The Water Resources Management Sector Project will concentrate on the Zarafshan River Basin and the Fergana Valley areas of Uzbekistan.

The densely-populated Fergana Valley is a strategic priority. The valley is highly productive and provides 35% of Uzbekistan’s agricultural production. The Zarafshan River and its associated irrigation system support the second most important agricultural center in the country.

Agriculture is a key sector of the Uzbek economy and the main source of livelihood for the rural population. Irrigated agriculture accounts for over 90% of all agricultural production and consumes 88% of all water resources. Irrigation and drainage are critical to productivity, competitiveness, and environmental management. In Uzbekistan, this infrastructure is rapidly deteriorating.

Rehabilitation of these structures is essential to avoid partial or complete collapse of irrigation systems, which would cause losses in production and incomes. It is essential to improve water management at the basin, inter-farm canal, and on-farm levels.

“The benefits of this loan are economically and environmentally far reaching,” said Juan Miranda, Director General of ADB’s Central and West Asia Department. “With fully functioning irrigation systems, farming production losses will drop and there will be increased yields and cropping intensity. There will also be increased energy efficiency and improved water and land management.”

By 2010, the Government of Uzbekistan aims to reduce poverty to 20%. The poverty reduction strategy relies on irrigated agriculture as an engine for growth and stresses the importance of investment in water resources, irrigation, and drainage.