International development association project appraisal document

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Background and Sector Context

  1. The Asian Development Bank (ADB) and World Bank have on a collaborative basis financed two rural water supply and sanitation (WSS) projects in the Kyrgyz Republic; as a combined program these were known as Taza Suu. The Rural Water Supply and Sanitation Projects (RWSSP) 1 and 2 financed by World Bank and United Kingdom Department for International Development (DFID) faced a number of challenges during the early phases of implementation, but the latter years of the program demonstrated substantial progress with the successful implementation of the main components.

  1. The second Rural Water Supply and Sanitation Project (RWSSP-2) was built on the experience gained during implementing RWSSP-1 and other assistance programs supporting local governments in the Kyrgyz Republic, including the Village Investment Project (VIP). The Implementation Completion and Results Report (ICR) for RWSSP-2 confirmed that despite difficulties in the early stages, the project helped to achieve the objectives of the JCSS (Joint Country Support Strategy, 2007-2010), submitted to World Bank Board in April, 2007. The JCSS, which included RWSSP-2, underlines ''...urgent need to stem deterioration in key infrastructure and social services that will reduce non-income dimensions of poverty" and a clear “…need to support the Government’s efforts to ensure and enhance the provision of, and access to, essential public services.” The RWSSP-2 closed on October 31, 2014 and achieved a positive final performance rating.

  1. In part, the success of the RWSSP-2 revolved around the transfer of its implementation to ARIS in July 2011, and with it the pace and quality of implementation improved dramatically. In particular, this included management of community relations, expectations and effective communications with civil society. As such, all proposed targeted 55 villages, including construction of the water supply systems in new villages and the rehabilitation of 26 RWSSP-1 village based subprojects, were completed.

  1. Capacity strengthening activities supported under RWSSP-2, which are consistent with the actions proposed in the strategy, included:

  • Development of a sector financial model and training program;

  • Guidelines and training on chlorination techniques for rural water supplies;

  • Support for billing systems and software installation, including training for the service provider;

  • Development of a nation-wide database on attributes and performance of systems, at local, rayon and oblast levels;

  • Capacity strengthening for rural water supply managers / service providers on customer service, operations and maintenance, tariff setting and billing management;

  • Legal review of reforms required to implement the water and sanitation sector strategy;

  • Collaborative project with UNICEF to implement WASH hygiene publicity and education program in schools and rural communities; and

  • A review technical design standards in the water supply and wastewater sector, including recommendations to optimize and improve.

  1. However, despite this progress capacity and institutional challenges in the sector remain and continued technical and financial assistance is required to support sustainability of service delivery. The achievements of RWSSP-2, need to be further reinforced, and entrenched in the day to day operations of Government at national and local level, and institutionalized at various levels. Furthermore, access to safe drinking water and hygienic sanitation facilities in rural areas remains low. The following graph shows that about 60% percent of the rural population obtain water from a water supply system (38 percent from water posts outside properties plus 22 percent from water posts inside properties). The remaining population (40 percent) use water obtained from ditches, rivers, channels, springs, water carriers, among others.

Figure A2.1: Analysis of water sources for rural population (from sector analytics supported by RWSSP-2, 2014)

  1. Many village and small town water supply systems have not been rehabilitated and are partially or not at all functioning. This exacerbates tariff and revenue generation issues, whereby collection rates and tariffs are generally low because of poor service quality. Also, as presented in Figure A2.2, only about 37 percent of rural population have water supply for 12 or more hours a day.

Figure A2.2: Analysis of water services for rural population (from sector analytics supported by RWSSP-2, 2014)

  1. Estimates of investment requirements for the water supply and wastewater are currently imprecise; though there are estimates from independent external studies undertaken in the past. From these, investment costs required to achieve the goal of universal access to improved water supply in rural areas are estimated at around US$600 million over the next 15 years. Capital investments required to achieve sanitation coverage expansion targets have not yet been reliably estimated and will depend largely upon the adopted approach for promoting rural sanitation development, which requires further analysis and strategic planning.

  1. An important component of the Taza Suu program was the formation of Communal District Water Users Unions (CDWUU) to operate and maintain reconstructed village water supply installations under these programs. Today there are about 390 CDWUUs functioning in rural areas. The “take up” of the CDWUU model was not complete across the country and range of operational performance and sustainability issues still remain.

  1. Direct technical and management support is required for CDWUUs and other service providers; including institutional and post-construction support mechanisms. In addition, service providers need other forms of support, including policies and legislation which enable establishment of robust contractual relationships with the Ayil Okmotus. There is also a need for standard contracts and templates for the internal regulations of service providers and a need for national handbooks and guidelines on operation and maintenance (such as Standard Operating Procedures), amongst other areas. The provision of support can also help identify the need for capital maintenance and assist to establish more systematic procedures for asset management.

  1. The European Bank for Reconstruction and Development (EBRD) is currently supporting water supply projects in Bishkek, Osh, Jalalabad, Karakol, Kara Balta and other cities, funded with loans from the EBRD, and with the Swiss Economic Cooperation Organization providing technical assistance. EBRD support includes tariff reform within affordability limits (including support to low income groups), increased collection rates (possibility with the establishment of the integrated utility bill collection system), and stronger contractual relationships between cities and service providers. These initiatives could provide wider benefits across the country’s water and wastewater sector through the sharing of experience and knowledge gained from these projects.

  1. The ADB’s technical assistance (TA) program was designed to support the strengthening of policy and institutional arrangements in rural water supply and sanitation sector. The TA focused on the following two main areas:

  • Gathering and disseminating lessons learned for future WSS development projects, including conducting a willingness-to-pay survey of rural population, and assessment of market for suppliers, consultants, and contractors.

  • Capacity development of rural WSS institutions including: assessment and recommendations for rural WSS institutional framework, ranging from national level institutions down to service provision at village level; definition of roles and responsibilities of these institutions; recommendations for incentives and compensation plans; defining capacity development needs of institutions; and deliver training essential for the rural WSS institutions to carry out their roles and responsibilities.

  1. This project has been designed to support outcomes from the ADB technical assistance and to provide a complementary program of activities to assist the Government to implement recommendations, towards the sector reform objectives and enhance the sustainability of rural water services. The project design will embrace opportunities for other donors to provide support within a common strategic framework and to support the Government to coordinate investments within the context of its own overall vision and strategy for the WSS sector.

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