News Release
July 27, 2006
MANILA, PHILIPPINES - Two ADB loans totaling more than US$60 million will help Uzbekistan farmers boost their incomes by addressing some of the country's worsening land degradation problems.
The project will tackle land degradation in about 162,300 hectares of irrigated land in nine districts of three provinces - Bukhara, Kashkadarya, and Navoi. These areas, where crop yields reportedly have declined by 30% since 1991, suffer the most serious forms of land degradation, directly affecting about 1.4 million rural people.
Poor water management, deteriorating irrigation and drainage systems, and policies that reduce incentives to invest in land improvement are seen to be causes of the problem.
“Land degradation is a serious economic, social, and environmental problem in Uzbekistan and the rest of Central Asia,” says Plamen Bozakov, an ADB Water Resources Specialist. “It directly affects livelihoods in rural areas by reducing land productivity and causing massive losses in agriculture.”
The project aims to improve land reclamation practices and set up three farms to demonstrate innovative farm technologies and enhanced agronomic practices. It will also rehabilitate drainage and irrigation to improve water control and efficiency.
Institutions at all levels - central, provincial, and community - will be strengthened so they can better address land degradation issues. The project will also promote policy reforms to help increase farmers’ incentives to raise land productivity and invest in land, as well as improved rural governance.
ADB is lending $32.6 million from its ordinary capital resources (OCR) and $27.6 million from its concessional Asian Development Fund (ADF). The OCR loan carries a 25-year term, including a grace period of 5 years, and an interest rate to be determined. The ADF loan carries a 32-year term, including a grace period of 8 years, and an interest charge of 1% per year during the grace period, and 1.5% per year thereafter.
An $800,000 technical assistance grant, cofinanced by the Poverty Reduction Cooperation Fund, from the Government of the United Kingdom, accompanies the loans to help the Government strengthen relevant institutions and prepare needed legislation.
The Government and project beneficiaries will contribute about $16 million equivalent towards the project’s estimated total cost of $76.18 million. For the technical assistance project, the Government will contribute $200,000 in the form of office space, logistical support, and counterpart staff.
The Ministry of Agriculture and Water Resources is the executing agency for the project, which is due for completion in September 2012.