The Asian Development Bank (ADB) and the Republic of Uzbekistan have signed a US$ 60 million loan agreement to support the government’s efforts to strengthen the water supply and sanitation sector.The loan, from ADB’s concessional Asian Development Fund, is the first tranche of a US$ 300 million multi tranche financing facility (MFF) – ADB’s first MFF investment program to Uzbekistan. The programme aims to improve the living standards, environment, and health of three million people in Uzbekistan.
Since 2000, ADB he provided US$ 193.1 million in loans and US$ 5.1 million in grants to the water supply and sanitation sector sector.
The loan will finance improvements to water source and distribution systems in Damkhodja and 11 district centres in Bukhara and Navoi provinces, as well as upgrade wastewater treatment plant and sewerage systems in the capital city of Surkhandarya province. The programme will also strengthen water supply and sanitation institutions and support capacity development. A performance-based service contract and lease contract will be piloted for service agencies to encourage more private investment in the sector. The loan will include programme preparation and management support to implement the loan and to prepare and design the remaining tranches under the investment program.
The total project costs are estimated at US$ 75 million. ADB will provide a US$ 60 million loan with repayment term of 32 years, including a grace period of eight years with an interest charge of 1% per year, rising to 1.5% for the balance of the term.
Source: ADB, 01 Dec 2009