Tashkent, Uzbekistan (UzDaily.com) -- The World Bank recognizes that the sound management of water resources for both irrigation and power generation is critical for the sustainable development of all the countries in Central Asia.

Central Asia is endowed with water and rich and varied energy resources. Water resources, which are increasingly under stress, have an important geographic and economic dimension, with downstream countries highly dependent on upstream countries for essential water for irrigation. Hydropower resources are concentrated in the Kyrgyz Republic and Tajikistan, the upstream countries of Central Asia’s Amu Darya and Syr Darya rivers. Thermal resources are concentrated in Uzbekistan, Turkmenistan and Kazakhstan. Thus, energy-water linkages are inextricable from perceptions of national security, regional stability and economic growth.

The Bank’s approach to water and energy issues in Central Asia is based on both regional and country level programs.

Regional Level

At the regional level, in response to requests from Central Asian governments, the World Bank is actively engaged in dialogue on energy/water issues with Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, acting in the best interests of all its member countries and taking maximum care in the application of its policies, including environmental and social safeguard policies.

“Better water management and energy security are critical issues for the people living in Central Asian countries,” says Motoo Konishi, the World Bank’s Central Asia Regional Director based in the Bank’s Central Asia Regional Office in Almaty. “In recent years, the increasing scarcity of energy resources and its impact on people has particularly highlighted the challenges Central Asian countries face. In some countries, available electricity falls far short of the needs particularly in very cold weather, resulting in long electricity outages up to 12 hours a day, impacting schools, hospitals and households. But these issues will not solve themselves. There needs to be better regional cooperation, more goodwill, and open and transparent discussion that is based on facts and analysis. By working on a regional level in collaboration with all the Central Asian countries and their institutions, we aim to develop a strong analytical basis that can support strategic and regionally beneficial decisions on water management and energy. ”

As part of its regional approach, the Bank is initiating a comprehensive Central Asia Energy-Water Development Program (CAEWDP), initially a four-year program, which aims to improve diagnostics and analytical tools to support the countries of the region in well-informed decision-making to manage their water and energy resources, strengthen regional institutions, and stimulate investments.

The CAEWDP also aims to coordinate and leverage the contributions of other development partners, to provide critical technical support as well as financial resources for the program. Several development partners are currently involved in Central Asia, in both water and energy, including the Asian Development Bank (ADB), the Islamic Development Bank (IsDB), the European Commission (EC), Eurasian Development Bank, UNDP, UNECE, Germany (GTZ), Switzerland (SECO), UK (Dfid), the US (USAID), and the Aga Khan Foundation.

The World Bank is currently discussing the CAEWDP with these and other potential partners in an effort to establish a multi-donor trust fund to support the core elements of the program. This partnership will build on current joint energy activities, such as co-chairing the implementation of the Energy Action Plan of the Central Asia Regional Economic Cooperation Energy Sector Coordinating Committee for Central Asia.

Energy trade and exports are important components of the regional engagement. The upstream countries of Central Asia have large potential to export electricity to South Asia and this was underscored in the World Bank’s Regional Energy Exports Prospects Study – and subsequent analysis of the energy-water nexus in Central Asia. The World Bank is working with the ADB on assessing the Uzbekistan-Afghanistan-Pakistan (UAP) regional electricity; and the Central Asia South Asia Regional Electricity Trade Project (CASA) with the Islamic Development Bank. The USAID-funded work on the Regional Energy Markets Assistance Program (REMAP) is a key input to the dialogue on deepening regional electricity integration.

In other sectors, the Bank is coordinating the multilateral development banks’ climate adaptation program for Tajikistan, and supporting GTZ and UNECE on institutional strengthening for the International Fund for Saving the Aral Sea (IFAS). USAID is applying the methodology developed by the Bank in Albania to Uzbekistan to develop an understanding of measures to address energy vulnerability to climate change.

Country Level Engagement

To complement the regional work and dialogue, the World Bank is also supporting a number of country-specific energy and water resources projects and studies in Central Asia. Many have regional significance and benefits and others have more localized, project/country level benefits.

In Kazakhstan, the Bank has funded a long term program to improve water-based economic and environmental conditions in the northern portions of the Syr Darya River and Aral Sea. In the energy sector, the Bank has funded several projects that helped establish a state-of-the-art power system management and dispatch center, upgrade the transmission network, and strengthen the important North-South transmission interconnection in the country, which also helps improve the reliability of the Central Asia Power System.

In Uzbekistan, the Bank has projects to support water management in the Ferghana Valley. An energy efficiency credit-line through Uzbek commercial banks aims to facilitate increased investment in energy efficiency by industrial enterprises. In the power sector, projects are under preparation to support transmission system upgrades to increase supply reliability, as well as to enhance the commercial management of the utility-customer interface to reduce technical and commercial losses.

In Kyrgystan, the Bank is funding a project to improve irrigation service delivery through Water User Associations. In Kyrgyzstan and also in Tajikistan, the Bank is initiating a project to improve hydrometeorology services and data, with a focus on these two countries but with a component for regional coordination. In both, Kyrgyzstan and Tajikistan the Bank has funded energy emergency mitigation and support projects to help address debilitating winter energy shortages.

In Tajikistan, the World Bank’s current involvement in energy and water issues is based on a broad set of studies and discussions with the Government during the past eight years. An energy utility reform review addressed structural reforms to improve the climate to attract investment in the sector. The World Bank, in partnership with its private sector affiliate (IFC) and the Aga Khan Foundation, financed a hydro project and utility to provide electricity services in remote South-Eastern Tajikistan. To improve commercial management and reduce technical losses in the power system, the Bank has partnered with the Swiss government to finance and implement a successful energy loss reduction program.

Studies and Riparian Consultations on Proposed Rogun Regional Water Reservoir and Hydropower Project in Tajikistan

To comprehensively assess the options to meet energy security needs, water management services, and help harness the potential for energy exports in Tajikistan, the Bank will undertake an assessment of economically viable energy and water management options with due consideration of environmental and social criteria. This assessment will help the Government, the Bank and the international community to better understand the range of investment options for energy and water security at least cost and highest development value.

This assessment of options will be undertaken in parallel and will complement the World Bank’s support for the preparation of two studies on the proposed Rogun Regional Water Reservoir and Hydropower Project in Tajikistan -- specifically these are: (i) Techno-Economic Assessment Study (TEAS); and (ii) Environmental and Social Impact Assessment (ESIA). These studies on the proposed Rogun project aim to assess the proposed project’s technical soundness, economic viability and compliance with all relevant environmental and social safeguards – and also to assess whether the proposed project is viable based on the current international standards and practices – all of which would be prerequisites for consideration of any further World Bank involvement.

The proposed assessment studies, which could take approximately 18 months to complete from their commencement, have already benefited from extensive consultations on their Terms of Reference, which the World Bank facilitated in 2008-2009 with the governments of Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan, and Afghanistan. Also, as part of the CAEWDP, the World Bank has committed to an expanded role to ensure credible, transparent assessments that are open to international scrutiny and riparian dialogue, which includes the following steps:

• Oversee assessment studies, including review of selection of consultants, attendance at contract negotiations, and review of all interim and draft reports.
• Manage direct payments to the firms selected to undertake the assessment studies.
• Undertake additional studies (to be funded by the World Bank or World Bank-managed Trust Funds), including studies of the energy supply and water management alternatives to the proposed Rogun Regional Water Reservoir and Hydropower Project
• Select and manage an independent Panel of Experts (to be funded by the World Bank or World Bank-managed Trust Funds) that will participate in the studies, providing objective advice, guidance and quality assurance.
• Facilitate a structured process for riparian involvement, including information exchange and access to independent experts.

At this time, the World Bank has reached an understanding with the Government of Tajikistan that no new construction would commence until after the techno-economic and environmental/social studies have been shared and discussed with riparians, and the studies are reviewed by the independent Bank-funded Panel of Experts to determine feasibility.