KMK will on-lend the proceeds of the loan to the participating water companies to finance priority investments in the cities of Chkalovsk, Gafurov, Isfara, Kanibaidam, Karaikkum, Khorog and Taboshar.

The project is expected to be co-financed by a US$ 10 million capital grant provided by the Swiss State Secretariat for Economic Affairs (SECO), a US$ 2.7 million grant from Global Environmental Facility Special Climate Change Fund (GEF SCCF) and has also received significant technical co-operation funds for preparation and implementation.

The project builds on the Bank’s previous experiences in the Tajik water sector, and it is the fourth EBRD-led water supply rehabilitation project in the country.

After the successful implementation of a programme of improvements in Khujand and the programme’s launch in three municipalities in southern Tajikistan the EBRD was approached by the government of Tajikistan to expand its municipal water infrastructure programme to cover seven northern Tajik cities. In addition, the Bank is preparing a new water supply renewal project covering four cities in central Tajikistan, as well as a water project for Dushanbe.

The population of the seven cities benefiting from the new project will amount to about 200,000. The cities like Khorog, Kanibaidam and Taboshar represent some of the poorest areas of Tajikistan. While Isfara, located along the Silk Road to China, and Karaikkum boast ancient history and renowned local products – appricot growing and carpet manufacturing. Chkalovsk and Gafurov are strong industrial and trading centres.

Despite recent efforts to improve services, the water and wastewater infrastructure condition in these cities remains in poor condition. With about 70 per cent of water supply system nearing the end of its operational life cycle, the population often receives water a couple of hours a day in the summer.

The EBRD loan and the donors’ contribution will not only finance infrastructure investments. The new project has an integrated approach with a series of actions designed to gradually introduce a new tariff policy which will help the local water companies to cover operating costs and generate income, while protecting low income households. Cost reductions, efficiency measures and transparency will in a further step lead to sustainability and performance improvements of the water companies.

“We are pleased to work with the Tajik government and KMK to jointly address sustainable water supply across the country through our integrated approach, which couples both environmental benefits and transition objectives. We thank the donors – SECO and GEF SCCF – for their generous contribution of large capital grants, which will allow us to restore reliable water supply and have a considerable beneficial impact on the lives of many thousands of people who so far have been suffering from insufficient water services,” said Ulf Hindstrom, Head of the EBRD Resident Office in Dushanbe.

In Tajikistan, the EBRD focuses its activities on developing the banking sector, improving municipal infrastructure, and promoting small businesses. The Bank is also supporting the development of agricultural sector, with a special emphasis on loans to farmers.

To date, the EBRD has committed over €110 million in various sectors of the Tajik economy, mobilising additional investments in excess of about €60 million.