Tashkent, Uzbekistan (UzDaily.com) -- The World Bank’s Board of Directors approved US$ 70 million for the Emergency Recovery Project to the Kyrgyz Republic to finance urgent social reconciliation efforts and infrastructure reconstruction needs following the civil unrest and violence earlier this year. The funding will be nearly half as a grant and half as a highly concessional credit (with no interest and repayable over 40 years).

“This Project was prepared swiftly following the donor conference at the end of July that raised US$1.1 billion for a three year recovery program,” said Afsaneh Sedghi, the leader of the World Bank team. “The Kyrgyz government is facing a daunting task of restoring social stability, reconstructing infrastructure, and mitigating the shock to the economy. The Project will forestall a large decline in public expenditures, especially social expenditures, at a time when the fiscal accounts are under severe stress.”

This Project is the initial step in a multi-year World Bank program of assistance to the country. By strengthening macroeconomic stability and the fiscal resilience of the government, it will help the country to meet high priorities in recovery and reconstruction spending. Resources from the Project will finance purchases (domestic or imports) of eligible essential goods and commodities, including fuels, as well as finance the repair and restoration of the electricity network so as to ensure adequate energy supplies throughout the country in the winter.

These activities reflect the high priorities of the government and complement assistance in other areas being provided by other donors.

The World Bank’s overall mission in the Kyrgyz Republic is to promote economic growth with a reduction in poverty and improvement in the standard of living. The country is eligible for grants and highly concessional credits – zero interest, with a repayment period of 40 years, including a grace period of 10 years. World Bank financial assistance to the Kyrgyz Republic since its membership in1992 has amounted to nearly US$ 900 million.