Kazakhstan: Alternative Urban Infrastructure Financing Modalities

Sovereign Project | 46487-001 Status: Closed

Summary

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Project Name Alternative Urban Infrastructure Financing Modalities
Project Number 46487-001
Country Kazakhstan
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8366-KAZ: Alternative Urban Infrastructure Financing Modalities
Urban Environmental Infrastructure Fund under the Urban Financing Partnership Facility US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Finance - Infrastructure finance and investment funds - Money and capital markets

Water and other urban infrastructure and services - Urban solid waste management - Urban water supply

Gender Equity and Mainstreaming
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact

Project Outcome

Description of Outcome
Progress Toward Outcome

Outcome achieved ahead of time; TA extension request under process to enable preparation of a possible follow on project (linked to TA recommendations on outputs 1, 2, 3, 4 and 5)

Final report, including pilot studies, shared with Government; TA closing extended from original 31 May 2015 to 30 September 2015 to enable ADB-GOK discussion on implementing the TA recommendations, as summarized under the proposed Urban Utilities Transition Support Program (UUTSP) to help operationalize key actions envisaged under the State Program of Infrastructure Development Nurly Zhol' 2015-2019. Mission scheduled for end-September 2015.

Pilot studies /assessments of Zhetisu Vodokanal (Taldykorgan water), Taldykorgan Teploservis (Heating) and Karaganda Su (water) will be shared with the Government in the first week of April, 2015.

Review Mission fielded in November 2014; Government comments on draft TA report received and discussed; comments on Aide Memoire received with regard to continuation of ADB technical assistance support; specifically, regarding (i) the priority projects of the state program of infrastructure development ("Nurly Jol") for the years 2015-2019; (ii) the infrastructure financing fund (feasibility of establishing a fund to finance the infrastructure is currently under consideration by interested government agencies and organizations); and (iii)

developing standard documentation (concession proposals, competitive documentation, and concession agreement) in the sectors of heat and water supply.

Additionally, the Committee for Construction, Housing and Communal Services and Land Management Department is currently considering the possibility of cooperation with the ADB to elaborate the mechanism of financing the modernization of ZhKH networks under the state program "Nurly Jol (The project of the state program of infrastructure development "Nurly Jol" for the years 2015-2019 is awaiting PM approval (as of March 2015).

Draft final TA report reviewed by ADB; to be shared with the EA (now under the new Ministry of National Economy); draft report of pilot project 1 (Karaganda Su Water/sanitation) being reviewed by ADB; Draft reports of pilot projects 2, 3, 4 being prepared

Financial assessment of 21 Water, and 13 District Heating Utility companies completed

Cities and priority pilot projects being shortlisted to initiate analyses on alternative ownership and financing modalities

Karaganda and Taldykorgan confirmed by the Government as the pilot cities (Letter of confirmation dated: 24/01/2014). The utilities selected are: Karaganda Su (water/sanitation), Karaganda Teplotranzit (Heat), Zhetisu Vodokanal (Water / Sanitation) and Taldykorgan Teploservice (Heat).

Mission to Karaganda fielded to begin to work closely with the heating and water utility companies and start the preparation of the Prefeasibility Studies (PFS). The PFS' will summarize the observations regarding each city and utility entity, articulate its strengths and weaknesses and scope for improvement, and detail the new financing, governance, institutional arrangements, and de-risking mechanisms identified to improve their service delivery.

Mission to Taldykorgan scheduled in April 2014.

Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)

All outputs completed; TA extension request under process to enable preparation of a possible follow on project (linked to TA recommendations on outputs 1, 2, 3, 4 and 5)

1, 2, 3, 4, 5 completed ( 5 - methods suggested/recommended; establishment being discussed with Government).

1, 2 and 3 - completed (refer draft TA report).

4 - draft completed (refer draft pilot study reports for (i) LLP Karaganda Su (karaganda water co); (ii) Karaganda TeploTranzit LLP (karaganda district heating co); (iii) Zhetisu Vodokanal GKP (taldykorgan water co); and (iv) Taldykorgan Teploservis GKP (taldykorgan district heating co)).

5 - completed (refer draft TA report)

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Draft final TA report - recommending policy, institutional legal and regulatory changes to increase private sector participation in urban infrastructure - reviewed by ADB; being translated for sharing with the EA (now under the new Ministry of National Economy);

Draft report of pilot project 1 (Karaganda Su Water/sanitation), providing recommendations for alternative ownership, management, and financing structures, and effectively mobilizing commercial and official cofinancing being reviewed by ADB

Draft reports of pilot projects 2 (Karaganda Teplotranzit (Heat); 3 (Zhetisu Vodokanal (Water / Sanitation); 4 (Taldykorgan Teploservice (Heat) in the process of being prepared

and

-Draft report to be ready by end- April due to delay in hiring of legal specialist

- Inter-ministerial Working Group established; stakeholder mechanism being established

- Priority projects selected are: Karaganda Su (water/sanitation), Karaganda Teplotranzit (Heat), Zhetisu Vodokanal (Water / Sanitation) and Taldykorgan Teploservice (Heat).

- TA team to start preparation of PFS' to achieve outputs 4 and 5.

- Pilot studies for 3 utilities will be sent to the government for review on 2 April 2015.

Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design

All key ministries and public and private sector stakeholders consulted during design (Government reorganization has led to ministerial portfolios being rationalized and ministry names changed)

Ministry of Economy and Budget Planning (MEBP), Kazakhstan Public-Private Partnership Center (PPP Center) and the Ministry of Finance (MOF) through regular in person meetings, email and telephone communication (with ADB team).

During Project Implementation

- All key stakeholders in Government and outside of government were consulted during implementation

- Continuous consultation with key implementing agencies and the EA

- Ministry of Finance (MOF), Kazakhstan Public-Private Partnership Center (PPP Center) and the Ministry of Regional Development through regular in person meetings, email and telephone communication (with ADB team and consultant team).

-ZhKH (RK Center for utilities modernization & reform), Water Association (KazSu); ZhKH Palata (association of ZhKH operators and vendors)

- Inter-ministerial/Agency Working Group constituted based on mutually agreed TOR

Business Opportunities

Consulting Services The TA requires a team of five international (25 person-months) and six national specialists (18 person-months). International consultants comprise (i) Team leader, 5 person-months; (ii) Municipal Infrastructure Development Specialist, 4 person-months; (iii) Senior Urban Planning Specialist/Urban Economist, 6 person-months; (iv) PPP and Institutional Development Specialist, 5 person-months; and (v) Senior Finance and Capital Markets Specialist, 5 person-months. National consultants comprise (i) National Infrastructure Development Specialist, 4 person-months; (ii) National PPP Specialist, 4 person-months; (iii) National Urban Economy and Finance Specialist, 4 person-months; (iv) National Capital Markets Development Specialist, 3 person-months; and (v) National Institutional and Social Specialist, 3 person-months

Responsible Staff

Responsible ADB Officer Priyanka Sood
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Department for Budget Investments and PPP Development under the Ministry of National Economy
010000, Astana, Kazakhstan, 8, Orynbor Street, Kazakhstan

Timetable

Concept Clearance 11 Feb 2013
Fact Finding -
MRM -
Approval -
Last Review Mission -
Last PDS Update 30 Mar 2016

TA 8366-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 May 2013 12 Jun 2013 12 Jun 2013 31 May 2015 31 Mar 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,000,000.00 0.00 0.00 0.00 0.00 1,000,000.00 09 May 2013 439,011.14

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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