Kyrgyz Republic : Almaty–Bishkek Economic Corridor Regional Improvement of Border Services Project

Sovereign Project | 54439-001

The project will build and equip 3 climate-resilient and energy-efficient border crossing points (BCP) between the Kyrgyz Republic and Kazakhstan on the Kyrgyz side of the border and a training center for the Kyrgyz Border Service (the project EA). The project with the total loan and grant financing of $37 Million will help facilitate trade and tourism between the Kyrgyz Republic and Kazakhstan and will contribute to the sustainable economic development along the Almaty-Bishkek Economic Corridor.

Project Details

Project Name
Almaty–Bishkek Economic Corridor Regional Improvement of Border Services Project
Project Number
54439-001
Country / Economy
  • Kyrgyz Republic
Project Status
Proposed
Project Type / Modality of Assistance
  • Grant
  • Loan
Source of Funding / Amount
Grant: Almaty"Bishkek Economic Corridor Regional Improvement of Border Services Project Readiness
Source Amount
Asian Development Fund US$ 24.00 million
Loan: Almaty"Bishkek Economic Corridor Regional Improvement of Border Services Project
Source Amount
Concessional ordinary capital resources lending US$ 13.00 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
  • Transport / Road transport (non-urban)

Gender
Effective gender mainstreaming
Description

The project will build and equip 3 climate-resilient and energy-efficient border crossing points (BCP) between the Kyrgyz Republic and Kazakhstan on the Kyrgyz side of the border and a training center for the Kyrgyz Border Service (the project EA). The project with the total loan and grant financing of $37 Million will help facilitate trade and tourism between the Kyrgyz Republic and Kazakhstan and will contribute to the sustainable economic development along the Almaty-Bishkek Economic Corridor.

Project Rationale and Linkage to Country/Regional Strategy

The Kyrgyz Republic is characterized as a small and open economy, with trade to gross domestic product ratio at 124% in 2023. In 2015, the country joined the Eurasian Economic Union (EAEU) of Armenia, Belarus, Kazakhstan, and Russia and adopted its trade rules and procedures. Nevertheless, cross-border time and cost at the key Kazakh-Kyrgyz border crossing points (BCPs) remain high after 2015. The country strives to improve its physical and digital infrastructure to facilitate the smooth movement of goods, people, and investment capital across borders. The midterm development plan emphasizes the full economic recovery after the coronavirus disease (COVID-19) pandemic and sets the goal for the average economic growth of at least 5% per year until 2026. The plan prioritizes improving transit flows of export and import goods through neighboring countries, strengthening border control procedures, infrastructure, facilities, and technologies to facilitate smooth and safe crossing of the national borders by persons and goods.

In 2014, the Kyrgyz Republic and Kazakhstan, supported by the Asian Development Bank (ADB), launched the AlmatyBishkek Economic Corridor (ABEC) development program to foster shared economic development of the two largest city agglomerations in the ABEC region. The ABEC program conducted several studies of the BCP infrastructure and procedures between Kazakhstan and the Kyrgyz Republic. The studies helped identify issues with the cross-border movement of people and goods and outline possible responses within the scope of the ABEC program. The ABEC program consultants estimated that due to long border delays at the BCP Ak-Tilek alone, the Kyrgyz Republic lose $9 million a year of export trade to Kazakhstan and the same amount of trade to Russia, while Kazakhstan lose $16 million of export trade a year to the Kyrgyz Republic.

Within the ABEC program framework the Kyrgyz Republic and Kazakhstan identified three pairs of BCPs requiring urgent modernization: (i) Ak-Tilek Karasu, mostly used for freight traffic and commercial passenger transport; (ii) Karkyra Kegen, used for the passenger traffic to the Issyk-Kul tourism area; and (iii) Kichi-Kapka Besagash, connecting western parts of the Kyrgyz Republic and Zhambyl oblast of Kazakhstan, but closed for traffic since 2010. Within the ABEC program framework two countries agreed that both countries will proceed with the BCP improvements in the coordinated manner. Kazakhstan will use its own state budgetary resources, while the Kyrgyz Republic requested ADB to finance the modernization of its BCPs and a training center through the proposed ABEC RIBS project.

Kazakhstan is slightly ahead of the Kyrgyz Republic with the modernization of their BCPs. In 2024 they plan to complete the detailed engineering design and intend to begin construction works at BCPs Karasu and Besagash. Furthermore, both countries are planning to develop the e-queuing systems with truck parking areas to enhance border crossing experience for drivers of heavy goods vehicles. Kazakhstan has already implemented such systems at its BCPs with People's Republic of China, Russia and Uzbekistan and experienced positive outcomes from this initiative.

The ABEC cross-border transport connectivity study completed by ADB in April 2024 demonstrated that key BCPs between Kazakhstan and the Kyrgyz Republic operate at or above their design throughput capacity. With the double-digit growth of cross-border cargo traffic expected in the next several years, the BCPs will become operational bottlenecks in the regional transport network. Without the BCP modernization projects on both sides of the border, and with the continuing growth of traffic and associated cross-border transport costs, export trade will face physical constraints, thus resulting in the slower overall economic growth and social development. The Kyrgyz economy is more susceptible to this trend than Kazakhstan, hence need to advance improvements of the physical BCP infrastructure and border control procedures.

The Kyrgyz Republic is characterized as a small and open economy, with trade to gross domestic product ratio at 124% in 2023. In 2015, the country joined the Eurasian Economic Union (EAEU) of Armenia, Belarus, Kazakhstan, and Russia and adopted its trade rules and procedures. Nevertheless, cross-border time and cost at the key Kazakh-Kyrgyz border crossing points (BCPs) remain high after 2015. The country strives to improve its physical and digital infrastructure to facilitate the smooth movement of goods, people, and investment capital across borders. The midterm development plan emphasizes the full economic recovery after the coronavirus disease (COVID-19) pandemic and sets the goal for the average economic growth of at least 5% per year until 2026. The plan prioritizes improving transit flows of export and import goods through neighboring countries, strengthening border control procedures, infrastructure, facilities, and technologies to facilitate smooth and safe crossing of the national borders by persons and goods.

In 2014, the Kyrgyz Republic and Kazakhstan, supported by the Asian Development Bank (ADB), launched the AlmatyBishkek Economic Corridor (ABEC) development program to foster shared economic development of the two largest city agglomerations in the ABEC region. The ABEC program conducted several studies of the BCP infrastructure and procedures between Kazakhstan and the Kyrgyz Republic. The studies helped identify issues with the cross-border movement of people and goods and outline possible responses within the scope of the ABEC program. The ABEC program consultants estimated that due to long border delays at the BCP Ak-Tilek alone, the Kyrgyz Republic lose $9 million a year of export trade to Kazakhstan and the same amount of trade to Russia, while Kazakhstan lose $16 million of export trade a year to the Kyrgyz Republic.

Within the ABEC program framework the Kyrgyz Republic and Kazakhstan identified three pairs of BCPs requiring urgent modernization: (i) Ak-Tilek Karasu, mostly used for freight traffic and commercial passenger transport; (ii) Karkyra Kegen, used for the passenger traffic to the Issyk-Kul tourism area; and (iii) Kichi-Kapka Besagash, connecting western parts of the Kyrgyz Republic and Zhambyl oblast of Kazakhstan, but closed for traffic since 2010. Within the ABEC program framework two countries agreed that both countries will proceed with the BCP improvements in the coordinated manner. Kazakhstan will use its own state budgetary resources, while the Kyrgyz Republic requested ADB to finance the modernization of its BCPs and a training center through the proposed ABEC RIBS project.

Kazakhstan is slightly ahead of the Kyrgyz Republic with the modernization of their BCPs. In 2024 they plan to complete the detailed engineering design and intend to begin construction works at BCPs Karasu and Besagash. Furthermore, both countries are planning to develop the e-queuing systems with truck parking areas to enhance border crossing experience for drivers of heavy goods vehicles. Kazakhstan has already implemented such systems at its BCPs with People's Republic of China, Russia and Uzbekistan and experienced positive outcomes from this initiative.

The ABEC cross-border transport connectivity study completed by ADB in April 2024 demonstrated that key BCPs between Kazakhstan and the Kyrgyz Republic operate at or above their design throughput capacity. With the double-digit growth of cross-border cargo traffic expected in the next several years, the BCPs will become operational bottlenecks in the regional transport network. Without the BCP modernization projects on both sides of the border, and with the continuing growth of traffic and associated cross-border transport costs, export trade will face physical constraints, thus resulting in the slower overall economic growth and social development. The Kyrgyz economy is more susceptible to this trend than Kazakhstan, hence need to advance improvements of the physical BCP infrastructure and border control procedures.

The following factors were identified by the ABEC program studies as the most critical constraints on cross-border trade, tourism, and transport.

Limited cross-border connectivity. During the EAEU establishment period in 2010, the Kyrgyz Republic lost connectivity with Kazakhstan across several BCPs, including the BCP Kichi-Kapka connected the agricultural region of western Talas Oblast of the Kyrgyz Republic with Zhambyl Oblast of Kazakhstan and its largest town, Taraz. Its closure in 2010 resulted in longer travel time for tourists and agricultural producers across the alternative BCP Chon-Kapka. Other BCPs, such as the BCP Karkyra in Issyk-Kul oblast, operate with limited seasonal operational modality due to its infrastructural limitations.

High climate vulnerability of the existing border crossing infrastructure. The BCP Ak-Tilek is located very close to the Chui riverbank and is impacted by spring flooding, hence needs to be moved away from the water line. Most BCPs experience electricity cuts, which are mitigated by diesel generators rather than by sustainable energy sources. Most BCPs do not have stable water supply which will further exacerbate due to the climate change.

Lack of modern border control equipment. The Kyrgyz Republic's BCPs lack essential control equipment, such as passport scanners, cargo inspection equipment, weighbridges, etc. It reduces the speed of control and increases risks of illegal movement of people and goods across the borders.

Inefficient border procedures. The ABEC study of cross-border transit times and control procedures in 2022 reported that due to the procedural inefficiencies, the average border crossing time at the BCP KarasuAk-Tilek was 12 hours for entry from Kazakhstan to the Kyrgyz Republic and 3 days for crossing from the Kyrgyz Republic to Kazakhstan, hence affecting trade logistics costs. Furthermore, long truck queues lead to high emissions of carbon dioxide, other gases, and particles from running truck engines, especially during the cold season.

Security of national borders. The Kyrgyz Republic lacks sufficient capacity to track and prevent all cases of illegal trafficking of persons. Modern passport scanners, face-recognition equipment, and real-time access to relevant international databases are required. Most of the BCP facilities are not sufficiently equipped to host victims of human trafficking on arrival to BCPs, and the Border Service of the State Committee for National Security of the Kyrgyz Republic (Border Service) personnel do not have sufficient training in handling such cases.

Training and capacity development of border management agencies. The Border Service personnel have limited knowledge of modern control technologies and procedures, which leads to slow control processes and increased illegal movement of persons and goods.

Impact

The project will be aligned with the following impact: the Kyrgyz Republic's trade and tourism potential increased, contributing to the country's accelerated economic and social development.

Outcome

The efficiency of cross-border goods and people movement between Kazakhstan and the Kyrgyz Republic have improved.

Outputs

Physical infrastructure and border facilities at BCPs Ak-Tilek, Karkyra and Kichi-Kapka upgraded and climate-proofed.

The capacity of Border Service to train and develop its staff improved.

Geographical Location
Nation-wide, Almaty

Safeguard Categories

Environment
B
Involuntary Resettlement
B
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

Contact

Responsible ADB Officer
Samukhin, Oleg
Responsible ADB Department
Sectors Group
Responsible ADB Division
Transport Sector Office (SG-TRA)
Executing Agencies
Border Service of the State Committee for National Security of the Kyrgyz Republic

Timetable

Concept Clearance
21 Jun 2024
Fact Finding
10 Nov 2024 to 20 Nov 2024
MRM
12 Feb 2025
Approval
-
Last Review Mission
-
Last PDS Update
28 Jun 2024

Funding

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

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Contracts Awarded

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Procurement Plan

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