the International Labor Organization (ILO) to monitor the current cotton harvest. ADB will work closely with the ILO and other development partners to continue a constructive dialogue on improving labor practices.

The project is to be carried out over six years with an estimated completion date of February 2020.