WASHINGTON, June 18, 2021 — Smallholder dairy producers in the Kyrgyz Republic will benefit from $17 million in Additional Financing support from the World Bank, which will help boost animal productivity and milk quality, expand market access, and facilitate the availability of finance for small farmers.
This Additional Financing complements the original $5 million financing to the Integrated Dairy Productivity Improvement Project and is provided on highly concessional terms through the International Development Association (IDA). Half of the funding will be allocated in the form of a grant, which requires no repayment, while the other half is a credit with a 0.75% administrative fee, with repayments spread out over 38 years, and a six-year grace period.
“The World Bank is supporting the anti-crisis measures of the Government of the Kyrgyz Republic, and agriculture is an important part of post-pandemic economic recovery,” said Naveed Hassan Naqvi, World Bank Country Manager for the Kyrgyz Republic. “This Additional Financing will promote income generation and creation of new jobs along the dairy supply chain, thereby assisting vulnerable rural households to maintain their livelihoods and incomes.”
The project is geographically expanded to include small-scale dairy producers in Naryn and Talas regions in addition to the focus area of the original project – the Issyk-Kul region. These provinces have been selected by the Government because of their strong tradition of farming and dairying, rural nature of the area and population, and proximity to potential export markets.
Smallholder dairy production is challenged with low productivity, lack of a milk quality system, and limited access to veterinary and other agricultural services. Other industry constraints include weak marketing and sale of milk due to lack of cold storage and collection, dilapidated transportation, incomplete market information, and inability to meet food safety standards required by milk processors. ‘’The Additional Financing for Integrated Dairy Productivity Improvement Project aims to comprehensively address these challenges along the entire supply chain,” said World Bank Senior Agriculture Economist and Task Team Leader of the project, Melissa Brown. She noted that World Bank financing will enable increasing the capacity of state-owned and private veterinary services and laboratories, providing better artificial insemination services to improve the breed stock of dairy cows, expanding market access, and promoting fodder crop production to address winter feed shortages.
A major component of the project, in the amount of $10 million, aims to help facilitate access to finance through a Revolving Fund. Micro-loans of up to $1,500 will be provided to small farmers for productive investments such as high-quality animals, improved animal housing, manure management, drought-resistant feed production, milk cooling and storage, and others.
The project also aims to generate important climate co-benefits by promoting climate-smart agricultural practices and technologies such as feeding management, manure management, grazing practices, energy efficiency, and renewable energy generation.
The Project will be implemented over a four-year period through January 2026.
The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity. The Bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to over US$ 2 billion in the form of grants and highly concessional credits.
