Project Name Program to Enhance Capabilities of Sovereign Institutions in the Central and West Asia Region to Introduce Innovative Financing Modalities
Project Number 56136-001
Country / Economy Regional
Kyrgyz Republic
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 10041-REG: Program to Enhance Capabilities of Sovereign Institutions in the Central and West Asia Region to Introduce Innovative Financing Modalities
Technical Assistance Special Fund US$ 3.13 million
Operational Priorities OP1: Addressing remaining poverty and reducing inequalities
OP2: Accelerating progress in gender equality
OP6: Strengthening governance and institutional capacity
Sector / Subsector

Public sector management / Reforms of state owned enterprises

Gender Some gender elements
Description The knowledge and support technical assistance (TA) program will address interest expressed by the governments of the Asian Development Bank (ADB) developing member countries (DMCs) of Central and West Asia in leveraging private capital to address gaps in the financing of the Sustainable Development Goals (SDGs) using innovative financing modalities. The TA will focus on advising and assisting sovereign institutions and their stakeholders on strengthening their institutional capabilities to (i) develop a better understanding of various innovative financing modalities being implemented globally to correct specific market failures, realize opportunities, and overcome institutional limitations; (ii) validate the use of complex financing modalities and de-risking mechanisms to tap new sources of private financing for SDG financing gaps; (iii) strengthen the role of sovereign institutions in enabling the flow of private institutional capital for economic additionality, such as high social impact investments; (iv) facilitate novel partnership and contracting arrangements with the private sector, such as outcome-based financing; (v) explore innovative financing instruments to transfer disaster risks at the central and regional levels; and (vi) explore approaches and modalities that encourage the blending of other sources of capital (official development assistance, and private and other similar sources) with traditional forms of ADB financing, such as sovereign loans funded by ordinary capital resources and/or grants. The TA is aligned with ADB's Strategy 2030 vision of supporting DMCs in accelerating the development of approaches to catalyze private financing for achieving the SDGs. The TA supports the implementation of SDG 9 and SDG 17.
Project Rationale and Linkage to Country/Regional Strategy

Limited fiscal resources of developing member countries of ADB's Central and West Asia region for financing the Sustainable Development Goals. To achieve the operational priorities of ADB's Strategy 2030, sovereign institutions in Central and West Asia DMCs must accelerate the mobilization of resources for SDG financing. The impact of the coronavirus disease (COVID-19) pandemic has been felt most acutely by some of the most vulnerable populations, and may delay the achievement of the SDGs in these DMCs by several years. The immediate consequences of COVID-19 have been rising public debt, increased sovereign risk, rating downgrades, capital outflow, reduced tax revenues, a marked drop in overseas remittances, and the reversal of social policy mandates. For women and girls, COVID 19 has further exacerbated gender inequalities. Developing economies in Central and West Asia have been further strained by the invasion of Ukraine. Pakistan's economic growth is expected to be slow in FY2023 (ending 30 June 2023) amid ongoing policy tightening, devastating floods, and a high inflation rate. Furthermore, because of the global investment and remittances, economic growth in Tajikistan and Uzbekistan is projected to be slower in FY2022 than in FY2021.

Weak sovereign institutional mechanisms. The COVID-19 pandemic has further exacerbated the challenges of mobilizing private sector funds for SDG-related investments. The challenges for sovereign institutions in operationalizing or scaling innovative financing modalities in public-private partnership for SDG-related sectors that are public service in nature, such as health care and education, include (i) ineffective cooperation modalities between private and public institutions, (ii) diverse organizational set-ups and management techniques, (iii) varied incentive mechanisms and risk return metrics, (iv) diverse legal provisions and governance mechanisms, and (v) inadequate oversight from public sources.

Insufficient links to private sector resources to address financing gaps. Although there is tremendous appetite and potential among private sector investors, the supply-side barriers include high initial transaction costs in developing a concept; lengthy design development stages; low risk-adjusted returns; disparate performance metrics; unfavorable contracting terms; and a lack of standardization for program design and delivery for key SDG sectors such as health care, education, and climate change adaptation.

Lack of sovereign incubators or sandboxes to nurture novel ideas. Globally, innovative financing modalities, such as impact bonds, guarantees, leasing, and impact investments, have shown that they can unlock new sources of capital and address development challenges. Although there is tremendous interest among sovereign institutions in Central and West Asia DMCs to evaluate various innovative financing modalities to address specific market failures, overcome institutional limitations, build suitable capacity for engaging with the private sector, and implement such novel concepts following internationally acceptable standards and practices, there is also a lack of understanding of innovative financing and global practices being implemented by governments. The sovereign institutions are further constrained by a significant degree of uncertainty, the longtime horizon for developing such modalities, and the substantial financial resources needed to explore such novel concepts.


Institutional capacity of Central and West Asia DMCs enhanced and financial resources for development mobilized.

Project Outcome
Description of Outcome

Capacity of Central and West Asia DMCs to facilitate the mobilization of capital for financing the SDGs improved

Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Institutional capability of sovereign institutions for adopting innovative financing modalities for the SDGs enhanced.

Knowledge support to sovereign institutions on innovative financing modalities provided

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Kyrgyz Republic - Nation-wide; Pakistan - Nation-wide; Tajikistan - Nation-wide; Uzbekistan - Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Hegde, Abhishek Naveen
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Office of the Director General, CWRD
Executing Agencies
Asian Development Bank
Concept Clearance 09 Nov 2022
Fact Finding 29 Nov 2022 to 02 Dec 2022
Approval 13 Dec 2022
Last Review Mission -
Last PDS Update 02 Jan 2023

TA 10041-REG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2022 - 13 Dec 2022 30 Jun 2025 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
3,125,000.00 0.00 0.00 0.00 0.00 0.00 3,125,000.00 04 Jan 2023 0.00
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