Kyrgyz Republic: Second Investment Climate Improvement Program (Subprogram 2)

Sovereign (Public) Project | 41544-089 Status: Closed

The Second ICIP aims to improve the investment climate for the private sector in the Kyrgyz Republic. It supports increasing access to finance, enabling private participation in infrastructure, diversifying export products and markets, encouraging diversified foreign direct investment, improving skills to match market needs, increasing transparency in government, and reducing the costs of doing business.

 
Project Name Second Investment Climate Improvement Program (Subprogram 2)
Project Number 41544-089
Country Kyrgyz Republic
Project Status Closed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0487-KGZ: Second Investment Climate Improvement Program (Subprogram 2)
concessional ordinary capital resources lending / Asian Development Fund US$ 12.50 million
Loan 3410-KGZ: Second Investment Climate Improvement Program (Subprogram 2)
concessional ordinary capital resources lending / Asian Development Fund US$ 12.50 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Education - Technical and vocational education and training

Finance - 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 - Public expenditure and fiscal management

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Second ICIP aims to improve the investment climate for the private sector in the Kyrgyz Republic. It supports increasing access to finance, enabling private participation in infrastructure, diversifying export products and markets, encouraging diversified foreign direct investment, improving skills to match market needs, increasing transparency in government, and reducing the costs of doing business.
Project Rationale and Linkage to Country/Regional Strategy Growth in the Kyrgyz economy slowed from 4.0% in 2014 to 3.5% in 2015 because of negative spillovers from the recession in the Russian Federation and a sharp economic slowdown in Kazakhstan. Growth in industry slowed from 5.7% in 2014 to 1.4% in 2015 as gold production and construction halved, while textiles and electricity output also fell. Private consumption remained stable at 94.7% of gross domestic product (GDP), compared with 95.0% in 2014, and capital investment declined from 32.5% of GDP in 2014 to 27.8% in 2015 because of lower remittances and currency depreciation. With GDP growth expected to contract by 1.2% in the Russian Federation and 2.0% in Kazakhstan in 2016, growth in the Kyrgyz economy is projected to slow to 1.0% in 2016. The challenging external environment and fiscal and social pressures pose significant downside risks. Accession to the Eurasian Economic Union (EEU) in 2015 also brings risks to the country's competitiveness in trading with non-EEU countries.
Impact Increased private sector investment in the economy
Project Outcome
Description of Outcome Improved investment and business climate
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Access to finance increased

PPP program enhanced

Trade and investment diversified

Transparency and ease of doing business increased

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
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 Sood, Priyanka
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Economy
106, Chui Prospect, Bishkek, Kyrgyz Republic
Timetable
Concept Clearance -
Fact Finding 21 Apr 2016 to 30 Apr 2016
MRM 08 Jun 2016
Approval 29 Jul 2016
Last Review Mission -
Last PDS Update 02 Sep 2016

Grant 0487-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jul 2016 12 Aug 2016 13 Dec 2016 31 Dec 2016 - 30 Dec 2016
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 12.50 Cumulative Contract Awards
ADB 12.50 29 Jul 2016 12.50 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Jul 2016 12.50 0.00 100%

Loan 3410-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jul 2016 12 Aug 2016 13 Dec 2016 31 Dec 2016 - 30 Dec 2016
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 12.50 Cumulative Contract Awards
ADB 12.50 29 Jul 2016 12.02 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Jul 2016 12.02 0.00 100%

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