ADB allocates US$60m to Uzbek water supply, sanitation sector

Tashkent, Uzbekistan (UzDaily.com) -- The Asian Development Bank’s (ADB’s) President Haruhiko Kuroda and Republic of Uzbekistan’s First Deputy Prime Minister and Minister of Finance Rustam Azimov signed on 1 December 2009 a US$60 million loan agreement to support the government’s efforts to strengthen the water supply and sanitation sector.

The loan, from ADB’s concessional Asian Development Fund, is the first tranche of a US$300 million multi tranche financing facility (MFF) - ADB’s first MFF investment program to Uzbekistan. The program aims to improve the living standards, environment, and health of three million people in Uzbekistan.

"ADB has been developing a long term partnership with the Government of Uzbekistan in the water supply and sanitation sector since 2000," said Mr. Kuroda. "ADB has provided US$193.1 million in loans and US$5.1 million in grants to the sector. We are committed to continuing and further strengthening collaboration with the government in this important sector for basic human needs."

The loan will finance improvements to water source and distribution systems in Damkhodja and 11 district centers in Bukhara and Navoi provinces, as well as upgrade wastewater treatment plant and sewerage systems in the capital city of Surkhandarya province. The program will also strengthen water supply and sanitation institutions and support capacity development. A performance-based service contract and lease contract will be piloted for service agencies to encourage more private investment in the sector. The loan will include program preparation and management support to implement the loan and to prepare and design the remaining tranches under the investment program.

The total project costs are estimated at US$75 million. ADB will provide a US$60 million loan with repayment term of 32 years, including a grace period of eight years with an interest charge of 1% per year, rising to 1.5% for the balance of the term.

ADB began its operations in the Republic of Uzbekistan in 1995 and established the Uzbekistan Resident Mission in 1997. As of 31 December 2008, the country had received 29 loans worth US$1.23 billion. ADB also provided US$45.5 million in TA and grant assistance to Uzbekistan.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2008, it approved US$10.5 billion of loans, US$811.4 million of grant projects, and technical assistance amounting to US$274.5 million.