Kyrgyz Republic Higher Education Quality and Innovation Project (P178592) 1st Implementation Supervision Mission June 7-11, 2024 AIDE MEMOIRE I. Introduction 1. A World Bank (Bank) team 1 conducted the 1st Implementation Supervision Mission for the Higher Education Quality and Innovation Project (HEQIP) from June 7-11, 2024. The main objective of the mission was to conduct a progress review of the progress in achieving the effectiveness conditions, initial project launching activities, and the preparation for the Centers of Excellence (COE) and to agree on the next steps. 2. The team met with the senior officials from the Ministry of Education and Science of the Kyrgyz Republic (MoES), rectors and vice-rectors of the Kyrgyz State Technical University named after I. Razzakov (KSTU), the Kyrgyz State National University named after J. Balasagyn (KSNU), the Osh State University (OshSU), the Kyrgyz National Agrarian University (KNAU) named after K. I. Skryabin, and representatives of the expert community (please see the detailed list in Annex 1). Key findings and agreed next steps were discussed with the Deputy Minister Mr. Rasul Abazbek Uulu on June 7, 2024. The team would like to express its appreciation to the above officials for their commitment and leadership and for their collaboration during the mission. The final Aide Memoire was endorsed by the Bank management. II. Project data and milestones Table 1: Key Project Data Project Data As of June 2024 Project Amount US$25 m Total Disbursement US$ 0 m (the project is not effective yet) Closing Date Nov 30, 2029 Table 2: Ratings Project Components As of June 2024 PDO Satisfactory Implementation Progress (IP) Satisfactory Component 1 Satisfactory Component 2 Satisfactory Component 3 Satisfactory Project Management Satisfactory M&E Satisfactory 1 The mission comprised Mr. Shiro Nakata (Senior Economist, Co-Task Team Leader), Ms. Gulmira Sultanova (Education Specialist, Co-Task Team Leader), Mr. Adis Medetov (Procurement Specialist), Ms. Aliya Kim (Senior Financial Management Specialist), Ms. Syrga Asanalieva (Social Development Specialist), Mr. Almaz Asipjanov (Environmental Specialist), and Ms. Meerim Sagynbaeva (Program Assistant). Procurement Satisfactory Financial Management Satisfactory Safeguard Satisfactory III. Implementation Progress and Key Findings A. Overall Progress 3. Progress towards the parliament ratification of the project is on track. The project has been cleared by three committees of the Parliament and commenced the final approval stages. The ratification process is expected to be finished by June 30, 2024. 4. Effectiveness Conditions: The project has two additional effectiveness conditions: (i) the adoption and disclosure of Environmental and Social Management Framework (ESMF) and (ii) hiring of three key additional staff to the Project Coordination Unit (PCU), including a new Project Director (PD), procurement specialist, and disbursement specialist. The effectiveness deadline is September 2, 2024. The MoES has made good progress in finalizing the ESMF. 5. Key Agreed Actions:The MoES/PCU will (a) adopt and disclose the final ESMF by July 31, 2024; (b) draft TORs for the new PD, new DPD and procurement specialist, and share them with the Bank for no- objection by July 10, 2024 based on the discussion of the implementation arrangements of the PCU; and (c) initiate and complete the hiring process for the two staff by August 31, 2024. It is expected that the project will become effective by August 31, 2024. 6. Legal Covenants: The project is required to, within two months from the effectiveness, (i) establish Research and Innovation Board (RIB) and (ii) prepare and adopt Project Operations Manual (POM), including the Center of Excellence (COE) Operations Manual (OM) and Academic Innovation Fund (AIF) OM. The PCU prepared the first drafts of POM, COE OM, and AIF OM. 7. Key Agreed Actions: The MoES/PCU will (a) share a draft TOR for RIB with the World Bank team by July 31, 2024; (b) complete the drafting of COE OM and share it with COE host universities by July 31, 2024; (c) complete the drafting of POM and COE OM and share them with the MoES for approval by August 31, 2024; (d) complete the drafting of AIF OM and share it with MoES for approval by September 30, 2024; and (e) establish RIB with an internal order of the MoES by September 30, 2024. B. Component-wise Progress: Component 1 – Strengthen the quality and relevance of research and innovation and teaching programs at selected higher education institutions 8. The component aims to enhance the institutional capacity for producing high-quality research and enhancing the quality and job-market relevance of academic programs in the five universities with the special status through the establishment of COEs. Key progress include: (a) the five universities presented their plan for establishing COEs in their respective fields and (b) the five universities were consulted on the format for the strategic development plan (SDP). It was agreed that the Water Management COE will be established under the collaboration and division of labor between KSNU and KSTU with technical advice from KNAU. 9. Key Agreed Actions: The five universities will prepare the first draft SDPs based on their proposed COE plans by October 31, 2024 and the final draft SDP by December 31, 2024. KSNU and KSTU will continue technical discussions under the guidance of MoES to agree on the modality of collaboration and division of labor for establishing the Water Management COE. Component 2 – Build capacity for research and innovation of universities 10. This component aims to foster research and innovation through grant provision from a competitive funding mechanism through the establishment of AIF. The MoES established a new Science Fund within the Ministry to manage grants from the Ministry’s own funding as well as AIF. It was agreed that the AIF Secretariat will be established within the Ministry as part of the Science Fund. C. Fiduciary: 11. Procurement: The PCU at the MoES will be responsible for implementing the procurement function under the project, including procurement planning, procurement process, and contract management. The PCU has extensive prior experience in implementing World Bank-financed projects. The procurement arrangements at the PCU have been reviewed regularly as part of the existing projects' procurement supervisions and assessed as adequate and satisfactory by the World Bank. Considering the experience and existing capacity at the PCU for the project implementation, procurement arrangements are considered to be overall in place but will need to be strengthened by: (a) developing the POM, including the project specific procurement arrangements; and (b) recruiting an additional procurement specialist dedicated to working under the project. 12. The overall project procurement risk is assessed as Substantial. Revealed risks will be mitigated through requirements for proper fiduciary implementation arrangements of the project, including requirements for the adoption of POM, hiring of competent fiduciary staff, capacity building through customized training, and strong supervision.During the mission the following discussions were conducted and estimated timeline was agreed: 1. Preparation of the POM for the project. 2. Entering the negotiated procurement plan to the World Bank’s STEP system. 3. General Procurement Notice (GPN) publication. PCU agreed to complete POM preparation by August 31, 2024, and all STEP related tasks by June 30, 2024. 13. Financial Management: Financial management (FM) arrangements, including budgeting and planning, accounting and financial reporting, flow of funds, internal controls and external audits are overall satisfactory at this stage. Financial management conditions agreed during the project preparation include: (i) contracting of dedicated disbursement specialist/accountant; (ii) have automated accounting software in place that is capable of recording transactions and generate financial reports under the project; and (iii) document FM arrangements, including internal controls in the POM and COE OM, are not yet due. Implementation of those conditions will be closely monitored by the World Bank team. D. Environmental and Social Risk Management: 14. The Environmental and Social risks are Moderate, and identified risks will be mitigated through the measures provided in the Environmental and Social Management Framework (ESMF) of the project. As per the project’s Environmental and Social Commitment Plan (ESCP), which is part of the Financing Agreement, adoption and disclosure of the ESMF is the project effectiveness condition. In order to simplify the draft ESMF prepared and consulted with public in December 2022, MoES PCU revisited it using the ESMF template recommended by the Bank for moderate risk projects. The revised draft ESMF will be reviewed by the Bank, consulted with public, finalized and disclosed by July 31, 2024. 15. In addition, the Bank team reminded to the MoES and PCU to ensure the project’s compliance with the project’s ESCP, including (i) submission of the first report on the ESCP implementation three months after the Effective Date, (ii) development of selection criteria and transparent selection mechanism for implementing the activities to support universities under the AIF activities under Component 2 as part of the AIF OM, which shall be consulted upon and disclosed, and (iii) establishment the project’s grievance mechanisms prior to hiring Project workers and prior to commencement of project activities. IV. NEXT STEPS AND AGREED ACTIONS No. Action Responsible Due Date Progress Overall 1 Complete the ratification of the project MoES June 30, 2024 2 Adopt and disclose ESMF MoES/PCU July 31, 2024 Complete the hiring of the Project Director 3 and procurement specialist PCU August 31, 2024 4 Finalize POM and COE OM PCU August 31, 2024 September 30, 5 Finalize AIF POM PCU 2024 September 30, 6 Establish RIB by the Ministry’s internal order MoES 2024 Component 1 KSNU, September 30, Hold joint technical meetings on water KSTU, 2024 1 management COE KNAU, MoES October 30, 2 Prepare the first draft SDPs COEs 2024 December 31, 3 Prepare the final draft SDPs COEs 2024 Fiduciary Enter negotiated procurement plan to STEP June 30, 2024 1 PIU system 2 Publish GPN in STEP PIU June 30, 2024 16. Next mission: The next implementation support mission is tentatively scheduled for October 2024. Annexes: Annex 1: List of officials met Annex 1: List of officials met and composition of World Bank (WB) team Name Title Ministry of Education and Science Mr. Rasul Abazbek Uulu Deputy Minister Ms. Aynura Isirailova Head of the Secondary and HigherVocational Education Department Higher Education Institutions Experts Mr. Beksultanov J. Vice-Rector of the Kyrgyz State University Mr. T. Abdyrahmanov Rector of the Kyrgyz State National University Mr. Kudayberdi Kozhobekov Rector of the Osh State University Mr. Aknazarov B.K. Dean of the Faculty of Technology and Bioresources/ Professor/Doctor of Veterinary Sciences Ms. G.K. Sadyrova Head of the Department of Quality, Accreditation and Licensing / Candidate of Philosophy /Associate Professor Mr. Akhmedjanov M.A. Head of Laboratory of Virology and Biotechnology/ Candidate of Biological Sciences Ms. G. M. Kudakeeva Deputy Director, Kyrgyz State Technical University by Razzakov Ms. T.D. Kabaeva Director of Institute, Kyrgyz State Technical University by Razzakov Mr. M.A. Kasymov Head of Faculty, Kyrgyz State Technical University by Razzakov Mr. M.A. Akhedjanov Head of Laboratory, Kyrgyz National Management Academy by Skryabin Ms. Shafika Suleimanova Faculty Dean, Kyrgyz National University of J. Balasagyn Ms. R.K. Sarymzakova Professor, Kyrgyz National University of J. Balasagyn Mr. Timur Bektursunov Head of Faculty, Kyrgyz National University of J. Balasagyn Other representatives of above-mentioned Universities Project Implementation Unit under the MoES Ms. Anara Ainekenova Director PCU team World Bank Task Team Mr. Shiro Nakata Senior Economist, Co-Task Team Leader Ms. Gulmira Sultanova Senior Education Specialist Ms. Syrga Asanalieva Social Development Specialist Mr. Almaz Asipjanov Environmental Consultant Mr. Adis Medetov Procurement Consultant Ms. Meerim Sagynbaeva Program Assistant