Kyrgyz Republic: Investment Climate Improvement Program - Subprogram 3

Sovereign Project | 41544-084

Summary

Subprogram 3 of the Investment Climate Improvement Program (ICIP) is the last subprogram of the program cluster approved in 2008. The program continues to address binding constraints to private investment and to sustainable economic growth and employment generation by (i) reducing the cost of regulatory compliance, (ii) improving access to finance, (iii) enhancing workers' skills, and (iv) facilitating public-private partnerships.

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Project Name Investment Climate Improvement Program - Subprogram 3
Project Number 41544-084
Country Kyrgyz Republic
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0393-KGZ: Investment Climate Improvement Program - Subprogram 3
Asian Development Fund US$ 22.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Education - Technical and vocational education and training
Finance - Banking systems and nonbank financial institutions - Central banking systems - Finance sector development - Inclusive finance - Small and medium enterprise finance and leasing
Industry and trade - Small and medium enterprise development - Trade and services
Public sector management - Economic affairs management - Law and judiciary - Public expenditure and fiscal management
Gender Equity and Mainstreaming Effective gender mainstreaming
Description Subprogram 3 of the Investment Climate Improvement Program (ICIP) is the last subprogram of the program cluster approved in 2008. The program continues to address binding constraints to private investment and to sustainable economic growth and employment generation by (i) reducing the cost of regulatory compliance, (ii) improving access to finance, (iii) enhancing workers' skills, and (iv) facilitating public-private partnerships.
Project Rationale and Linkage to Country/Regional Strategy Long-term development prospects in the Kyrgyz Republic particularly for higher wages, employment, and profitable investment opportunities depend on diversifying into higher-value-added products and opening up new markets. The government still faces challenges in providing market-supporting mechanisms that foster private sector development. Among the constraints are (i) a challenging business environment that still discourages many entrepreneurs and investors from expanding, investing, or lending in the country; (ii) an increasing shortage of qualified workers that prevents firms from moving up the production ladder; and (iii) expensive, short term finance that is concentrated in few sectors.
Impact Sustainable economic growth and employment creation
Project Outcome
Description of Outcome Improved investment climate and business environment
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Cost of regulatory compliance reduced

Access to finance improved

Workers' skills enhanced

Public-private partnerships facilitated

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Kyrgyz Republic
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The program of economic reforms aims to reduce cost of regulatory compliance, improve access to finance, enhance workers skills and facilitate PPPs.

It is anticipated that the proposed policy-based grant will have no adverse environmental impacts. Nevertheless, it is advised that the PPP facility considers the ADB prohibited investment activities list as provided in Appendix 5 of the SPS2009.

Category C is being proposed for the Sub-program.

Involuntary Resettlement The proposed policy-based grant includes country-wide policy reforms to improve investment climate and employment opportunities. Program activities do not include civil works with land acquisition.
Indigenous Peoples The proposed policy-based grant includes country-wide policy reforms to improve investment climate and employment opportunities .The reforms shall be applied across regions and are not expected to have adverse impacts on any specific minority ethnic groups in the country.
Stakeholder Communication, Participation, and Consultation
During Project Design ADB missions were fielded in the Kyrgyz Republic in January and May 2013 to design subprogram 3 of the Investment Climate Improvement Program. The missions discussed the program of reforms with government bodies (including Office of the President, Office of the Prime Minister, Ministry of Finance, Ministry of Economy, State Tax Service, State Customs Service, the National Bank, the Agency of Vocational Education, the Deposit Protection Agency, the Single Window Center on Foreign Trade), business associations, private businesses, financial institutions, and development partners. An open round table was held on 29 May 2013. ADB mission visited Osh City on 30 May 2013 to better understand the business environment in the southern part of the country and regional constraints to private investment. About 160 people attended an ADB-sponsored PPP forum to discuss the required reforms for improving the enabling environment for PPPs in light of international experience.
During Project Implementation ADB missions fielded in May 2013 discussed the program of reforms with business associations, private businesses, and development partners. An open round table was held on 10 February 2014 to better understand the expected impact of the reforms.
Business Opportunities
Consulting Services There will be no recruitment of consultants. The policy-based grant is to be provided in the form of budget support.
Procurement There will be no procurement. The policy-based grant is to be provided in the form of budget support.
Responsible ADB Officer Ruben Barreto
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Economy106, Chui Prospect,Bishkek_Kyrgyz
Republic
Timetable
Concept Clearance -
Fact Finding 20 May 2013 to 31 May 2013
MRM 24 Feb 2014
Approval 19 Jun 2014
Last Review Mission -
Last PDS Update 20 Mar 2014

Grant 0393-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Jun 2014 19 Jun 2014 10 Jul 2014 31 Dec 2014 - 08 Sep 2014
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 22.00 Cumulative Contract Awards
ADB 22.00 19 Jun 2014 22.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 19 Jun 2014 22.00 0.00 100%

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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