Document of The World Bank FOR OFFICIAL USE ONLY Report No: 74835-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 FEBRUARY 19, 2013 ABBREVIATIONS AND ACRONYMS FTTC Food Technology Training Center IDA International Development Association KSTU Kyrgyz State Technical University PDO Project Development Objective PHRD Policy and Human Resources Development Grant Regional Vice President: Philippe Le Houerou Country Director: Saroj Kumar Jha Sector Manager: Dina Umali-Deininger Task Team Leader: Talaibek Koshmatov 2 KYRGYZ REPUBLIC – AGRIBUSINESS & MARKETING PROJECT P049724 CREDIT 4015-KG / PHRD TF053554 Restructuring Paper 1. Proceeds for the Kyrgyz Republic, Agribusiness and Marketing Project (P049724), Cr.4015-KG will be reallocated as follows: Category of Expenditure Allocation, SDR % of Financing Current Revised Current Revised Current Revised (1) Public Sector (1) Public 637,000.00 980,368.25 100% 100% Investments Sector Investments (2) Goods (2) Goods 61,131.75 61,131.75 100% 100% (3)Consulting (3)Consulting 430,800.00 195,000.00 100% of 100% of services, training services, local local and audit training and expenditures; expenditures; audit 90% of 90% of foreign foreign expenditures expenditures (4) Sub-loans (4) Sub-loans 3,350,000.00 3,347,600.00 100% of 100% of eligible Sub- eligible Sub- loans loans disbursed by disbursed by the PFIs by the PFIs by December December 31, 2006, and 31, 2006, and 80% 80% thereafter thereafter (5)Operational (5)Operational 491,868.25 415,000.00 100% 100% costs costs (6)Undistributed (6)Undistribute 0.00 0.00 d (7) Sub-grants (7) Sub-grants 529,200.00 500,900.00 100% 100% Total 5,500,000.00 5,500,000.00 2. The Kyrgyz Republic Agribusiness and Marketing Project, financed by an IDA Credit (SDR 5.5 million, US$8.1 million equivalent) and 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 2, 2005. Currently, 92.3% of the IDA credit and 100% of the PHRD Grant have been disbursed. 3. Most of the project activities were completed by June 30, 2012, with good results contributing towards achievement of the Project’s Development Objective 3 (PDO). 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. Establishment of the FTTC will improve the capacity and knowledge of the country’s food technologists and enable the agribusiness sector to meet the increasing consumer demand for high quality and safe food products. To ensure timely completion of these activities, the project’s closing date was extended to March 31, 2013. Significant progress have been achieved to date: the refurbishment works of the building which will house the FTTC have been completed, FTTC’s Supervisory Board has been established and held the first meeting, Director has been hired, and staff training is underway. 5. The proposed reallocation is necessary to ensure that sufficient budget is available to complete the establishment of the FTTC. A detailed budget has been agreed with the counterparts and serves as the basis for this reallocation. Under this reallocation, all amounts remaining unused under the various disbursement categories will be reallocated to the (1) Public Sector Investment Category. 6. The project rating on financial management is “Satisfactory” and the project has no audit reports pending. 7. This will be the fifth restructuring of this project. 4