EBRD and FAO Encourage Agribusiness Investments in the Kyrgyz Republic
Wednesday 28 September 2011
(Press release) – Agribusiness community leaders representing a wide range of public and private sector enterprises and donor agencies are meeting in the Kyrgyz Republic’s capital, Bishkek, on 28 and 29 September 2011. The purpose of the meeting is to share insights on how to develop the country’s agricultural sector which lies at the heart of further economic recovery and sustainable growth.
During the two-day Kyrgyz Agricultural Investment Forum representatives from local and international businesses, together with government officials, will discuss their experiences and concerns about investing in Kyrgyz agriculture. The Forum was organised by the Kyrgyz government with the support of the Food and Agriculture Organization of the United Nations (FAO), the European Bank for Reconstruction and Development (EBRD and the EBRD’s Shareholder Special Fund.
Potential areas for investment and major concerns
The main aim of the Forum, the first of its kind in the Kyrgyz Republic, is to assess potential areas for investment through encouraging public-private sector dialogue and identifying ways to overcome obstacles that currently hamper the sector’s further development.
With long-term funding remaining a scarcity in a country that has recently emerged from a period of social and political unrest, the participants will outline the rural infrastructure investment needs and their possible responses. These range from developing rural roads, railways and electricity supplies through to lower marketing costs and facilitating access to urban markets.
Another key topic will be to assess the appropriate role of the private sector in providing access to finance, especially in agribusiness lending and the introduction of supportive financial instruments for farmers.
The Forum’s main international partners and sponsors – the FAO and the EBRD – reconfirmed their strong commitment to the Kyrgyz agricultural sector and the catalytic contribution that they could make. The event also received support from the European Union, the United States Agency for International Development (USAID) and the Swiss Cooperation Office (SCO).
“We are committed to providing technical assistance to the Kyrgyz government,” said Charles Riemenschneider, Director of FAO’s Investment Centre division. “FAO is already active in advising national authorities in a wide range of specialised areas. Just to mention a few, we are helping the local veterinary services to fight against transboundary diseases and farming communities to use pesticides more efficiently. Under one of our new projects we will also work with the Ministry of Agriculture to improve the business environment and services offered to Kyrgyz farmers and agribusiness companies. This should foster the development of rural enterprises and result in safer and higher quality products for all Kyrgyz consumers.”
In line with the EBRD’s new country strategy adopted earlier this month, the Bank will continue supporting local private enterprises, with particular focus on the agribusiness sector.
“Agriculture is one of the Kyrgyz Republic’s most important sectors, contributing about 30% to the gross domestic product and employing over one-third of the country’s population,” said Masaru Honma, EBRD’s Director for Central Asia, who leads the Bank’s delegation to the Forum. “With better understanding of the obstacles in the investment climate, enhanced public-private sector dialogue, and identification of priority areas for increased investments, we will be able to support further agricultural sector growth.”
The EBRD is the largest investor in agribusiness in the transition region and signed a record number of transactions in the sector during 2010. The Bank’s main focus remains helping agribusiness in the region recover from the financial crisis and move towards fulfilling its potential as the world’s next “bread basket”. To date, the EBRD has committed about US $450 million in various sectors of the Kyrgyz economy, mobilising additional investments of approximately $650 million in over 70 projects.
Over the past three years the Bank’s investments in the Kyrgyz Republic have more than tripled, from $63 million in 2008 to $214.6 million at the end of 2010. In 2010 alone the EBRD signed eight projects worth a total of $115.1 million. Some 84% of the Bank’s projects have been investments in the country’s private sector.