Document of
                                          The World Bank


                                                                                 Report No: 73415-KG




                                    RESTRUCTURING PAPER

                                                  ON A

                          PROPOSED PROJECT RESTRUCTURING

                                                    OF

                  AGRIBUSINESS & MARKETING PROJECT (P049724)

                                          CREDIT 4015-KG
                                          PHRD TF053554


                                        DECEMBER 14, 2004

                                                TO THE

                                        KYRGYZ REPUBLIC


                                        NOVEMBER 19, 2012




AGRICULTURE AND RURAL DEVELOPMENT
SUSTAINABLE DEVELOPMENT DEPARTMENT
EUROPE AND CENTRAL ASIA REGION


This document has a restricted distribution and may be used by recipients only in the performance of their
official duties. Its contents may not otherwise be disclosed without World Bank authorization.
                  ABBREVIATIONS AND ACRONYMS

ABCC   Agribusiness Competiveness Center
FTTC   Food Technology Training Center
KSTU   Kyrgyz State Technical University
PDO    Project Development Objective
PFI    Participating Financial Institution
PHRD   Policy and Human Resources Development Grant




          Regional Vice President:        Philippe Le Houérou
                 Country Director:        Saroj Kumar Jha
         Sector Manager / Director:       Dina Umali-Deininger
                Task Team Leader:         Talaibek Koshmatov
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         KYRGYZ REPUBLIC — AGRIBUSINESS & MARKETING PROJECT
                               P049724
                       CREDIT 4015-KG; TF053554

                                  Restructuring Paper

1.      The closing date for the Kyrgyz Republic, Agribusiness and Marketing Project
(Credit 4015-KG, TF053554; P049724), both in respect of the IDA financing and PHRD-
provided financing, is proposed to be extended from November 30, 2012 until March 31,
2013.

2.      The Kyrgyz Republic Agribusiness and Marketing Project, financed by an IDA
Credit (US$8.1 million) in combination with a PHRD Co-financing Grant from the
Government of Japan (US$4.75 million), was approved on December 14, 2004 and
became effective on May 02, 2005. Of the IDA Credit, 92.3% and 100% of the PHRD
Grant have been disbursed. The Project works directly with private enterprises and
producer and other commercial organizations to improve the competitiveness of Kyrgyz
products. Most of the project’s activities were completed by June 30, 2012, with good
results contributing towards achievement of the Project’s Development Objective (PDO).

3.      The project has assisted 42 agro-processing enterprises with improvement of
technological processes, marketing, sales, and financial management and accounting.
Some 68 new products were introduced in client enterprises contributing to increase in
sales and profits. The Market Development Service (MDS) facilitated 142 trade deals
resulting in sales of 54,000 tons of products with a total value of US$17.5 million, of
which 89% went to the export market. In addition, the MDS has provided information
and consulting services to 1,971 clients. Under the credit line, 81 borrowers (including 11
cooperatives) have received sub-loans in the total amount of US$5.03 million, and
additionally 27 sub-loans in the total amount of US$1.73 million have been financed by
the Participating Financial Institutions (PFIs) from reflows. Overall investments in the
agribusiness sector generated through the credit line amount to about US$14.8 million.

4.     At this time, only activities related to the establishment of the Food Technology
Training Center (FTTC), which is being set up at the Kyrgyz State Technical University
(KSTU), are still on-going and require extension of the project’s closing date.

5.      The reason for this extension is the delays experienced during the procurement of
equipment for the FTTC. It was necessary to re-tender equipment for the dairy, cereals
and fruits & vegetables processing lines for an approximate value of US$ 0.5 million.
The initial tender resulted in limited number of offers far exceeding the available budget.
The revised composition of lots has resulted in successful selection of a supplier for the
dairy and cereals processing lines. Only more time is required for contracting, delivery
and installation. This extension will equip the FTTC to train university students and
private companies from the agriculture processing sector on modern technologies in food
processing and food safety. Non-extension of the project closing date would leave the
FTTC incomplete, after about US$ 360,000 of project funds spent on civil works for the
reconstruction of the building.


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6.     The project rating on financial management is “Satisfactory” and the project has
no audit reports pending.

7.      This will be the fourth project restructuring and the fourth extension of the
project. The total period of extension is 2 years and 3 months.




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