Kyrgyz Republic: Support a High Level Forum on Public-Private Partnerships in the Kyrgyz Republic

Sovereign Project | 47097-001

Summary

The impact of the TA will be active participation of private investors in PPP project tenders. The outcome will be accelerated reforms to further strengthen the enabling environment for PPP.

The PPP forum will be undertaken over 1.5 days in May 2013. Half a day is scheduled for discussions on the enabling environment and one day for presentations of prospective PPP project opportunities. Representatives of the highest level of government will actively participate in the introductory part of the forum and individual sessions to demonstrate their commitment to PPP. Representatives from foreign private and public sector institutions will participate to provide references for the Kyrgyz PPP framework design and learning experience.

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Project Name Support a High Level Forum on Public-Private Partnerships in the Kyrgyz Republic
Project Number 47097-001
Country Kyrgyz Republic
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8333-KGZ: Support to High Level Forum in Public-Private Partnerships
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector Finance - Infrastructure finance and investment funds
Public sector management - Public expenditure and fiscal management
Transport - Transport policies and institutional development
Gender Equity and Mainstreaming
Description

The impact of the TA will be active participation of private investors in PPP project tenders. The outcome will be accelerated reforms to further strengthen the enabling environment for PPP.

The PPP forum will be undertaken over 1.5 days in May 2013. Half a day is scheduled for discussions on the enabling environment and one day for presentations of prospective PPP project opportunities. Representatives of the highest level of government will actively participate in the introductory part of the forum and individual sessions to demonstrate their commitment to PPP. Representatives from foreign private and public sector institutions will participate to provide references for the Kyrgyz PPP framework design and learning experience.

The sessions on enabling environment for PPP will focus on institutional, financial, and legal and regulatory pillars, and the progress made by the Kyrgyz Republic under each pillar. Experiences of other countries at different stages of PPP development and the perspective of the financial sector, represented by local and international banks and international finance institutions, will be presented. The government will also outline the financial support schemes it proposes to establish over the coming months, including a project development facility, long-term debt facility and possibly a viability gap finance facility. These support facilities have proven useful in strengthening the enabling PPP environments of other developing countries. They are particularly critical for the Kyrgyz Republic in light of the current limitations in global project finance, the country's risk profile, and limitations in the domestic project finance market.

The sessions of the forum on PPP project pipelines will introduce short-term opportunities for PPP in urban services, health and transport by presenting a realistic timeframe for further developing (structuring) already-identified projects. The government's commitment to these projects will be demonstrated by aligning them with the overall and sector-specific development strategies and through participation from high ranking officials responsible for the respective sectors. International case studies of comparable PPP projects will provide reference points for further project development. The session on prospective opportunities could include information about PPP initiatives in the energy, tourism and water sectors, subject to further consultation with the relevant ministries in the months leading up to the forum.

Key activities that need to be undertaken under the TA to prepare the forum are: finalizing the list of invitees, developing an event promotion plan, contacting invitees, preparing and distributing promotion material, and preparing presentations by government officials

Project Rationale and Linkage to Country/Regional Strategy

Economic and social infrastructure is one of the key drivers for economic growth and poverty reduction. Since independence, the Kyrgyz Republic has encountered economic hardships and budgetary deficits constraining the ability of the government to provide adequate financial support for maintaining existing and constructing new infrastructure. In addition, weak capacity across line ministries and other state agencies undermines the efficiency of infrastructure facilities, which are still mainly managed by the government. As a response, the government is undertaking a comprehensive reform initiative to create an enabling policy, legal, regulatory and institutional environment for PPP.

ADB has supported this reform initiative since the Investment Climate Improvement Program (ICIP) Cluster was approved in 2008. PPP reforms reached a new stage in 2012 with the enactment of a PPP law that is in line with international good practices in February 2012, the adoption of a PPP development action plan in April 2012, the adoption of a PPP risk-management policy in October 2012, and the identification of specific PPP project opportunities in the urban, transport and health sectors. These reforms were supported under Subprogram (SP) 2 of ICIP.

Building on these achievements, the government plans to undertake a high level PPP forum in Bishkek in May 2013 to (i) demonstrate the government's commitment to PPP in infrastructure and social services, (ii) demonstrate the quality of the enabling environment for PPP in Kyrgyz Republic and build consensus for further reforms, and (iii) introduce short- and medium-term PPP opportunities for private investors. During his visits in the Kyrgyz Republic in February and October 2012, VPO1 agreed in principle to support such a PPP forum. During his visit to the Kyrgyz Republic in October 2012, DG, CWRD re-confirmed this agreement.

On 23 January 2013 the government established a working group through government resolution No. 12-P to prepare the PPP forum. On 31 January 2013 the working group reached agreement on an agenda and action plan for the preparation of the forum, and a draft lists of invitees from the Kyrgyz Republic and abroad. On this basis, the government requested ADB to provide financial assistance for the forum through a small-scale TA.

The PPP forum will complement and reinforce reforms supported under SP 3 of the ICIP that aim to further strengthen the enabling environment for PPP and facilitate the development of a strong PPP project pipeline. The forum will also help to build consensus for the establishment of PPP project development and financial support facilities that are broadly seen as integral parts of an enabling framework for PPP in line with international good practice.

Impact Increased engagement of private sector in economic and social infrastructure
Project Outcome
Description of Outcome Increased knowledge of the Kyrgyz Republic's enabling environment for PPP and investment opportunities among the private sector, government participants, and other attending stakeholders
Progress Toward Outcome

--The Forum improved awareness about PPP; it demonstrated to the government as well as prospective investors that while Kyrgyz Rep. has taken some important steps, including the approval of a PPP Law, the quality of the enabling environment is still weak and more needs to be done.

- Forum Report prepared, detailing Forum organization, proceedinds and recommendations

The Forum helped reached broad consensus on further reforms, including strengthening the institutional, financial and policy and regulatory pillars of the enabling environment for PPP.

The government is demonstrating its commitment to PPP. The PPP Unit in the Ministry of Economy is being strengthened with suitable additional human resources. The first reading of the draft Law On amendments and additions to some regulatory acts of the Kyrgyz Republic in PPP (amendments to related codes and regulations to bring them in conformity with the PPP law) has already been held. The Budget Law is being amended to create budgetary allocations for a Project Development Support (PDS) Facility. The scheme and guidelines for the PDSF are also being developed with ADB assistance.

The Forum introduced some possible PPP opportunities in health, street lighting, car parking, roads and airports. The presentations were made by the respective line ministers and Mayor of Bishkek (for Car Parking and Street lighting).

Implementation Progress
Description of Project Outputs

A successfully launched Forum with strong participation by private sector representatives and government officials

Complete presentations, sector reviews and other knowledge products containing comprehensive information on the existing enabling environment for PPP, ongoing reform initiatives, and PPP project opportunities in key sectors

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

- 163 people attended the forum comprising government officials, private sector representatives and international speakers.

- 36 presentations were made covering the existing enabling environment in Kyrgyz Rep. (policy, regulatory, legal, financial, institutional); ongoing reform initiatives, experiences of other developing countries; key enabling elements that need to be developed in Kyrgyz Rep.; sector reviews (transport - roads and airports; health, urban infrastructure - street lighting and car parking)

- Possible PPP opportunities in the above sectors presented by relevant senior government officials and assessments made by international private sector partners and DMC officials with similar sector-project experiences.

Geographical Location National
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design A broad range of stakeholders were consulted during the consultations mission from 5 11 December 2012 in Bishkek and a reconnaisance mission for Subprogram 3 of the Investment Climate Improvement Program from 21 January 2013 to 1 February 2013 in Bishkek. This was followed by stakeholder consultations within ADB in Manila.
During Project Implementation The PPP forum was held in Bishkek, Kyrgyz Republic from 23-24 May 2013. Representatives at the highest levels of central and local government of the Kyrgyz Republic actively participated in the Forum's plenary and sector sessions.
Business Opportunities
Consulting Services One international (PPP Specialist) and three national consultants (PPP Expert and event coordinators) were recruited individually. Eighteen (18) speakers were invited as resource persond for the forum. Translators and interpreters were also hired to translate all forum related materials into Russian/English and vice versa.
Procurement N/A
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
Ministry of EconomyMr. Sanjar Mukanbetov, Deputy Ministersmukanbetov@mert.kg106, Chui Prospect, Bishkek, Kyrgyz Republic
Timetable
Concept Clearance -
Fact Finding 28 Jan 2013 to 01 Feb 2013
MRM -
Approval 28 Feb 2013
Last Review Mission -
Last PDS Update 27 Sep 2013

TA 8333-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Feb 2013 - 28 Feb 2013 30 Sep 2013 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 0.00 0.00 0.00 0.00 225,000.00 28 Feb 2013 159,309.76

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