Kyrgyzstan is endowed with sufficient quantities of water of excellent quality for domestic and industrial use for the foreseeable future. Due to commitments towards downstream countries, water availability is likely to become a constraint on expanding irrigation, extending land reclamation, and improving productivity of irrigated areas, unless there are significant improvements in efficiency, and a major effort made to increase water conservation.
The main source of drinking water supply is underground waters. Besides drinking water supply the underground waters are used for the industrial needs and partially for land irrigation.
Within the country, water disputes are particularly pervasive in the Ferghana Valley. Existing water scarcity is exacerbated by the region’s high population density. In 1989, disputes between Tajik and Kyrgyz groups over water allocation led to riots in which several people were killed or injured. In 1999, Tajik and Kyrgyz groups were again in violent conflict over the allocation of water.
Tariffs for irrigation water currently do not cover expenses. Between 2007 and 2010, the government introduced staggered rises in tariffs to a level covering operating costs.

With the Bank’s support the Kara-Balta Water Company will carry out significant rehabilitation and modernisation of water and wastewater networks – pump upgrades, installation of household/bulk meters and chlorination equipment. This will enable the water supply and wastewater services to meet local requirements and to move towards achieving full compliance with EU standards.

The project will be financed by a €2 million loan to Kara-Balta Water Company and grant funds of €3 million from the EBRD Shareholder Special Fund.

Additional grants of €1.3 million from the EBRD will be used to support project implementation and to provide technical assistance to strengthen operational and financial sustainability of the Kara-Balta Water Company.

Speaking at the signing ceremony in Kara-Balta, Akylbek Japarov, Minister of Finance of the Kyrgyz Republic, thanked the EBRD for practical assistance with the critical infrastructure in the country and elaborated on the investment need in water supply infrastructure of Kara-Balta city: “Daily domestic per capita usage of water in Kara-Balta is estimated at 170 litres, which is higher than in many other industrialised towns in Europe. In 2011 the total daily loss and wastage of water produced was estimated at 78 per cent. The project will allow the city to rehabilitate the water networks, install consumer metering to provide a management tool for leakage detection and to replace depleted water pumps. These measures will lead to a reduction of leakage as well as a reduction of excessive use of water at household level. As a consequence operating and maintenance costs for water supply will be reduced as well.”

Larisa Manastirli, Head of the EBRD office in the Kyrgyz Republic, said: “In May 2011 the EBRD approved the Kyrgyz Republic Water and Wastewater Framework, a sovereign framework of up to €20 million, to co-finance with international donors priority water and wastewater rehabilitation subprojects across the Kyrgyz Republic. Under this framework, the EBRD signed two municipal water subprojects in Osh and Jalalabad in 2011, and so the Kara-Balta subproject would be the third project under the framework. It will significantly improve the water and wastewater services in Kara-Balta, which has 40-year-old water networks and wastewater systems, and will ensure that the population and businesses operating in the city have an uninterrupted supply of good quality drinking and technical water.”

Since the beginning of its operations in the Kyrgyz Republic, the EBRD has invested over €414 million in more than 84 projects in the infrastructure, corporate, energy and financial sectors.