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1、Water sector financial governance gap analysis in Central AsiaGeorg Petersen Erkin MadumarovAiman UteyevaBakhrom GaforzodaGulnara MergenovaAziz KarimovMay,2024 Disclaimer:The views expressed in this publication are the views of the authors and do not necessarily reflect the views or policies of the

2、CAREC Institute,its funding entities,or its Governing Council.The CAREC Institute does not guarantee accuracy of the data included in this publication and accepts no responsibility for any consequences of its use.The terminology used may not necessarily be consistent with the CAREC Institutes offici

3、al terms.The CAREC Institute accepts no liability or responsibility for any partys use of this publication or for the consequences of any partys reliance on the information or data provided herein.The report is written by a team of consultants of the Asian Development Bank(ADB),led by Georg Petersen

4、(International Consultant).The team includes Erkin Madumarov(National Consultant for the Kyrgyz Republic),Aiman Uteyeva(National Consultant for Kazakhstan),Bakhrom Gaforzoda(National Consultant for Tajikistan),Gulnara Mergenova(National Consultant for Turkmenistan),and Aziz Karimov(National Consulta

5、nt for Uzbekistan).Ilhom Abdulloev,Senior Specialist on Research and Knowledge Connectivity of the CAREC Institute,facilitated the project.The CAREC Institutes Publication Board reviewed the report and provided comments for its further improvement.The research is funded through the technical and fin

6、ancial assistance from the ADB under“TA-6694 REG:Water sector financial governance gap analysis in Central Asia:from planning to practice.”By making any designation of or reference to a particular territory or geographical area,or by using country names in the report,the authors did not intend to ma

7、ke any judgment as to the legal or other status of any territory or area.Boundaries,colors,denominations,or any other information shown on maps do not imply any judgment on the legal status of any territory,or any endorsement or acceptance of such boundaries,colors,denominations,or information.This

8、publication is available under the Creative Commons Attribution 3.0 IGO license(CC BY 3.0 IGO)https:/creativecommons.org/licenses/by/3.0/igo/.By using the content of this report,you agree to be bound by the terms of this license.This CC license does not apply to other copyright materials in this rep

9、ort.If the material is attributed to another source,please contact the copyright owner or publisher of that source for permission to reproduce it.The CAREC Institute cannot be held liable for any claims that arise as a result of your use of the material.Central Asia Regional Economic Cooperation(CAR

10、EC)Institute 21st Floor,Commercial Building Block 8,Vanke Metropolitan,No.66 Longteng Road,Shuimogou District,Urumqi,Xinjiang,the PRC,830028 f:+86-991-8891151 L inkedIn:carec-institute km carecinstitute.o rg ww w.carecinstitute.o rg ii CONTENT Executive summary.1 Kazakhstan.1 Kyrgyz Republic.3 Tajik

11、istan.4 Turkmenistan.5 Uzbekistan.7 Objective and purpose of the research.9 Identified water financing gaps including priorities.10 Kazakhstan.10 Situational analysis/overview of the water sector.10 Analysis of the drinking water supply and sanitation subsectors.19 Analysis of the industrial subsect

12、or.22 Analysis of the land reclamation and irrigation subsectors.25 Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities.28 Kyrgyz Republic.31 Situational analysis/overview of the water sector.31 Analysis

13、of the drinking water supply and sanitation subsectors.35 Analysis of the hydropower subsector.37 Analysis of the land reclamation and irrigation subsectors.39 Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including pri

14、orities.42 Tajikistan.53 Situational analysis/overview of the water sector.53 Analysis of the drinking water supply and sanitation subsectors.59 Analysis of the hydropower subsector.62 Analysis of the land reclamation and irrigation subsectors.65 Summary/results of the review of the critical financi

15、al needs of the water sector,concentrating mostly on major infrastructure,including priorities.68 Turkmenistan.73 Situational analysis/overview of the water sector.73 Analysis of the drinking water supply and sanitation subsectors.79 Analysis of the industry subsector.84 Analysis of the hydropower s

16、ubsector.87 Analysis of the land reclamation and irrigation subsectors.92 Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities.98 Uzbekistan.106 Situational analysis/overview of the water sector.106 Analys

17、is of the drinking water supply and sanitation subsectors.115 Analysis of the hydropower subsector.122 Analysis of land reclamation and irrigation subsectors.126 Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including p

18、riorities.132 Conclusion.137 Annex 1Study methodology and next steps.140 Annex 2Implementation plan.143 Annex 3Institutions or stakeholders to be consulted.144 1 EXECUTIVE SUMMARY The CAREC Institutes 2022 research on water infrastructure in Central Asia revealed challenges in coordinated investment

19、 planning,suggesting that economic frameworks promoting cooperation and integrated planning could be more effective.Private engagement in the water sector is rare owing to regulatory hurdles and unclear ownership,which hinders financing solutions.Despite efforts to improve fee collection,significant

20、 challenges persist,prompting the project to identify governance gaps and prioritize actions for the appropriate financing of water infrastructure in each country.The proposed consultancy involves delivering key outputsincluding a water financing gaps report focusing on critical financial needs and

21、infrastructure priorities;a water sector financing improvement action plan that systematizes existing schemes and addresses financing problems;and a policy paper and dialog series to initiate partnerships and agreements in Central Asias water sector.KAZAKHSTAN Situational analysis/overview of the wa

22、ter sector Kazakhstana vast,landlocked country in Central Asiafaces challenges in its water management and economy.With a large territory but low population density,its climate is continental and arid,leading to an uneven distribution of water resources.Climate change exacerbates these issues,causin

23、g floods of increasing frequency and economic damage.Kazakhstan experienced economic growth driven by natural resource extractionparticularly in the oil,gas,and mining sectors,which are concentrated in water-stressed regions.The water sector is fragmented,and the government is working on reforms;how

24、ever,challenges include a lack of data,insufficient monitoring,and fragmented ownership.Water scarcity poses risks to agriculture,and projections suggest a 6 percent GDP decrease by 2050.Kazakhstan collaborates with neighboring countries on transboundary water management,with agreements in place.The

25、 water supply and sanitation infrastructure involve a mix of national,municipal,and private ownership.Common governance themes include diplomatic relations for water security,low water tariffs,limited citizen participation,and challenges in accountability.The Open Budget Index(OBI)score for Kazakhst

26、an indicates limited public participation in budget planning and control,improving from 38 points in 2010 to 63 in 2021.The budget code of 2008 governs the water management sector,financed primarily by the state budget and official development assistance,with evidence suggesting weak implementation

27、and monitoring despite existing legislative frameworks.Analysis of the drinking water supply and sanitation subsectors Over the past two decades,Kazakhstan has invested in water supply and sanitation through various programs to enhance quality of life and economic potential;challenges include incomp

28、lete program implementation and limited public information about the outcomes.The Green Kazakhstan program launched in 2021 focuses on improving the environmental situation and preserving ecosystems.The country needs investment in the aging infrastructure,with numerous cities lacking wastewater trea

29、tment plants and requiring modernization.Kazakhstan emphasizes publicprivate partnerships(PPPs)in the water supply subsector,governed by the law on PPPs,but faces challengesparticularly in rural areashindering the development of PPP models.2 Analysis of the industrial subsector Major industrial play

30、ers in Kazakhstan primarily in natural resources extractionsuch as KazMunayGas,Kazatomprom,and Tau-Ken Samrukare owned by National Holding Samruk-Kazyna.Despite significant water extraction,these companiesincluding KazMunayGas,Kazatomprom,and KAZ Mineralsoften neither treat nor re-use wastewater.The

31、 Ministry of Ecology and Natural Resources(MENR)highlights the industrial pollution of surface waters,emphasizing the need for wastewater treatment plants and a reduction in the extraction of surface and groundwater.While some companiessuch as KazMunayGas and Kazatompromreport percentages of re-used

32、 water,otherssuch as Kazakhmys and KAZ Mineralsprovide limited information on water use and recycling.Financial gaps in the industrial subsector,marked by profits from resource extraction,highlight the need for the construction of wastewater treatment plants to address water pollution and improve wa

33、ter quality.Analysis of the land reclamation and irrigation subsectors Between 2000 and 2019,water projects in Kazakhstan received only 0.24 percent of tracked investments,with annual irrigation investments being less than USD20 million from 2006 to 2010.In 2014-2015,annual investments increased to

34、USD250 million to address growing water demand and improve infrastructure.Projections indicate potential water scarcity by 2030 if efficient water resources management measures are not implemented.Financial gaps in the land reclamation and irrigation subsectors,coupled with low water tariffs,lead to

35、 water losses,land salinization,and deteriorating infrastructure,negatively impacting food safety and security.The financial requirements for development include infrastructure reconstruction,construction of new reservoirs,tariff policy revision,and investment in water-saving technologies.The concep

36、t also emphasizes the need for digitalization and investment in staff training and infrastructure operations.While the action plan is expected to be financed from the state budget,specific budget details are not available as the concept is yet to be approved by the government.Summary/results of the

37、review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities While improvements were made to PPP legislation in 2022,the complexity of PPP procedures and lack of clarity on investment return timeframes pose corruption risks in water pro

38、jects in Kazakhstan.Factors like inconsistent financial returns and the Ukraine conflict make water sector investments risky,deterring potential investors.Blended finance,recommended by the World Bank and OECD,is proposed to make water projects attractive to private investors by mitigating environme

39、ntal risks.Recommendations to address financial gaps in the drinking water supply,sanitation,industrial,and land reclamation sectors include enforcing the polluter pays principle,incentivizing water-saving technologies,and resolving governance issues.Challenges in the water management sector,such as

40、 water scarcity and pollution,require sustainable measures like integrated water resources management,investments in modern infrastructure,climate-resilient development,pollution prevention,education,and international cooperation.3 KYRGYZ REPUBLIC Situational analysis/overview of the water sector Th

41、e infrastructure plans of the Kyrgyz Republic are dominated by the energy and transport sectors,with energy projects constituting 54 percent of investments between 2000 and 2018,while water-related investments are limited to 1 percent.The water resources service oversees the management and regulatio

42、n of water resources,implementing a unified state policy on water use,protection,and interstate water relations.The Water Code of 2005 established the principles for water resources management,state competencies,and regulations for water use,pollution prevention,and ownership of water fund lands,wit

43、h ongoing reforms focusing on basin management in accordance with the Water Code.Analysis of the drinking water supply and sanitation subsectors The drinking WSS subsectors in the Kyrgyz Republic,overseen by the Department for the Development of Drinking Water Supply and Sanitation,face challenges s

44、uch as low access,poor service delivery,and financial gaps,with about 40 percent of the rural population lacking safe drinking water and limited sanitation infrastructure.The financial requirements for the subsectors involve substantial investments,especially in rural areas,and the government aims t

45、o establish state enterprises and technical service centers to address the infrastructure needs.The implications of financial gaps include low tariffs,inadequate salaries,and the governments inability to finance modernization,making international financing crucial for procurement and development.Ana

46、lysis of the hydropower subsector The hydropower subsector in the Kyrgyz Republic,managed by the Department of Energy Efficiency,faces challenges related to poorly maintained assets and slow technology adoption.The government has implemented reforms to enhance energy infrastructure,including increas

47、ed tariffs and the construction of the Kambar-Ata Hydroelectric Power P-1.Financial gaps exist,with the need for about USD14 billion by 2030 to realize the countrys hydropower potential,creating jobs and increasing renewable energy capacity,and requiring strategies like tariff adjustments,institutio

48、nal reforms,and alternative financing approaches.Analysis of the land reclamation and irrigation subsectors Financial analysis of the land reclamation and irrigation subsectors in the Kyrgyz Republic reveals the need for substantial support in areas such as agriculture,natural resources management,a

49、nd climate adaptation.Challenges include fragmented agriculture production,limited post-harvest technologies,and inadequate logistics networks,all of which impact the competitiveness of the sector.To address financial gaps,the country requires significant investment for modernizing irrigation networ

50、ks,providing drinking water,and implementing new irrigation technologies,with implications including high losses in on-farm irrigation and the need for improved water management at various levels.Summary/results of the review of the critical financial needs of the water sector,concentrating mostly o

51、n major infrastructure,including priorities Kyrgyz Republic is categorized as group A for concessional assistance,having access to Asian Development Fund grants and concessional loans,with a moderate risk of debt distress.4 The Asian Development Banks sector priorities(2018-2022)in the Kyrgyz Republ

52、ic include agribusiness,power,telecommunication,and ICT,with a focus on energy,transport,agriculture,education,public sector management,and water supply.Water sector challenges involve inefficient resource use and ineffective management,while measures include precision agriculture,water-saving techn

53、ologies,tariff and administrative regulation,and cancelling groundwater licensing.Recommendations for addressing water sector financing gaps include strengthening public funding,enhancing cost recovery,encouraging private sector participation,and seeking international assistance,with key actions inv

54、olving tariff adjustments,improved billing systems,and attracting private investment.Institutional development and governance initiatives in the water sector include delegating powers to the civil sector,establishing basin management bodies,improving financial management and governance,and recommend

55、ing capacity building,partnerships,and anti-corruption measures for effective development.TAJIKISTAN Situational analysis/overview of the water sector Tajikistan actively advocates for global water resource issues and climate change adaptation through initiatives such as UN resolutions.The country f

56、aces challenges in water sector financing owing to economic crises,climate change impacts,and aging infrastructure.The water sectorpivotal for Tajikistans socio-economic developmentinvolves key subsectors like hydropower,drinking water supply,and irrigation,necessitating reforms for financial sustai

57、nability and modernization.Analysis of the drinking water supply and sanitation subsectors The Republic of Tajikistan faces challenges in its drinking water supply and sanitation subsectors,with a coverage rate of 64 percent,leaving a significant portion of the population dependent on untreated wate

58、r sources.Centralized services are provided by 85 enterprises,mainly under the state unitary enterprise Khochagii Manziliyu Kommunali,but infrastructure deterioration,financial constraints,and low tariffs contribute to operational difficulties.Financial gaps result from insufficient funds,low tariff

59、s relative to production costs,and low collection rates,posing risks to infrastructure,water quality,and public health,with estimated requirements of approximately USD2 billion over 30 to 40 years for clean water and sanitation.Analysis of the hydropower subsector Tajikistan possesses substantial hy

60、droelectric potential,ranking eighth globally,but currently utilizes only 4 percent of its estimated 527 billion kWh resources.Hydropower constitutes about 90 percent of the countrys 5,757 MW energy capacity.The main financial challenges in the hydropower subsectorled by Barki Tojikstem from financi

61、al losses,debtor obligations,and insufficient tariffs,posing risks to infrastructure,energy security,and economic development,with emphasis on the need for approximately USD5.2 billion for the completion of the Rogun Hydroelectric Power Station and the financial recovery of Barki Tojik.Analysis of t

62、he land reclamation and irrigation subsectors The land reclamation and irrigation subsectors in Tajikistan play a crucial role in achieving strategic goals,including food security and rural employment.However,financial challenges,including infrastructure depreciation and insufficient profitability,p

63、ose risks.The water sector faces financial 5 gaps,with inadequate water tariffs,leading to debtor and creditor liabilities,and insufficient government subsidies,impacting infrastructure,natural disaster risks,and socio-economic development.The financial requirement for the sectors developmentincludi

64、ng infrastructure restoration,modernization,and constructionis estimated at around USD2 billion for sustainable operation and achieving its tasks.Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities Financ

65、ial challenges in subsectors include gaps in drinking water,sanitation,irrigation,and electricity services,with tariffs not covering production costs leading to high lending rates and accounts payable,which means profitability and stability must be achieved through financial and economic mechanisms.

66、Infrastructure modernization is needed owing to the aging water infrastructure;this requires grants,loans,and publicprivate partnerships.Climate change impact includes melting glaciers,droughts,and land degradation.Integrated water resources management and basin principles are crucial for adaptation

67、.Government initiatives focus on clean water,sanitation,and hydropower development,with recommendations for infrastructure assessments,automation,privatization,and tariff policies.The emphasis is on attracting funds for ecosystem-based adaptations and intersectoral strategies.Sector-specific financi

68、al strategies include recommendations for drinking water supply and sanitation,such as infrastructure improvement,automation,and tariff policies.In hydropower,the focus is on the Rogun Hydroelectric Power Plant,alternative energy,and the financial recovery of Barqi Tojik.For land reclamation and irr

69、igation,recommendations cover infrastructure inventory,energy efficiency,automated monitoring,and cost recovery.TURKMENISTAN Situational analysis/overview of the water sector Turkmenistan faces the challenge of managing water resources amid a projected population increase and decreasing water availa

70、bility.The country demonstrates commitment through the reorganization of governing bodies,the launch of efficient water-use mechanisms,and international engagement.Financially,Turkmenistan relies on government funds,water tariffs,and international support,with a growing emphasis on water-related pro

71、jects and large-scale infrastructure development.Analysis of the drinking water supply and sanitation subsectors Turkmenistan,grappling with the outdated water infrastructure from the Soviet era,has undertaken significant reforms and international collaborations since 2010 to enhance water managemen

72、t.The country developed an elaborate legal and institutional framework for drinking water supply and sanitation,outlining the general conditions,regulations,and dispute resolution.While water supply and sanitation have improved,the financial gaps pose challenges,with low tariffs and the need for inc

73、reased investment in sewerage networks,treatment facilities,and water disinfection.Analysis of the industry subsector In 2022,Turkmenistans industrial sector,particularly in hydrocarbons,expanded by 6.3 percent.Despite industrys significant role in the economy,it is not water-intensive,with water co

74、nsumption 6 for production and industry being low compared to the agricultural sector.Financial gaps and environmental challenges arise in the industry subsector,especially concerning industrial wastewater discharge,pollution,and the need for effective environmental management.Analysis of the hydrop

75、ower subsector Turkmenistan relies primarily on natural gas for energy generation,with limited renewable energy infrastructure.The country has two transboundary hydropower facilitiesthe Tuyamuyun hydro complex and the Dostluk reservoir dammanaged jointly with Uzbekistan and Iran,respectively.Althoug

76、h Turkmenistan has a small hydroelectric power station,the potential for small hydropower development remains largely untapped owing to financial gaps,challenges such as water scarcity,and insufficient expertise.Analysis of the land reclamation and irrigation subsectors Turkmenistans land reclamatio

77、n and irrigation subsector,primarily financed by the state budget,focuses on restoring and constructing large irrigation systems.With a total irrigated area of 1.815 million hectares and significant water consumption for agriculture,the agricultural complex aims to complete major investments,includi

78、ng drainage systems and irrigation networks.Financial gaps pose challenges,leading to deteriorating infrastructure,increased water scarcity,and potential economic losses due to climate change.The country is implementing measuressuch as the construction of the Altyn Asyr artificial laketo address wat

79、er-related issues,but sustained funding and international support are crucial for sustainable development in this sector.Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities Central Asian countries,includi

80、ng Turkmenistan,have witnessed an improvement in water sector financing from national budgets since the 2010s,reaching 49 percent to 60 percent of the required funds.By 2021,Turkmenistan achieved 60 percent financing,but the impact of climate change and aging infrastructure necessitates regular revi

81、ews of financial mechanisms.The government of Turkmenistan has recognized the increasing importance of financing the water sector,especially in response to challenges like low river levels in recent years.In 2022,the government established a commission on water supply,emphasizing the need for uninte

82、rrupted water resources and allocating funds for necessary equipment.With the agriculture sector consuming over 90 percent of the countrys water resources,investments are directed towards critical projects,such as the construction of the Altyn Asyr artificial lake.Priorities include increasing reser

83、voir capacity,upgrading irrigation systems,and improving the state of lands,reflecting in updated national programs with increased funds for water-related projects.To address financial gaps in the drinking water supply and sanitation subsectors,recommendations include developing a comprehensive fina

84、ncing mechanism,integrating funding for sewerage networks,exploring innovative disinfection solutions,planning financing collaboratively with other sectors,addressing seasonal water interruptions,and promoting collaborations between state and private efforts.Filling the financial gaps in the hydropo

85、wer subsector involves cost-effective approaches to address siltation issues in reservoirs and considering simultaneous development and restoration of small rivers.In the land reclamation and irrigation subsectors,suggestions include attracting foreign investments,effective management,reconstruction

86、 of irrigation 7 networks,implementation of water-saving measures,and adopting progressive irrigation methods.UZBEKISTAN Situational analysis/overview of the water sector Uzbekistan relies heavily on external water sources,particularly the Amu Darya and Syr Darya rivers,facing challenges in balancin

87、g agricultural irrigation demands with conservation.The country grapples with water scarcity issues,impacting both agriculture and domestic water supply,exacerbated by inefficient water usage patterns.To address these challenges,Uzbekistan is implementing strategies to modernize irrigation systems,p

88、romote water-saving technologies,transition to partial cost recovery,and focus on hydropower development for sustainable water management.Analysis of the drinking water supply and sanitation subsectors The country faces issues with outdated and deteriorated infrastructure,particularly in sewage syst

89、ems,leading to contamination of surface water resources.Financial gaps,insufficient tariff structures,and limited access to centralized sewage systems contribute to the sectors stagnation,posing economic,health,and social risks.To address these issues,the government has initiated a comprehensive dev

90、elopment program with a budget of USD6.8 billion,to modernize the water infrastructure,improve access,and ensure economic sustainability in the water supply and sanitation subsectors.Analysis of the hydropower subsector The Uzbekistan government has prioritized enhancing the hydropower sectors gover

91、nance and financial sustainability,allocating significant funds for development projects.The country aims to achieve a balanced combination of foreign loans and government finance to support large-scale hydropower projects,with plans to increase capacity by 1.6 GW by 2030.The hydropower sector,contr

92、ibuting 14.3 percent to the total power output,is set to undergo substantial growth with the construction of 35 new hydropower plants(HPPs),the modernization of 27 existing ones,and a projected cumulative capacity of 3,785 MW by 2030.Financial challenges,including a less favorable external environme

93、nt,necessitate comprehensive reforms for sustained economic growth and energy security.The government is actively seeking private sector involvement,international support,and alternative financing channels to bridge financial gaps,stimulate investments,and ensure the sectors sustainable development.

94、Analysis of land reclamation and irrigation subsectors Uzbekistan allocates approximately 1.3 percent of its GDParound UZS3 trillion to UZS4 trillion annuallyfor irrigation and drainage(I&D)works,but the real impact is challenged by factors like inflation.The aging infrastructure,with over 75 percen

95、t requiring repair,poses a significant obstacle,hindering water efficiency and agricultural output.Financial gaps,distorted investments,and insufficient funding for modernization highlight the complex challenges facing Uzbekistans land reclamation and irrigation subsectors.8 Summary/results of the r

96、eview of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities Uzbekistan faces water challenges,necessitating substantial investments in improving effluent treatment,irrigation networks,and water supply systems.A World Bank public expendi

97、ture review(PER)emphasizes the importance of efficient public investments to counter the adverse effects of aging infrastructure and climate change,as Uzbekistan anticipates a 25 percent water deficit.Reforms and innovative technologies are being pursued to address these challenges and accommodate t

98、he growing population.The agricultural sector in Uzbekistan requires significant investment to achieve the widespread adoption of water-saving technologies,notwithstanding the positive outcomes from initiatives.Farmers,especially non-landowners,face barriers to investing in critical technologies.The

99、 government provides subsidies to encourage adoption,but the limitations impact resource allocation.The sectors water supply and sanitation infrastructure,developed during the Soviet era,requires extensive rehabilitation to improve accessibility,particularly in remote areas.The government aims to st

100、rengthen the hydropower sectors governance and financial viability,emphasizing improved operational procedures,regulatory frameworks,and transparency.Financial sustainability is a focal point,prompting strategic financial planning,investments,and the exploration of novel funding mechanisms.Tariff re

101、visions,regional energy market integration,and long-term commitment are all recommended measures.To overcome financial gaps,recommendations include improving operational efficiency,exploring publicprivate partnerships,utilizing novel financing structures,implementing cost-reflective rates,and adopti

102、ng smart water metering systems.Gradual increases in water costs reflect the expenses incurred and alleviate the financial strain on water delivery entities.Uzbekistan faces challenges in water management,prompting strategies such as water-saving technologies in agriculture,digitalization for effici

103、ent water management,addressing water scarcity and environmental impact,water allocation using tools like smartsticks,and integrated planning for coordinated efforts in water and sanitation improvement.9 OBJECTIVE AND PURPOSE OF THE RESEARCH In 2022,the CAREC Institute conducted a research project t

104、itled Water Infrastructure in Central Asia:Advancing Sustainable Funding and Involvement of Private Capital.The study shed light on sector-specific challengesincluding the limited coordinated investment planning in the water sector in the Kyrgyz Republic,the Republic of Uzbekistan,the Republic of Ta

105、jikistanindicating that such an approach would not offer viable solutions for infrastructure financing.Instead,it suggested that economic frameworks encouraging cooperation and integrated planning across sectors could be a more effective approach.This strategy aims to take advantage of potential syn

106、ergies,reduce costs,evaluate trade-offs,implement demand-side interventions,and provide decentralized services to ensure the sustainability of infrastructure projects.Within this context,the government could act as a social regulator,ensuring the equitable distribution of water resources among all u

107、sers.Privatization,concessions,or any other private engagement in the water sector is not common in Central Asian(CA)countries.Both ownership and investment in the water sector by private entities have rarely been observed in the region.The primary obstacle is the high degree of regulation and a lac

108、k of clarity regarding the ownership of water infrastructure,as well as an inadequate and unclear water governance system.While water agencies are responsible for the operation and maintenance(O&M)of water infrastructure,ownership rights are often poorly defined.In some cases,ownership is with the m

109、unicipality;in other cases,infrastructure belongs to a different line of ministries or agencies(for example,energy or water supply).This situation also makes it challenging to trace the sources of financing streams.The service fees charged by state water organizations are not fully collected,since w

110、ater users are reluctant to pay for unreliable water supply.However,lately,household water supply fee collection has been improved owing to better metering and infrastructure improvements.For the irrigation water supply,the collected service fee rates are still significantly below the point where th

111、ey can cover a substantial portion of the O&M costs.The countries are trying to increase service collection rates by introducing water metering(Uzbekistan),giving more roles to user organizations(the Kyrgyz Republic)and management organizations(Tajikistan),or giving them the right to keep part of th

112、e fees(Kazakhstan).None of these schemes alone can help solve financing problems in the water sector.Therefore,by identifying water financing governance gaps in each country of focus,the project will shape priority actions that will facilitate the provision of the right finance to the right infrastr

113、ucture.10 IDENTIFIED WATER FINANCING GAPS INCLUDING PRIORITIES KAZAKHSTAN Situational analysis/overview of the water sector General The Republic of Kazakhstan is a landlocked CA country rich in natural resources that borders with the Russian Federation in the north and northwest,the Kyrgyz Republic

114、and Uzbekistan in the south,the Peoples Republic of China in the east,the Caspian Sea in the west,and Turkmenistan in the southwest.Kazakhstan,with its territory of 2.72 million km2,is the worlds ninth-largest country and the population of 20 millionits population density of 7 people per km2is one o

115、f the lowest population densities in the world.1 Most of the population live in either the northeast or southeast,while the central and western regions are sparsely populated.2 The climate of the country is continental and arid.Annual precipitation levels are generally low,less than 100 mm in the de

116、serts,between 250 mm to 350 mm in the steppes,and around 1,500 mm/year in the mountainous regions.Summer thunderstorms often produce flash floods in the steppes.2 Kazakhstans freshwater resources amount to 37,000 m3 per km2.This translates into 6,000 m3 of renewable freshwater per capita per annum,p

117、lacing the country in the middle of OECD member states.3 Surface and groundwater resources are distributed unevenly,with multiyear and annual dynamics across the country.The groundwater resources in the south and east of Kazakhstan exceed demand,while the north,center,and west of Kazakhstan experien

118、ce significant water shortage.The country is struggling with climate change adaptation needs for managing floods and other natural disasters.Floods causing damage to Kazakhstans economy have become more frequent.This can be explained by the increase in water content in most of Kazakhstans mountain r

119、ivers observed over the recent years.The increase in water content in the mountain rivers and flood frequency results from climate change,temperature rise,degradation of mountain glaciation,and increased water loss from glaciers.The temperature rise also causes lowland river reduction and earlier ic

120、e breakup on the upper reaches while the downstream is still covered with ice.The ice jams on lowland rivers,causing floods,as mostly observed on rivers flowing from the south to the north of the country(Syr Darya,Yertis,Yessil,and Tobol rivers).4 An increase in air temperature of 2C by 2030 is expe

121、cted to affect the hydrological regime of all water basins of the country.4 By 2050,the 1 Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan(BNS),2024.Population of the Republic of Kazakhstan as of 1 January 2024.Retrieved on 19 February 2023

122、,from the BNS official website:https:/stat.gov.kz/en/2 UNECE,2019.:3 OECD,2016.Sustainable Business Models for Water Supply and Sanitation in Small Towns and Rural Settlements in Kazakhstan,OECD Studies on Water,OECD Publishing,Paris,https:/doi.org/10.1787/9789264249400-en 4 Ministry of Energy of th

123、e Republic of Kazakhstan,United Nations Development Programme in Kazakhstan,Global Environment Facility(Ministry of Energy,UNDP&GEF),2017.Seventh National Communication and Third Biennial Report of the Republic of Kazakhstan to the UN Framework Convention on Climate Change.Retrieved on 15 October 20

124、21,from https:/kazhydromet.kz/uploads/calendar/29/march_4_file/5f8fd22701e3f7th-national-communication-of-the-rk-to-the-unfcc_2017.pdf 11 temperatures are expected to change in river basins.Projections from 2025 to 2050 show a possible increase of 2.5C,compared with the historical trend,in the Yerti

125、s(Moiyldy and Oba rivers),Nura-Sarysu(Nura and Sarysu rivers),Zhayik-Caspian(Ilekr river),and Yessil(Yessil river)water basins.2 The hydrogeographic territory of Kazakhstan comprises eight river basins,five of which experience a significant deficit of surface and groundwater resources.The four large

126、st river basins together constitute more than 90 percent of water resources and more than 70 percent of available resources of fresh water.2 Seven out of eight river basins of Kazakhstan are formed in neighboring states and are of a transboundary nature.15 groundwater basins are transboundary and ar

127、e exploited jointly with neighboring states(the Peoples Republic of China,CA countries,the Russian Federation).Considering that 44 percent of the surface water is replenished from external sources,the transboundary cooperation in the context of water security of the country is very important and req

128、uires a strategic and integrated approach.5 Figure 0-1:Sources of surface water in Kazakhstan6 5 Government of Kazakhstan,2024.Concept on the Development of the System of Water Resources Management of the Republic of Kazakhstan for 2024-2030.Retrieved on 19 February 2024 from https:/adilet.zan.kz/ru

129、s/docs/P2400000066#z20 6 MWRI,2024.About the Ministry.Retrieved on 19 February 2024 from https:/www.gov.kz/memleket/entities/water/about/structure?lang=ru Kazakhstan54%Uzbekistan15%Kyrgyzstan3%Russia7%China21%12 Figure 0-2:Map of water basins in Kazakhstan2 Kazakhstan experienced accelerated economi

130、c growth from 2000 to 2010 owed mainly to the extraction and exports of natural resources that include hydrocarbons,uranium,coal,iron ore,manganese,chrome ore,nickel,cobalt,copper,molybdenum,lead,zinc,and bauxites.7 Kazakhstan has approximately 12 percent of global uranium reserves.7 Oil and gas are

131、 extracted in the west of the country and are exported mainly to Europe via the Russian Federation.In 2019,the share of crude oil and natural gas production amounted to 43.1 percent of the total volume of industrial production,where crude oil contributed 41.7 percent and natural gas 1.4 percent.8 54

132、.4 percent of the total volume of industrial production comes from mining and metals production.8 The oil and gas and mining and metals-generating industriesconstituting around 30 percent of the national GDP and around 85 percent of the countrys exportsare concentrated in the water basins affected m

133、ost by water stress.In the water sector,the government aims to solve the problems with access to improved sources of drinking water for the urban and rural population and to solve problems with irrigation.One of the major concerns for agriculture is related to water availability:90 percent of irriga

134、ted land in the south of the country benefits from water coming from glaciers in neighboring countries.2 In 2050,Kazakhstans GDP is projected to decrease by 6 percent owing to water shortages.9 By 2040,water consumption is expected to increase by 56 percent and the water deficit will be around 12 bi

135、llion m3.9 Thus,the country urgently needs to find solutions to the problems related to water availability.Kazakhstans water supply sector is fragmented.Multiple public agencies,at different levels,share responsibility for water allocation and use.The Ministry of Water Resources and Irrigation(MWRI)

136、,formed in 2023,is responsible for the reforms in the water sector and for facilitating integrated,7 OECD,2017a.Reforming Kazakhstan:Progress,Challenges and Opportunities.Paris 8 EITI,2020.15th National Report.Retrieved on 13 August 2023 from https:/eiti.org/sites/default/files/attachments/kazakhsta

137、n_2019_eiti_report.pdf 9 MEGNR,2020.Project:Concepts of the State Program of the Water Resources Management for 2020-2030 in Kazakhstan(In Russian).13 collaborative water management on a national level.6 The Committee on the Regulation of Natural Monopolies of the Ministry of National Economy(CRNM)a

138、pproves and regulates water tariffs across the sector.The Committee for Construction and Housing and Communal Services of the Ministry of Industry and Infrastructure Development(CHCSA)oversees the water supply,drainage,utilities,and management of municipal waste.10 The Committee on Environmental Reg

139、ulation and Control of the Ministry of Ecology and Natural Resources(CERC)controls the use and protection of the water fund,the dumping of harmful and radioactive wastes,sewage discharge,as well as regulatory compliance with the maintenance of water quality.11,12 The Committee for Water Resources of

140、 the Ministry of Water Resources and Irrigation(CWR)is the main implementing agency for locally and externally funded rural water supply and irrigation projects.The CWR is responsible for rural water supply development,the construction of group water supply systems,irrigation,drainage,river basin wa

141、ter resources management,transboundary natural water,and water use permits.13 The CWR functioned under the Cabinet of Ministers(1991-1997),the Ministry of Environment and Natural Resources(1997-2002),the Ministry of Agriculture(2002-2013),the Ministry of the Environment and Water Resources(2013-2014

142、),the Ministry of Agriculture(2014-2019),and the Ministry of Ecology and Natural Resources(MENR)(2019-2023).During the annual presidential address on 1 September 2023,the CWR was transferred to the MWRI.At a local level,water regulation falls under either maslikhats(local representatives)or akimats(

143、executive bodies).The akimats own public vodokanals,regulate the water consumption standards for users without meters,appoint the directors of the public water service companies,and approve the investment plans and tariff increase requests before their submission to the CRNM.14 The regulatory contex

144、t for water utilities is not sufficiently comprehensive.There are no specific laws regulating the rights,obligations,and responsibilities of private and public water companies and the three laws regulating the water sector are the Water Code,the Environmental Code,and the Law on Natural Monopolies.T

145、he Environmental Code,adopted in 2021,is the primary legislation governing environmental protection and natural resource management in the country.15 The Law on Natural Monopolies(last amended in February 2017)deals with tariff setting,customer rights,obligations,and procurement oversight for natura

146、l monopolies.The Water Code serves as the basic legal document for water supply and sanitation(WSS)entities.It controls water resources management issues and defines the principles and types of water use and different forms of ownership.The new Water Code is under revision and has not yet been appro

147、ved.The latest amended version was available from 1 May 2023.The Water Code designates the CWR to issue all approvals related to surface and groundwater and to establish the principles of river basin councils,which are advisory bodies of governmental organizations,water user associations(WUAs),and n

148、on-governmental organizations set to jointly resolve issues and implement basin agreements.14 The republican state enterprise(RSE)KazVodKhoza subordinate organization of the CWRmanages the operations,maintenance,and security of water facilities of national importance,as well as the 10 CHCSA,2023.Abo

149、ut the Committee.Retrieved on 3 June 2023 from https:/www.gov.kz/memleket/entities/kds?lang=ru 11 CERC,2023.About the Committee.Retrieved on 3 June 2023 from https:/www.gov.kz/memleket/entities/cerc?lang=ru 12 CRNM,2023.About the Committee.Retrieved on 3 June 2023 from https:/www.gov.kz/memleket/ent

150、ities/krem?lang=ru 13 CWR,2023.About the Committee.Retrieved on 3 June 2023 from https:/www.gov.kz/memleket/entities/water?lang=ru 14 Government of Kazakhstan,2003.Water Code.Retrieved on 3 June 2023 from https:/adilet.zan.kz/rus/docs/K030000481_ 15 Government of Kazakhstan,2021a.Environmental Code.

151、Retrieved on 3 June 2023 from https:/adilet.zan.kz/rus/docs/K2100000400#z4472 14 supply of irrigation and drinking water.The main responsibility of RSE KazVodKhoz is the maintenance,operation,and restoration of hydraulic structures,multipurpose water reservoirs,and water mains held on the balance of

152、 the enterprise.16 In the 1990s,donor institutions concluded that combining the functions of policy setting,operating and managing the water utility,and regulating or governing its operations presented conflicts of interest and were not conducive to the efficient and effective governance of the wate

153、r sector.17,18,19,20 Therefore,reformers and policy advocates prescribed a standard model for reform that involved separating the three sector functions by mandating them to different authorities or entities to improve sector governance.17,21 The water management sector of Kazakhstan needed an indep

154、endent public regulatory agency or commission that was not linked to the utility,for instance,by owning it.7 In 2019,the Ministry of Ecology,Geology,and Natural Resources(MEGNR,restructured and renamed the Ministry of Ecology and Natural Resources or MENR in 2023)was formed to improve water governan

155、ce in the country.22 On 1 September 2023,this function was transferred to the MWRI.The situation in the water management sector is also hampered by a lack of data,insufficient monitoring of quality and implementation of measures to improve efficiency,and low levels of compliance.23 There is no integ

156、rated national database containing critical information on water balance and consumption in various sectors,and no integrated electronic database on the state of the water bodies.23,24 There is a lack of transparency in the system of compliance with regulatory requirements on the part of organizatio

157、ns operating infrastructure facilities,utilities,industrial enterprises,and water users,as well as an inefficient monitoring and control system.23,24 Fragmented ownership and management of assets is also a big problem in the sector.23,24 For instance,the RSE KazVodKhoz manages infrastructure facilit

158、ies on a national level.16 The water sector utilities own the municipal facilities.10 Agricultural infrastructure facilities are owned and operated by akimats(municipalities)or an association of consumer-farmers.23 16 KazVodKhoz,2023.Maintenance and operation of the hydrotechnical structures.Retriev

159、ed on 1 June 2023 from https:/www.qazsu.kz/ru/activity/17 Organisation for Economic Cooperation and Development(OECD),2006.Environmental Finance:Local Capital Markets for Environmental Infrastructure Prospects in China,Kazakhstan,Russian Federation and Ukraine.Retrieved on 5 June 2023 from https:/re

160、ad.oecd-ilibrary.org/environment/local-capital-markets-for-environmental-infrastructure_9789264035966-en#page5 18 OECD,2011.Water Governance in OECD Countries:A Multi-level Approach.Paris 19 Asian Development Bank(ADB),2004.Past Experience and Future Challenges.Cooperation in Shared Water Resources

161、in Central Asia.Water for All;Series 12.Manila 20 ADB,2012.National and Sector Level Risk Assessment and Risk Management Plans for Kazakhstan in Relation to Public Financial Management,Public Procurement System and Anti-Corruption Measures.Manila 21 OECD,2022a.On the approval of the Concept for the

162、development of housing and communal infrastructure until 2026.Retrieved on 3 June 2023 from https:/adilet.zan.kz/rus/docs/P2200000736 22 Kapital.kz 2023.,.Retrieved from on 1 June 2023 from https:/kapital.kz/gosudarstvo/111795/reorganizovano-ministerstvo-ekologii-geologii-i-prirodnykh-resursov-rk.ht

163、ml 23 UNECE,2017.Improving the efficiency of river basin management.Challenges in water resources management and recommendations.Retrieved on 22 May 2023 from https:/unece.org/fileadmin/DAM/env/water/meetings/Water_Convention/2016/Projects_in_Central_Asia/Review_of_the_main_challenges_of_the_river_b

164、asin_principles_implementation_in_Kazakhstan_and_recommendations.pdf 24 UNECE,2019.:.15 The uneven distribution of surface water across the country poses economic and social risks.24,25 Half of the surface runoff is formed in the upstream neighboring countries.Similar to the river basins,there are e

165、ight water management basins in Kazakhstan.24,25 The largest riversYertis,Syr Darya,and Ileoriginate in neighboring countries.24,25 In most of the basins,there is a deficit in both surface and groundwater.24,25 The problem of water shortage has profound consequences for the lower reaches of the rive

166、rs and leads to a lack of irrigation water,a decrease in crop yields,a reduction in the income of the population engaged in crop and livestock production,a reduction in fisheries,a deterioration in the reclamation state of irrigated lands,as well as a lack of ecological releases,which led to the vir

167、tual disappearance of Tugai forests in the lower reaches of the river basins and deepening desertification.24,25,26 The scarcity of water resources is exacerbated by the poor condition of irrigation facilities,high seepage of irrigation canals,lack of advanced irrigation practices,poor technical con

168、dition of treatment facilities and their insufficient capacity,and outdated wastewater treatment technologies used in industrial and mining enterprises.24,25 For all transboundary rivers,bilateral and multilateral agreements on water management have been signed with all neighboring states.27 The bil

169、ateral cooperation of Kazakhstan in the field of water resources does not cover transboundary groundwater.23 As seven out of eight water basins are transboundary,diplomatic agreements with neighboring countries are especially important for Kazakhstan.28 The negotiations on the water intake are compl

170、ex,can take years,and are not completely resolved with some of the neighbors.28 Water relations with the Peoples Republic of China are regulated by the Agreement between the Governments on Cooperation in the Use and Protection of Transboundary Rivers,signed on 12 September 2001.In accordance with th

171、e agreement,two projects were completed in the past 20 years:the Dostyk hydraulic complex on the Khorgos River has been operating since 2013;and a reconstruction of the KazakhChinese joint water intake facility on the Sumbe River was completed in 2018.Water relations with the Russian Federation are

172、regulated by the Agreement on the Joint Use and Protection of Transboundary Water Bodies,signed on 7 September 2010.28 Six working groups on the protection and use of the Zhayik,Yertis,Yessil,Tobyl,Kigach,Karaozen,and Saryozen transboundary rivers meet at least once a year to exchange information on

173、 the hydrological and hydrochemical regime,and the prevention of pollution of the transboundary rivers.29 Kazakhstan cooperates with the Russian Federation in five transboundary basins overall.28 Relations with the Kyrgyz Republic are regulated based on the Agreement on the Use of Interstate Water F

174、acilities on the Chu and Talas rivers,dated 21 January 2000.30 The distribution of operating 25 Global Water Partnership(GWP),2021.Country Brief:Kazakhstan.How water resources management can support climate-resilient development in Kazakhstan 26 Ministry of Ecology,Geology and Natural Resources(MEGN

175、R),2022.State Report on Environmental Condition and on the Use of Natural Resources of the Republic of Kazakhstan in 2021 27 Agency on Strategic Planning and Reforms of the Republic of Kazakhstan(.),2021.20162020.28 UNECE,2020.6.5.2().:https:/unece.org/sites/default/files/2021-11/Kazakhstan_2ndRepor

176、ting_SDG652-WatConv_2020_web.pdf 29 Central Asia Monitor,2020.How Kazakhstan will introduce new technologies to save water.Retrieved on 22 May 2023 from https:/camonitor.kz/36169-kak-v-kazahstane-planiruyut-borotsya-s-deficitom-vody.html(In Russian)16 costs of the interstate water facilities and oth

177、er issues of the joint use of water resources are facilitated by the agreement.30 The water relations with the neighboring states of the Amu Darya and Syr Darya river basins are regulated by the Agreement on the Cooperation in the Field of Joint Management of the Use and Protection of Water Resource

178、s of Interstate Sources,signed on 18 February 1992 by Kazakhstan,the Kyrgyz Republic,Uzbekistan,Tajikistan,and Turkmenistan.29 In 2020,the Ministry of Ecology,Geology,and Natural Resources(MEGNR)signed a roadmap on cooperation with the Ministry of Water Resources of Uzbekistan in the field of water

179、relations between Kazakhstan and Uzbekistan.31 The WSS infrastructure can be owned by national,municipal,or private entities:14 Transboundary,interbasin and interoblast waterworks and the water resources of strategic significance are owned by the central government.Inter-raion,intersector waterworks

180、,and urban water supply networks belong to municipalities.These water networks are financed by local budgets.These entities can generate income through the delivery of water supply services.Other waterworks are privately owned Common governance themes of the water management sector through most hist

181、oric periods have been:20,24 Ensuring water security through diplomatic relationships with the neighboring countries of the Peoples Republic of China,the Russian Federation,Uzbekistan,and the Kyrgyz Republic Issuance of affordable(low)water tariffs to water users Wide acceptance by citizens of the d

182、irectives of government leaders,with little citizen participation Limited experience with holding managers accountable for results or with the requirements of modern public financial management or procurement systems.Existing practice of financing the water sector Kazakhstans Open Budget Index(OBI)s

183、core,compiled by the Open Budget Survey,indicates limited public participation in the planning and control of the state and local budgets and limited audit control.The overall OBI score indicates improvement in budget transparency over the past 11 years,from 38 points out of 100 in 2010 to 63 out of

184、 100 in 2021.32 30 GEF,UNECE,UNDP,2018.:(translated from Russian:Information report on the results of the capacity building program:Development and implementation of a capacity building program for water management in the Chu and Talas River basins).Retrieved on 22 May 2023 from https:/info.undp.org

185、/docs/pdc/Documents/KGZ/Final_report_capacity_building_2018.pdf 31 Information and Analytical Center of Environment Protection(IACOOS),2021.The head of the Ministry of Ecology,Geology and Natural Resources of Kazakhstan Magzum Mirzagaliyev announced the conclusion of an important document with Uzbek

186、istan in the field of water relations.Retrieved on 22 May 2023 from https:/iacoos.kz/2020/07/03/7673(In Russian)32 International Budget Partnership,2023.Kazakhstan Open Budget Index.Retrieved on 2 June 2023 from https:/internationalbudget.org/ru/open-budget-survey/country-results/2021/kazakhstan 17

187、The Budget Code of 2008 governs budget and interbudget relations and establishes basic provisions,principles,and mechanisms of the budget system of the water management sector.14 The budget execution is subject to internal audit and external review by the Supreme Audit Chamber of the Republic of Kaz

188、akhstan(former Accounts Committee)and by the Parliament of the Republic of Kazakhstan.14 Financing the water management sector comes largely from the state budget and official development assistance.23,24 The national budget is developed annually on a rolling three-year basis and is approved into la

189、w by the Parliament of Kazakhstan.14 The state budget is the main instrument used for strategic planning.Financing of water and sanitation services development is normally from the state budget and is administered by the Ministry of Finance(MoF).14 Financial management and allocation of funding in t

190、he water sector Evidence suggests that,despite the legislative frameworks in place,effective implementation and monitoring of the frameworks in the water management sector is weak.20 The governance risk assessment shows that,while Kazakhstan is a fiscally responsible country,(i)it is good at plannin

191、g,but bad at implementation and execution,and(ii)it is good at auditing,but bad at accounting and reporting.20 The financial relationship between line ministries and municipal utilities has evolved over years of practical experience.Although the de facto relationship may seem adequately defined to t

192、he parties of annual budgeting and service delivery,a well-functioning credit market requires a more explicit commitment to budgetary support and contingent liability.17,32 Kazakhstan clearly states that there is no implicit guarantee by the national government of subnational debt.On behalf of the G

193、overnment of Kazakhstan,the Ministry of Finance(MoF)may choose to provide explicit guarantees for subnational borrowing,but in the absence of explicit loan covenants to this effect,the national government bears no liability for repayment of subnational debt obligations.14 This express statement of l

194、aw insulates central fiscal authorities from irresponsible local debt management.It is also a building block for a responsible subnational government credit market,as it requires both borrower and lender to make realistic assessments of the borrowers capacity to repay loans rather than speculate abo

195、ut the probability of bailout by the central government.17 Kazakhstan has set a limit on debt service ratio of 10 percent of total local revenue,a limit on new annual borrowing of 10 percent of total local revenue,and a limit on stock debt of 25 percent of total local revenue.14,24 The MoF reviews s

196、ubnational borrowing for the rural water supply subsector on a case-by-case basis.2 Current laws permit only existing assets to be offered as loan collateral,not future revenues.14 In the absence of specific legislation stating that revenue streams can be offered as collateral for debt,the legal sta

197、tus of such pledges remains in doubt.As the rural water supply subsector is considered unattractive for external investments,the government aims at directing state support primarily to the development of rural water supply.The government has already provided sovereign guarantees for the loans issued

198、 by the IsDB and the European Bank for Reconstruction and Development(EBRD)to the RSE KazVodKhoz to support the restoration of the rural water supply subsector.16 Institutional and capacity challenges present significant risks,particularly as more responsibilities and accountability evolve with an i

199、ncreasing demand for the development of the water management sector.To address these issues,the government:20,23,24 18 Is undertaking a tariff reform program Disseminates the full details of the budget documents to the public Supports private sector participation in publicprivate partnership(PPP)sch

200、emes Finances and co-finances water sector development programs The following sources of funding can be considered for water-related projects at local level:25 Current revenue from the national or local budget Special grants from national budget Investment from the international financial organizati

201、ons contracting with the government(projects co-financed from republican budget)Commercial banks Own funds of enterprises General subsector analysis National planning The updated national development plan of Kazakhstan for 2021-2025 outlines the countrys medium-term vision for economic diversificati

202、on and development.33 The plan focuses on ten tasks,the fifth of which is dedicated to the support of the agricultural sector,efficient water use,and wastewater treatment.34 The government of Kazakhstan finalized the new economic policy(NEP)in September 2022,which is guided by several key principles

203、,including ensuring private property rights,creating a favorable investment climate,promoting fair competition,sound public finance management,reducing administrative barriers,minimizing the states role in the economy,and providing social protection.33 Project financing and governance The Supreme Au

204、dit Chamber carries out a complete and comprehensive external procurement audit.35 Internal procurement audits and quality control are not carried out systematically.The evidence suggests that there are major bottlenecks in domestically financed project procurement,suggesting weak capacities in the

205、regulatory regime.32 Capacity constraints occur in line ministries and water utility enterprises.36 This is especially the case for water management enterprises that have limited experience or training in the procurement systems in place.For instance,RSE KazVodKhoz has been heavily involved in procu

206、rement processes while at the same time attempting to play a monitoring and regulatory role in the projects.33 ADB,2022.PublicPrivate Partnership Monitor:Kazakhstan.Retrieved on 3 June 2023 from https:/www.adb.org/sites/default/files/publication/850386/public-private-partnership-monitor-kazakhstan.p

207、df 34 Government of Kazakhstan,2021b.On amendments to the Decree of the President of the Republic of Kazakhstan dated 15 February 2018 No.636 On approval of the Strategic Development Plan of the Republic of Kazakhstan until 2025 and invalidation of some decrees of the President of the Republic of Ka

208、zakhstan.Retrieved on 3 June 2023 from https:/adilet.zan.kz/rus/docs/U2100000521 35 Government of Kazakhstan,2008.Budget Code.Retrieved on 3 June 2023 from https:/adilet.zan.kz/rus/docs/K080000095_ 36 Accounts Committee for Control over Execution of the Republican Budget of the Republic of Kazakhsta

209、n,2015.Bulletin of the Accounts Committee on the Execution of the Republican Budget#46(IV Quarter of 2015).Astana(in Russian)19 Contract management,part of the procurement cycle,faces major challenges.The performance aspects of an awarded contract,including quality assurance,time,and cost control,ha

210、ve been routinely neglected.20,25 As a result,some bidders have been quoting a very low bid price to take advantage of the weak monitoring of the cost,quality,and time of the contract.7,25 From the perspective of procuring entities and the private sector,the following areas could be considered for f

211、urther improvement:(i)provision in procurement regulations addressing conflicts of interest and specific penalties to punish fraud and corruption in public procurement;(ii)monitoring and assessment of procurement,including data collection and analysis,and report preparation;(iii)civil society involv

212、ement as observers in the public procurement system(PPS)processes.7,20,25 Based on the issues in the PPS,the water management sector is prone to the following governance risks to development effectiveness:3,20 The lack of procurement professionals and competent engineers can lead to loss of contract

213、s,legal disputes,and non-delivery of services Technical specifications could suit favored contractors,precluding competitive procurement Large capital projects present opportunities for large-scale procurement,which can create vulnerability to leakages when transparent procurement processes are not

214、employed Lack of due diligence and eligibility checks during prequalification can allow unsuitable contactors to bid,compromising value-for-money procurement Insufficiently specified bid documents allow low-cost contractors to bid despite lack of expertise,capital,and equipment Preselection of the w

215、inning bidder leads to a short bid evaluation period,compromising the integrity of the procurement process The absence of coherent guidelines for awarding contracts can lead to inconsistent procurement practices as well as disputes Large contracts with service providers in an environment characteriz

216、ed by weak watchdog institutions can provide opportunities for decision makers to make illegal gains Inadequate oversight of contracts and lack of functionality checks can lead to substandard services and facilities,which subvert sound resource uses Limited expertise in strategic planning,contract a

217、dministration,and asset management undermines sector operations Conflict of interest regarding staff appointments,especially senior-level appointments with decision-making authority for the sector and subsectors,can interfere in the performance of staff duties and lead to actions that favor certain

218、contractors and political patrons Analysis of the drinking water supply and sanitation subsectors Financial analysis of the drinking water supply and sanitation subsectors Over the past 20 years,the government of Kazakhstan has made significant efforts to improve WSS services by investing public fun

219、ds in the rehabilitation and development of WSS infrastructure.23,24 The investments undertaken initiallywithin the Drinking Water Program(2002-2010),Ak Bulak Program(2011-2020,discontinued in 2014),Regions Development Program(2015-2020,2020-2025,discontinued in 2022),and Nurly Zhol(2020-2025,discon

220、tinued in 2022)have been adopted to improve the quality of life of the population and the economic potential of the regions by,among others,developing the water management sector and modernizing the sector infrastructure.23,24,34 The sector development programs tend to stop in the middle of implemen

221、tation and almost no information on the outcomes is readily available on public websites.To monitor public spending and improve accountability,participation,and predictability in the water management sector,it is 20 essential to provide information on water development programs on one web portal by

222、different stakeholders,including line ministries and agencies.The Green Kazakhstan 2021-2025 state program was launched in 2021;it was aimed at bettering the environmental situation,including improving air quality,efficient and careful water use,and preserving the ecosystems of Lake Balkhash and the

223、 North Aral Sea.37 The program discontinued on 22 September 2023.The most recent Residential and Communal Infrastructure Development Concepts 2023-2029,proposed by the Ministry of Industry and Infrastructure Development address a constant increase in technological violations in the systems of heat,W

224、SS,and the requirement for more investment in aging infrastructure.Many existing water and wastewater treatment facilities have already exhausted their operational resources and require replacement.To date,out of 89 cities,27 do not have a wastewater treatment plant,and 42 require modernization.38 T

225、here is no financing for repairs,upgrades,and modernization.The Government of Kazakhstan defines tariff policy in the water and sanitation sectors.Water tariffs vary across the country and are regulated by the CRNM.Formally,according to the current tariff regulation,the tariff covers all operating c

226、osts and provides a return on capital.Tariffs are based on actual costs,with lagged adjustments to changes in input prices like electricity plus a percentage markup for profit.35 Water tariff collections in urban and rural regions are projected to repay the loans issued by the IFIs for the renovatio

227、n of the sector.17,23,24,39 The CRNM have been working jointly with EBRD on the development of a framework to improve the tariff regulation of natural monopolies and,using the recommendations,on the implementation of pilot projects in,among others,the water supply sector.23,24 In April 2023,the gove

228、rnment of Kazakhstan announced that,among others,water tariffs will rise depending on the current state of infrastructure in any given region.40 Capacity constraint is also a major bottleneck towards achieving good public financial management(PFM)outcomes.33 In some regional WSS entities,the labor t

229、urnover has been equal to 100 percent.23,24 Low salary,high intensity of work,and poor social benefits package are some of the reasons for the problem.2 Additionally,public institutions do not have the capacity,facilities,or resources to organize and provide extensive training programs in the water

230、management areas.2 Consequently,most graduates with degrees in a water-related specialization(water engineers,37 Government of Kazakhstan,2021c.On approval of the national project Green Kazakhstan.Retrieved on 3 June 2023 from https:/www.adilet.zan.kz/rus/docs/P2100000731 38 Government of Kazakhstan

231、,2022.On approval of the concept for the development of housing and communal infrastructure until 2026.Retrieved on 3 June 2023 from https:/adilet.zan.kz/rus/docs/P2200000736 39 The tariff readjustment schedules need to be negotiated in advance with the CRNM.The World Banks Atyrau Pilot WSS Project

232、financed rehabilitation and replacement of water mains and sewers and was scheduled to repay from tariffs that would be adjusted to recover operating costs and debt service costs(OECD,2006).However,as the WB report states,the lack of management and financial autonomy on the part of the vodokanal mad

233、e it impossible to recover the costs of the project(OECD,2006).The CRNM did not approve any tariff adjustments over the lifetime of the project requiring the Atyrau akimat to cover the costs of the project(OECD,2006).40 Primeminister.kz.2023.Citizens of all Kazakhstan cities and villages to be provi

234、ded with clean drinking water by 2025.Retrieved from the official website of the prime minister of Kazakhstan,on 4 June 2023 from:https:/primeminister.kz/en/news/citizens-of-all-kazakhstan-cities-and-villages-to-be-provided-with-clean-drinking-water-by-2025-23951 21 hydrologists,and so on)do not acq

235、uire practical knowledge in college and,consequently,cannot find a job in the water management sector after graduation.Implications of financial gaps in the drinking water supply and sanitation subsector Kazakhstan aims to develop PPPs in the water supply subsector.33 The water PPP projects are gove

236、rned by the Law on PPPs 2015(amended on 1 May 2023).The government allows 100 percent of foreign ownership of equity in greenfield projects in bulk water supply and treatment,water distribution,and wastewater collection and treatment.Since 2015,the government has been actively promoting PPPs,but no

237、standard contracts for PPPs have been signed yet in the water and wastewater sector.According to the Kazakhstan PPP Center(2023),to date,four projects are at the post-investment stage,three are at the planning stage,and three are at the project preparation stage(Table 0-1).All projects are on a shor

238、t-term basis(re)constructionand have been promoted by local akimats.33 There are no PPP projects at national level.33,41 Several factors that influence the small uptake of PPP models in rural areas in Kazakhstan are(i)lack of experience in applying lease contracts in small WSS supply systems;(ii)lac

239、k of WSS infrastructure and its poor condition,which may not be attractive to the private sector;(iii)small consumer base in rural areas.24,33 The development of PPP models requires a solid legal base and a consolidation of small local markets into larger markets that are more attractive to the priv

240、ate sector.24,33 Table 0-1:PPP projects in water and sanitation sector42 Project Area Project status Cost (million KZT)Initiative type PPP level Major repairs,trust management of the dam in the Sepe village,Atbasar district Dam management Post-investment period 100.9 Competition Local Reconstruction

241、 and construction of the wastewater treatment plant,Konayev City Wastewater treatment Post-investment period 5,895.7 Competition Local Water supply system,Kopa station,Zhambyl region Water supply Post-investment period 123.0 Competition Local Water supply system,Kainar village,Karasay region Water s

242、upply Post-investment period 249.6 Competition Local Water supply system,Zhaysan village,Zhambyl region Water supply Post-investment period 294.4 Competition Local Sanitary cleaning in Arys Wastewater treatment Planning stage 335.4 Competition Local Sanitary cleaning of Kentau city,Turkestan region

243、Wastewater treatment Planning stage 385.6 Competition Local 41 Kazakhstan PPP Center,2023.Project Pipeline.Retrieved on 5 June 2023 from https:/kzppp.kz/ru/pipeline/42 Kazakhstan PPP Center,2023.Project Pipeline.Retrieved on 5 June 2023 from https:/kzppp.kz/ru/pipeline/22 Sanitary cleaning of Kyzems

244、hek,Sozak district Wastewater treatment Preparation stage 108.0 Competition Local Sanitary cleaning of Sholakkorgan,Sozak district Wastewater treatment Preparation stage 171.6 Competition Local Sanitary cleaning of Taukent settlement,Sozak district Wastewater treatment Preparation stage 90.2 Competi

245、tion Local Mechanized cleaning of riverbeds and canals in Shymkent Wastewater treatment Post-investment stage 1,425.2 Competition Local Financial requirement for the development of the drinking water supply and sanitation subsectors Ensuring access to safe drinking water and proper sanitation is ess

246、ential for public health.Investment is needed in drinking water supply systems,water treatment facilities,distribution networks,and wastewater treatment plants.Financing is required to improve access to clean water,especially in rural areas,and to address water quality and sanitation challenges.5 Ka

247、zakhstan requires investments in the construction,rehabilitation,and maintenance of water infrastructure,including reservoirs,canals,pipelines,and treatment plants.This infrastructure is crucial for water storage,distribution,and wastewater management.Financing is needed to fund the initial construc

248、tion and ongoing O&M of these facilities.The existing water supply network in the country needs urgent rehabilitation.43 Between 2000 and 2019,Kazakhstan invested around USD471.1 million in WSS(56.3 percent)and irrigation and water management(43.7 percent)projects.70 On average,60 percent of the cou

249、ntrys water supply and around 70 percent of wastewater disposal systems need replacement and require around KZT515.6 billion for the reconstruction of WSS networks in 86 cities.In 2018 figures it is stated that over KZT1.27 trillion is needed for the construction of new and rehabilitation of old WSS

250、 facilities.44 Analysis of the industrial subsector Financial analysis of the industrial subsector Most major industrial playerssuch as KazMunayGas,KazAtomProm,Tau-Ken Samrukare owned by National Holding Samruk Kazyna.45 Other big players are Kazakhmys,Kazzinc,and KazMinerals.All these companies are

251、 in the natural resources extraction sector.None report the complete treatment and re-use of wastewater.The Ministry of Ecology and Natural Resources(MENR)46 reports that most surface waters are being polluted,in many cases,by the industrial sector.To minimize the 43 Kumenov A,April 2023.Kazakhstan:

252、Steep utility tariff rises to arrive in summer.Prices for power,water and gas may see increases of up to 30 percent.Retrieved on 3 July 3,2023,from https:/eurasianet.org/kazakhstan-steep-utility-tariff-rises-to-arrive-in-summer 44 EBRD,2018.Commercialising the utilities sector in Kazakhstan.Policy p

253、aper on infrastructure.Retrieved on 22 May 2023 from https:/ 45 OECD,2017b.Anti-Corruption Reforms in Kazakhstan.Round 4.Monitoring of the Istanbul Anti-Corruption Action Plan.Paris 46 Ministry of Ecology,Geology,and Natural Resources(MEGNR)(2022).State Report on Environmental Condition and on the U

254、se of Natural Resources of the Republic of Kazakhstan in 2021 23 environmental impact of the extractive industry,the companies need to build industrial wastewater treatment plants and minimize the extraction of surface and groundwater for industrial use and dumping wastewater in storage ponds.Accord

255、ing to NC KazMunayGasa hydrocarbon exploration,production,processing,and transportation operatorin 2021 the company extracted 84.3 million m3 of water resources;in 2020,85.8 million m3;in 2019,93.6 million m3.47 The company extracted:36.85 million m3 from surface water 25.99 million m3 from groundwa

256、ter 3.3 million m3 from urban water supply 18.11 million m3 from the Caspian Sea 0.08 million m3 from wastewater sources The company reports that 24 percent of the water is being re-used,most of it by Atyrau Oil Refinery.The construction of a desalination plant by the company with an estimated capac

257、ity of 50,000 m3 of water per day near the Kenderli recreational area in the Mangistau region is expected to release 6.2 million m3 of Volga River water resources per year.47 In its annual report,KazAtomPromthe national operator for the export and import of uranium,rare metals,nuclear fuel,special e

258、quipment,and dual-use technologiesextracted 91,889,000 m3 of water in 2022 and 101,207,000 m3 in 2021.48 The company extracted:65,000 m3 from surface water(0.07 percent)85,735,000 m3 from groundwater sources(93 percent)6,089,000 m3 from municipal water sources The company reports that mine wastewate

259、r is discharged into a storage pond.In 2022,KazAtomProm invested KZT47.4 million in improving the efficiency of existing dust and gas collection and water treatment plants.48 NMC Tau-Ken Samruk JSC(2021)49Kazakhstani operator for exploration,development,extraction,processing,and sale of solid minera

260、ls,as well as reproduction of the mineral resource base of the countryreports that the discharge of mine wastewater was carried out in accordance with approved permits of the authorized bodynamely,the Ministry of Ecology,Geology,and Natural Resources.In 2021,the company extracted:42,975,000 m3 from

261、groundwater sources 11,000 m3 from municipal water sources 47 KazMunayGas,2022.ESG Agenda:In trend of global challenges.Sustainability Report 2021.Retrieved on 3 July 2023 from https:/www.kmg.kz/upload/iblock/496/eh0hopsa0777d4uzlee0ni80fxx9kb00/%20%20%20_2021.pdf 48 KazAtomProm,2022.NAC Kazatomprom

262、 JSC Integrated Annual Report 2022.Retrieved on 4 July 2023 from https:/www.kazatomprom.kz/storage/07/eng_annual_report_110523_fin4wbwrex2_y2ndvd6cvxnc.pdf 49TauKen Samruk,2021.2021 Annual Report.Retrieved on 4 July 2023 from https:/tks.kz/wp-content/uploads/2022/08/ENG-1.pdf 24 The company reports

263、that mine wastewater is disposed to the storage pond,whereas the sludge formed in the treatment facilities is collected by a specialized organization that transports it to an allocated landfill.49 Therefore,the total volume of wastewater discharge equaled 902,000 m3 in 2021,including 891,310 m3 to t

264、he storage pond,11,000 m3 transferred to third parties,and 47,949 m3 was re-used.The company reports that its main wastewater treatment plant consists of a modular unit with a capacity of 400 m3 dedicated to treating domestic wastewater.49 Kazakhmys is the worlds 20th largest producer of copper in c

265、oncentrate(271,000 tons)and the 12th largest producer of blister and cathode copper(377,000 tons and 365,000 tons,respectively).In 2020,the company ranked third in power generation in Kazakhstan(7,267.54 million kWh).Its business in mining,enrichment plants,and copper smelters is in Balkhash,Zhezkaz

266、gan,and Karaganda.The company reports that 100 percent of the water supplied to its sites in Zhezkazgan comes from the Kengir reservoir,while technical water in Balkhash is supplied from the lake.The company does not specify what amount is being extracted and re-used.The corporate website provides i

267、nformation only on how Kazakhmys has helped the government by supplying drinking water to the cities of Zhezkazgan and Satpayev.50 Kazzinc is a major fully integrated zinc producer with considerable copper,precious metals,and lead credits.51 The company operates in the East,Akmola,and Ulytau regions

268、 of Kazakhstan.The MENR6 reports serious pollution cases of water resources by the company.Kazzinc provides limited information on the water use and recycling.The only information available on the Kazzinc website is that the companys Ust-Kamenogorsk Metallurgical Complex recycles 91 percent of its w

269、astewater and the Ridder and Altay Mining and Concentrating Complexes recycle 100 percent.51 KAZ Minerals is one of the largest copper producers in Kazakhstan and the CIS region.The total water extraction equaled 31.525 million m3 in 2020 and grew to 41.612 million m3 in 2021,consisting of:52 Surfac

270、e water:10.43 million m3 in 2020 vs.17.506 million m3 in 2021 Groundwater wells:21.095 million m3 in 2020 vs.24.106 million m3 in 2021 The company reports that all its mining sites benefit from access to sufficient freshwater sources.52 No information on how much is being recycled is provided by the

271、 company.Financial gaps in the industrial subsector According to their annual reports,the major oil,gas,mining,and metals companies mentioned earlier generate profits from extracting natural resources in Kazakhstan.47,48,49,51,52 The volume of industrial recycled water supply is 9.3 km3,and the volu

272、me of re-used water supply is 1.1 km3.Based on existing production capacities,the industrial enterprises have already reached maximum capacity for water recycling;modernization and construction of new wastewater treatment plants are required to improve the water quality.5 50 Kazzinc,2023.Company-Com

273、munity Relationship.Retrieved on 4 July 2023 from https:/ 51 Kazzinc,2023.Company-Community Relationship.Retrieved on 4 July 2023 from https:/ 52 KAZ Minerals,2021.Water.Retrieved on 4 July 2023 from https:/ Implications of financial gaps in the industrial subsector Water pollution caused by extract

274、ive industries poses a significant environmental concern.These industries release various pollutants(heavy metals,ammonia,and so on)into water bodies,leading to adverse impacts on aquatic ecosystems,human health,and water quality.26 In 2022,six water bodies were classified as best quality(grade 1),2

275、7 as good quality(grade 2),37 as bad quality(grades 3 and 4),eight as the worst quality(grade 5),and 28 water bodies were unsuitable for any type of water use.5 Financial requirements for the development of the industrial subsector While re-using water,very few extractive enterprises re-use treated

276、wastewater.As the evidence suggests,most of the companies in Kazakhstan do not have industrial wastewater treatment plants;they either dump the wastewater in the tailing dams or treat it at municipal wastewater treatment plants from where it gets discharged.26,53,54 As such options increase water ne

277、eds and pollute surface and groundwater resources,land,and air,these companies need to be encouraged to build wastewater treatment plants.Analysis of the land reclamation and irrigation subsectors Financial analysis of the land reclamation and irrigation subsectors Between 2000 and 2019,out of the U

278、SD195.6 billion of tracked investments,water projects(water supply,irrigation,water resources management)accounted for only USD471 million(0.24 percent).Between 2006 and 2010,investment in irrigation was less than USD20 million annually.This level of investment was inadequate to maintain the extensi

279、ve irrigation facilities spanning millions of hectares in the country.33 In 2014-2015,annual investment reached USD250 million,in an attempt to address the growing water demand and improve the water infrastructure in Kazakhstan.Projections suggest that by 2030,the demand for water in Kazakhstan will

280、 surpass the available water supply.This indicates a potential water shortage unless adequate measures are taken to manage water resources efficiency,improve infrastructure,and implement water conservation measures.33 Financial gaps of the land reclamation and irrigation subsectors Water availabilit

281、y is a limiting factor for the development of the agricultural and industrial sectors of Kazakhstan.Farmers pay for water use in cash or instant bank transfers supported by Kaspi Bank to the social entrepreneurial corporations supervised by KazVodKhoz.The agriculture sector,especially small farmers,

282、is at risk of being dependent on the will of the intermediary company,increasing the risks of corruption.55 Of all the water lost during transportation,90 percent comes from the agricultural sector.One of the major reasons for this is the wear of water facilities.Most dams in Kazakhstan were constru

283、cted 40 53 Water Resources&Marketing,2023.19 May 2023 news.Retrieved on 5 June 2023 from https:/www.wrm.kz/rus/index.html#potreb 54 Zakon.kz 2016.When emitting hydrogen sulfide in Aktobe,the deputy asked to warn:do not breathe.Retrieved on 2 June 2023 from https:/www.zakon.kz/4819309-pri-vybrosakh-s

284、erovodoroda-v-aktobe.html 55 Khabar,2022.Journalistic Investigations.Retrieved on 5 June 2023 from https:/ 26 to 50 years ago and their depreciation will intensify in the coming years.4 The average wear of the dams is 40 percent and canals 60 percent to 80 percent.This results in an efficiency drop

285、of 50 percent.Out of the total amount of water consumed,the water lost during transportation equals around 60 percent for the agricultural sector,40 percent for the industrial sector,and around 50 percent for the municipal sector.26 The overwhelming majority of on-farm canals,which passed into the o

286、wnership of water users,remained ownerless and became unusable.As a result,there is a low efficiency in distribution networks,large water losses,rising groundwater,and salinization of adjacent lands.Low water tariffs lead to inefficient water consumption by the agricultural sector;discourage the ado

287、ption of water-saving technologies and crops;and prevent the proper maintenance,operation,and repair of irrigation systems.Economically justified water tariffs will ensure a return on investment for private stakeholders and promote water-saving practices in all sectors of the economy.These measures

288、will be supported by the provision of subsidies to economically vulnerable population groups and farmers.56 Implications of financial gaps in the land reclamation and irrigation subsectors 3,573 km(30 percent)of the main canals that are national property and in a critical state were repaired by the

289、end of 2020.Consequently,non-revenue water in the main canals has dropped to 20 percent.Most inefficient water use is observed in local irrigated agriculture,where 40 percent of water transported through inter-farm and on-farm canals does not reach the fields.5 Financial gaps in the land reclamation

290、 and irrigation subsectors lead to high volumes of water losses during transportation,land salinization,the rise of groundwater,frequent flooding,and the further deterioration of the existing infrastructure.All these contribute negatively to food safety and the security of the country.Financial requ

291、irements for the development of the land reclamation and irrigation subsectors Kazakhstans agricultural sector accounts for around 4 percent of its GDP and consumes 60 percent of the total water intake.1,5 Approximately 75 percent of the countrys land is suitable for agriculture,but only around 30 p

292、ercent of the territory is used for agricultural production.57 The Concept for the Development of the Water Resources Management System of the Republic of Kazakhstan for 2024-2030 has outlined the target indicators shown in Table 2-2 for the next five years.5 56 United Nations,2020.Kazakhstans trans

293、ition to a green economy:A stocktaking report 57 Deloitte,2019.Business outlook in Kazakhstan.Deloitte CIS Research Centre.Retrieved on 10 September 2021 from https:/ 27 Table 0-2:Target indicators to reach within the next five years outlined by the Concept for the Development of the Water Resources

294、 Management System of the Republic of Kazakhstan#Indicator Unit 2024 2025 2026 2027 2028 2029 2030 1 Level of water losses in agriculture during transportation through main and inter-farm canals (from 50%to 25%)%50 47 43 39 35 30 25 2 Volume of additionally accumulated water (increase by 2.4 km3)km3

295、-0.5 1.0 1.5 2.0 2.4 3 Saving irrigation water through the introduction of water-saving technologies in irrigated farming million m3/year 135 230 300 400 500 600 690 4 Level of irrecoverable water consumption and losses during transportation in industry(decrease from 26%to 20%)%26 25 24 23 22 21 20

296、5 Coverage of water infrastructure with digital technologies (growth to 40%by 2030)%0 5 10 16 24 32 40 6 Volume of inflow into Lake Balkhash (at least 12 km3/year)km3/year 12 12 12 12 12 12 12 7 Volume of the Northern Aral Sea(increase from 20 km3 to 27 km3)km3 20 20.6 21.2 22 23 25 27 8 Level of pr

297、essure on water resources:8.1 In the Aral-Syr Darya water basin(decrease from 57.2%to 53.2%)%57.2 57.2 56.7 56.2 55.2 54.2 53.2 8.2 In the Shu-Talas water basin(decrease from 56.8%to 52.8%)%56.8 56.8 56.3 55.8 54.8 53.8 52.8 The MWRI envisions that the following results will be reached by 2030:1.Red

298、uction of water losses to 690 million m3 per year through reconstruction and repair work on 14,450 km of irrigation network.2.Commission of 20 new reservoirs and reconstruction of 15 existing reservoirs.3.Creation of an information and analytical center for water resources in the form of a non-profi

299、t joint-stock company under the MWRI.28 4.Creation of a national hydrogeological service in the form of a non-profit joint stock company under the MWRI.5.Digitalization and automation of water accounting on main and inter-farm irrigation canals.6.Creation of the local production of water-saving irri

300、gation technologies,and water measuring instruments and installations.7.Development of the digital geoservice flood.gharysh.kz for flood modeling and forecasting.8.Development of an interactive geoinformation platform on water resources of the Republic of Kazakhstan hydro.gov.kz.9.Signing of additio

301、nal three agreements between the Republic of Kazakhstan and neighboring countries in the field of joint management and use of transboundary water bodies.The digitalization of the water sector will require substantial funding to train staff and build and operate the infrastructure.5 The concepts acti

302、on plan will be financed from the state budget.5 The following budget has been allocated from the state budget for the management of the water sector by the MWRI in 2024-202658:Effective water resources management:in 2024KZT101,285,086;in 2025KZT80,283,479;in 2026KZT28,038,045 Increase of accessibil

303、ity of knowledge and scientific research in the water sector:in 2024KZT800,000 Services for coordinating activities in the field of use and protection of water resources,water supply,and sanitation:in 2024KZT8,393,191;in 2025KZT6,806,717;in 2026KZT6,829,876 Services for coordinating activities in th

304、e field of use and protection of water resources,water supply,and sanitation:in 2024KZT8,393,191;in 2025KZT6,806,717;in 2026KZT6,829,876 Summary/results of the review of the critical financial needs of the water sector,concentrating mostly on major infrastructure,including priorities General recomme

305、ndations While PPP legislation has undergone major improvements in 2022,the procedures remain complex.The regulations on the investment compensation do not set a clear investment return timeframe for the PPP projects.This gap in the legislation increases the risks of vulnerability to corruption at t

306、he contract award stage.33 Factors such as inconsistent financial returns push potential investors away from the water sector.59 The war in Ukraine and the effect of secondary sanctions from the West make most of the investment projects in the country highly risky.60 Blended finance is increasingly

307、advised by the World Bank(WB)and OECD.Blended finance aims to make a project bankable for private investors.The bankability of water projects depends on the 58 Law of the Republic of Kazakhstan dated 5 December 2023,#43-VIII.On the Republican Budget for 2024-2026.Retrieved on 19 February 2024 from h

308、ttps:/zakon.uchet.kz/rus/docs/Z2300000043 59 McCoy W&Schwartz K,2023.The water finance gap and multiple interpretation of bankability.Water,Sanitation&Hygiene for Development,13(1):19,doi:10.2166/washdev.2022.201 60 World Bank,2023.Kazakhstan Economic UpdateSpring 2023.Retrieved on 2 June 2023 from

309、https:/www.worldbank.org/en/country/kazakhstan/publication/economic-update-spring-2023 29 risk/return profile that a potential investor is willing to accept.59 Thus,in the medium term,to attract private investment in the water sector,the government needs to mitigate the environmental risks imposed b

310、y water-polluting industries and solve the problem of rural water governance.Recommendations for overcoming financial gaps in the drinking water supply and sanitation subsectors Based on the issues in the PFM system,the water management sector is prone to the following governance risks to developmen

311、t effectiveness:20,61 Inadequate financial management capacity(computerized planning,executing,monitoring,and reporting)in sector agencies and utility enterprises can impair sector performance and optimal resource uses The mismatch between planned funding requirements,budgetary allocation,and actual

312、 fund releases can lead to significant delays in implementing projects Inadequate revenue streams to cover operations and maintenance costs,including depreciation,can lead to poor service quality and undermine new investments Weak enforcement of internal controls on revenue and expenditure managemen

313、t can lead to the diversion of funds to unauthorized uses,mismanagement,and fraud Weak accounting systems and record-keeping practices can hamper the provision of timely and adequate information on revenue streams,expenditure flows,liquidity,and debt levels Incomplete recording of transactions owing

314、 to technical weaknesses and disregard for comprehensiveness and accuracy can obscure fraudulent activity,impede auditing,and restrict management control Recommendations for overcoming financial gaps in the industrial subsector The industrial subsector is the second-biggest water consumer.40 percent

315、 of all water transported to the sector is non-revenue water.One of the main reasons for this is the aging infrastructure.26 Frequently,the industrial sector uses municipal wastewater treatment plants to treat the industrial wastewater,which harms both the WWTP and the environment(heavy metals canno

316、t be treated by a municipal WWTP).26 To close the financial gaps in the industrial water management sector,the government needs to reinforce the polluter pays principle.17,18 Weak enforcement of environmental standards for industrial and agricultural wastewater discharge lead to ongoing water pollut

317、ion,environmental degradation,and social and economic risks.33 Recommendations for overcoming financial gaps in the land reclamation and irrigation subsectors The agricultural sector is the countrys largest water consumer(60 percent).26 90 percent of all water lost during transportation(non-revenue

318、water)comes from this sector.24,25 Currently,hardly anyone accepts responsibility for the operation and technical condition of the irrigation infrastructure that distributes water from the water intake to the fields.Most on-farm canals,which passed into the ownership of water users,remained practica

319、lly ownerless and became unusable.23 This resulted in a low efficiency of distribution networks,large water losses,rising groundwater levels,and the salinization of adjacent lands.23 The main recommendations have been to incentivize farmers to save water by using subsidized water-saving technologies

320、 and by increasing water tariffs.23,25 Degraded 61 ADB,2010.Governance and Anticorruption in Project Design.Office of the General Counsel Guide.Manila 30 land,the uneven distribution of water resources across the country,high amounts of non-revenue water,and frequent corruption cases in the national

321、 state enterprise KazVodKhoz make the rural water management sector particularly unappealing to private investors.The government provides sovereign guarantees to international financial organizations to borrow money to build and reconstruct the rural water infrastructure.To close the financial gaps

322、in the rural water management sector,the medium-term recommendation is to solve the rural water governance problems by hiring qualified managers to the RSE KazVodKhoz to eliminate any corruption in the sector,deliver high-quality projects,and digitalize the water canals across the country.Challenges

323、 and measures for effective water management based on an ecosystem approach Challenges in the water management sector pose collective risks for all sectors of the economy that require a unified approach.Adoption of an ecosystem-based approach that considers the interconnectedness of water resources,

324、ecosystems,and human activities promotes sustainable and resilient water management.The following are the identified challenges and proposed sustainable measures for the water sector of Kazakhstan:Challenges 1.Water scarcity 2.Irrigation inefficiency 3.Transboundary water management 4.Water pollutio

325、n 5.Infrastructure aging 6.Climate change impact Proposed sustainable measures 1.Integrated water resources management principles support the optimization of the use of water resources,considering the environmental,social,and economic factors.62 2.Investments in modern water infrastructure are neces

326、sary to reduce water losses,enhance efficiency of water use,and meet the increasing demand for water resources by all sectors of the economy.63 Examples of modern water infrastructure investment include the implementation of smart water meters;advanced water and wastewater treatment plants;smart irr

327、igation systems;the construction of distributed water storage facilities;the deployment of advanced leak detection technologies;the application of remote sensing and satellite technologies;and the implementation of decentralized small-scale water purification units for remote or underserved communit

328、ies.64 62 Meran G,Siehlow M,&von Hirschhausen C,2020.Integrated Water Resources Management:Principles and Applications.The Economics of Water,23-121.Retrieved on 25 January 2024 from https:/ 63 United Nations,n.d.Water Infrastructure and Investment.High Level Panel on Water.Retrieved on 25 January 2

329、024 from https:/sustainabledevelopment.un.org/content/documents/hlpwater/08-WaterInfrastInvest.pdf 64 OECD,2022.Financing a Water Secure Future.OECD Publishing,Paris.Retrieved on 25 January 2024 from https:/www.oecd.org/environment/resources/policy-highlights-financing-a-water-secure-future.pdf 31 3

330、.Climate-resilient development gives the highest priority to reducing exposure and vulnerability to climate hazards,including water-related hazards.65 The key initiatives include the implementation of water conservation programs to promote efficient water use in households,industries,and agriculture

331、;the implementation of floodplain management strategies for effective flood control;water quality monitoring and management;the monitoring and regulation of groundwater extraction to prevent overextraction and depletion.66 4.Pollution prevention and control:The Government of Kazakhstan is strongly a

332、dvised to enforce and strengthen regulations to prevent water pollution and improve wastewater treatment systems.67 5.Education and awareness programs shall target communities,emphasizing the collective importance of water conservation,sustainable resource management,and pollution prevention.68 6.In

333、ternational cooperation:Active cooperation with the neighboring countries on transboundary water management by sharing data and developing joint strategies to address shared water challenges is the measure necessary to ensure sustainable and fair water consumption by all stakeholders.69 KYRGYZ REPUBLIC Situational analysis/overview of the water sector General The energy and transport sectors domin