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World Bank Supports Integration of Southern Kyrgyzstan

Thursday 30 June 2011

WASHINGTON (press release) – The World Bank’s Board of Directors today approved a Second Additional Financing in the amount of US$ 16 million equivalent to support scaling up activities under the on-going National Road Rehabilitation (Osh-Batken-Isfana) Project (NRRP) in the Kyrgyz Republic. The funding in the amount of US$ 8.8 million is a highly concessional credit, while the US$ 7.2 million is a grant.

The Second Additional Financing will scale up project activities through the rehabilitation of an additional section of the Osh-Batken-Isfana road corridor (including the 18 km-long Nookat Pass and the provision of technical assistance to improve road asset management in the country. These activities will improve road infrastructure, reduce travel time, lower vehicle operating costs, and provide reliable access to social services and economic activities for the population (in particular living along the road corridor in Batken and Osh), as well as improve road network management in Kyrgyzstan.

Mr. Erkin Isakov, Minister of Transport and Communications of Kyrgyz Republic says:

The additional funds will drastically improve linkages between the south and the rest of the country, which is of high priority to the Government which aims to provide balanced support to the populations of all regions … The economic rates of returns for the section along the road corridor under rehabilitation are high due to current high traffic volumes of over 5,000 vehicles per day and potential increase over time as a result of this Project.

This project will also finance the development and implementation of a road asset management system. The collection of data in a systematic way and the management of a modern and comprehensive road database will help the MoTC to design appropriate investment programs for their network. This activity is in line with the Government’s Road Transport Development Strategy of the Kyrgyz Republic for 2011-2015.

Alexander Kremer, Country Manager in the Kyrgyz Republic says:

The corridor, once rehabilitated will improve the only land transport connection between the main Kyrgyzstan cities in the Fergana Valley. It will enhance access to markets and economic opportunities for relatively isolated Batken (which is amongst the poorest sub-regions in the country) and Osh regions. The Project will in particular help integrate the remote, impoverished and often inaccessible Batken oblast with the rest of the country thus addressing the issue of closed borders and associated transport bottlenecks.

The civil works under the original project (Pulgon-Burgandy section) are progressing well: the contractor for the Osh city road infrastructure repair and maintenance works has been hired and the works are underway. Temporary jobs among the local population are being created through this engagement, thereby addressing the socio-economic consequences of the events of April/June 2010.

The Second Additional Financing for the NRRP is expected to be implemented within three years by the Ministry of Transport and Communications of the Kyrgyz Republic.

The World Bank’s overall mission in the Kyrgyz Republic is to promote economic growth, reduce poverty, and encourage a better quality of life. 45% of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 55% is in highly concessional credits – no interest, and only a 0.75% service charge. Credits are repayable in 40 years, including a 10-year grace period, while grants require no repayment. The financial assistance to the Kyrgyz Republic since 1992 amounts to over 1 billion, in the form of grants and highly concessional credits.

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