Kyrgyz Republic : Climate-Resilient Agricultural Value Chain Development Project

Sovereign Project | 51276-001

The project will provide a loan to the Kyrgyz Republic to channel through qualified participating financial institutions who will on-lend to horticulture-related value chain businesses for investments in refrigerated vehicles, cold storage facilities, primary processing equipment (grading and/or sorting platforms, washing facilities, packaging equipment) and value addition processing equipment together with associated fixed assets such as warehouses and buildings. The project will address the critical constraint of providing long-term financial resources for agri-business in the Kyrgyz banking system. In parallel, it will provide support to value chain participants to consolidate the delivery of quality horticultural produce from participating farmer groups and key members of identified value chains. As the horticultural subsector generates high value produce, the project will contribute significantly to creating sustainable enterprises, increasing employment, and improving household incomes.

Project Details

  • Project Officer
    Bui, Giap Minh
    Sectors Group
    Request for information
  • Approval Date
    6 December 2023
  • Country/Economy
    Kyrgyz Republic
  • Sector
    • Agriculture, natural resources and rural development
Project Name
Climate-Resilient Agricultural Value Chain Development Project
Project Number
51276-001
Country / Economy
  • Kyrgyz Republic
Project Status
Approved
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Grant 0925-KGZ: Climate-Resilient Agricultural Value Chain Development Project
Source Amount
Concessional ordinary capital resources lending US$ 20.00 million
Loan 4413-KGZ: Climate-Resilient Agricultural Value Chain Development Project
Source Amount
Concessional ordinary capital resources lending US$ 20.00 million
Operational Priorities
  • OP1: Addressing remaining poverty and reducing inequalities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP5: Promoting rural development and food security
  • OP6: Strengthening governance and institutional capacity
  • OP7: Fostering regional cooperation and integration
Sector / Subsector
  • Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agro-industry, marketing, and trade

Gender
Effective gender mainstreaming
Description
The project will provide a loan to the Kyrgyz Republic to channel through qualified participating financial institutions who will on-lend to horticulture-related value chain businesses for investments in refrigerated vehicles, cold storage facilities, primary processing equipment (grading and/or sorting platforms, washing facilities, packaging equipment) and value addition processing equipment together with associated fixed assets such as warehouses and buildings. The project will address the critical constraint of providing long-term financial resources for agri-business in the Kyrgyz banking system. In parallel, it will provide support to value chain participants to consolidate the delivery of quality horticultural produce from participating farmer groups and key members of identified value chains. As the horticultural subsector generates high value produce, the project will contribute significantly to creating sustainable enterprises, increasing employment, and improving household incomes. Key lessons learned from previous and ongoing projects financed by ADB and development partners are taken into account in the project design: (i) there needs be dedicated project implementation units located in PFIs to monitor PFI lending activities and safeguards compliance; and (ii) terms and conditions of PFIs subloans must be demand-based and without government intervention.
Project Rationale and Linkage to Country/Regional Strategy

Under the National Development Strategy of Kyrgyz Republic for the period of 2018-2040, agriculture is expected to (i) provide the population with high-quality food; (ii) supply environment-friendly organic products to world and regional markets; (iii) overcome the country's limited competitive status on foreign markets; and (iv) implement an international standard quality control system for production, storage and processing of agricultural products. Its agrarian policy is to (i) promote agro-clusters to (a) supply raw materials for processing including milk, meat, walnuts, medicinal herbs, fish, cotton, wool and leather; and (b) improve farmer-access to modern resource-saving technologies; (ii) study issues associated with agro-logistic centers and create conditions to enable their establishment; and (iii) expand irrigation networks and introduce new technologies to enhance agricultural productivity.

Within the horticultural subsector, the realization of these objectives is compromised by the large number of small-scale producers. Consequences include (i) few opportunities for more efficient mechanized production, (ii) tradeable quantities are often small and difficult and costly to assemble and invariably are of mixed quality and variety, (iii) low farm-gate prices provide little incentive for farmers to introduce higher productivity systems, (iv) market signals are masked by extended value chains, many participants being opportunist traders motivated by short-term profit, and (v) farmers are unwilling (and unable) to invest in modern production systems. The widespread fragmentation over large geographic area of these farms render aggregation of perishable goods a high-risk activity. Other constraints include (i) the declining availability of water resources under climate change and competition for arable land from expanding urban settlements, (ii) limited access to suitable development finance for all participants along the value chain, (iii) a reliance on imported planting material (genetically superior being free of virus and disease), and (iv) lingering low productivity traditional production systems.

Climate change impacts are likely to trigger an increased frequency and intensity of natural hazards and exacerbate existing vulnerabilities across all socioeconomic sectors in the Kyrgyz Republic. The risk of disasters such as landslides, mudflows, and floods will increase the most as a result of rapid glacial melting due to temperature rise and increase in winter and spring precipitation. The increase in the number of hot days and heat waves will, on the other hand, increase the risk of droughts in the country with the water scarcity risk being considered as medium. Under the median range of simulations for representative concentration pathways (RCP) 4.5 and RCP 8.5, future climate projections demonstrate (i) a warming trend across the country with an annual average temperature rise of 2.0C by mid-century in comparison with a reference period of 1986-2005, increasing the risks of heatwaves, glacial melting and drought in the country; and (ii) a 1.6-2.6 millimeters increase in monthly precipitation by 2040-2059, mainly in winter and spring, increasing the risks of floods, landslides, mudslides and mudflows, especially in the mountainous regions. A projected decrease in precipitation during the summer season, on the other hand, may lead to droughts.

Impact

Poverty reduced through improved rural productivity and income-earning activities created

Project Outcome

Description of Outcome

Supplies of fresh and processed horticultural produce in domestic and international markets increased

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Lending by PFIs to support horticulture value chain development increased

Horticulture value chains strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Nation-wide

Safeguard Categories

Environment
FI
Involuntary Resettlement
FI-C
Indigenous Peoples
FI-C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Contact

Responsible ADB Officer
Bui, Giap Minh
Responsible ADB Department
Sectors Group
Responsible ADB Division
Agriculture, Food, Nature, and Rural Development Sector Office (SG-AFNR)
Executing Agencies
Ministry of Agriculture

Timetable

Concept Clearance
03 Jul 2023
Fact Finding
20 Mar 2022 to 31 Mar 2022
MRM
17 Jun 2022
Approval
06 Dec 2023
Last Review Mission
-
Last PDS Update
06 Dec 2023

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


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.

Title Document Type Document Date
Climate-Resilient Agricultural Value Chain Development Project: Environmental and Social Management System Environment and Social Management System Arrangements Aug 2023

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

  • 07 Dec 2023 | News Release

    ADB to Help Improve Agribusiness Value Chains in the Kyrgyz Republic

    ADB is providing a $20 million loan and a $20 million grant to the Kyrgyz Republic to help small and medium-sized agribusinesses improve their processing and storage capacity and reduce post-harvest handling losses, through inclusive, resilient, and climate-adaptive horticultural value chains.

Tenders

Tender Title Type Status Posting Date Deadline
Implementation Support Consultants Firm - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

Title Document Type Document Date
Climate-Resilient Agricultural Value Chain Development Project: Procurement Plan Procurement Plans Oct 2023