World Bank to Help Kazakhstan Modernize Irrigation System

April 29, 2014

About 40,000 farming households in the south to benefit from the improved water supply

ASTANA, April 29, 2014 – Today, the Government of the Republic of Kazakhstan signed a $102.9 million loan agreement with the International Bank for Reconstruction and Development (IBRD) to support efficient water use and modernization of irrigation infrastructure in Kazakhstan.

The loan agreement was signed by Bakyt Sultanov, Deputy Prime Minister and Minister of Finance on behalf of the Government of the Republic of Kazakhstan, and Sebnem Akkaya, Country Manager for Kazakhstan, for the World Bank (IBRD).

The Second Irrigation and Drainage Project (IDIP-2) will help address a key pillar of the Kazakhstan Green Economy Concept -- an effective use of water resources. The seven-year project aims to improve irrigation and drainage service delivery as well as participation of water users in developing and managing the modernized systems in four most densely populated regions of South Kazakhstan: Almaty, Kyzylorda, South Kazakhstan and Zhambyl oblasts.

The project will introduce modern approaches in infrastructure design, in using information and communication technology to improve irrigation management, in demonstrating modern techniques in farming, and in supporting key regulatory and institutional reforms to modernize the irrigation sector.

“Funds allocated for this project will help improve socio-economic and environmental conditions for the population residing in transboundary river basins in the most densely populated regions of the country,” said Bakhyt Sultanov, Deputy Prime Minister and Minister of Finance of the Republic of Kazakhstan.

A total of 40,000 farming households will benefit from the project’s institutional and agricultural development interventions. The rehabilitated and modernized irrigation and drainage systems on the area of more than 100,000 hectares will ensure timely and adequate water supply to farmers. This will help save 300 million cubic meters of incremental irrigation water per year.

“The new irrigation project will be supported by the World Bank to provide more efficient irrigation systems, community support, and better technology, maximizing water productivity, minimizing losses, and increasing yields,” highlighted Sebnem Akkaya, World Bank Country Manager for Kazakhstan. “Better use and management of irrigation infrastructure will help develop the agricultural sector of Kazakhstan to the benefit of the national economy and rural people.”

Moreover, the agro-climatic conditions favorable for irrigated crop productivity as well as comparative advantage for production of high-value crops with export potential, such as cotton, fruits, and vegetables, will contribute to scaling up local employment through the related processing and manufacturing.

The project is taking into account the lessons learned under the first Irrigation and Drainage Improvement Project (IDIP-1), supported by the World Bank in 1996-2004. The project was implemented in several oblasts with encouraging results, involving rehabilitation of irrigation and drainage infrastructure and related improvements in water management and systems operations and maintenance.

On May 31, 2013, the World Bank Group’s Board of Executive Directors approved a US$ 102.9 million loan to co-finance the Project totaling US$ 343 million. The loan from the IBRD carries an 8-year grace period, and a maturity of 18 years. The Ministry of Finance of the Republic of Kazakhstan is responsible for servicing and acquittance of the loan from the state budget, according to the financial terms and conditions of the Loan Agreement. The project will be launched once ratified by the Parliament of the Republic of Kazakhstan.

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