Regional : Leveraging the Private Sector to Deliver Inclusive, Affordable, and Climate-Resilient Housing in Central and West Asia

Project Name

Leveraging the Private Sector to Deliver Inclusive, Affordable, and Climate-Resilient Housing in Central and West Asia

Project Number

57043-001

Country / Economy

• Regional
• Armenia
• Azerbaijan
• Georgia
• Kyrgyz Republic
• Pakistan
• Tajikistan
• Uzbekistan

Project Status

Active

Project Type / Modality of Assistance

• Technical Assistance

Source of Funding / Amount

TA 10265-REG: Leveraging the Private Sector to Deliver Inclusive, Affordable, and Climate-Resilient Housing in Central and West Asia

Source	Amount
Technical Assistance Special Fund	US$ 500,000.00

Operational Priorities

• OP1: Addressing remaining poverty and reducing inequalities
• OP4: Making cities more livable

Sector / Subsector

• Water and other urban infrastructure and services / Urban housing

Gender

Effective gender mainstreaming

Description

1. This regional technical assistance (TA) in Central and West Asia (CWA) countries is designed to explore and help implement grounded and actionable recommendations to enhance the role of the private sector in the delivery of inclusive, accessible, adequate, affordable, and climate-resilient housing (I3ARCH) ecosystems that also champion the needs of disadvantaged population groups. Accordingly, the TA team will explore private sector-based solutions and interventions, and also identify potential pilot projects for implementation.

2. The TA is aligned with Strategy 2030 of the Asian Development Bank (ADB), which defines "making cities more livable" as one of its seven operational priorities for achieving its vision of a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. The TA is aligned with other operational priorities to reduce inequalities, foster gender equality, promote climate and disaster resilience, strengthen institutional capacity, and advance regional cooperation. The TA will help achieve the Sustainable Development Goals of creating sustainable cities and communities; ending poverty; reducing inequalities; and fostering good health and well-being for all, gender equality, resilient infrastructure, clean water and sanitation, climate action, and strong partnerships and partnerships.

Project Rationale and Linkage to Country/Regional Strategy

1. Housing is a complex, multifaceted issue with economic, social, cultural, physical, environmental, and financial ramifications. It is a basic social good because it provides shelter, safety, privacy, dignity, and health. It is fundamental to welfare and is an important determinant of productivity with many multiplier effects, such as direct and indirect job creation, and induced macro- and microeconomic benefits. Housing accounts for a significant share of capital stock in each country, and therefore has macroeconomic consequences. A well-developed housing market is crucial for creating and maintaining livable cities and is also integral to sustainable urban development. Well-planned, structurally resilient, climate-resilient, and energy-efficient housing can contribute to reducing the environmental footprint of cities. Climate-resilient and energy efficient housing has the potential to reduce urbanization's negative impact on climate change while also mitigating the negative impact of climate change on buildings and people.

2. ADB's developing member countries (DMCs) in CWA face numerous housing challenges, and the public sector typically lacks the institutional, financial, or technical capacity to address these challenges. In many former Soviet Union countries, the older multifamily housing stock continues to deteriorate because of inadequate maintenance and management, and the private sector seems unable to produce new housing of the composition, type, or price needed to meet the prevailing demand of middle- and lower-income households. New housing being produced often disregards modern norms of sound urban planning and design with regard to location, construction quality, energy efficiency, accessibility, and climate responsiveness and resilience. This not only exacerbates disparities in housing access, adequacy, and affordability but also results in unsustainable and erratic patterns of urban growth. As for the needs of lower-income households, social housing is grossly inadequate and housing subsidies are not well-targeted. As such, low-income households have a limited choice of housing, and certain population segments are forced to find alternative, informal solutions that are not only suboptimal in terms of living conditions but also increase the exposure to disaster risk and the effects of climate change.

3. Globally, housing is the single largest subsector of the construction industry, and accounts for 37% of all global energy emissions. Although green building technology has advanced greatly in the 21st century, much of it is too expensive and hence outside the realm of middle- and lower-income housing, informal housing, and those who are most vulnerable to climate change.

4. Cities emit 70% of greenhouse gases and contribute significantly to climate change. Unplanned and unmanaged urbanization negatively impacts cities' infrastructure, adds inefficiency to the use of resources, and increases climate vulnerability and environmental degradation. DMCs in CWA are heavily reliant on energy-intensive economies, and at risk from climate change impacts that threaten ecosystems as well as economies and infrastructure based on natural resources, especially water supply. It is imperative for these countries to build resilience to mitigate these risks. This will require transitioning to a greener economy with low-carbon livable cities and climate-smart and adaptive housing infrastructure.

5. While gender and housing remain a relatively under-researched area, there are underlying gender-related issues pertaining to housing in CWA countries. Women are typically disadvantaged in terms of access to property and quality housing, especially when this is largely determined through the market because, on average, women have lower incomes and less capital than men. Also, while women are legally entitled to own and inherit land and property in CWA countries, traditional gender roles and norms mean that men are usually favored in property inheritance, ownership, and management. In Central Asia, more than 60% of urban women lack at least one of the following: access to clean water, improved sanitation, and durable housing and/or a sufficient living area. Women who are heads of households, and households made up of lone women tend to be overrepresented in less advantageous housing circumstances. As women take on greater caring roles, their housing needs change in terms of location, tenure, design, cost, and other features. Cultural, institutional, and policy barriers further exacerbate women's access to housing finance. Women remain disadvantaged in obtaining housing loans because of economic inequalities, including lower incomes and fewer formal employment opportunities. While financial institutions' internal policies and practices are gender neutral, these gender-neutral processes may themselves inherently disadvantage women. Households headed by women are the most disadvantaged group regarding income, income documentation, property ownership, and other factors that affect access to housing finance. Women in informal employment (the number of which outrank men in the region) often do not meet the requirements to borrow money or access formal financial services. Lower levels of education, limited financial literacy, and lower incomes, combined with mobility constraints and limited access to information often hinder women from accessing housing finance and, in turn, quality housing. These distinctive factors reflect a need for housing policy to be gender-responsive and geared toward making it easier for women to obtain climate-friendly housing and housing finance, which could potentially improve their economic and social well-being. It is therefore important to understand the cultural, institutional, and policy barriers that could limit women's access to climate-resilient housing and consequently develop housing finance offerings that are tailored to women while facilitating public policies that support women's access to climate-friendly housing.

6. In CWA, government bodies often find it very challenging to deliver affordable and social housing solutions. This limitation stems from low government capacity because of lack of institutional, financial, and technical capabilities, further complicated by aging infrastructure and outdated urban planning standards and policies. Historical reliance on public sector solutions has proven insufficient to meet the growing demand, particularly among middle- and lower-income households. This inadequacy is evident in the widespread deterioration of the existing housing stock, inefficient urban growth, and lack of sustainable and inclusive housing policies. Consequently, a substantial portion of the population resorts to informal housing arrangements, which are typically substandard and pose increased risks related to disaster and climate change effects.

7. Tackling the housing challenges in CWA requires a fundamental shift to more active private sector involvement. The private sector's agility, innovation, investment and management capabilities make it a crucial player in developing I3ARCH solutions, if appropriate conditions are created for their participation. Leveraging private sector strengths can help bridge the gap in housing provision, particularly in inclusive, sustainable and climate-responsive construction practices. It is essential to create an enabling environment that encourages private sector participation (PSP), including policy reforms, market incentives, and public-private partnerships (PPPs). Such an engagement will not only help narrow the housing gap but also contribute to the long-term goal of building more resilient, inclusive and sustainable urban environments in the CWA region.

Impact

(i) Understanding of the demand for accessible, affordable and climate resilient housing in CWA improved; (ii) DMCs' capacity to engage the private sector in delivery of I3ARCH improved; (iii) potential I3ARCH pilot projects with PSP identified.

Project Outcome

Description of Outcome

DMCs' capacity for engagement of the private sector to improve inclusiveness, accessibility, adequacy, affordability and climate resilience in the delivery of housing in CWA is improved.

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

High level housing diagnostic study developed

Strategy for gender and climate-responsive and climate-resilient housing formulated

Private sector engagement plan developed

Potential I3ARCH projects identified and pre-feasibility studies completed

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

Geographical Location

Armenia - Yerevan; Azerbaijan - Baku; Georgia - Tbilisi; Kyrgyz Republic - Bishkek; Pakistan - Islamabad; Tajikistan - Dushanbe; Uzbekistan - Tashkent

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

Kabrelyan, Dmitry

Responsible ADB Department

Central and West Asia Department

Responsible ADB Division

Private Sector Development Unit, CWRD (CWPS)

Executing Agencies

Asian Development Bank

Timetable

Concept Clearance

11 Dec 2023

Fact Finding

-

MRM

-

Approval

22 Dec 2023

Last Review Mission

-

Last PDS Update

27 Dec 2023

Funding

TA 10265-REG