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Bishkek, July 28, 2015
–The World Bank Group, working with the Kyrgyz government and other partners, has launched an initiative to boost agricultural production and encourage local economic development by addressing key challenges in the country’s dairy sector.
Starting with a pilot in Issyk-Kul province, the government’s Dairy Sector Development Program aims to strengthen the sector along the entire supply chain and improve regulations and access to finance. The objective of the pilot program is to boost the quantity and quality of raw milk, which will lead to improved dairy products from Issyk-Kul, resulting in increased exports. Ultimately, the program aims to make Kyrgyz dairy products internationally recognized and the country’s leading export products.
“The dairy sector is crucial for our region as it provides income opportunities for thousands of people, contributing to the country’s economic growth and reducing poverty in rural areas of the Kyrgyz Republic,” said Emilbek Kaptagaev, Plenipotentiary Representative of the Government of the Kyrgyz Republic in Issyk-Kul. “This groundbreaking new program will increase the competitiveness of local dairy products and expand their reach to regional and global markets.”
Leveraging the government’s national animal identification and registration program, the World Bank Group program will provide support by vaccinating all animals in the pilot zone. Other activities aim to boost the capacity of state-owned and private veterinary services and of private dairy processing companies and their supply chains (including farms, milk collectors, and cooperatives) in Issyk-Kul province.
The program will also work with financial institutions to help develop financing products and mobile payment solutions for dairy supply chains, and with the government to create a favourable business environment for the sector in order to attract more private investment.
“Dairy in Issyk-Kul is a major opportunity for farmers considering the mountainous, pasture-based, agro-ecology and strong tradition of farming and dairying,” said Mai Nguyen, IFC/World Bank Group Program Manager. “But the sector is ridden with challenges. By coordinating stakeholder efforts to address the sector’s shortcomings, the program will strengthen this crucial agribusiness supply chain and improve the livelihoods of thousands of people. This program, however, is only the beginning. We intend to help the government replicate the approach across the country.”
Agribusiness accounts for nearly 13 percent of Kyrgyz exports, one-fifth of the country’s GDP, and employs about one-third of the workforce. In this context, the dairy sector is vital, with the Kyrgyz Republic striving to establish itself as a leading milk producer in the region.
The Dairy Sector Development Program pilot in Issyk-Kul Province is supported by the International Development Association (IDA) and International Finance Corporation (IFC), members of the World Bank Group. Technical assistance activities will be funded by the Austrian Federal Ministry of Finance, the Government of Japan, the Government of Switzerland, and the UK’s DFID. Partners in this program include, amongst others, FAO, IFAD, and GiZ.
About the World Bank Group
The World Bank Group is one of the world's largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID).
The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty, and to promote economic growth and shared prosperity. Forty five percent of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other fifty five percent is in highly concessional credits – no interest, and only a 0.75 percent 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.
The Kyrgyz Republic became a member of IFC in 1993. Since 1996, IFC has invested more than $113 million to support over 30 private sector projects across a variety of sectors. As of June 30, 2014, IFC’s portfolio in the Kyrgyz Republic stands at $30 million, with investments in financial markets, manufacturing, and infrastructure sectors.
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