Fergana Valley is the most highly populated area in the Central Asia with great potential for economic development. The project constitutes the first phase of a long-term program in water management in the Valley. Therefore, it addresses the most pressing problems of severe water logging in the three districts of Rishtan, Baghdad and Altyarik affecting agriculture, damaging private and public infrastructure. The project is to address lowering of the ground water table and therefore soil salinity in the project area. The project beneficiaries are farmers of which 96% are small subsistent farmers with an average land holdings of 0.2 ha. and large farms. In addition the other beneficiaries are the city dwellers in the districts flooded with high ground water table.

Loup Brefort, the World Bank’s Country Manager for Uzbekistan, says: “The rise of the ground water table close to the surface of the soil in some parts of the Ferghana valley has created significant economic damage and human suffering. This is evidenced by the fact that many fields and dehkan plots are waterlogged, preventing the growing of crops for sale to market or for family consumption, or that buildings, including such socially important ones as schools and medical centers, are flooded and their structural integrity damaged. Given its important social and environmental focus, this drainage project is not just about rehabilitation of physical infrastructure but very much about improving the livelihood and living conditions of the people in those parts of the Fergana Valley”.

There are three main components to the project:

• improvement of irrigation and drainage network. This component aims at addressing the problem of high groundwater levels by financing for improvements in surface irrigation and drainage network as well as for installation of subsurface horizontal and vertical drainage wells.
• institutional strengthening and agricultural development support. This component will finance institutional strengthening support to public institutions and private farmers (water users) organizations involved in water management and utilization.
• project management, monitoring and evaluation of project impact. The component will support strengthening the Ministry of Agriculture and Water Resources and project implementation unit (PIU’s) capacity for project management, monitoring and evaluation through the provision of goods, consultant services, including project audit, and training, and financing of operating costs.
  Total project cost is estimated at US$81.85 million. Out of the total cost, IDA would finance US$65.544 million on the following terms: maturity = 35 years; grace period = 10 years. The remaining US$15.5 million would be financed by the Government of Uzbekistan.