The World Bank Group works with countries in Europe and Central Asia to help improve people's lives and achieve shared prosperity in a variety of ways, including through financial lending and analytical and advisory services. Our work aims to help countries achieve better competitiveness, more inclusive growth, and to adapt to climate change and improve energy efficiency.
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WASHINGTON, January 29, 2015 – The World Bank’s Board of Executive Directors today approved a US$24 million Energy Sector Development Policy Operation (Energy Sector DPO) for the Kyrgyz Republic. ... Show More +; The operation will support the Kyrgyz Republic’s reforms aimed at long-term energy supply reliability, through a single tranche of a highly concessional credit of US$13.2 million and a grant of US$10.8 million to be paid directly to the Kyrgyz budget.Despite its vast hydropower resources, the energy sector in the Kyrgyz Republic, which accounts for about four percent of GDP and 16 percent of the industrial production, suffers from deeply rooted structural issues. The Kyrgyz Republic has the lowest electricity tariffs in the Europe and Central Asia region, which contributes to the inefficient use of energy, severe under-spending on maintenance and new investments, and resulting poor supply reliability and quality. The patchwork regulatory framework and insufficient transparency and accountability result in operational inefficiencies and undermine public trust in the sector.These underlying weaknesses of the sector, when coupled with cycles of poor hydrology, lead to recurrent winter energy shortages with serious repercussions for the population and the economy. The 2014-2015 winter situation has been particularly alarming because of the significantly reduced water inflows in the Toktogul reservoir caused by insufficient precipitation and glacier melting, low levels of coal and fuel oil reserves due to the dire financial condition of the energy sector, and significant growth of power demand in recent years.The Energy Sector Development Policy Operation has been designed to support select reforms of the Kyrgyz Government’s Energy Sector Action Plan for 2013-2014, with a focus on three policy areas:(i) improving financial viability of the energy sector through tariff reforms;(ii) strengthening energy sector governance, transparency, and accountability through establishment of an economic regulator, adoption of a clearly defined tariff setting methodology, implementation of a performance reporting and monitoring framework, as well as public outreach and communication; and(iii) managing the impact of power shortages on the poor regions through preparation and implementation of power supply management plans for the regions based on the principles of transparency, equitability, predictability, and preservation of essential services.“The policy areas of the Energy Sector DPO are interlinked and essential for addressing energy supply reliability in a sustainable manner,” said Ani Balabanyan, World Bank’s Senior Energy Specialist and Task Team Leader for the Energy Sector DPO. “Firstly, improved financial viability of the energy sector through power and heating tariff reforms will allow investments in maintenance and system improvements, and procurement of fuel for the combined heat and power plants. Secondly, strengthened governance, transparency and accountability of the sector will ensure that increased revenues lead to improvements of sector operational and financial performance for the benefit of all groups of population. Finally, the management of power shortages will ensure that power rationing is equitable across the country and is not to the detriment of poor regions.”The Kyrgyz Government’s reforms, initiated to address winter energy shortages and broader energy supply reliability issues, include introduction of the mid-term tariff policy for electricity and heating for 2014-2017, recent amendments to the laws that created a legal basis for clearly delineating roles and responsibilities in the energy sector, and establishment of the State Regulatory Agency of the Fuel and Energy Complex. The establishment of a performance reporting and monitoring framework, under which the service quality indicators will be regularly monitored and published to build larger accountability and consumer confidence in the sector, is another important achievement of this reform process.“The reforms supported by this operation will contribute to both economic growth and poverty reduction in the Kyrgyz Republic. The improved reliability of power supply and the increased financial sustainability of the energy sector are critical for improving the competitiveness of businesses, and will help to improve the quality of life for Kyrgyz people,” said Jean-Michel Happi, World Bank Country Manager in the Kyrgyz Republic. “It is important that these reforms are accompanied with improvement of the social protection system in order to better target the poor and ensure that access to electricity and heating remains affordable for low-income households.”The World Bank development policy financing aims to help the countries achieve sustainable growth and poverty reduction through non-earmarked general budget financing that supports the countries’ economic and sectoral policies and institutions.The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty, and promote economic growth and shared prosperity. Forty-five percent of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 55 percent is in highly concessional credits with no interest, and only a 0.75 percent service charge. Credits are repayable in 38 years, including a 6-year grace period, while grants require no repayment. The Bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to over US$1 billion. Show Less -
IDA Credit: US$13.2 million equivalentTerms: Maturity = 38 years, Grace = 6 yearsIDA Grant: US$10.8 million equivalentProject ID: P152440Project Description: The objective is to support the Kyrgyz Rep... Show More +ublic in addressing the recurring winter energy shortages in order to minimize the hardship on its population and dampen negative economic consequences for its economy in a sustainable manner.Contact:For more information, please visit: http://www.worldbank.org/projects/P152440?lang=en Show Less -
TourismBlessed with a rich cultural heritage and an abundance of natural beauty, Georgia has attracted an increasing number of tourists in recent years. Conservation efforts, infrastructure developmen... Show More +t, urban rehabilitation and cultural heritage restoration have all played their part in helping to boost tourism and grow the economy. But, there is potential to achieve much more.As such, tourism development is one of the country’s top priorities. Giorgi Kvirikashvili, Minister of Economy and Sustainable Development, points out that the tourism sector requires close inter-agency coordination, including with private and non-governmental bodies. “Taking into consideration all the above-mentioned factors,” Kvirikashvili says, “elaboration of the tourism strategy will clearly identify the challenges existing in the sector and define the main directions that will become the basis for development of this important sector in the country”.The World Bank Group works closely with the government through its Country Partnership Strategy with Georgia, and regards the development of the tourism sector, related business opportunities and private investments as priorities for the country’s economic development.“The joint World Bank and IFC collaboration focuses on fostering entrepreneurship and access to finance, improving the investment climate and developing Georgia’s tourism strategy that will determine how to improve the sector’s performance, align implementation priorities and enable job growth,” Henry Kerali says.Ahmed Eiweida, Program Leader for Sustainable Development in the South Caucasus, said in a recent interview that “Tourism and travel is one of the fastest growing sectors of the economy in Georgia and a key generator of jobs, accounting for 14.2 percent of total direct and indirect employment in 2013 and 6-7 percent of GDP. The sector currently provides nearly 20 percent of export earnings. The national tourism development strategy is, therefore, an instrument to develop further the sector in order to take full advantages of Georgia’s potentials and position it globally as a rich, diversified and high quality destination.”A process to elaborate the national tourism strategy took place at a workshop in Tbilisi on 3 December, 2014, following extensive consultations with a variety of stakeholders. Participants at the workshop shared their experiences and discussed the proposed Vision 2025 for the tourism sector. Public consultations will take place in the coming months and both the national education and tourism strategies, together with their respective action plans, will be finalized in spring 2015 for approval by the government. Show Less -
Q: What are these values you mention? And what are the negative consequences, exactly?A: These values refer to the damages caused by economic activity to us through air, water and soil pollution, thro... Show More +ugh the destruction of ecosystems, and the depletion of our forests and other habitats. The negative consequences are premature mortality, illnesses, reductions in the income from activities that depend on the natural environment, such as tourism, recreation etc.Q: Why is climate change a game changer for Romania? Why is it important for Romania to have a strategy dedicated to climate change?A: It is really important for Romania to recognize that climate change will have major impacts on the country. As temperatures increase steadily over the rest of this century, agricultural yields for different crops will change, with some of them declining quite a lot by 2100. In addition, rainfall patterns will alter, with lower precipitation in the summer and some possible increases in the winter. These changes will be accompanied by an increase in the frequency of extreme events – more droughts and floods. Also, global warming implies a rise in the sea level and an increase in storm surges, making coastal towns liable to increased flooding. The degree to which these things happen is not pre-determined. If the world succeeds to reduce greenhouse gas (GHG) emissions significantly, then there will be less warming and a smaller increase in extreme events. But some changes are inevitable and your country has to prepare for them. As a member state of the European Union, Romania also has significant obligations to reduce GHG emissions. These reductions will imply some costs as we move away from a carbon intensive economy, but they also have benefits, as lower burning of fossil fuels reduces air pollution, and benefits public health. The new infrastructure that goes with a shift to low carbon also creates jobs and can be an impetus to economic growth.Q: Beyond strategy, what are the other important factors in terms of climate change that Romania needs to pay attention to?A: The thinking is increasing towards “green growth” – ways in which we improve living standards and create employment while at the same time reducing our use of fossil fuels and switching to renewable sources of energy. There is a lot of work on this. A central feature is the role of city development and land use planning in the future so that it reduces the need for travel, and supports low carbon mobility such as walking and cycling. Energy efficiency in the building sector is also of great importance and a lot can be done on that.Q: Tell us what needs to be done so that more people become aware of the impact of climate change on their lives and on the future of their children?A: Climate change is not something only for governments to address. It is for people to start changing their mindsets so they think of ways to reduce their carbon footprint, and encourage their children to think of these factors as well. Education and awareness and very important, and lifestyle changes need leaders from society. Reducing the use of cars, increasing public transport and walking and cycling all have a role to play. Well, we can all do little things, like not driving for short journeys when it would be possible to walk or cycle, and it would be better for us; reducing energy consumption by switching off electric devices when they are not in use but in stand-by mode; cancelling our carbon footprint by supporting programs of afforestation, where we can get a formal credit for each ton of carbon captured. Show Less -
Accelerating the Growth of High-Speed Internet Services in AzerbaijanNestled at the crossroads between Europe and Central Asia, Azerbaijan is a resource-rich country that has achieved impressive econo... Show More +mic growth over the past decade, thanks in great part to its highly successful petroleum industry.Poverty has been reduced significantly, unemployment has steadily decreased and the middle-class has grown among the country’s 9.4 million citizens.Azerbaijan’s government recognizes, however, that the country faces some long-term challenges, including an over-dependence on oil exports, a concentration of employment in only a few sectors, and a rapidly growing population of young people entering the labor market in the coming years.Consequently, the government has shifted its focus recently to a range of policies that include diversification of the economy and increased investment in information and communication technologies (ICT). Identified as an important future contributor to non-oil GDP, the ICT sector could help facilitate the country’s transition into a successful knowledge economy by 2020.Azerbaijan’s ICT sector has been expanding rapidly – at an average rate of 25-30% per year since 2005 – stimulated largely by telecommunications liberalization, modernization and extension of the national telecom infrastructure, and implementation of e-government, among other sector-specific policies.Overall development of the country’s ICT sector has been fueled mostly by the telecom industry, especially its mobile segment.The number of Internet users in Azerbaijan soared from only 17% of the population in 2008 to 73% in 2013. By 2014, wireless penetration per capita had grown to over 100%, while around one third of the population had gained access to mobile broadband, and 30% of households had subscribed to fixed (wired) broadband Internet.Increased Internet penetration and improved affordability are the results of a gradual extension of mobile and fixed broadband networks, coupled with significant reduction in broadband access wholesale and retail prices for the country’s Internet service providers (ISPs) and customers.In comparison with neighboring countries in Central Asia, Azerbaijan boasts the lowest prices for fixed and mobile broadband access in proportion to average disposable monthly income.However, the quality of broadband service in Azerbaijan is strikingly low: the number of higher speed connections (over 4Mbps) is persistently lower than 10% of all connections in the country, with only a very slow increase over the last two years.Such low-speed broadband connectivity can negatively impact aspects of socio-economic development in Azerbaijan, including but not limited to job creation, human skills development, and foreign direct investment – all of which are associated with higher speed broadband rollout.Lithuania and Norway, for example, have demonstrated that countries can perform highly in terms of fixed and wireless broadband penetration by facilitating infrastructure-based and technology-neutral competition, while enjoying a high quality of service at low and affordable prices.Infrastructure-based competition is usually fostered through regulatory approaches that encourage the market players in a country to invest in national backbone infrastructure through the use of bitstream, and to invest in regional infrastructure.The absence of a level-playing field between state-owned incumbents and alternative operators in Azerbaijan means that Internet Service Providers (ISPs) are not sufficiently incentivized to develop their own access fixed networks through regulatory means and therefore increase the quality of their service provision.In addition, regulatory bottlenecks at the wholesale level and low fixed broadband infrastructure coverage outside of the capital city, Baku, further impede private sector deployment of access networks.Azerbaijan’s Ministry of Communications and High Technologies is responsible for establishing and enforcing policy on electronic communications, acting both as a policymaking and regulatory body.The Ministry also formulates proposals related to the provision of public investment in the ICT sector, while the sector itself is dominated by two state-owned enterprises. A major challenge that arises, therefore, is being able to sustain healthy competition and private investment inflows over the long-term.Given that the telecom sector is the backbone of Azerbaijan’s ICT sector, it is highly recommended that policymakers enact sector governance reform and adopt measures to stimulate infrastructure-based competition, specifically in the fixed broadband market.Such actions will not only improve the country’s broadband potential and ensure long-term sustainable growth in the ICT sector, but also help toward achieving economic diversification and development more broadly for Azerbaijan in the future. Show Less -