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Issyk-Kul Wastewater Management Project

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Issyk-Kul Wastewater Management Project Report and Recommendation of the President to the Board of Directors Project Number: 50176-002 October 2018 Proposed Loan and Grant Kyrgyz Republic: Issyk-Kul Wastewater Management Project Distribution of this document is restricted until it has been approved by the Board of Directors. Following such approval, ADB will disclose the document to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS (as of 8 October 2018) Currency unit – som (Som) Som1.00 = $0.014347 $1.00 = Som69 ABBREVIATIONS ADB – Asian Development Bank DDWSSD – Department of Drinking Water Supply and Sewerage Development EMP – environmental management plan Gosstroy – State Agency for Architecture, Construction, Housing and Public Utilities under the Government of the Kyrgyz Republic km – kilometer LARP – land acquisition and resettlement plan m3 – cubic meter MLD – million liters per day O&M – operation and maintenance PAM – project administration manual PIO – project implementation office PMO – project management office PRGIKO – Office of the Plenipotentiary Representative of the Government in Issyk-Kul Oblast SPZ – sanitary protection zone WSS – water supply and sanitation WWTP – wastewater treatment plant NOTE In this report, “$” refers to United States dollars unless otherwise stated. Vice-President Wencai Zhang, Operations 1 Director General Werner Liepach, Central and West Asia Department (CWRD) Director Yong Ye, Urban Development and Water Division, CWRD Team leader Ruoyu Hu, Urban Development Specialist, CWRD Team members Annalyn Almodiel, Operations Assistant, CWRD Ainagul Amanova, Senior Project Officer, Kyrgyz Resident Mission, CWRD Ana Paula Araujo, Environment Specialist, CWRD Minhong Fan, Procurement Specialist, Procurement, Portfolio and Financial Management Department Cholpon Mambetova, Integrity Specialist, Office of Anticorruption and Integrity Maritess Marcelino, Associate Project Officer, CWRD Patricia Rhee, Senior Counsel, Office of the General Counsel Mary Alice Rosero, Social Development Specialist (Gender and Development), CWRD Lu Shen, Unit Head, Portfolio Management, CWRD Yukihiro Shibuya, Social Development Specialist (Safeguards), CWRD Peer reviewer Jingmin Huang, Principal Urban Development Specialist, SARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page PROJECT AT A GLANCE MAP I. THE PROPOSAL 1 II. THE PROJECT 1 A. Rationale 1 B. Impact and Outcome 3 C. Outputs 4 D. Summary Cost Estimates and Financing Plan 4 E. Implementation Arrangements 5 III. DUE DILIGENCE 6 A. Technical 6 B. Economic and Financial 7 C. Governance 7 D. Poverty, Social, and Gender 8 E. Safeguards 8 F. Summary of Risk Assessment and Risk Management Plan 9 IV. ASSURANCES AND CONDITIONS 10 V. RECOMMENDATION 10 APPENDIXES 1. Design and Monitoring Framework 11 2. List of Linked Documents 14 Project Classification Information Status: Complete PROJECT AT A GLANCE 1. Basic Data Project Number: 50176-002 Project Name Issyk-Kul Wastewater Management Department CWRD/CWUW Project /Division Country Kyrgyz Republic Executing Agency Department of Drinking Water Borrower Kyrgyz Republic Supply and Sewerage Development under the State Agency for Architecture, Construction, Housing & Public Utilities under the Government of the Kyrgyz Republic 2. Sector Subsector(s) ADB Financing ($ million) Water and other urban Urban policy, institutional and capacity development 7.67 infrastructure and services Urban sewerage 28.85 Total 36.52 3. Strategic Agenda Subcomponents Climate Change Information Inclusive economic growth Pillar 2: Access to economic Climate Change impact on the Medium (IEG) opportunities, including jobs, made Project more inclusive Environmentally sustainable Global and regional transboundary ADB Financing growth (ESG) environmental concerns Adaptation ($ million) 1.23 Natural resources conservation Urban environmental improvement 4. Drivers of Change Components Gender Equity and Mainstreaming Governance and capacity Institutional development Effective gender mainstreaming development (GCD) (EGM) Partnerships (PAR) Implementation Private Sector Private sector development Public sector goods and services (PSD) essential for private sector development 5. Poverty and SDG Targeting Location Impact Geographic Targeting No Urban High Household Targeting No SDG Targeting Yes SDG Goals SDG3, SDG6, SDG11 6. Risk Categorization: Low . 7. Safeguard Categorization Environment: B Involuntary Resettlement: B Indigenous Peoples: C . 8. Financing Modality and Sources Amount ($ million) ADB 36.52 Sovereign Project grant: Asian Development Fund 12.84 Sovereign Project (Concessional Loan): Ordinary capital resources 23.68 Cofinancing 0.00 None 0.00 Counterpart 5.30 Government 5.30 Total 41.82 Currency of ADB Financing: USD Source: Asian Development Bank This document must only be generated in eOps. 16102018113417419503 Generated Date: 29-Oct-2018 14:41:16 PM KYRGYZ REPUBLIC MAIN MAP ISSYK-KUL WASTEWATER MANAGEMENT PROJECT BISHKEK CHUI Talas Karakol TALAS ISSYK-KUL Project City National Capital NARYN Provincial Capital JALAL-ABAD Naryn Main Road N Jalal-Abad Railway River 0 15 30 Provincial Boundary Osh International Boundary OSH Kilometers Boundaries are not necessarily authoritative. Batken BATKEN CHUI Ak-Bulak Korumdu ISSYK-KUL Oital Grigorievka Ananyevo Tyup Cholpon-Ata Novovoznesenovka Krasnyi Most Tamchy Lipenka Balykchy Toru-Aygyr Karakol Lake Issyk-Kul Kyzyl-Suu Ottuk Kyzyl-Tuu Ak-Terek Barskoon Bokonbayevo Ala-Bash Kaji-Say Tosor Temir-Kanat This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this NARYN map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information. 18-1882 17KGZ ABV I. THE PROPOSAL 1. I submit for your approval the following report and recommendation on a proposed (i) loan and (ii) grant, both to the Kyrgyz Republic for the Issyk-Kul Wastewater Management Project.1 2. The project will improve wastewater services in two lakeshore cities on Issyk-Kul lake, in the eastern region of the Kyrgyz Republic. It will upgrade and expand the existing wastewater systems, build institutional capacity, and strengthen the sustainability of the water supply and sanitation (WSS) utilities in Balykchy and Karakol.2 II. THE PROJECT A. Rationale 3. Issyk-Kul lake, the second-largest high-altitude lake in the world, is renowned for its clear waters; it is designated as a Ramsar site of globally significant biodiversity,3 and is a key asset of the Issyk-Kul Biosphere Reserve.4 The surrounding Issyk-Kul region is rich with environmental, archeological, and cultural resources, and supports internationally important biodiversity.5 As a consequence, the region is one of the nation’s most popular tourist destinations, with tourism now an important source of revenue, especially for lakeshore cities. The impacts of tourism growth on the environment and ecosystems of the lake and shoreline areas are of growing concern, particularly in relation to wastewater pollution, and notably in the three primary lakeshore cities of Balykchy, Cholpon-Ata, and Karakol. 4. Core problem. Balykchy (population 47,000) is located at the western extremity of the lake; Karakol (population 76,000) is located at the lake’s eastern extremity. Both cities have extended aeration-based wastewater treatment plants (WWTPs) that were constructed in the 1980s. However, only 30% of the population in Balykchy (3,400 households), and 45% of the population in Karakol (7,200 households) are currently connected to the centralized systems. The WWTPs are dilapidated and treat only about 8 million liters per day (MLD) of wastewater through sedimentation. The remaining 14 MLD of wastewater is disposed of through unsanitary pit latrines and other methods characterized by poor maintenance and lack of adequate septage collection and disposal. While most resorts maintain sewage treatment facilities, monitoring of treatment operations and effluent quality is inadequate. The combination of partially operating sewerage systems, self-provision of sanitation facilities, and inadequate monitoring of sewage discharge from resorts pose a significant threat to the lake’s water quality, leading to increased public health risks and environmental degradation. These in turn limit tourism development, which relies heavily on the lake’s environment.6 5. Vodokanal enterprises in Balykchy and Karakol are responsible for WSS services.7 Their expenditures are high due to operational inefficiencies arising from the aging system, poor operational and management capacity and lack of maintenance equipment. Staff incentives are 1 Formerly the Second Issyk-Kul Sustainable Development Project, listed in Country Operations Business Plan, 2018– 2020. Manila. 2 Asian Development Bank (ADB) 2016. Technical Assistance to the Kyrgyz Republic for Preparing the Second Issyk- Kul Sustainable Development Project. Manila. 3 The Ramsar Convention is an international treaty relating to the sustainable use and conservation of wetlands. 4 The reserve was designated by the United Nations Educational, Scientific and Cultural Organization
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