WASHINGTON, March 3, 2022 – The World Bank’s Board of Executive Directors approved today a $50 million project to support the Government of the Kyrgyz Republic in promoting socioeconomic recovery and development of the Batken Region.
The financing for the Second Regional Economic Development Project is provided on highly concessional terms through the International Development Association (IDA). Half of the funding is allocated in the form of a grant, which requires no repayment, while the other half is a credit with a 0.75% administrative fee, the repayments of which are spread out over 38 years, with a six-year grace period.
"The Batken Region was selected as the focus of this project at the request of the Government of the Kyrgyz Republic," said Naveed Hassan Naqvi, World Bank Country Manager for the Kyrgyz Republic. "The World Bank stands ready to support the Government in addressing the social and economic challenges in this area."
The selection of the Batken Region is also aligned with the key findings of the World Bank’s 2019 Regional Development Analysis which identified Batken among the country’s most lagging regions. The population of the Batken region is extremely vulnerable to poverty and heavily dependent on remittances.
Batken’s Gross Regional Product per capita in 2019 was only 40 percent of the national average, and nearly 80 percent of households continue to lack access to safe drinking water. Access to basic public services including education, health, water and sanitation, as well as employment, credit, and markets for produce is limited.
Expected long-term benefits from the project for the residents of the Batken Region include improved infrastructure and public services, greater income through production and sales of competitive agricultural products, and increased job opportunities through small and medium enterprises.
The Project will provide support in three main areas:
1) Investments in basic municipal infrastructure and services in the three key urban centers of the Batken Region – namely, Batken, Isfana and Kadamjai. Project-supported infrastructure could include schools and kindergartens, water supply, stormwater and drainage systems, municipal roads, sidewalks, street lighting, parks, and public spaces.
2) Strengthening agricultural competitiveness by addressing key constraints such as a highly fragmented and small-scale agricultural production system, maintaining the required quality and food safety standards, and limited market linkages. The Project will finance laboratory equipment and facilities upgrading at border control points and improving sampling capacity at the rayon (district) level in order to raise food quality and safety.
3) Development of small and medium enterprises through training and a small grants program. The selected participants will undergo a robust training program on how to start and execute a business, how to address climate-related risks and incorporate energy-efficient solutions and any other green infrastructure ideas in their business plans. Those who successfully complete the training program will be eligible to apply for grant financing to start or scale up their business. The Project’s small grants program will give preference to women, youth, and socially vulnerable groups.
The Second Regional Development Project will be implemented over a six-year period through 2027 by the Community Development and Investment Agency (ARIS), in close coordination with the Ministry of Economy and Commerce, Ministry of Agriculture, state authorities and local self-governments in the Batken Region. The Project will comply with relevant World Bank procedures and standards including procurement and financial management regulations and anti-corruption guidelines.
The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity. The Bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to $2.1 billion in the form of grants and highly concessional credits.