98804 CENTRAL ASIA ENERGY WATER DEVELOPMENT PROGRAM Working FOR Energy AND Water Security PROGRESS REPORT 2012 CENTR AL A SIA ENERGY WATER DE VELOPMENT PROGR AM Working FOR Energy AND Water Security PROGRESS REPORT 2012  iiiiii Executive Summary In 2012, CAEWDP shifted to specific activities to Context T achieve Program objectives, strengthening the focus he Central Asian countries are endowed on investment preparation at the national level and with significant energy and water building capacity for cooperation at the regional resources. However, the distribution of level. This annual program report is a retrospective these resources is highly skewed across on the activities undertaken in 2012 for each of the individual countries, creating multiple challenges three sectors of the program—energy development; for resource management; for example, generating energy-water linkages; and water productivity—in hydropower in upstream countries addresses energy addition to the strategic program management. deficits in the winter but compromises water available for irrigation in the summer growing months even RESULTS while almost 50 percent of irrigated lands are affected Outputs from the 2012 program activities include: by salinization and waterlogging. The consequences ◗◗ Analysis: The Tajikistan Winter Energy Crisis of doing nothing are considerable: 2 million Study articulated the scope and seriousness of households experience winter heat and power the energy situation in Tajikistan and catalyzed shortages; some $1.5 billion in cost savings are lost to interest and commitment of the develop- a 90 percent reduction in energy trade within Central ment community. Two climate change reports Asia since 1990; and 1 percent in GDP is lost per year in energy and agriculture clearly identified from weather-related disasters in Tajikistan and Kyrgyz risks and potential adaptation mechanisms in Republic. Simply put, energy-water linkages are Uzbekistan. The energy studies are now being inextricable from regional stability and growth. replicated across all Central Asia countries, with The Central Asia Energy-Water Development the intention of (i) assisting each country; and Program (CAEWDP) initiates a long-term effort (ii) exploring possible regional scale approaches. to build energy and water security in Central Asia Considerable dialogue on analysis for integrated countries, combining national activities with efforts water resources management led to a six-country to nurture regional coordination. The three main workshop in which participants called for a components of the CAEWDP are: (i) energy develop- paradigm shift in regional analysis. Specifically, a ment, (ii) water productivity, and (iii) energy-water much stronger interest was expressed in access- linkages. Component activities are implemented ing global data sets to leverage local sources through three key outputs: preparing investments, and increase transparency, particularly at the strengthening national and regional institutions, and national level. A demonstration model funded undertaking diagnostics and analysis. The Program by CAEWDP helped illustrate the possibilities balances national and regional initiatives and mobi- of new data and modeling resources that are lizes donor support. publically accessible. ◗◗ Institutional strengthening and regional dialogue: The World Bank continued its role CAEWDP Program Report 2012 as co-chair of the Energy Sector Coordinating Committee (ESCC) of CAREC, with ADB. The The CAEWDP formally began in spring 2010 with ESCC completed its 2009–2012-action plan and the establishment of a Swiss single donor seed fund ministers approved a 2013–2015-work program of $1 million. The activities focused on working with in November 2012. Although CAEWDP retains regional organizations and undertaking core analyti- its aim to support the International Fund for cal work to establish building blocks for the Program. iv CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 Saving the Aral Sea (IFAS), the uncertainty and BALANCING NATIONAL AND REGIONAL delays in the transition to the next Chair has INITIATIVES compromised progress in strengthening its role The 2011 CAEWDP program report emphasized in the region. Dialogue at the technical levels the need to attend to national level challenges and remains, as illustrated by the integrated water opportunities, and recognizes the importance of resources workshop, the ESCC and the ongo- addressing national development priorities while ing Regional Hydrometeorology program. At building an environment for regional dialogue. At the more political level, the WB has received the country level, the Bank’s work consists of: an requests to convene countries on water issues. extensive body of analytical and knowledge services; The proposed Rogun hydropower project con- 32 investment projects supporting national water tinues to stress relations; however, the infor- and energy challenges; and two development policy mation sharing and consultation process has operations addressing energy sector reforms among received wide support both from participating other issues in Kyrgyzstan and Tajikistan. Over 2012, countries and the broader diplomatic com- links between national and regional initiatives munity. All six countries (including Afghanistan) were tightened. For example, SDC (Swiss Agency have participated at either the government for Development and Cooperation) and the World or civil society level. Uzbekistan continues Bank are now partnering on data collection and to remain aside from government sessions; management initiatives in both Kyrgyz Republic and however, detailed technical comments were Tajikistan. CAEWDP country profiles were produced received after the second consultation meetings for each country as an internal guide for dialogue and the World Bank maintains ongoing bilateral at senior government levels regarding the role of relations that further facilitate information CAEWDP in their development priorities and in the sharing. region. ◗◗ Investment preparation: The initial assess- ment study for a transmission line linking DONOR SUPPORT Uzbekistan, Afghanistan, and Pakistan was In 2012, significant progress was made in secur- completed, and preparation of the CASA 1000 ing and consolidating donor support, resulting in a project accelerated. In addition to these signifi- four-fold increase in commitments to the CAEWDP cant investment assessments, a corollary study multi-donor trust fund (MDTF). In December 2012, to the Tajikistan Winter Energy Study identified the European Commission joined DFID, SECO, and a package of energy efficiency investments the Bank, as the fourth CAEWDP donor. SECO has for the aluminum smelter in Tajikistan, which confirmed its commitment to more than triple its could help reduce the plant’s 40 percent share original contribution, as did DFID. These additional of winter energy consumption. In 2012, the contributions are expected to total US$8.4 million. Bank engaged in investment preparation for national projects that have regional implica- FINANCIAL OVERVIEW tions. For example, modeling efforts will assist Cumulative disbursements of CAEWDP trust funds, in the assessment of a second investment in from seed contributions from SECO (US$1m) restoring the North Aral Sea (Kazakhstan), and and DFID ($1.4m) amounted to $1.6 million to a major irrigation project is under preparation end January 2013.Supplemented by Bank Budget in Uzbekistan, with transboundary linkages ($5.4 million) and other trust funds ($2.8 million), with downstream Turkmenistan. It is expected total disbursements for CAEWDP since July 2009 that the investment preparation component of amount to $9.8 million. Among program com- CAEWDP will grow over time and efforts have ponents, Energy Development, dominated by begun to identify potential partner interna- the CASA 1000 initiative, accounted for about tional finance institutions. EXECUTIVE SUMMARY v FIGURE A: CAEWDP Program Disbursements A. By Component (US$) B. By Component—All Funds CAEWDP Trust Funds (US$ Millions) 1.5 830,000 210,000 3.8 4.5 530,000 Strat. Program Mgmt. Energy/Water Linkages Energy Development 45 percent of cumulative program disbursements The first milestone for the overall goal (Regional while Energy-Water Linkages (including the Central organizations and national bodies have capacity to Asia Hydrometeorology Program and energy-water support transboundary dialogue on regional coop- decision support) accounted for 40 percent. The eration) is partially achieved, with the publication of remainder funded start up activities and strate- the ASBP-3, ongoing work towards the CASA 1000 gic program management. Disbursements for transmission investment, ongoing consultation on Water Productivity remained minimal, reflecting the proposed Rogun HPP, inclusion of Afghanistan in the sensitive nature of this work and the need to various Central Asia activities, and increased consen- establish clear and detailed projects with national sus on building analytical tools and the knowledge governments. The low ratio of CAEWDP trust funds base for integrated water resources management. illustrates the importance of Bank Budget and other However, there remains much to do as the core trust funds during program mobilization. This was institution with a mandate to convene countries on particularly important for CASA-100 ($3 million in regional water issues (IFAS), remains weak and, at Bank Budget and non-CAEWDP trust funds), the present, without an effective Executive Committee Pilot Program for Climate Resilience in Tajikistan as it transitions from Kazakhstan’s leadership. ($550,000 in non-CAEWDP trust funds), Regional Progress on the first milestones on develop- Hydrometeorology Program ($500,000 in Bank ment objectives in the Results Framework vary from Budget). This proportion is expected to rise as the “achieved” to “partially achieved”. Investment plan- expansion of dedicated CAEWDP trust funds enables ning for energy security is moving forward and inte- a more targeted and consolidated CAEWDP pro- grating transboundary coordination into investment gram. Figure A illustrates the distribution of disburse- decisions is clearly illustrated in the Rogun process, ments across program components for CAEWDP CASA 1000, the Regional Hydrometeorology pro- seed trust funds and all funds (including Bank Budget gram, and the Bank’s more recent involvement in the and other trust funds). South Karakalpakstan irrigation investment, strad- dling both Uzbekistan and Turkmenistan. RESULTS FRAMEWORK Some milestones require review. For example, To date, progress has been made on all initial mile- both the Central Dispatch Center (CDC) and IFAS stones (see table below). were identified as key regional organizations to vi CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 Central Asia Energy-Water Development Program Results Framework: Program Goals and Objectives Status at December 2012 INDICATOR BASELINE 2010/11 MILESTONE 1 MILESTONE 2 GOAL (Impact): Regional cooperation catalyzes long-term economic growth and livelihood security to Central Asia and provides a catalyst for continued economic growth and increased income Regional organizations and Disparate national level Agreement on collaboration Skills and tools in place to national bodies have capacity to investments and fragmented with key regional institutions, facilitate regional dialogue for support transboundary dialogue regional cooperation supported by Heads of State cooperation. on regional cooperation. DEVELOPMENT OBJECTIVE: Strengthened mutually beneficial regional cooperation enhances energy security and water security At least three investment or 1.  TAJ & KYRG have winter energy Needs Assessment completed Winter energy coordination policy options (incl. Tajikistan deficit. identifying priority activities plans in place. & Kyrgyz Republic) initiated to strengthen stability and predictability of power supplies At least two investment 2.  Few current investment Potential national and regional At least two investment projects decisions on national level decisions on water and energy energy water investments selected water or energy projects take into account transboundary identified include clear understanding implications for effective use of of their transboundary water and energy resources. implications. 3.  Program activities are Active donors in the region, Draft agreement on Multi- Established MDTF with a coordinated and donor disparate coordination and Donor Trust Fund (MDTF) and minimum of two donors supported through an MDTF inefficient donor coordination based on contributing. (Multi-Donor Trust Fund) consultations Sustainable institutions for 4.  No shared institutional and Analytical Framework developed Analytical framework agreed at improved water dialogue analytical framework exits in the with input from technical technical level between at least across Central Asia region specialists of all CA states two states; Institutions. links on stakeholder’s exits. analytics between at least three states are in place LEGEND Achieved Partially achieved Initiated No progress Revision required coordination. However, CDC now has little policy acknowledged the importance of resolving the impact or ability to convene countries and the politi- regional water agenda, and the completion of sev- cal influence of IFAS continues to be tested. A review eral multi-country initiatives. Beyond the program, of the Results Framework will be undertaken in 2014. Turkmenistan recently signed the UN Convention on Transboundary Waters and the UNRCCA initiated dialogue in all five countries on a framework agree- ment for sharing transboundary waters. CAEWDP Strategic Perspective continues to assess progress on key activities of the Challenges to the program remain, with increasing program and adapting programming. stress from energy resources constraints, energy Structurally, the original objective of the deficits, and unbalanced energy trade. In the water CAEWDP remains valid with somewhat more sector, aging irrigation infrastructure reduces land emphasis on national level activities. The three main productivity, exacerbates energy inefficiency, and program components of Energy Development, degrades the environment. Climate change is Energy-Water Linkages and Water Productivity also expected to worsen the situation. However, there remain valid, to be augmented by additional moni- are a number of positive developments. At the toring of the political economy of the region through 11th CAREC Ministerial Meetings in November the formalization of a fourth formal component: 2012, in “a key breakthrough”, CAREC countries “Strategic Program Management”. EXECUTIVE SUMMARY vii LOOKING FORWARD donor perspectives and insights into program imple- The four-fold expansion of CAEWDP will support mentation (through the Donor Advisory Committee) investment in selected flagship activities in each of and more explicit dialogue on issues of water and the program components (see table below), which energy with both technical and political levels of will guide allocation of funds. IFAS and the ESCC will national governments. remain focal organizations for the program, comple- mented by expanded opportunities to integrate CAEWDP: Program Components and Flagships ENERGY DEVELOPMENT WATER PRODUCTIVITY Energy security in Central Asia countries Irrigation efficiency and National Action Plans Intra-Central Asia trade Dam safety and rehabilitation Connecting CA to Regional Power Markets Water resources diagnostics ENERGY-WATER LINKAGES STRATEGIC PROGRAM MANAGEMENT Central Asia Knowledge Platform Regional institutions and Capacity Building Climate change Political economy Riparian dialogue Program partnerships  ixix Table of Contents EXECUTIVE SUMMARY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii I. CONTEXT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A.  Regional Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Energy and Water Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 B.  Program Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 C.  Purpose and Structure of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 II.  PROGRAM ACTIVITIES (2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 B.  Energy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Energy Development—Achieved and Ongoing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 National Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Energy Development—Results Framework Indicators and Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 C.  Energy-Water Linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Energy-Water Linkages—Achieved and Ongoing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Energy-Water Linkages—Framework Indicators and Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 D.  Water Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Water Productivity—Achieved and Ongoing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 National Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Water Productivity—Indicators and Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 E.  Program Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Basin Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Institutional Strengthening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Donors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Development Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Strategic Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 F.  Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Program Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Leveraging CAEWDP Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Geographic Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 x CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 III.  STRATEGIC PERSPECTIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 A.  Challenges, Risks and Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 National Confidence and Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Capacity for Dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Increasing Stress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Positive Signals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 B.  Revisiting Program Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Program Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Program Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 C.  Strategic Adaptation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Program Scope and Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Flagship Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 CAEWDP Core Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Donor Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Development Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 IV. ANNEXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Annex I: Select List of Central Asia Energy-Water Development Program Outputs (as of 12/2012) . . . . . . . . . . 38 Annex II: CAEWDP Results Framework (2010/11–2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Annex III: CAEWDP Progress Report to October 2011—Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Annex IV: National and Regional Investment and Technical Assistance Activities Supporting Energy and Water Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50  xi Abbreviations and Acronyms ADB Asian Development Bank ASBP-3 Third Aral Sea Basin Program CAEWDP Central Asia Energy-Water Development Program CAHMP Central Asia Hydrometeorology Modernization Project CAREC Central Asia Regional Economic Cooperation Program CAREWIB Central Asia Regional Water Information Base Project CASA Central Asia—South Asia DC Direct Current DFID UK Department for International Development EBRD European Bank for Reconstruction and Development EC-IFAS Executive Committee—International Fund for Saving the Aral Sea EWDSS Energy-water modeling decision support system ESCC Energy Sector Coordinating Committee GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GWP Global Water Partnership HVDC High Voltage Direct Current IDA International Development Association IFAS International Fund for Saving the Aral Sea IWRM Integrated Water Resources Management MDTF Multi-Donor Trust Fund PPCR Pilot Program for Climate Resilience RESET Regional Energy Security, Efficiency and Trade SDC Swiss Agency for Development and Cooperation SECO State Secretariat for Economic Affairs, Government of Switzerland SIC-ICWC The Scientific Information Center of the Interstate Commission for Water Coordination UNECE United Nations Economic Commission for Europe UNRCCA United Nations Regional Centre for Preventive Diplomacy for Central Asia USAID United States Agency for International Development WB The World Bank  11 I.  Context depend on hydropower. At the same time, hydro- A.  Regional Context power can play a role in energy security and system T ENERGY AND WATER ISSUES stability through the annual and year-over-year he Central Asian countries are endowed management of reservoirs and their potential role in with significant energy related natural ancillary services such as power frequency regulation resources, such as low-carbon hydro- and reserve capacity. power potential in the Kyrgyz Republic Alongside large existing and potential water and Tajikistan, significant reserves of oil, gas and coal storage capacity, the role of hydro resources extends in Kazakhstan, and substantial gas reserves as well beyond power generation to meet other needs, as some oil in Uzbekistan and Turkmenistan. These like drinking water and irrigation, passing through resources, if fully exploited, well exceed domestic multiple downstream countries towards the Aral demand and represent the key development Sea. Of particular concern is agriculture, a mainstay strengths of the region through expanded exports. of several economies, which needs irrigation water A well-functioning, interconnected energy system during the summer season. Generating hydropower could enable the region to manage across differing in upstream countries to address energy deficits in cost patterns, fuel mixes, and risk profiles, as well as the winter can compromise water available for irri- offsetting demand patterns with cost and reliability gation in the summer growing months, contributing benefits and potential positive environmental to potential water use conflicts. Furthermore, poor impacts. irrigation systems are exacerbating the problems; However, the distribution of these energy almost 50 percent of irrigated lands are affected resources is highly skewed across individual coun- by salinization and waterlogging. In Turkmenistan, tries: in particular, hydropower resources are con- approximately 96 percent of the land area is affected centrated in the Kyrgyz Republic and Tajikistan, the by salinization. The consequences of doing nothing upstream countries of the two main river basins cov- are considerable: 2 million households experiencing ering the Central Asian countries, and Afghanistan. winter heat and power shortages; foregone benefits Thermal resources are concentrated in the down- of some $1.5 billion from a 90 percent reduction in stream countries of Uzbekistan, Turkmenistan and energy within Central Asia since 1990; and 1 percent Kazakhstan. Although new transmission lines linking loss in GDP per year from weather-related disasters north and south Kazakhstan, and north and south in Tajikistan and Kyrgyz Republic. Tajikistan, may improve the distribution situation, Climate change is also expected to exacerbate winter shortages continue to be pervasive in the water and energy pressures, with an overall reduc- region. These are the most pressing in the upstream tion in volume and continuing changes in tem- countries of Kyrgyzstan and Tajikistan, which mostly poral patterns. Rising temperatures and reduced 2 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 precipitation in Central Asia will exacerbate the dis- The main components of the CAEWDP are: appearance of the Southern Aral Sea, while Central ◗◗ Energy Development to promote highest Asia’s glaciers face accelerated melting caused by value energy investments and management. higher temperatures. Areas of focus include: infrastructure planning, Thus, energy-water linkages are inextricable winter energy security, energy trade, energy from regional stability and growth. With deteriora- accountability, and institutional development; tion in regional cooperation, winter energy short- ◗◗ Water Productivity to enhance the productiv- ages and summer water conflicts dominate the ity and efficiency of water use in both agricul- current Central Asia picture, and cast a shadow on ture and energy sectors. Areas of focus include long-term development in the region. And yet, capacity strengthening, 3rd Aral Sea Basin Central Asia still lacks the systems, institutions and Management Program, national action plans infrastructure to manage joint energy and water for water productivity, and rehabilitation of resources. In addition, other factors compound infrastructure; and these institutional difficulties, such as inadequate ◗◗ Energy-Water Linkages aims to strengthen the appreciation of financial/commercial principles to analytical tools for integrated water resources finance energy trade; dependence on high water- management to improve the understanding consuming crops; lack of investment in energy and of linkages between water and energy at the irrigation resulting in generation deficits and land national and regional levels. Areas of focus degradation, respectively; strong economic growth include energy-water modeling, regional hydro- that has increased energy and water demand; and meteorology, climate vulnerability, and energy- hydrologic variability. water dialogue in support of IWRM. The fundamental socio-economic benefits of coordination among countries on both water and Program activities address strategic direction, energy have been confirmed by recent diagnostics adaptation to emerging risks, opportunities and and at the technical level there is strong support for country needs, and coordination with donors. regional initiatives. High-level regional dialogue is Activities under CAEWDP, as illustrated in Figure 1, continuing on a range of energy and water issues combine both nationally focused initiatives (with in the two key regional platforms: IFAS with the regional implications) as well as regional initiatives completion of the ASBP-3 Management Plan and (with national benefits). In each component, the CAREC’s ESCC with expanding membership and Program focuses on three outcomes—institutional ongoing implementation of the Central Asia Energy strengthening, analytical foundations and invest- Action plan framework. ment preparation. B.  Program Context C. Purpose and Structure of Report The Central Asia Energy-Water Development The purpose of this report is to capture, in a compre- Program was designed to provide the initial steps in hensive overview, CAEWDPs progress to date and a long-term effort to build energy and water security define a direction for the way forward for 2013, and for the region through enhanced cooperation. By future program activities. Following this introductory establishing sound energy-water diagnostics and section, the report provides the following: analytical tools, by strengthening regional institu- ◗◗ Section II—summarizes the completions and tions, and identifying high priority infrastructure accomplishments of 2012, building on the work investments, the Program’s long-term goals are to of previous years. The section elaborates on the eliminate winter energy shortages, increase electric- milestones achieved and ongoing activities1, ity trade both within and outside the region, and enhance water productivity with accompanying benefits for energy and agricultural incomes contrib- 1 The activities undertaken were supported by the combination of the Swiss seed-funds, DFID funds, Bank budget leveraged funds uting to regional security through informed dialogue from other multi- and bilateral sources—this is referred to as the first on energy-water management across the region. phase of the Multi-Donor Trust Fund (MDTF) CONTEXT 3 FIGURE 1: CAEWDP—An Integrated Program Three Sectors Three Outcomes Energy Development Investment Preparation Support policy and investments Expanded water and energy decisions for the highest value infrastructure investments, mix of resources with early results Energy-Water Linkages Regional Institutions Improve understanding of linkages Strong physical, intellectual and between water and energy and management hubs for regional facilitate regional dialogue cooperation and dialogue Water Productivity Diagnostics and Analysis Increase productivity and Better identify the costs, benefits, opportunities and both agriculture and risks of cooperation to energy sectors national interests in energy development, energy-water link- Several annexes are attached, covering: ages, water productivity, and summarizes the I. List of major diagnostic and analytical outputs program’s strategic management in the broader of the program, cumulative to the end of 2012 context of the program. It also summarizes cumulative program financing, the multi-donor II. CAEWDP Results Framework (prepared April trust fund (MDTF) and trust fund governance, 2010) updates on the status of donor coordination, III. Executive Summary of 2011 Progress Report and emerging partnerships and alliances. ◗◗ Section III—outlines the strategic perspectives IV. National and regional level activities in energy, of the program going forward, building on the agriculture, and water management. 2012 status, and the lessons learned, program basics are revisited and key structural aspects of the program reviewed and adapted for 2013.  55 II.  Program Activities (2012) of measures (underscoring the elusiveness of A. Overview T an easy solution) and catalyzed interest and he CAEWDP formally began in spring commitment of the development community. 2010 with the establishment of a Swiss Two climate change reports in energy and seed fund (single donor trust fund) of agriculture clearly identified risks and potential $1 million and a Bank contribution of adaptation mechanisms in Uzbekistan. These $1.2 million over FY10 and FY11. These activities studies are now being replicated across all CA focused on working with regional organizations and countries, with the intention of (i) assisting each undertaking core analytical work, and helped estab- country; and (ii) exploring possible regional lish important building blocks for the next phase of scale approaches. Considerable dialogue on the CAEWDP. The program now moves from building analysis for integrated water resources manage- blocks to strengthening conditions for cooperation, ment led to a six-country workshop in which strengthening the focus on investment preparation at participants called for a paradigm shift in the national level and building capacity for coopera- regional analysis. Specifically, a much stronger tion at the regional level. This annual program report interest was expressed in accessing global data is a retrospective on the specific “building block” sets to leverage local sources and increased activities funded in 2012 for each of the three sectors transparency. Participants expressed an interest of the program—energy development; energy-water in better understanding the main basin models linkages; and water productivity—in addition to the and ensuring they adequately reflect national strategic program management. priorities and conditions. A demonstration This section begins with an overview of activity model funded by CAEWDP helped illustrate of the three different categories of outputs for the the possibilities of new data and modeling program (Analysis, Institutional strengthening and resources that are publically accessible. Investment preparation) as well as the evolution of ◗◗ Institutional strengthening and regional political economy affecting the program, balancing dialogue: The World Bank continued its role national and regional initiatives and donor sup- as co-chair of the Energy Sector Coordinating port. After a financial overview, progress against Committee (ESCC) of CAREC, with ADB. The milestones of the program’s results framework is ESCC completed its 2009–2012-action plan and compared. Lastly, this section provides more in ministers approved a 2013–2015-work program depth descriptions of results for 2012 for each sector in November 2012. Although CAEWDP retains (Energy Development, Energy-Water Linkages and its aim to support EC-IFAS, the uncertainty and Water Productivity); Table 3 lists all outputs of 2012; delaying the transition to the next Chair has com- Annex I provides a full listing of component products promised progress in strengthening its role in the and outputs from the inception of the Program. region. Dialogue at the technical levels remains on some issues, as illustrated by the integrated ◗◗ Analysis: The Tajikistan Winter Energy Crisis water resources workshop, the ESCC and the Study articulated the scope and seriousness of ongoing Regional Hydrometeorology program. the energy situation in TAJ, identified a package 6 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 The information sharing and consultation process CAEWDP regional workshop co-hosted with SDC and for the projected Rogun HPP has received sup- UNECE; SDC and the World Bank are now partner- port both from participating countries and the ing on data collection and management initiatives broader diplomatic community. All six countries in both Kyrgyz Republic and Tajikistan. CAEWDP (including Afghanistan) have participated at either country profiles were produced for each country as the government or civil society level. an internal guide for dialogue at senior government ◗◗ Investment preparation: The initial assess- levels regarding the role of CAEWDP in their devel- ment study for a transmission line linking opment priorities and in the region. Uzbekistan, Afghanistan and Pakistan was Donor Support completed, and preparation of the CASA 1000 In 2012, significant progress was made in secur- project accelerated. In addition to these signifi- ing and consolidating donor support, resulting in cant investment assessments, a corollary study a four-fold increase in funds. In December 2012, to the Tajikistan Winter Energy Study identified the European Commission joined DFID, SECO, and a package of energy efficiency investments the Bank, as the fourth CAEWDP donor. SECO has for the aluminum smelter in Tajikistan. These confirmed its commitment to more than triple its investments, which have been confirmed by original contribution, as has DFID. The Bank is also the Government, have attractive paybacks and strengthening efforts with other development part- will help reduce the plant’s 40 percent share ners and the diplomatic community (e.g., the UN) to of winter energy consumption. In 2012, the improve regional dialogue. Bank engaged in investment preparation for national projects that have regional implica- Financial Overview tions. For example, modeling efforts will assist Cumulative disbursements for CAEWDP since July in the assessment of a second investment in 2009 amount to $9.8 million. Bank budget and non- restoring the North Aral Sea (Kazakhstan), and CAEWDP trust funds played a critical role—accounting a major irrigation project is under preparation for over 80 percent of total disbursements to end in Uzbekistan, with transboundary linkages January 2013—as program donors were mobilized with downstream Turkmenistan. It is expected and seed funds from SECO and DFID were made that the investment preparation component of available. Among program components, Energy CAEWDP will grow over time and efforts have Development, dominated by the CASA 1000 initiative, begun to identify potential partner IFIs. accounted for about 45 percent of program disburse- ments while Energy-Water Linkages (including the Basin Agreements Central Asia Hydrometeorology Program and energy- Based on donor interests, a political economy analy- water decision support) accounted for 40 percent and sis was completed for the 1992 Syr Darya agreement. the remainder funded start up activities and Strategic The analysis was part of a global study on the risks of Program Management. Disbursements for Water cooperation, and possible approaches to mitigation. Productivity remain minimal, reflecting the sensitive Balancing National and Regional Initiatives nature of this work and the need to establish clear The 2011 CAEWDP program report emphasized and detailed projects with national governments. the need to attend to national level challenges and Results Framework opportunities recognizing the importance of address- Tables 1 and 2 summarize progress on the milestones ing national development priorities while building defined in the results framework, developed at the an environment for regional dialogue. At the country program concept stage of the CAEWDP, while Annex II level, the Bank’s work consists of: an extensive body details the full results framework. To date, progress has of analytical and knowledge services; 32 invest- been made on all but one initial milestone and about ment projects supporting national water and energy 30 percent have been fully met. The water productivity challenges; and two development policy operations component is lagging, partly due to a program deci- addressing energy sector reforms among other issues sion to delay funding by one year, and partly due to in Kyrgyzstan and Tajikistan. Over 2012, links between the sensitive environment for these activities, particu- national and regional initiatives were tightened. For larly in some key downstream countries. As indicated example, a shift in the paradigm for data collection in the two tables, several milestones require revision. and management with a greater focus on accessibil- For example, promoting energy trade identified the ity and national management was discussed at a PROGRAM ACTIVITIES (2012) 7 Central Dispatch Center (CDC) as a key regional of increased dialogue, there remains much to do as organization: CDC’s role over time has reduced to the core institution with a mandate to convene on transaction reporting, with little policy impact or regional water issues (IFAS), remains weak and, at ability to convene countries. Similarly, a target to have present, without an effective Executive Committee regional organizations that leads analytical work and as it transitions from Kazakhstan’s leadership. dialogue needs reassessment. A review of the Results The first milestones on development objectives Framework will be undertaken in 2014. in the Results Framework vary from “achieved” to In Table 1, the indicator for the overall goal— “partially achieved”. Investment planning for energy regional organizations and national bodies have security is moving forward with the completion of capacity to support transboundary dialogue on the Tajikistan Winter Energy Crisis report, and subse- regional cooperation—is partially achieved, with the quent convening of donors, as well as: publication of the ASBP-3, ongoing work towards ◗◗ TALCO winter energy study that identified a the CASA 1000 transmission investment, ongoing series of investments in energy efficiency consultation on the proposed Rogun HPP, inclu- ◗◗ Initiation of the Nurek rehabilitation feasibility sion of Afghanistan in various Central Asia activities, study and increased consensus on building analytical ◗◗ A new study focused on identifying and priori- tools and the knowledge base for integrated water tizing investments in building energy efficiency. resources management. While there are some areas TABLE 1: Central Asia Energy-Water Development Program Results Framework: Program Goal and Objective Status at December 2012 INDICATOR BASELINE 2010/11 MILESTONE 1 MILESTONE 2 GOAL (Impact): Regional cooperation catalyzes long-term economic growth and livelihood security to Central Asia and provides a catalyst for continued economic growth and increased income Regional organizations and Disparate national level Agreement on collaboration Skills and tools in place to national bodies have capacity to investments and fragmented with key regional institutions, facilitate regional dialogue for support transboundary dialogue regional cooperation supported by Heads of State cooperation. on regional cooperation. DEVELOPMENT OBJECTIVE (Outcome): Strengthened mutually beneficial regional cooperation enhances energy security and water security At least three investment 1.  TAJ & KYRG have winter energy Needs Assessment completed Winter energy coordination or policy options (incl. deficit. identifying priority activities plans in place. Tajikistan & Kyrgyz Republic) initiated to strengthen stability and predictability of power supplies At least two investment 2.  Few current investment Potential national and regional At least two investment projects decisions on national level decisions on water and energy energy-water investments selected water or energy projects take into account transboundary identified include clear understanding implications for effective use of of their transboundary water and energy resources. implications. 3.  Program activities are Active donors in the region, Draft agreement on Multi- Established MDTF with a coordinated and donor disparate coordination and Donor Trust Fund (MDTF) and minimum of two donors supported through an MDTF inefficient donor coordination based on contributing. (Multi Donor Trust Fund) consultations Sustainable institutions for 4.  No shared institutional and Analytical Framework developed Analytical framework agreed at improved water dialogue analytical framework exits in the with input from technical technical level between at least across Central Asia region specialists of all CA states two states; Institutions. links on stakeholder’s exits. analytics between at least three states are in place LEGEND Achieved Partially achieved Initiated No progress Revision required 8 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 In both Kyrgyz Republic and Tajikistan, energy with the establishment of regular biannual Advisory sector governance is also being supported through Committee meetings with donors. the World Bank’s national portfolios. The fourth program level outcome—sustainable Integrating transboundary coordination into institutions for improved water dialogue across investment decisions is clearly illustrated in the Central Asia stakeholder’s exits—lags. As noted Rogun process (including extensive consultation with above, progress is being made at the technical level riparian consistent with high international stan- (e.g., knowledge base for integrated water resources dards), CASA 1000, the Regional Hydrometeorology management, Regional Hydrometeorology) but the program that is under implementation, and the political economy of the region remains difficult. Bank’s more recent involvement in the South In energy development, one program level Karakalpakstan irrigation investment, straddling both milestone requires review and possible revision. Uzbekistan and TURK. Originally, it was expected that the program could As detailed in subsequent sections, there has assist the Central (Electricity) Dispatch Centre been a significant commitment of donor funds modernization and revitalization. However, with the in 2012. Not only is the multi-donor trust fund deterioration of the traditional trade flows, the appe- (MDTF) established, but the founding donor tite for centralization has waned and other models (DFID) has committed a second tranche and two of electricity interconnection are needed. donors have joined to increase funds from $2.4 m Further detail on results monitoring for each of to a cumulative total of over $10 m. The second the three major components of the program is cov- milestone is expected to be completed in 2013 ered in the subsequent sections of this report. TABLE 2: Central Asia Energy-Water Development Program MILESTONES ACHIEVED AS OF DECEMBER 2012 INDICATOR MILESTONE 1 2 ENERGY DEVELOPMENT National energy plans in at least two countries take into consideration inter- and intra-regional energy trade implications Pre-investment analysis completed for two options for stable and predictable winter power supply in Tajikistan & Kyrgyz Republic National energy generation institutions taken into account for regional implications of national investments. Strengthened institutional development (energy trade institutions) Political and financial support increased for transmission infrastructure planning. At least one new investment decision includes inter- /intra-regional implications. ENERGY-WATER LINKAGES Expand data management to enhance energy/water analysis Regional dialogue on at least two priority water & energy issues facilitated by regional and national org. Strengthened regional organizations capacity to facilitate regional dialogue Climate change (CC) adaptation implications recognized for both energy and water. WATER PRODUCTIVITY IFAS’ capacity in agricultural water management strengthened, and communication between national agricultural water specialists improved Infrastructure and management opportunities (including investments) for increased agricultural water productivity identified National action plans for increasing agricultural water productivity prepared Understanding of regional water productivity is reflected in national plans, policies and/or investments of at least two countries LEGEND Achieved Partially achieved Initiated No progress Revision required PROGRAM ACTIVITIES (2012) 9 TABLE 3: Central Asia Energy Water Development Program List of Major Outputs (2012) DATE OUTPUT TITLE PURPOSE/REFERENCE COUNTRY DELIVERED Energy Development CAREC ESCC Regional 1.  The Plan identified power sector deficiencies on regional level and Regional 10/2012 Energy Master Plan resolve those through focusing on promotion of inter- and intra- regional electricity trade, increasing energy security and energy efficiency, optimizing integrated transmission and generation expansion and identifying primary energy (generation and trade) instruments (PDS on file need electronic copy of Plan) Tajikistan Winter Energy 2.  Assessment of the scope of the shortages and information of measures TAJ 10/2012 Crisis Study to eliminate energy deficit 3. Uzbekistan-Afghanistan- Initial assessment of the feasibility for Uzbekistan-Afghanistan-Pakistan UZB 04/2012 Pakistan Electricity power trade indicates that given the large deficits in Pakistan, the Supply and Trade Study trade is economically feasible. The project would need relatively large (UAP-EST) investments to cover CAPEX for a new generation plant, given that existing plants are not able to meet full domestic demand. TALCO Energy Audit 4.  An Energy Efficiency study for TALCO to assess the energy saving TAJ 12/2012 opportunities and develop an Energy Efficiency Action Plan was conducted by an international consortium led by NorskEnergi (Norway). Implementing the Energy Efficiency Action Plan will allow TALCO to save up to 1,155 GWh of electricity and 197 GWh of natural gas per year, with a simple payback period below 2 years. Climate Vulnerability, 5.  Based on a consultative approach, identified a series of activities to UZB, TURK, 6/2012 Risk and Adaptation adapt to energy sector impacts on climate change, including changes KAZ, KYG Assessments: Helping in water availability. World Bank funded Uzbekistan study; USAID Countries Prepare an application of methodology to KAZ, TURK, and KYG Effective Power Sector Response CASA 1000 6.  Continued support, complemented by an expanded donor group, KYG, TAJ Ongoing to four investing countries. Financial mobilization, transactions development, selection of a developer and operator, and risk mitigation continue Energy-Water Linkages Comparative Analysis of 1.  Responded to clients requests to review existing national models Regional 3/2011 Basin Models to provide an overview of national-level activities; 36 models were 6/2012 inventoried: and comparative analysis responded to clients requests to review existing basin models, identify gaps, and build a system of models as needed The Hydrology of 2.  Report on first generational demonstration open source platforms & Regional 5/2012 the Aral Sea Basin: decision meeting First-Generation EWDSS scoping Phase 1B intends to demystify data transparency Demonstration Model issues in the region with a prototype demonstration model, designed based on Open and using public domain data and public modeling platforms to illustrate, Public Source Data with reasonable certainty, the Aral Sea basin’s water budget and Report and Decision visualize possible water management scenarios [http://test4.ocean. Meeting washington.edu/] Scoping Studies for 3.  In-depth scoping study was undertaken to identify national priorities 2 countries Draft the Development of a for strengthening analysis of integrated water resources management Mathematical Model in two countries for Integrated Water Resources Management 4. Workshop Knowledge exchange technical regional workshop, engaged specialists Regional 7/2012 Report: Regional from all 6 countries, and explored current approaches and emerging technical workshop analytical tools for M&DS; the workshop built on individual national “Strengthening level efforts and, through a multi-national and multi-sectoral format, Analysis for Integrated defined a way forward, a Road Map/work program for a second phase and Adaptive Water to strengthen analysis for integrated and adaptive water resources Resources Management management in Central Asia in Central Asia” 10 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 TABLE 3: Continued DATE OUTPUT TITLE PURPOSE/REFERENCE COUNTRY DELIVERED  ogun Riparian 5. R Documentation and materials from May 2011 and November 2012 Regional 1st: 5/2011 Consultation and consultations and information exchange on national data sharing and 2nd: 11/2012 Information Exchange consultations with riparian’s; Panels of Experts Program-documentation http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0, ,contentMDK:22743325~pagePK: 146736~piPK:146830~theSitePK:258599,00.html  Review of Rogun 6. A The hydrologic analysis provides a critical review, advice, guidance Regional 6/2012 Hydropower Project— and quality assurance for the hydrologic components of the proposed Hydrologic Analysis Rogun hydropower project. The report emphasizes that the review concentrates only on the hydrologic components of the project, though when hydrologic concerns raise other more system-wide concerns, we discuss those as well  orld Bank Central 7. W The objective is to improve the delivery of weather, climate and KYG, TAJ Ongoing Asia Hydrometeorology hydrological services in the Central Asia region. The program aims to Modernization Project rebuild the infrastructure and human capacity to reduce disaster risks, & PIU established manage the consequences of climate variability and strengthen the within Regional economic development of the agricultural, water resources, energy Hydrometeorology and transportation sectors. It will help hydrometeorology services in Center the Kyrgyz republic and Tajikistan http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0, ,contentMDK:22792502~pagePK: 146736~piPK:146830~theSitePK:258599,00.html Water Productivity  educing the 1. R A Country Note on Climate Change and Agriculture provides a UZB (Draft Final Vulnerability of summary of available country-specific information, with a focus on Report), August Uzbekistan’s Agricultural climate and crop projections, adaptation options, policy development, 2011. Systems to Climate and institutional involvement on agriculture and climate change Change Strategic Program Management  AEWDP website 1. C External website: http://web.worldbank.org/WBSITE/EXTERNAL/ Regional Ongoing COUNTRIES/ECAEXT/0,,contentMDK:22743346~pagePK:146736~piPK: 146830~theSitePK:258599,00.html  upporting study on 2. S Background report (Indecon consulting) for the WPP supported Regional 11/2011 Cooperation on the “Reaching Across the Waters—Facing the Risks of Cooperation Syr Darya River for in International Waters”http://water.worldbank.org/sites/ Reaching Across the water.worldbank.org/files/publication/WaterWB-Reaching-Across- Waters—Facing the Waters.pdf Risks of Cooperation in International Waters  AREC ESCC 3. C Reference Document for Session 2 of the CAREC Senior Officials’ Regional 9/2012 Completion Report Meeting October 2012 summarizing the CAREC ESCC progress and (2009–2012) completion through 2012  AREC ESCC 2013–2015 4. C http://www.carecinstitute.org/index.php?page=energy) Regional 9/2012 Work Program  ountry Portfolio 5. C Portfolio review of energy-water projects and ESW/AAA for blending Regional 9/2012 Reviews for Energy national and regional activities, draft notes for discussion for Water Kazakhstan, Tajikistan, and Uzbekistan PROGRAM ACTIVITIES (2012) 11 B.  Energy Development of reducing seasonal shortages through more regional cooperation, reflecting a similar conclusion ENERGY DEVELOPMENT—ACHIEVED in the Tajik study. AND ONGOING Within the Program’s overall objective in the energy NATIONAL PORTFOLIOS sector—to support policy and investment deci- Annex IV lists the current set of World Bank initia- sions for the highest value mix of resources—the tives in each of the countries. Of note are activities program to date has paid particular attention to in Kyrgyz Republic and Tajikistan to alleviate energy addressing energy shortages in Tajikistan and the shortages that have serious social and economic Kyrgyz Republic. This has been approached through costs, and put pressure on the downstream water a combination of energy management (including regime. energy efficiency), planning and analytical work, and preparing key investments in these two countries. ENERGY DEVELOPMENT—RESULTS FRAMEWORK In this respect, the CAEWDP links closely with the INDICATORS AND MILESTONES World Bank’s national assistance portfolios that Achievement of the overall output objective of also include governance and policy dialogue. In this component—to support policy decisions and Tajikistan, there is a pressing need to ensure that the investment decisions for highest value mix of energy Nurek hydropower station, which accounts for over resources at the regional level (both within Central 90 percent of winter supply, is reliable. Preparing a Asia and a broader regional level)—has been struc- finance-ready investment feasibility study for Nurek tured along six indicators. As of December 2012, rehabilitation has been added as a new task comple- three (of six) initial milestones have been achieved, mented by efforts to manage winter energy crises and the other three are underway. The deteriora- more economically and with fewer social impacts tion of regional trade and sovereign focus away from (e.g., through planned load shedding). Energy centralized management raises questions about the efficiency among large industrial users starts with an appropriateness of two indicators for milestone 2, independent energy audit of Tajikistan’s aluminum both related to revitalization of the Central Dispatch plant (TALCO) that consumes 40 percent of the total Centre. power. The Tajikistan Winter Energy Crisis Study is expected to form the basis for an action plan to significantly reduce the energy deficit by 2020 and for convening and targeting donor funds. C.  Energy-Water Linkages At the regional level, CAEWDP supported the ENERGY-WATER LINKAGES—ACHIEVED initial assessment of the Uzbekistan/Afghanistan/ AND ONGOING Pakistan electricity transmission line and contin- Within the Program’s overall objective in the energy ues to support CASA 1000, which now enters the water sector—to strengthen the analytical capacity first stages of preparation (supported by an Inter for integrated water resources management at the Government Agreement signed by the four coun- national and regional levels—there are three main tries). The finalized ADB-funded Regional Energy elements: (i) roadmap for energy-water decision Master Plan provides a list of possible energy support tools and capacity building; (ii) promoting investment projects while confirming earlier stud- dialogue on energy-water issues, and (iii) assess- ies of very high economic value of regional trade. ment of climate vulnerability of energy sectors to the USAID has continued with its RESET program, regional level. The following section highlights the including capacity building on regional trade. The technical assistance and analytical activities achieved 2009–2012 work program, under the Energy Sector in 2012. Coordinating Committee (with ADB) was concluded Roadmap in Support of a Knowledge Base for and a new Action Plan developed for 2013–2015. Energy-Water Decision Support The Action Plan continues some initiatives (e.g., A long term goal for the CAEWDP is to build an capacity building) and expands exploration of new appropriate and trusted knowledge base for Central trade routes in South Asia. An Energy/Power Issues Asia countries. Initial activities focused on national note for Uzbekistan (WB) also highlights the benefit 12 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 TABLE 4: CAEWDP—Energy Development Milestones achieved as of December 2012 BASELINE INDICATOR 2010/11 MILESTONE 1 MILESTONE 2 STATUS 12/2012 National energy Investments not linked Regional energy At least two The master plans, after discussions with plans in at least to regional planning master plan, national level countries, have been finalized [available two countries take developed under discussions take at ADB website]. This study corroborates a into consideration ADB funding, account of cost- previous (2010) CAEWDP study by Mercados. inter- and intra- identifies list of effectiveness of Tajikistan Winter Energy Study identifies the regional energy trade least cost energy regional energy role of imports and exports. RESET program implications projects markets increased capacity at the national levels. Kazakhstan and Kyrgyz have started work on preparing feasibility of a Kyrgyz-Kazakh transmission interconnector Pre-investment TAJ & KYRG have Needs Winter energy For TAJ: Study on options to meet the winter analysis completed winter energy deficit. Assessment coordination energy power shortages; and TALCO energy for two options for completed plans in place. efficiency study have been completed. For KYG stable and predictable identifying and TAJ heating and energy efficiency studies are winter power supply priority activities being initiated. Establishing an effective winter in Tajikistan & Kyrgyz energy market needs to be reassessed given the Republic deterioration in existing dispatch system. National energy Fragmentation of Regional National energy CAREC Energy sector Work Plan for 2013–15 decisions take into energy development Energy Markets generation based on the finding of Regional master account regional focuses at national and Analytical work discussions plan studies and Mercados study to focus on implications of bilateral level; limited commences. consider relevant regional investments. national investments. regional coordination; Institutional regional Further analytic technical assistance and work CAREC has mandate Analysis of the implications. being done by USAID RESET, and planned by as a regional energy energy and water WB. Discussions with Tajikistan, Turkmenistan, institution; sector Kyrgyz and Kazakhstan on exploring IFAS not explicitly opportunities for increased collaboration. engaged in links Rogun HPP Assessment studies include between water and analysis of downstream impacts and potential energy sector. for summer exports. Strengthened CAREC/CDC are Energy dispatch Dialogue Milestone 1 met through two studies: institutional major trade energy and trade needs between Mercados’ dispatch study estimating the development (energy institutions; assessment CAREC and benefits of increased trade and identifying trade institutions) CAPS (Central Asia completed CDC and other activities, and the ADB-funded regional Power System) is weak. identifying stakeholders master plan. CDC’s role has over time reduced priority activities on potential to transaction reporting agency. CASA joint regional power working of countries has evolved as a good market. platform for regional trade discussions, which would be useful for future trades. Some dialogue for energy trade is being held at CAREC, ESCC level. Countries also prefer bilateral discussion to a multi-lateral platform. Political and financial Existing transmission Feasibility report Increased CASA1000 feasibility report prepared. Ministerial support increased infrastructure, on CASA 1000 bilateral level Inter Governmental Council of CASA for transmission investments plans. discussion on countries met in Dubai in May 2012 and the Joint infrastructure UAP is recently transboundary working group is meeting every month to speed planning. proposed. transmission up preparation of the project. Kazakhstan and Kyrgyz have started work on preparing feasibility of a Kyrgyz-Kazakh transmission interconnector At least one new Current investment Potential national At least Regional Master Plan identifies priority investment decision decisions on energy and regional one energy investments. Datka-Kemin line being built includes inter- /intra- infrastructure rarely investments investment by Kyrgyzstan would be later extended to regional implications. take into account identified project selected Kazakhstan to provide inter country trade link. the transboundary implications. LEGEND Achieved Partially achieved Initiated No progress Revision required PROGRAM ACTIVITIES (2012) 13 and regional consultation to determine the state to address all management issues across multiple of capabilities and regional coordination, and to sectors and spatial and temporal scales. identify global practices that could be introduced. ◗◗ Two scoping studies were undertaken for Largely completed in 2012, this first phase resulted Kazakhstan and Tajikistan to inform each coun- in a roadmap for strengthening analytical capabilities try on the status quo of technical resources in and tools for integrated water resources manage- the country, and measures to build up analytical ment. The roadmap, as explained below, reflects a capacity inside the government. For example, paradigm shift in the approach, expectations and one country requested support to prepare a products for better understanding water in Central model of the Syr Darya to help in national water Asia, and will support both improved national level management. Similarly, requests for training on management, and trust and transparency at the energy-water decision support systems (e.g., regional level. Kyrgyz Republic) will be considered for phase 2 Initiated in 2009 with an introductory work- future funding. shop of regional energy and water representatives2, ◗◗ Concurrently, an independent first generation several consultations were undertaken with all six demonstration model of the Aral Sea water countries (including Afghanistan) through 2010 flows and water balance—the AralDIF, (Dynamic and 2011. These consultations identified current Information Network for the Aral Sea Basin)— capabilities, challenges and priorities in enhanc- was completed by the University of Washington ing water-energy analytics which encompassed: a River Systems Research Group. This draft need for a consensus regional water-energy model demonstration (“first-generation”) model uses structure; improved data requirements; support for publicly available data and modeling platforms institutional platforms that were consistent with new (e.g., remote sensing and satellite imagery) to realities of sovereign development in the region; and demonstrate key characteristics of the two river need for capacity strengthening and a facilitation basins through geospatial earth systems model- role for the World Bank, as a neutral broker. ing. A key objective of this effort is to promote In 2012, several of these preparatory tasks transparency and promote open access in the were completed (bulleted below) and a six-country region. Combined with a publically avail- technical workshop was convened to develop a able earth systems modeling approach, the framework for strengthening the knowledge base for numerous publically available datasets enables integrated water resources management.3 estimation of mass balance at any geospatial scale, independent of locally managed data. ◗◗ Building on the inventory of national and basin The AralDIF meets four principles: 1) the data management models completed in 2011, a to develop the model is fully transparent, and detailed comparative review was undertaken is derived initially from globally available open- for ten models to better describe the potential source data sets; 2) the full mass-balance of range of modeling exercises and to explore how water is accounted for across the entire basin, they may address the national counterpart’s very as the basis of the hydrologic cycle; 3) energy strong desire to have any model/decision support and water linkages, including hydropower, system fully and explicitly address the specific irrigation, and other land use practices can then needs, circumstances and aspirations of each be superimposed on the basic hydrological country. Key issues arising from the comparative cycle; and 4) the model is scalable (in space and review (subsequently discussed in the regional time). The first-generation model was demon- workshop) were model architecture and transpar- strated to the World Bank technical specialists, ency, model accessibility, model functions, and and presented to an informal meeting of the the concept of a system-of-models/modules ESCC4 and the regional technical workshop, and recognizing that one model may not be adequate 2 As part of the September 2009 meeting of the Energy Sector Coordinating Committee 3 The final workshop for this task was originally scheduled for 2011 but the needs expressed in initial discussions led to the addition of several tasks. The timetable was also affected by the Rogun Assessment Studies that began in 2011. 4 A full presentation was scheduled to the formal ESCC but flooding risks in Thailand resulted in cancellation of the formal ESCC meeting. 14 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 report submitted (The Hydrology of the Aral Sea specific activities to further strengthen energy and Basin: First-Generation Demonstration Model water decision support. based on Open and Public Source Data Report Significantly, the workshop identified eight prin- and Decision Meeting). ciples (see Box 1) that establish a new paradigm for future work. The workshop afforded the opportunity To consolidate these activities, the World to begin defining a community of practice for water Bank convened key partners—Swiss Development resources planning. Specifically, participants: Corporation and UNECE—to co-host a regional workshop on “Strengthening Analysis for Integrated ◗◗ Strongly supported a process to better under- and Adaptive Water Resources Management in stand current available models in terms of Central Asia,” ( July 4–6, 2012 in Almaty, Kazakhstan). (i) how well they captured national interests The workshop engaged a range of technical and and aspirations; and (ii) scope and technical policy expertise from Central Asia and the interna- approach; tional community. National delegations from all six ◗◗ Welcomed the increased use of global data countries (Afghanistan, Kazakhstan, Kyrgyz Republic, sets5 to increase transparency and coverage of Tajikistan, Turkmenistan, and Uzbekistan) were rep- available information for water management, resented with 34 delegates (five or six participants although many also requested more informa- in each national delegation) covering the range of tion and capacity building to be able to judge water-sensitive sectors. The attendees and active their relevance and quality; participation by all six countries in discussing water ◗◗ Emphasized the need to strengthen both data management was noted as a significant accomplish- and analysis at the national level as a necessary ment by delegates and international community complement to regional initiatives; familiar with Central Asia issues. Also in attendance ◗◗ Considered both regional (basin) level modeling were observers from international donor organiza- and analysis to be important, but also noted the tions; and a cadre of global experts to share experi- value of more specific topics that draw coun- ence elsewhere. tries together on operational issues (e.g., water The workshop explored current approaches and conservation). emerging analytical tools. These included examples A draft roadmap framework was presented that of: a range of data and information sources; model- proposes a multi-year (2013–2015) regional work ing tools; the importance of an information inter- program to be supported by, and integrated with, face; opportunities to develop national capacity; individual national road map programs. Participants standardized data platforms, integrating open source requested that the proposed elements of the road- ‘top-down’ (such as the AralDIF platform) with local- map be developed further. A workshop report was sourced ‘bottom-up’ data. A review of the current prepared and distributed (November 2012) to par- institutional structure in Central Asia provided rec- ticipants and national policy stakeholders for their ommendations for a more effective legal framework comments. The road map preparation and a draft for and transparent institutions to build cross-border national consultations continued in spring 20136. trust regarding data exchange. The issue of balancing An integral part of Central Asia energy-water hydropower and irrigation was reiterated, and the decision support is provided under the Central need to use appropriate tools that integrate national Asia Hydrometeorology Modernization Project perspectives was re-emphasized. The Almaty work- (CAHMP)7. CAHMP is designed to improve the shop concluded with a framework for a roadmap on delivery of weather, climate and hydrological data 5 In the 2009 workshop, considerable skepticism and lack of interest in global data sets was noted. 6 A December 2012 draft of the roadmap specifies activities in four key areas: data, modeling, institutional strengthening and capacity devel- opment (such as: activate a web-based data portal; define a shared information system integrating “top-down & bottom up” data; develop appropriate water conservation analytical tools; develop appropriate multi-country flood management tools; strengthen inter-regional climate change adaptation/mitigation activities; train on global experiences in international data and modeling; explore institutional needs, particu- larly related to IFAS. 7 Implementation of CAHMP is funded through regional IDA; early development of the program was partially funded by CAEWDP under the SECO single donor seed trust fund. PROGRAM ACTIVITIES (2012) 15 BOX 1: Eight Governing Principles for Strengthening Analysis for Water Resource Management COOPERATION 1. Balance of regional and national ownership 2. Emphasis on national and regional consultations KNOWLEDGE OUTPUTS 3. Basin modeling addressing regional and national priorities and constraints 4. Presentation of information in user-friendly accessible formats OPEN SOURCE 5. Emphasis on open source data, information products and models placed in the public domain 6. “Top down” and “bottom up” data appropriately integrated CAPACITY AND INSTITUTIONS 7. Existing human and technical resources combine with emerging technology to build a community of practice 8. Institutional and financial stability and services in the Central Asia region, addressing innovative for water management in Central Asia as both infrastructure and human capacity. Focused on it is aimed at ensuring credible, transparent Rogun hydrometeorology services in the Kyrgyz Republic HPP Assessment Studies that have benefited from and Tajikistan, CAHMP also supports facilitation of international scrutiny and riparian dialogue. In 2012, regional cooperation in hydrometeorology, includ- CAEWDP supported two key efforts: ing through sharing of related information. CAHMP ◗◗ Consultation and Information Sharing: efforts are coordinated with the SDC national data A second session8 was hosted in Almaty in programs. November 2012 focused on the Environmental Riparian Dialogue and Social Screening Report and Project Riparian dialogue is being undertaken concurrently Design Criteria. These two reports, which in several dimensions. Efforts to convene technical were disclosed well in advance of the meet- specialists across the basin have a goal to strengthen ings, are critical building blocks for the studies trust and collaborative culture. The energy-water and the review period emphasized the need decision support workshop above is such an for stakeholder comment to identify gaps and example as is the study tour to the Rhone parallel to weaknesses. The consultation sessions, com- the World Water Week (see below). posed of one day for government, one day for The second, more dominant engagement is the civil societies, and an evening session for the World Bank’s regional engagement in the Rogun development community, were held partway Hydropower Assessment Studies. As part of the through a review period wherein stakeholder CAEWDP, the World Bank’s riparian engagement, could provide comment via e-mail or mail. Five complementing the IDA-funded Rogun Assessment countries (all but Uzbekistan) participated in the Studies themselves, has two purposes: (i) to help government session and approximately 45 civil establish a credible, trusted source of information societies from all six countries participated in on the proposed project, and possible forum for person or by video links and 38 representatives dialogue on its regional risk and benefits; and (ii) to from the development community attended. demonstrate international good practice in trans- Issues of primary concern for riparian were boundary water management. Such an approach is (i) downstream flows; and (ii) dam safety, 8 Consultation with riparian began in 2008 with in-country reviews of the terms of reference for both the Techno-Economic Assessment and Environmental Impact Assessment studies. The regular program of consultation, focused on the consultant’s inception reports, began in May 2011. 16 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 although issues of environmental degradation, With four country reports, the World Bank has resettlement and economics were also raised. leveraged CAEWDP funds to secure additional All materials shared at the sessions, as well as climate change funds to complete the study for the disclosed report are on www.worldbank Tajikistan and then to explore adaptation at a .org/eca/rogun, as is the consultation report regional scale. The study will be completed in (click on 2nd riparian consultations). 2014. ◗◗ Independent Panels of Experts: The World ◗◗ A second study of Uzbekistan’s agricultural sys- Bank-coordinated Engineering and Dam Safety tems (“Reducing the Vulnerability of Uzbekistan’s Panel and Environmental and Social Impact Agricultural Systems to Climate Change”) Assessment Panel reengaged in detailed reviews identifies the exposure and vulnerability to of consultants’ work in the Fall of 2012. Their climate change, analyzes the potential impacts, mandate is to ensure due diligence and inter- and links these impacts to pragmatic adaption national quality standards, as well as objectiv- responses in Uzbekistan. More specifically, the ity and technical credibility. In addition, Panel study has found that: i) the direct temperature members directly participate in the consulta- and precipitation effect of future climate change tion program, thereby affording governmental on irrigated crops will be to reduce yields for and civil society stakeholders opportunities to most crops, and increase yields for grasslands hear from, seek clarification from and com- and alfalfa, but only if sufficient irrigation water ment to internationally recognized experts. The is available; and ii) farmers in Uzbekistan are not Panels provide recommendations directly to suitably adapted to current climate, particu- the Government of Tajikistan at key milestones, larly regarding efficient use of irrigation water incorporating comments and concerns of which may worsen current conflicts over water stakeholders. resources. Many of the identified climate adap- tation measures can have immediate benefits in Climate Change improving yields, as well as improving resiliency As the climate changes, many parts of Central Asia to future, more severe climate change. High pri- are expected to experience increasingly hot, dry ority actions include national-level adaptation conditions and projections indicate that sometime and capacity and, at the farm level, optimiz- mid-century, there could be notable reductions in ing water application efficiency, and providing runoff in the Amu Darya and Syr Darya basins. Two more climate-tolerant and pest-resistant seed studies assessing climate vulnerability and options varieties (and the know-how to cultivate them for adaptation were completed for Uzbekistan as effectively for high yield). The study also noted part of pilot programs, covering the agriculture and the potential negative impact on livestock and energy sectors. animal husbandry. ◗◗ The energy study (“Climate Vulnerability, Risk and Adaptation Assessments: Helping Countries ENERGY WATER LINKAGES—FRAMEWORK Prepare an Effective Power Sector Response: INDICATORS AND MILESTONES Focus on Uzbekistan”) quantified the physical, As detailed in Table 5, two indicators for this com- market and regulatory costs and benefits of cli- ponent met first milestones by December 2012, mate change, suggesting increased costs relative namely strengthening energy-water analysis (com- to business-as-usual (BAU) capital expenditures. pletion of AralDIF model and signing of the Regional The assessment emphasized energy efficiency Hydrometeorology program), and institutional and demand control measures and attention strengthening (provision of advisors for the comple- to the cross-sectoral issues related to water tion of IFAS Third Aral Sea Basin Management Plan). (affected by both from increased demand for The other two are partially achieved, with dialogue pumping and possible shortages of water for on the Rogun Assessment Studies, the program to cooling energy units). The methodology was develop a roadmap for strengthening analysis of applied to three other countries in Central Asia integrated water resources management, and com- (Kyrgyz Republic, Turkmenistan and Kazakhstan) pletion of two climate change studies. Further work funded by USAID and executed by EC-IFAS. is needed to take the climate change analysis to the PROGRAM ACTIVITIES (2012) 17 TABLE 5: CAEWDP—Energy-Water Linkages Milestones achieved as of December 2012 OUTPUT 2 INDICATOR BASELINE MILESTONE 1 MILESTONE 2 STATUS 12/2012 2010/11 Energy-water Expand data No robust recent First generation Framework for Milestone 1 achieved linkages: Improve management to analysis of links integrated energy- decision support through preparation of understanding enhance energy/ between energy water model is system evolves AralDIF demonstration of the linkages water analysis and water undertaken and from continued model, and CAHMP between water shared analytical work commenced and energy, Regional implementation; facilitate regional Hydrometeorology Milestone 2 underway with dialogue regarding program signed preparation of Roadmap. cooperative management of water and energy, and investigate investments at the regional level. Regional dialogue Regional dialogue Program Concept Engagement Milestone 1 achieved with on at least two continues to falter Note completed and ownership CAEWDP energy-water priority water & due to political and financing of analytics decision support phase I energy issues tensions and no identified for by regional concept note; and seed- facilitated strong regional analytics of regional institutions. funds & MDTF supported by regional institution to lead. hydrometeorology, activity implementation. and national CAREC and IFAS winter energy, water Milestone 2 underway organizations. have potentially productivity, and with continued analytics important role to basins’ water energy and technical assistance play balance. under proposed Roadmap and engagement of EC-IFAS in energy sector climate vulnerability studies. However, the role of regional institutions requires review. Strengthened IFAS—not active A consortium IFAS identifies Milestone 1 achieved regional in regional water- of advisors to its added value in completion and organizations energy dialogue assist IFAS to in the region on endorsement of ASBP-39; capacity to develop ASBP-3 is water and energy IFAS currently in transition; facilitate regional operational. linkages. role of regional institutions dialogue requires review Climate change CC implications Range of existing Continued Milestone 1 partially (CC) adaptation currently poorly and planned analytical work achieved in that a series implications understood at national and develops CC of national level individual recognized for both national and regional CC adaptation options efforts are underway both energy and regional level. adaptation activities for national and five sector-specific water. identified with IFAS; governments, studies completed in four First generation with regional countries; IFAS executed of CC adaptation coordination by studies on energy sector analytical work IFAS vulnerability to climate undertaken change for three countries. Completion of energy sector studies for all five countries, with regional overview underway LEGEND Achieved Partially achieved Initiated No progress Revision required 9 Serving the People of Central Asia: Aral Sea Basin Program 3 (ASBP-3), Executive Committee of the International Fund for Saving the Aral Sea (http://www.ec- ifas.org/about/activities/pbam-3/91-aral-sea-basin-program-3-document.html) 18 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 regional level and better engage and strengthen is taken in those areas with the highest potential for institutions. Milestones 2 for indicators related to improved water productivity. regional dialogue and strengthening institutions CAEWDP will assist countries to develop require re-examination to define realistic goals National Action Plans to identify high value invest- given the lack of progress on transforming regional ment opportunities for increasing irrigation effi- institutions into effective bodies for coordination ciency. The plans will estimate costs, magnitude of and discussion. the savings and economic rate of return to priori- tize needs and establish an action plan or specific investment operations. The activity has a strong investment focus, concluding with a presentation D.  Water Productivity of results to donors and possible financiers. The Within the Program’s overall objective in this irrigation efficiency activity will begin by developing sector—to increase productivity and efficiency of an approach that can be applied across the region, water use in both agriculture and energy sectors— before focusing on one downstream country and CAEWDP focuses on assisting countries to increase one major investment. Of particular importance will water use efficiency while reducing irrigation costs. be expert debate and discussion on the methodol- Particular attention is paid to downstream countries ogy for assessing irrigation efficiency investments. In (Uzbekistan, Kazakhstan and Turkmenistan). The cases that support sovereign objectives, opportuni- Water Productivity component of the MDTF pro- ties for joint (bi- or multi-lateral) investments and gram is exploring the following main elements: activities will be pursued subject to available funds. Building on World Bank-funded prototype work ◗◗ Planning methodology for irrigation efficiency in the region, this proposal has received positive investments, including National Action Plans response from agriculture ministry officials. ◗◗ Assessment of remote sensing data The Water Productivity component of the ◗◗ Methodology for carbon credits program is not as advanced as energy development ◗◗ Agriculture water expert working groups and energy-water linkages, the result of delayed This component is implemented at the national funding10 and the nationally sensitive nature of level almost exclusively, taking advantage of the irrigation management. In 2012, a Project Concept World Bank’s existing and pipeline portfolio of lend- Note was prepared and approved setting out a ing and technical assistance. program to conduct thematic studies at the national level, strengthen capacities and institutions, and WATER PRODUCTIVITY—ACHIEVED prepare National Action Plans for improving irriga- AND ONGOING tion efficiency. TORs were prepared for a first study Diversions of an estimated 116 km3 irrigate to identify the direct (fiscal) costs of irrigation inef- 11.4 million hectares in the region but have also ficiency to the national budget and their composi- contributed to environmental and health problems tion. The study will be initiated in Uzbekistan and and land degradation. Agriculture is by far the largest Tajikistan, the countries in Central Asia with the consumptive use of water in the region. Improving highest proportion of lift irrigation. Subsequent stud- the performance of irrigated agriculture thus holds ies will focus on the costs of irrigation inefficiency the promise of better economic performance in the on agriculture and the macro economy. The study Central Asian countries that will translate CAEWDP will include the identification of opportunities to directly on the ground. Demands for improved improve efficiency, and will lead to the preparation irrigation efficiency through both infrastructure of National Action Plans for irrigation efficiency. rehabilitation and management efforts are high, with Assessment of Remote Sensing Data calls on limited public resources from fragmented Contacts have been established with experts in local decision processes. With water resources the field of remote sensing, and with experience in increasingly under stress, it is critical to ensure action 10Funds were allocated to the water productivity component only after the establishment of the CAEWDP Multi-donor Trust Fund. No funds were allocated from the 2010 SECO seed fund. PROGRAM ACTIVITIES (2012) 19 Central Asia. Some of this work is being developed and for promoting sustainable irrigated agri- and implemented already. Detailed TORs will be culture through participatory irrigation man- prepared in consultation with these experts to avoid agement. The major change introduced by duplication, to be rolled out in 2013. DIWIP has been the suspension of Beruni and Kyzylkum pumping stations that released saline Methodology for Carbon Credits drainage water into the Amu Darya and Lake A pre-Project Information Note (PIN) was prepared Ayazkala. All drainage water from the project and shared with the Carbon Finance Unit in the area is now drained via the former channel Bank. A final PIN will be prepared and submitted for of the Janadarya to the Aral Sea. The newly approval and funding in 2013. The proposal aims constructed main drain and the rehabilitated to identify and prepare a methodology for earning on-farm and inter-farm drainage system now carbon credits, through the New Market Mechanism, flow by gravity, the areas of high water table are for improving the efficiency of irrigation and drain- considerably reduced, and some of the institu- age. Carbon benefits would include reduction of tional issues were addressed, including estab- pumping as a result of more efficient irrigation, and lishment and strengthening of 21 WCAs, training replacement of old, inefficient pumps by modern of 1,250 farmers and water management staff, more energy-efficient ones. and organization of 12 demonstration plots. Agriculture Water Expert Working Groups ◗◗ The Uzbekistan South Karakalpakstan Water During this reporting period, a study tour to Resources Management Improvement Project Marseille was organized in the wake of the World aims to restore irrigation and improve water Water Forum (March 2012). Agricultural water management in the project area, located in experts from Kyrgyzstan and Tajikistan (three from South Karakalpakstan, in a sustainable and each country) participated in the study tour to the financially efficient manner. The Project is pro- Rhone river basin authority in Southern France. The posed to be financed by IDA in the amount of study tour took place at a time when both countries US$220 million. The Board date for the Project were actively engaged in irrigation and water sec- is scheduled for June 27, 2013. Over 40 per- tor reforms at the national level, and provided an cent of the water for irrigation in the Project opportunity for participants to study the experience area depends on two major pumping stations from a country where the principles of integrated and more than 20 floating pumps that abstract water resources management have been adopted water from the Amu Darya. The total energy and implemented some time ago. In addition, costs of pumping into the Project area amount the visit provided an opportunity to learn from to about US$2.4 million per year. The Project experience in private sector involvement in public will eliminate this dependence on pumping irrigation service delivery. This effort afforded an water from the Amu Darya by constructing a opportunity to begin building a community of prac- canal that will draw water from the Tuyamuyun tice for the water in agriculture community. reservoir and by gravity supply the irrigation needs in the area. All pumping stations will be NATIONAL PORTFOLIOS decommissioned, thereby improving the reli- ability of supply of water and eliminating the ◗◗ The Uzbekistan Drainage, Irrigation and need to release large amounts of water from Wetlands Improvement (US$60 million IDA/ Tuyamuyun dam into the Amu Darya to raise IBRD) aims to (a) increase productivity of the water level in the river when this is too irrigated agriculture, employment and incomes low to serve these stations. The existing canal in Karakalpakstan, one of the poorest regions network in the Project area will be reconfig- in Central Asia; (b) improve the water quality of ured to accommodate the gravity inflow, and the Amu Darya river by the safe disposal of the automation of irrigation management will be drainage effluent, and enhance the quality of introduced to improve the accountability of the wetlands in the Amu Darya delta; and public irrigation service delivery. (c) develop institutions for improving water ◗◗ The Uzbekistan Ferghana Valley Water management, operation and maintenance Resources Improvement Project (US$65 million (O&M) of the irrigation and drainage systems, 20 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 IDA) represents the first phase of a longer-term to, in part achieve the a two-pronged develop- engagement in Uzbekistan. The project design ment objectives: (i) improving irrigation service addresses overall constraints to agricultural delivery and water management for the benefit production, damage to public and private of a sustainable increase in irrigated agricultural infrastructure, threats to the environment due productivity; and (ii) improving national water to shallow groundwater in the project area, resource governance for the benefit of water and weak capacity for efficient water resources users and the nation as a whole. The National management in both public and private sec- Water Resources Management Project was tors. The project covers three districts, Rishtan, completed and the preparation is underway. Baghdad and Altiarik in the Ferghana Oblast ◗◗ In Kazakhstan, the Syr Darya Control and (one of the three oblasts in Ferghana Valley Northern Aral Sea Project—Phase II (SYNAS2) in Uzbekistan). The Project Development with objective to improve water resource and Objective is to improve agricultural production environmental management in the Syr Darya in areas affected by waterlogging, and to reduce Basin, under preparation will benefit from damage to housing and infrastructure from ris- CAEWDP AralDIF modeling support. ing ground water levels and salinity in the proj- ect districts. The Project finances improvements WATER PRODUCTIVITY—INDICATORS of subsurface drainage network and irrigation AND MILESTONES systems and rehabilitation and installation of Assessing the four indicators against the first vertical drainage networks. The project also milestones, (see Table 6) three have been initiated. provides support for institutional strengthening However, several milestones need to be reviewed to of public and private organizations involved in align with the constraints to regional cooperation in the enhancement of water resources manage- this area, and the sensitivity even within the country. ment and agriculture production in the project area. Finally, the project supports operational expenditures for project management, consul- E.  Program Management tancy services for auditing project expenditures, M&E of project impacts, and preparation of a This component was originally envisioned as strictly future project. a management task to ensure coordination across ◗◗ The Tajikistan Ferghana Valley Water Resources activities, engagement of donors, consistent program Management Project (US$23.6 million IDA) framework and financial management. The compo- aims to (i) increase the coverage of drained nent started to explore political economic context of and irrigated areas in Bobojon Gufarov and CAEWDP activities in 2012. Kanibodom districts; and (ii) strengthen the early warning system of the Kayrakkum dam BASIN AGREEMENTS as well as carry out a geotechnical survey for An analysis of the 1992 transboundary agreement on assessing the risks associated with said dam. the Syr Darya explored individual riparian’s incen- The Project helps the Government of Tajikistan tives to cooperate regionally on water and energy. address deficiencies affecting irrigation and This research is one case study in a global project drainage and improves water management in that draws lessons from Asia, Europe and Africa on Kanibodom and Bobojon Gafurov districts of cooperation on international waters, and captured the Soghd Region. It addresses critical ele- in “Reaching Across the Waters—Facing the Risks of ments of the irrigation and drainage systems Cooperation in International Waters“. to improve their performance and efficiency, and strengthen the early warning system of INSTITUTIONAL STRENGTHENING Kayrakkum Dam. Interventions under the proj- CAEWDP focuses on two regional organizations: ect are expected to benefit about 30,000 ha and International Fund for Saving the Aral Sea (IFAS), about 250,000 people. mandated by the five Head of State and the ◗◗ In Kyrgyz Republic the Water Management Energy Sector Coordinating Committee (ESCC), a Improvement Project, extended to close in 2013 10-country forum of the ADB’s Central Asia Regional PROGRAM ACTIVITIES (2012) 21 TABLE 6: CAEWDP—Water Productivity Milestones achieved as of December 2012 BASELINE OUTPUT 3 INDICATOR 2010/11 MILESTONE 1 MILESTONE 2 STATUS 12/2012 Water productivity: IFAS’ capacity in Institutional Needs assessment Capacities Milestone 1: IFAS currently Address infrastructure agricultural water capacity varies for institutional strengthened, in transition. Activity and management management between countries; strengthening based on needs postponed. opportunities strengthened, and Limited of agriculture assessment to increase the communication institutional capacities within productivity and between national linkages between IFAS efficiency of agricultural water riparian states on water use in both specialists improved agricultural water; agriculture and energy sectors. Limited capacity of IFAS in agriculture Infrastructure Opportunities Riparian Ag Water TOR for an Milestone 1: first meeting and management and constraints Forum established assessment of of Ag Water Forum opportunities to improve with high-level constraints and taken place. Milestone 2: (including agricultural water experts from opportunities underway investments) productivity are riparian countries agreed by riparian for increased not systematically countries agricultural water analyzed, are not productivity identified at a identified transboundary level, and are not owned by riparian governments National action No countries National report Countries have Milestone 1: TOR plans for increasing have prepared on infrastructure translated report prepared, consultant agricultural water national actions and management into a national about to be recruited productivity plans to improve constraints and action plan prepared agricultural water opportunities productivity for increased agricultural water productivity available Understanding Existing Strategic Analytics Milestone 1: underway. of regional water national plans / Framework for continued; Milestone 2: not yet productivity is investments do Prioritization Initial investment started. reflected in national not take account of Irrigation options identified plans, policies and / adequately Investments and at national level. or investments of at environmental hydropower least two countries demands or investments regional needs. LEGEND Achieved Partially achieved Initiated No progress Revision required Economic Coordination program. Engagement with for new projects and activities. While initiating IFAS has been focused at the Executive Committee some activities, the full program of support, based (EC) level, primarily in supporting the preparation on from ASBP-3 and CAEWDP, will be determined of the Third Aral Sea Program Plan (ASBP-3) and as once the future location and chair of the EC-IFAS is official observer to the World Bank-hosted Rogun established. Consultation and Information Sharing Program. The ESCC concluded its 2009–2012 work pro- Since later 2011, the transition of the EC from gram and approved a new 2013–2015 action plan. Almaty to Tashkent, as part of the Fund’s governance All countries participated, although at different levels arrangement has been delayed, raising a vacuum (some countries at Deputy Minster level, with others 22 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 at the mid-technical staff). In the past, sensitive top- The UNRCCA has supported numerous activities ics such as CASA 1000 and new hydropower projects in regional cooperation, covering information and were not included in discussions; however, the gov- analysis, support to the Rogun riparian consultation ernance of CAREC has since changed to consensus process, and most recently, drafting of a framework on decisions only, and not on discussion agendas, so agreement on transboundary water management. that a wider array of topics for discussion can now The preparation of IFAS’ ASBP-3 served as a be expected. ADB has also made significant efforts to strong forum for development partner dialogue and raise the profile of the committee with the inclusion coordination. Since its completion, the develop- of national focal points in the meetings. ment community has continued to coordinate at the activity level, but with less emphasis on jointly DONORS strengthening regional actions. This is further com- Establishing the multi-donor trust fund (MDTF) for promised by a gradual shift of donors to national as CAEWDP in 2011 accelerated the opportunities opposed to regional activities given the difficulty in for additional contributions. During 2012, discus- convening all six countries, and the delayed transfer sions advanced with SECO and EC. An agreement of EC-IFAS to a new Chair. The Berlin process meet- was signed in December 2012 for a EUR 1 million ings in March 2012 hosted by GIZ and the German contribution from the EC. Internal approvals were Foreign Ministry, and the IWRM regional technical completed for a $3.5 million contribution from workshop hosted by the World Bank in consulta- SECO to augment the $1 million seed fund, which tion with UNECE and SDC in July 2012 served as two has been 90 percent disbursed. In addition, the specific regional level meetings. In September 2012, World Bank and DFID were preparing a second a meeting of development partners with representa- contribution of $3.5 million to the MDTF, on top of tives of EC IFAS, SIC ICWC and GWP met to discuss the original $1.4 million. This second contribution the status of the information field of Central Asian parallel’s DFID’s support to South Asia energy and water sector, given SDC’s decision to stop fund- water issues. These significant contributions totaling ing of the CAREWIB initiative. No comprehensive, $8.4 million will enable the program to more effec- broadly supported action plan was agreed; how- tively support key issues in energy and water security ever, as described above, CAEWDP convened the over multiple years. World Bank, UNECE and SDC to prepare a roadmap for future support to analysis for integrated water DEVELOPMENT COMMUNITY resources management. The donor community in Central Asia has strength in the range of tools it can offer: development of mar- STRATEGIC PARTNERSHIPS kets, strengthening capacity for dialogue, and invest- At the request of donors, the World Bank hosted a ments in energy and water security at the national brainstorming-session [November 2, 2011 in Almaty, level. It is diverse—ranging from the UN’s expertise Kazakhstan] with SDC, USAID, GIZ, EC, UNECE, in international conventions and dispute resolution UNDP, and ESCAP to specify further opportunities (UNECE), to bilateral development partners such as for collaboration. This session, and bilateral meetings the Swiss-SDC’s contribution to data management, that followed, identified several key opportunities to ADB’s investment focus. Despite the challeng- that take advantage of common program objectives ing implementation environment, development and collaborate on analyses, methodologies and partner involvement has shown important advances. technical assistance activities: Work on small transboundary basins, funded by ◗◗ Switzerland: GIZ, has demonstrated successful cooperation ɪɪ Irrigation efficiency on improving water on issues related to integrated water resources resources management (in particular in the management, dam safety and data collection and three countries of the Ferghana Valley); sharing. Exploration of new transmission corridors, ɪɪ In Kyrgyzstan, advanced discussions are coordinated by the World Bank, is bearing fruit and underway to jointly prepare an investment the UNECE has engaged all countries in challeng- operation for accelerated implementation of ing discussion on institutional reform of IFAS and the Water Code, including investment in a international conventions on international waters. Water Information Management System; PROGRAM ACTIVITIES (2012) 23 ɪɪ In Tajikistan, good collaboration with SDC ◗◗ Eurasian Development Bank: Discussions on co- was achieved in the context of national financing an investment operation in Tajikistan Water Sector reforms; portion of the Fergana valley (pending official ɪɪ In Uzbekistan SDC and the Bank are co- request from the Government of Tajikistan). financing RESP II, among others in the ◗◗ Collaboration with FAO’s Investment Center is Fergana Valley; and taking place on a number of projects, with FAO ɪɪ Energy efficiency program in Kazakhstan. experts providing key inputs in the preparation ◗◗ UNECE: Possible areas of cooperation are: dam and implementation of investment opera- safety; water management in Afghanistan. tions in Kazakhstan, Kyrgyzstan, Tajikistan and ◗◗ ADB: Active coordination as co-chairs of the Uzbekistan. FAO has also provided a contribu- Development Coordination Committee specific tion to the preparation of the ECA Irrigation and to Tajikistan energy options and governance. Drainage strategy. ◗◗ USAID, SDC, UNECE: Past and planned corrobo- ration on data collection and management, and energy-water modeling and analytics. F.  Financial Review ◗◗ USAID and EBRD: Continuation of partnership on analysis of energy sector vulnerability to Cumulative disbursements of CAEWDP trust funds climate change. amounted to $1.6 million at the end of January ◗◗ EC: Focus on a sustainable energy strategy for 2013. Cumulative disbursements of CAEWDP trust Tajikistan and coordination on application of funds and supplemental Bank Budget and other trust the EC’s Investment Facility for Central Asia funds amounted to $9.8 million. This figure includes (with EIB and EBRD). $3.1 million for CASA and $1.1 million for the ◗◗ UNRCCA: The World Bank and UNRCCA main- Regional Hydrometeorology Program that received tain regular contact and share information on considerable supplemental funds. political and diplomatic initiatives, such as the drafting of a Framework Agreement on sharing PROGRAM COMPONENTS transboundary waters. The UNRCCA is an offi- As shown in Figure 2a, about half of the disbursed cial observer to the World Bank-hosted Rogun funds supported a better understanding and Consultation and Information Sharing Program. knowledge platform for energy-water manage- Opportunities exist to cooperate more closely ment (“Energy-Water Linkages”). When all funds are on the knowledge base for energy and water taken into account (Figure 2b) the share of Energy management. Development rises dramatically, to about half of FIGURE 2: CAEWDP Program Disbursements A. By Component (US$) B. By Component—All Funds CAEWDP Trust Funds (US$ Millions) 1.5 830,000 210,000 3.8 4.5 530,000 Strat. Program Mgmt. Energy/Water Linkages Energy Development 24 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 disbursements. About $3 million was expended on background papers on political economy, capac- CASA 1000 which will continue to need support as ity building events and support to the Executive countries establish commercial relations and mobi- Committee of IFAS in the production of the Third lize financing. Other major activities include support Aral Sea Basin Management Plan have been funded, to the Energy Sector Coordinating Committee, the and support provided for numerous initial activities Tajikistan Winter Energy Crisis Study and evaluation prior to their formalization. of the Uzbekistan/Afghanistan/Pakistan power line Commitments and allocations (versus disburse- project. ments) of CAEWDP trust funds reflect expected Energy-Water linkages account for about 40 per- future spending. Over 60 percent of funds undis- cent of total (trust fund + Bank budget + other trust bursed at the end of 2013 were committed (to funds) disbursements ($3.8 million), with the Central contractual obligations) or allocated (set aside Asia Hydrometeorology Modernization program by program management for specific activities in accounting for about $1 million. The CAHMP is now anticipation of commitments and disbursements) to in implementation, funded by IDA credits. Three the Water Productivity component (mainly irrigation sets of activities account for the remainder of this efficiency). This will result in a more equal allocation component’s disbursements: of funds across program components. ◗◗ Climate change assessments including energy LEVERAGING CAEWDP TRUST FUNDS sector and agriculture systems in Uzbekistan Figure 3—disbursements by source of funds— and the Pilot Project on Climate Resilience illustrates strong supplemental funding for some ini- project in Tajikistan ($1296k) tiatives and the strategic use of CAEWDP trust funds ◗◗ Energy-water knowledge base and decision to leverage such support, particularly in the early support ($846k) days of the program. For every dollar in CAEWDP ◗◗ Rogun riparian program ($573k). trust funds expended, an additional $3 dollars Since 2009, Strategic Program Management were spent from Bank budget and an additional ($1.5 m) has supported program design, establish- $1.80 from non-CAEWDP trust funds. ment of a result framework and multi-donor trust These supplemental funds were particu- fund, and convening of donors. In addition, various larly important for CASA-100 ($3 million in Bank Budget and non-CAEWDP trust funds), the Pilot Program for Climate Resilience in Tajikistan ($550,000 in non-CAEWDP trust funds), Regional FIGURE 3: CAWEDP Disbursement by Source of Hydrometeorology Program ($500,000 in Bank Funds (US$ Millions) Budget) and $150,000 from ESMAP for the Tajikistan Winter Energy Crisis Study. Sometimes these funds can cover the full costs of the initiatives; in other 2.8 cases, CAEWDP funds are critical supplements for staff support and supervision (as was the case in the 1.6 energy and agriculture vulnerability studies in the 5.4 initial work program). This leverage is expected to decline as the program establishes a more cohesive work program, but in the coming year, other trust funds have been secured to support CAEWDP activi- ties. For example, the energy vulnerability study has accessed $500,000 from the CDKN climate fund and Bank Budget CAEWDP TF’s Other TF’s ESMAP is again supporting energy security assess- ments in upstream countries. PROGRAM ACTIVITIES (2012) 25 FIGURE 4: Disbursement by Geography (in US$ Millions) 1.5 2 4.4 1.8 Regional (< 5 countries) Regional (5 countries) National SPM GEOGRAPHIC DISBURSEMENTS support initiatives relevant to some combination CAEWDP is designed as a regional program that also of countries (e.g., the assessment of transmission functions at the national level. Figure 4 illustrates investment from Uzbekistan through to Pakistan) the allocation of disbursements across (i) regional while another 20 percent supports initiatives that activities that include all five countries, (ii) regional involve all five countries, such as energy-water link- activities that involve multiple but less than all ages, institutional strengthening with Energy Sector five countries, and (iii) national activities. (The pie Coordinating Committee and IFAS, and the Rogun chart separates out Strategic Program Management riparian program. National programs (20 percent) which is a mix of national, regional program activi- include climate change assessments, and winter ties.) At present about 45 percent of expenditures deficit studies.  27 27 III.  Strategic Perspective A program retrospective and assessment dialogue. Both are necessary tools for verifiable, of risks, challenges and opportuni- objective assessment of possible benefits, risks and ties provides the basis for adjusting indirect implications of cooperation. Without an or “course-correcting” the program agreed upon, commonly trusted information and by (i) revisiting program basics (e.g., objectives, knowledge base, discussions on the energy-water structure); and (ii) adapting the program to new nexus and cooperation will lack a strong founda- circumstances (e.g., new diagnostics, increase in tion. Similarly, each country must feel confident funding). participating on an equal footing. National technical specialists have called for increased access to and transparency of information, and assurance that national perspectives are explicitly taken into con- A.  Challenges, Risks sideration. This requires adequate capacity building and Opportunities and investment in knowledge tools in each country, matched by institutional strength and capacities at NATIONAL CONFIDENCE AND SECURITY the regional level. In order to achieve mutual benefits from coopera- On the institutional side, notwithstanding the tion or coordination, each country must attain a challenges encountered, both the CAREC ESCC11 minimum level of energy or water security. In other program and EC-IFAS12 have produced joint, multi- words, national level programs—specifically national- country products over the last two years. The value level efforts in hard investments and management of these organizations should not be underestimated; to alleviate energy and water scarcity—are needed. experience in other international river basins of In upstream countries, the focus must be on energy the world confirms that these institutions are hard efficiency measures and load management in the won, difficult to establish and even more difficult short term, and identifying and preparing new to transform into pragmatic champions of regional sources of winter energy supply in the medium to cooperation. Continued investment is needed to longer term. In downstream countries, the focus is assist existing and any emerging Central Asia institu- on effectively creating “new” water by increasing tions realize their potential as centers of excellence water efficiency and investing in irrigation systems and dialogue. to reduce agricultural costs, lower water require- Formal and informal consultations with technical ments and increase yield. Given the age of irrigation specialists in the six countries recognize the benefit infrastructure, national level plans are needed to pri- of regional coordination and underscore the need oritize irrigation efficiency investments and to direct for improved analytical tools to articulate basic limited funds to their highest development value. resource endowments, linkages between energy and water management, and a future with climate CAPACITY FOR DIALOGUE change. Within the basin, there is increasing atten- Institutional and analytical capabilities are the tion to climate change and associated concerns such cornerstones of effective and evidence-based 11 Central Asia Regional Economic Cooperation Program—Energy Sector Coordinating Committee 12 Executive Committee—International Fund for Saving the Aral Sea 28 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 as disaster risk management. The data, analysis and These are likely to remain and even worsen knowledge in these areas have strong national inter- as rehabilitation and new supply fails to keep ests but also lend themselves to regional coopera- up with growing demand. For example, the tion, constituting a regional public good. recently completed ADB Master Energy Plan Strengthening capacity for dialogue must adopt identifies over $30 billion in required new a pragmatic view of basin-level cooperation. It must energy investments to catch up with demand. support different levels and types of cooperation, II. Energy deficits remain in the Republic of dictated by the issue and readiness of the parties. For Kyrgyz and Tajikistan with serious economic each international basin, the optimal mode of coop- impacts, estimated at about 3 percent of GDP eration will depend on a mix of factors including annually (Tajikistan). The indirect cost, of hydrologic characteristics, the economics of coop- course, extends much further: to the human erative investments, the geopolitical and socio- impact of winter heat shortages, and the economic relationship of riparian states, and the longer term but very potent effect on busi- risks and opportunity costs of parties coming ness investment climate in all countries (see together as illustrated in Figure 5. Engagement in Table 7)14. There are no easy solutions given energy-water in Central Asia requires a multi- the countries’ limited resource options, and in dimensional and flexible approach that facilitates both Kyrgyz Republic and Tajikistan, reforms gradual evolution of coordination and cooperation. are hampered by customer, citizen and donor concerns about the transparency and gover- INCREASING STRESS nance of the energy utilities. I. Energy resource constraints continue to III. Energy trade within the Central Asia Power compromise the economies of at least four System now functions with only three countries. The inefficient energy usage, as evi- countries: Tajikistan was isolated in 2009, and dent by high-energy intensity of Central Asian overdraws are increasing instability (including countries makes the situation even worse. FIGURE 5: International Rivers—the Cooperative Continuum13 Types of Cooperation—some examples Indus Mekong Rhine Orange Senegal River Communication Information Convergence Joint Equity & sharing of national preparation joint Types of agenda of projects ownership cooperation & investments Inform Adapt Join Dispute Cooperation Continuum Integration Unilateral Coordination Collaboration Joint Action Action 13 Sadoff C. and D. Grey. (2005) Cooperation on International Rivers—A Continuum for Securing and Sharing Benefits. International Water Resources Association, Water International Volume 30 Number 4. 14 The fourth World Bank/European Bank for Reconstruction and Development Business Environment and Enterprise Performance Survey (BEEPS)—conducted in 2008, before the onset of the financial and economic crises—shows that electricity is a major concern to businesses throughout Europe and Central Asia. The 2008 survey showed a dramatic increase in concerns about electricity supply since the previous sur- vey, conducted in 2005. In every country surveyed, the percentage of firms that considered electricity supply a problem rose. In the Central Asian countries, the results were striking, as shown in Table 7. STRATEGIC PERSPECTIVE 29 TABLE 7: Business Environment and Enterprise Performance Survey (2008): Electricity as a Problem for Business RANK OF PROBLEM FOR BUSINESS PERCENT RESPONDENTS INDICATING (1 IS MOST SERIOUS RISK) A PROBLEM 2005 2008 2005 2008 UZB 6 3 16 51 TAJ 5 2 29 58 KYG 12 1 12 77 KAZ 13 4 10 58 blackouts)15 of the electric grid. Large draws VI. Institutionally, the transition of the Executive on the northern border led Kazakhstan to Committee of the International Fund for voice strong concerns about grid discipline, Saving the Aral Sea (EC-IFAS) to Uzbekistan, its first publicly aired complaint. The direct the next host-country Chair, remains uncer- financial cost of reduced trade in the region is tain. It raises questions regarding EC-IFASs in the order of $2 billion over three years. survival as a viable forum for regional initia- tives and dialogue. The credibility of the IFAS’s IV. In the water sector, aging irrigation infra- Interstate Committee on Water Coordination structure reduces land productivity, increases (SIC-ICWC) as a balanced, neutral regional energy inefficiency, and degrades the environ- institution is increasingly under scrutiny, ment. Climate change is expected to worsen with the termination of the SECO supported the situation: rising temperatures will increase CAREWIB-program. Without a resumption of demand for pumping, while the natural flow leadership, progress on much needed reforms regime may shift. Economically, farmers’ to evolve IFAS into a modern water institution incomes are reduced and government costs will be affected, notwithstanding the efforts of increased—in Uzbekistan, a 1 percent drop UNECE and GIZ. in pumping efficiency costs $10 million/year to the state ministerial budget which itself POSITIVE SIGNALS is 80 percent pumping costs. Dysfunctional drainage infrastructure leads to high levels of I. Notwithstanding the difficult regional cir- soil salinity in particular in the downstream cumstances, the current EC-IFAS developed parts of the Amu and Syr Darya, which in turn a comprehensive program plan (ASBP-3) for requires application of large amounts of water improving water management in the Aral Sea (as high as 25,000 m3/ha/year) to leach the Basin, assumed strategic initiatives and estab- soil, closing the vicious cycle. lished a strong and supportive donor base. V. Specific initiatives or events16, as well as II. Joint efforts have been recognized most less publicized sensitivities on transboundary recently at the 11th CAREC Ministerial water management17, fuel disagreement with Meetings in Wuhan China in November 2012, economic consequences. Political and ethnic noting “a key breakthrough” that CAREC tensions, be they overdevelopment projects countries acknowledge the importance of or treatment of ethnic minorities, must also be resolving the regional water agenda. The joint monitored. ministerial statement identified a common 15 For example, the Kazakh energy utility, KEGOC, recently accused Uzbekistan of systematically violating the accepted and legally sanctioned norms of simultaneous grid operation by drawing significant amounts of non-contracted power from Kazakhstan and threatening destabiliza- tion of the Central Asia power system and even the Kazakh/Russian interconnection. 16 For example, the proposed Rogun Hydropower Project (HPP) Assessment Studies for which the Ecological Movement of Uzbekistan filed a request for Inspection panel with the World Bank (subsequently denied given its status as studies), and CASA-1000 Kyrgyz/Tajik/Afghan/ Pakistan transmission line that is perceived as competition for Uzbekistan’s similar efforts to export power to Afghanistan. 17 For example, Shadhara/Arnasai basins and joint management of irrigation schemes on the Uzbek/Turkmen border and water diversion from Toktogul reservoir. 30 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 understanding “on the initial need to develop fundamental, knowledge-based transbound- the analytical tools for water management at ary dialogue. Strong interest was expressed in the national and regional levels” and acknowl- convening on knowledge products for mutual edged the efforts of the WB energy and water benefit (e.g., managing extreme hydrology teams. and disaster risk). III. In the energy sector, alternative models of VI. Turkmenistan recently signed the UN power trading within Central Asia and with Convention on Transboundary Waters. South Asian countries are being explored VII. Two Rogun consultations (May 2011 and through several significant initiatives: November 2012) have been held, involving ◗◗ The CASA-1000 Project aims to connect all six countries in either government or civil Kyrgyz Republic, Tajikistan to Afghanistan society sessions, complemented by broad and Pakistan (four countries have signed sharing of information and access to indepen- a Memorandum of Understanding (MoU) dent international experts. During the year, which identifies a 500 kV line between the the Government of Tajikistan has commit- Kyrgyz and Tajik grids, a 500 kV HVDC line ted to numerous actions to address regional between the Republic of Tajikistan and concerns regarding the Rogun Assessment Pakistan via Kabul); Studies, namely ceasing works at the site ◗◗ Uzbekistan—Afghanistan transmission link and committing to maintain flows within the (operating since 2009); Nukus Declaration, should they proceed with ◗◗ Tajikistan—Afghanistan link (recently the proposed project. Uzbekistan has pro- completed); vided written comments to the Bank, which ◗◗ Turkmenistan—Afghanistan Regional Power were shared with all stakeholders. (TAP) Interconnection Project (proposed 300MW power plant in Turkmenistan and VIII. The Energy Sector Coordinating Committee associated transmission infrastructure into of CAREC successfully completed its Afghanistan); 2009–2012-work program and agreed on a ◗◗ Datka-Kemin 500 kV line and associated follow up for 2013–2015. works (already under construction, this line IX. UNRCCA is convening countries at the policy could reshape the Central Asia grid system level to increase familiarity with “scenario by 2015 and provide a good platform for a approach” as a modern approach to explor- new era in power trade); and ing the challenges of cross-border water ◗◗ Increased consideration of power and gas management. links between Turkmenistan and Tajikistan through Afghanistan. X. UNRCCA also initiated dialogue in the region on a framework agreement for sharing IV. The Tajikistan Winter Energy Alternatives transboundary waters. Study offers a roadmap to eliminate energy deficits by 2016, and development partners XI. As noted in last year’s update, the dynam- are expressing their intent to assist in imple- ics of the broader geographic area are an menting the recommendations. emerging, significant influence. Central Asia’s economic and cultural borders are becom- V. Technical issues can act as entry points ing more porous as the geopolitical balance for a broader transboundary discourse. For shifts, influenced by the proposed transi- example, salinity is a key agricultural produc- tion of western engagement in Afghanistan, tivity concern in the downstream parts of further consideration of non-traditional trade the Aral Sea basin; but it also has important routes (including momentum of the CASA transboundary implications in view of the investments, the Turkmenistan, Afghanistan, significant inefficiency associated with leach- Pakistan, India pipeline, and various trans- ing. Similarly, issues such as storage, dam mission links from Turkmenistan through safety, climate change and irrigation efficiency Tajikistan and Pakistan), increasing interests can serve as technical entry points for a more STRATEGIC PERSPECTIVE 31 of China trade with Turkmenistan, and active in the statement of objectives for the program is discussion on Kambarata 1 and the Naryn recommended: Cascade confirming Russia’s ongoing interest in regional energy-water issues. BOX 2: Proposed revision to CAEWDP XII. Afghanistan has emerged as key player in objective both hydropower and irrigation (Amu Darya River). Coupled with the strategic interests of ɪɪ From: Build energy and water security various donors/investors (e.g., U.S. Silk Road for countries in Central Asia through Initiative, mines and hydro carbon conces- enhanced regional cooperation. sions), Afghanistan is increasingly shaping ɪɪ To: Build energy and water security regional dialogue in both energy and water in Central Asia countries while lever- issues in Central Asia. While this is likely to aging the essential role of regional bring more pressure, it also offers an opportu- cooperation. nity to update the understanding of available resources, possible emerging demands and the relationships among CA water managers. PROGRAM STRUCTURE CAEWDP’s original structure had three components: energy development; energy-water linkages; and water productivity. These three elements remain B.  Revisiting Program Basics essential. Both water productivity and energy PROGRAM OBJECTIVES development are at the base of national actions CAEWDP seeks to enable CA countries to take in Uzbekistan, Turkmenistan and Kazakhstan, and advantage of their resource base, maximize benefits Kyrgyz Republic and Tajikistan, respectively. Energy- of energy and water management at the regional water linkages, covering the analytics on integrated scale, while respecting national priorities and safe- water resources management (which includes guarding regional stability. The original objective energy), information sharing, climate change and of the CAEWDP remains valid, as does the meth- regional hydrometeorology, form the knowledge odology to work regionally for national prosperity. base and, to a large extent, the evidence for produc- Shortages of energy persist, exacerbated by insti- tive dialogue. tutional and investments gaps at the national level, Several factors suggest a fourth component— and weak efforts to capture the benefits of trade and Strategic Program Management—warrants greater cooperation within Central Asia. Some downstream focus. Lessons on political economy influences on countries are making progress in shifting to less cooperation from other international river basins water-intensive, high value added crops; however, (e.g., Reaching Across Waters report) emphasize the the cost of irrigation, potential impact of climate risks and risk mitigation strategies that can assist in change and dependence on foreign sources of water transboundary cooperation. Institutional possibili- remain potent political and economic challenges. ties offered by a (i) renewed CAREC program, (ii) the As recognized in the 2011 review, the objec- UNRCCA efforts on international framework agree- tive of the CAEWDP needs to further strengthen its ment, and (iii) a re-located EC-IFAS, can be used to national focus to build the conditions for coopera- strengthen the diplomatic and political economy tion and establish a level of confidence and national foundations for the program. In addition to basic security focused on: program management, more effort could be com- mitted to engaging at senior levels of donors and ◗◗ Reducing winter energy shortages in Kyrgyz Central Asian governments in direct discussions, both Republic and Tajikistan; and within and across borders. The Bank has initiated ◗◗ Increasing resilience to hydrologic variability in a comprehensive study in water management in Turkmenistan, Uzbekistan, and Kazakhstan. Central Asia to better understand political economy To underscore the importance of national pressures—past as well as emerging. It is intended to level actions a subtle but important modification stimulate discussion and debate within the region. 32 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 Numerous activities are expected to lead to access to capital. CAEWDP offers a vehicle to increased investment in energy and water assets. increase key investments, moving the invest- CAEWDP currently funds investment preparation ment preparation activities under CAEWDP to only, but does not fund projects. Looking forward, financial projects by a range of IFIs. the program will seek partners that can provide access to significant lending, possibly leading to an FLAGSHIP INITIATIVES investment facility for Central Asia energy and water. Several “flagships” have been identified as outputs and outcomes to meet program objectives. These flagships require a package of activities over the medium term that, collectively and cumulatively, C.  Strategic Adaptation transform energy and water security in Central Asia. PROGRAM SCOPE AND ACTIVITIES These flagships summarized in Table 8 and will be An increase in the cumulative funds for CAEWDP further detailed in the CAEWDP work program for from $2.4 million (SECO single donor plus DFID 2013–2015, currently under preparation. MDTF) to almost $11 million will enable a qualitative shift in commitment and scope of activities. This shift CAEWDP CORE TEAM will be guided by the following principles: The four-fold expansion of CAEWDP will require restructuring and strengthening the CAEWDP core ◗◗ Country engagement: To better incorporate team. It is expected the core team will be strength- national level objectives, the CAEWDP funding ened as follows: will extend to national portfolios of the World Bank and donors, with particular reference to ◗◗ Add coordinators for program components to hydrologic variability (downstream countries) expedite implementation of new projects and and energy security (upstream countries). activities; Country engagement will also link national ◗◗ Mobilize local focal points (in country offices) priorities to regional opportunities. As the pro- to engage and increase local presence; and gram matures, and country engagement grows, ◗◗ Establish regular advisors on key issues such as the program will commit funds to recipient- trust fund management and communications. executed tasks. It is expected the additional staffing would ◗◗ Transformative impact: Individual actions, as amount to 3 people over 3 years for a total (approxi- characterized CAEWDP to date, are useful; mate) cost of $1 million. The costs will be covered by however, with added resources, the program can secondees, the administration budget for the MDTF, focus on key areas that require a suite of activi- Bank budget and project budgets (direct costs). As ties to be implemented over time and leading to noted in the governance structure, the Core Team significant or transformative impact at the heart will call on specialists both in and outside the World of energy-water challenges in Central Asia. Bank as needed to ensure adequate quality reviews ◗◗ Building confidence to cooperate: Countries face and cross-sectoral coordination. a variety of risks and constraints to cooperation. Attention is needed to eliminate those con- PARTNERSHIPS straints, with an immediate focus on leveling National Governments the playing field in knowledge and capacity, and To date, CAEWDP has adopted a cautious approach building specialist communities of practice. to national governments, the results of the politi- ◗◗ Leveraging partner activities: The water-energy cal circumstances and more weight during the seed development community in CA is relatively period on regional activities and establishing specific cohesive. Taking advantage of common priori- activities in each country (see Annex IV). National ties through discussion of the Donor Advisory profiles under the banner of CAEWDP have not committee, collaborating on priorities (such as been a priority and, as a consequence, CAEWDP as with SDC on information management), and a cohesive program is not well recognized among aligning messages will leverage CAEWDP funds. national governments. However, with the exception ◗◗ Investments: The strength of the World Bank is of Turkmenistan, activities supporting the objectives to link analytics and sectoral knowledge with STRATEGIC PERSPECTIVE 33 TABLE 8: CAEWDP: Program Components and Flagships ENERGY DEVELOPMENT WATER PRODUCTIVITY Energy security Design and implement measures to alleviate Irrigation Improve efficiency of irrigation at the national in Central Asia severe winter energy shortages as a base for efficiency level through prioritization of investments countries sustainable energy security. opportunities, and strengthening capacities and institutions Intra-Central Asia Enhance energy trading among CA countries Technology for Promote adoption of advance technologies trade by transition to more efficient, market irrigation and to increase water productivity by reducing transactions based on well-designed drainage wastage, increasing control of water supply, and commercial contracts minimizing evapotranspiration Connecting CA to Build the foundation for development of a Dam safety and Improve dam safety and water management at Regional Power power market linking Central Asia to other rehabilitation bulk infrastructure facilities Markets regions ENERGY-WATER LINKAGES STRATEGIC PROGRAM MANAGEMENT Decision support Strengthen the knowledge base and technical Regional Nurture institutions and communities of capacity to manage water and energy institutions practice that support regional dialogue and resources at the national level, and support coordination evidence-based dialogue at the regional level Climate change Identify climate change risks and develop Political Increase understanding of strategic pressures adaptation strategies in energy, and economy in support and as barriers to energy and water agriculture security Riparian dialogue Facilitate dialogue across countries to improve Program Strengthen partnerships in program coordinated management and development partnerships implementation of shared resources of the program are underway in each of the Central Regional Organizations Asia countries, offering a concrete foundation for EC-IFAS and the ESCC will remain focal organizations greater national dialogue. Conditions are right to for the program. “string the pearls” of CAEWDP activities through ESCC: Following the completion of the 2009/12 more explicit dialogue on issues of water and energy work program, the Ministerial Council of the Central with both technical and political levels of govern- Asia Economic Cooperation Program (CAREC) ment, with explicit reference to a comprehensive approved a follow-up program for 2013/15. Several CAEWDP umbrella. core activities will remain, and expand to discussion The proposed mechanisms for national level of contentious but regionally significant issues. Of dialogue are: note, CASA 1000 will now be addressed as part of the work program’s focus on CA/South Asia trade ◗◗ Share findings of WB-funded macroeconomic expansion. analysis (when completed); EC IFAS: Drawing lessons from other interna- ◗◗ Enhance direct country-level communication tional river basins, CAEWDP recognizes IFAS as a about CAEWDP, ensuring that each government potentially valuable asset for Central Asia. However, understands the opportunities afforded by the its history, the current transition, the regional program; reputation of its entities, and institutional structure ◗◗ Expand national activities under CAEWDP, inte- suggest it does not at present have the ability to grated into World Bank country programs; convene parties on energy-water issues, above a ◗◗ Initiate new initiatives that link regional and certain technical level. The transition of the chair of national activities such as (i) building a knowl- the Executive Committee to Uzbekistan, therefore, edge base for integrated water resources man- is a critical step in continued partnership with IFAS. agement; and (ii) supporting regional energy Should the transition safeguard the role of IFAS as a trade; regional body, CAEWDP will outline the priorities of ◗◗ Support country participation in the MDTF the partnership in a Memorandum of Understanding Donor Advisory Committee meetings; and with EC-IFAS. In addition to identifying specific ◗◗ Introduce recipient-executed activities. 34 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 coordinated activities based on the ASBP-3 (e.g., implementation, monitoring progress and advising knowledge base, irrigation rehabilitation), this on annual work programs. MoU will help define the potential for CAEWDP to As set out in the governance structure, non- strengthen IFAS to contribute to the overall goals of MDTF contributing partners, including the Central energy and water security. Asia countries (Kazakhstan, Kyrgyz Republic, IFAS: With a focus on EC-IFAS as a core agency Tajikistan, Turkmenistan and Uzbekistan), and pos- for regional dialogue, there are opportunities to sibly Afghanistan, will also be invited to deliberations consider other IFAS agencies for specific work pro- of the Committee. grams. Agencies such as the Interstate Commission Beyond the management of the MDTF, CAEWDP for Sustainable Development, which has a mandate seeks to engage donors to: to cover a range of sectors related to environmental ◗◗ Leverage work programs by connecting donor protection and socio-economic well-being, may be and CAEWDP activities in areas such as data positioned to engage on issues related to climate management (e.g., SDC/SECO) and energy change. The CAHMP partnership with the Regional governance (e.g., EC); Hydrology Centre will continue. ◗◗ Strengthen transboundary dialogue through the role donors may play at the political level; and DONOR PARTNERS ◗◗ Engage additional donors. The World Bank expresses its appreciation to SECO, DFID and EU for their contributions. The expansion DEVELOPMENT PARTNERS of the MDTF to three donors offers an opportunity CAEWDP has coordinated work programs with sev- to integrate donor perspectives and insights into eral (non-donor) development partners. These will program implementation. This will be accomplished continue in the future, with the following priorities: through a more active Advisory Committee (MDTF DAC)18 providing strategic guidance, reviewing TABLE 9: CAEWDP Development Partner Priority Activities PARTNER TOPIC PRIORITY ADB Energy development CAREC-ESCC CA/SA trade Tajikistan energy security DFID Energy Support for CASA 1000 GIZ Basin-level IWRM Scaling up regional dialogue UNECE Knowledge base Data management Institutional strengthening IFAS governance UNRCCA Knowledge base Scenario analysis (FAO) Information Bulletins Regional Dialogue Framework Agreement for Transboundary Water Management USAID Energy development CASA 1000 Energy trade (coordination with RESET) CAREC-ESCC Knowledge base TBD19 Regional analysis of energy vulnerability to climate change 18 The Advisory Board will consist of a World Bank representative and representatives of MDTF contributing partners, defined as organiza- tions that have signed an administrative agreement/arrangement with the World Bank for the CAEWDP with a minimum contribution of US$1,000,000. 19 A mutual interest has been expressed in coordinating on elements of the Roadmap for Strengthening Analysis for Water Resources Management, such as further development/dissemination of BEAM.  37 37 IV.  Annexes 38 ANNEX I: Select List of Central Asia Energy-Water Development Program Outputs (as of 12/2012) DATE OUTPUT TITLE PURPOSE/REFERENCE COUNTRY DELIVERED CAEWDP–Energy Load Dispatch and System Operations 1.  Estimated the economic value of regional electricity trade (approximately $2 bn) and identified possible options to Regional 10/2010 Study for Central Asia Power System balance trade Energy Demand/Supply Balance and 2.  Scoping Study for the Regional Energy Master Plan http://www.carecinstitute.org/uploads/docs/Foundation-Studies/ Regional 10/2010 Infrastructure Constraints Diagnostics Diagnostic-Study-CAREC-Energy-Strategy-Pillar1-Full-Report.pdf Study CAREC ESCC Regional Energy Master 3.  The Plan identified power sector deficiencies on regional level and resolve those through focusing on promotion Regional 10/2012 Plan of inter- and intra- regional electricity trade, increasing energy security and energy efficiency, optimizing integrated transmission and generation expansion and identifying primary energy (generation and trade) instruments (PDS on file need electronic copy of Plan) Updated Feasibility Study on Central 4.  Central Asia—South Asia Regional Electricity Market (CASAREM)—is a concept for developing electricity trade among Regional 2/2011 Asia South Asia Electricity Trade the countries of the two regions through a set of projects and associated investments, underpinned by the relevant Project (CASA 1000) institutional arrangements and legal agreements; and necessary transmission and trading infrastructure and systems to enable a trade of about 1300 MW of electricity between Central Asia and South Asia, and is referred to as CASA-1000. http://siteresources.worldbank.org/INTRANETTRADE/Resources/239054-1239120299171/5998577-1254498644362/ 6461208-1300395869284/SA_Energy_CrossBorder.pdf Tajikistan Winter Energy Crisis Study 5.  Assessment of the scope of the shortages and information of measures to eliminate energy deficit Daryl electronic copy TAJ 10/2012 needed 6. Uzbekistan-Afghanistan-Pakistan Initial assessment of the feasibility for Uzbekistan-Afghanistan-Pakistan power trade indicates that given the large UZB 04/2012 Electricity Supply and Trade Study deficits in Pakistan, the trade is economically feasible. The project would need relatively large investments to cover (UAP-EST) CAPEX for a new generation plant, given that existing plants are not able to meet full domestic demand. TALCO Energy Audit 7.  An Energy Efficiency study for TALCO to assess the energy saving opportunities and develop an Energy Efficiency Action TAJ 12/2012 Plan was conducted by an international consortium led by NorskEnergi (Norway) and funded by WB. Implementing the Energy Efficiency Action Plan will allow TALCO to save up to 1,155 GWh of electricity and 197 GWh of natural gas per year, which is expected to yield cost savings of about US$49 million20 per year, with total investments of US$87 million. The simple payback period on total investments is below 2 years. CAEWDP Energy-Water Linkages Comparative Model Analysis Report 8.  Responded to clients requests to review existing national models to provide an overview of national-level activities; Regional 3/2011 36 models were inventoried and comparative analysis responded to clients requests to review existing basin models, 6/2012 identify gaps, and build a system of models as needed Synthesis Report on National 9.  Strengthened knowledge base and trust by promoting cross sectoral dialogue which scoped energy water issues and AFG, KAZ, 4/2011 Consultations understanding on inter-relationships and dependencies; identified compounding threats and opportunities national KYG, TAJ stakeholders clearly highlighted that today’s economics on energy and water requires a new and different approach; transparency, and quality and access to information are significant concerns, where national engagement and ownership is vital and policy makers need to be involved in the process 20 At weighted electricity tariffs (US$0.0183/kWh), based on summer tariffs (US$0.0131/kWh) and winter tariffs (US$0.0215/kWh) introduced in April 2012 for TALCO. CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 The Hydrology of the Aral Sea Basin: 10.  Report on first generational demonstration open source platforms. EWDSS scoping Phase 1B intends to demystify Regional 5/2012 First-Generation Demonstration data transparency issues in the region with a prototype demonstration model, designed using public domain data Model based on Open and Public and public modeling platforms to illustrate, with reasonable certainty, the Aral Sea basin’s water budget and visualize ANNEXES Source Data Report possible water management scenarios [http://test4.ocean.washington.edu/] Workshop Report: Regional 11.  Knowledge exchange technical regional workshop, engaged specialists from all 6 countries, and explored current Regional 7/2012 technical workshop “Strengthening approaches and emerging analytical tools for M&DS; the workshop built on individual national level efforts and, Analysis for Integrated and Adaptive through a multi-national and multi-sectoral format, defined a way forward, a Road Map/work program for a second Water Resources Management in phase to strengthen analysis for integrated and adaptive water resources management in Central Asia Central Asia” Rogun Riparian Consultation and 12.  PoE reports include 3 sets of reports by each of the two panels & 2 sets of power point presentations. Documentation Regional 1st Information Exchange Program & and materials from May 2011 and November 2012 consultations and information exchange on national data sharing consultation documentation and consultations with riparian 5/2011 http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0,,contentMDK:22743325~pagePK:146736~piPK: 2nd 146830~theSitePK:258599,00.html consultation 11/2012 World Bank Central Asia 13.  The objective is to improve the delivery of weather, climate and hydrological services in the Central Asia region. The KYG, TAJ Ongoing Hydrometeorology Modernization program aims to rebuild the infrastructure and human capacity to reduce disaster risks, manage the consequences Project & PIU established within of climate variability and strengthen the economic development of the agricultural, water resources, energy and Regional Hydrometeorology Center transportation sectors. It will help hydrometeorology services in the Kyrgyz republic and Tajikistan http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0,,contentMDK:22792502~pagePK:146736~piPK: 146830~theSitePK:258599,00.html Climate Vulnerability, Risk and 14.  Based on a consultative approach, identified a series of activities to adapt to energy sector impacts on climate change, UZB Pending Adaptation Assessments: Helping including changes in water availability Countries Prepare an Effective Power Sector Response: Focus on Uzbekistan CAEWDP Water Productivity Reducing the Vulnerability of 15.  A Country Note on Climate Change and Agriculture provides a summary of available country-specific information, with UZB (Draft Final Uzbekistan’s Agricultural Systems to a focus on climate and crop projections, adaptation options, policy development, and institutional involvement on Report), Climate Change agriculture and climate change August 2011. CAEWDP–Strategic Management CAEWDP website 16.  External website: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0,,contentMDK:22743346~ Regional 6/2010 pagePK:146736~piPK:146830~theSitePK:258599,00.html CAEWDP: A comprehensive program 17.  The executive summary of the power point presentation designed and prepared to solicit funding from donor partners Regional 12/2012 to build energy and water security for Central Asia—working regionally for national prosperity Supporting study on Cooperation 18.  Background report (Indecon consulting) for the WPP supported “Reaching Across the Waters—Facing the Risks of Regional Pending on the Syr Darya River for Reaching Cooperation in International Waters”http://water.worldbank.org/sites/water.worldbank.org/files/publication/ Across the Waters—Facing the Risks of WaterWB-Reaching-Across-Waters.pdf Cooperation in International Waters 39 40 ANNEX I: Continued DATE OUTPUT TITLE PURPOSE/REFERENCE COUNTRY DELIVERED CAREC–ESCC (2009–2012) Energy 19.  Meetings and dialogue (9/2009 Almaty; 10/2010 Bishkek; 5/2011 Baku, 10/2011 Bangkok, 9/2012 Bangkok) with various Regional See dates in Action Plan presentations and reports through implementation (http://www.carecinstitute.org/index.php?page=energy) Reference cell CAREC ESCC Completion Report 20.  Reference Document for Session 2 of the CAREC Senior Officials’ Meeting October 2012 summarizing the CAREC ESCC Regional 9/2012 (2009–2012) progress and completion through 2012 CAREC ESCC 2013–2015 Work 21.  http://www.carecinstitute.org/index.php?page=energy Regional 9/2012 Program CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 ANNEX II: CAEWDP Results Framework (2010/11–2014) (Draft .3:8 April2010/11) ANNEXES PROJECT TITLE CENTRAL ASIA ENERGY WATER DEVELOPMENT PROGRAM (CAEWDP) GOAL (Impact) Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Regional cooperation Regional organizations Disparate national Agreement on Skills and tools in At least two regional catalyzes long-term and national bodies level investments and collaboration with key place to facilitate institutions operating economic growth and have capacity to support fragmented regional regional institutions, regional dialogue for in capacity to support livelihood security to Central transboundary dialogue cooperation supported by Heads cooperation. transboundary Asia and provides a catalyst on regional cooperation. of State dialogue in key for continued economic economic sectors. growth and increased Source: income Existing institutions mandates and activities. DEVELOPMENT OBJECTIVE Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Risks (Outcome) At least three investment or TAJ & KYRG have Needs Assessment Winter energy TAJ & KYRG Winter Regional organizations are too policy options (two of which winter energy deficit. completed identifying coordination plans in energy security weak to be able to convene targeted at Tajikistan & priority activities place. improved from substantive inter-state dialogue Kyrgyz Republic) initiated 2009/10 situation on water-energy to strengthen stability and There is no dialogue on water predictability of power and energy, limited to individual supplies national discussions Source: Government statistics Strengthened mutually Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 beneficial regional At least two investment Few current Potential national and At least two At least one water and cooperation enhances decisions on national investment decisions regional energy water investment projects one energy investment energy security and water level water or energy on water and energy investments identified selected take into account security. projects include clear take into account transboundary understanding of the transboundary implications for their transboundary implications. effective use of water implications. and energy resources. Source: Government Reports, World Bank country CASs, pipeline of investments Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Program activities are Active donors in the Draft agreement on Established MDTF Multi-Donor trust coordinated and donor region, disparate Multi-Donor Trust with a minimum Fund fully operational. supported through an coordination and Fund (MDTF) and of two donors MDTF (Multi-Donor Trust inefficient donor coordination contributing. Fund) based on consultations Source: Water Sector: DFID, EC, Finland, Germany, Switzerland, UNDP, others. Energy Sector: ADB, Russia, USAID, WB, others. 41 42 ANNEX II: Continued Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Sustainable for improved No shared Analytical Framework Analytical framework Analytical water dialogue across institutional and developed with agreed at technical framework is used in Central Asia stakeholder’s analytical framework input from technical level between at least transboundary water exits. exits in the region specialists of all CA two states; policy discussions; states Institutional links on Regular analytics between at communication least three states are between relevant in place technical institutes in CA states Source: Communication monitoring reports OUTPUT 1 Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Risks Energy: Support policy National energy plans in Investments not Regional energy At least two national At least two countries Severe winter power shortages decisions and investment at least two countries take linked to regional master plan work level discussions commence dialogue divert attention from medium to decisions for highest value into consideration inter- planning under ADB funding, take account of on investment plans long-term solutions. mix of energy resources and intra-regional energy identifies list of least cost-effectiveness linked to energy Lack of common appreciation at the regional level (both trade implications cost energy projects of regional energy market. between the countries on within Central Asia and a markets A regional platform benefits of regional cooperation, broader regional level) for coordination and incl. cooperation on hydro power planning exists resources in the region At least four regional Achieving a common investment projects understanding on energy assessed and under generation options (esp. Hydro) development requires a lot of iteration, effort Source: and time. Government reports; national investment plans; USAID regional market working group, National interests have higher ADB grid study priority than regional ones Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Pre-investment analysis TAJ & KYRG have Needs Assessment Winter energy TAJ & KYRG Winter completed for two winter energy deficit. completed identifying coordination plans in energy security options for stable and priority activities place. improved from predictable winter power 2009/10 situation supply in Tajikistan & Source: Kyrgyz Republic Government statistics CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 National energy Fragmentation of Regional Energy National energy Key regional generation institutions energy development Markets Analytical generation institutions have ANNEXES taken into account focuses at national work commences discussions consider ownership of regional implications of and bilateral level; (USAID REMAP II) regional implications. individual role in national investments. limited regionally Institutional Analysis linking energy and coordination; of the energy and water to ensure stable CAREC has mandate water sector power supply. as a regional energy institution; IFAS not explicitly engaged in links between water and energy sector. Source: RISK RATING National energy generation management plans. CAREC and IFAS strategies. ADB Regional Energy Master Plan studies High Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Risks Strengthened institutional CAREC/CDC are Energy dispatch Dialogue between Framework developed High level of political sensitivities development (energy major trade energy and trade needs CAREC and CDC and by CAREC and around power systems means trade institutions) institutions; assessment other stakeholders CDC and other outcomes may be difficult to CAPS (Central Asia completed identifying on potential regional stakeholders for realize. Power System) is priority activities power market. a regional power weak. market Source: Government reports; CAREC reports; CDC reports; WB AAA; Other donors AAA Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Political and financial Existing transmission Feasibility report on Increased bilateral Plans for Increased support increased for infrastructure, CASA 1000 discussion on investment (to be transmission infrastructure investment plans. transboundary funded by both planning. UZAP is recently transmission governments proposed. and donors) in transboundary transmission exist. Source: Government reports; CAREC reports; WB reports; other IFI reports 43 44 ANNEX II: Continued IMPACT WEIGHTING Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 25 percent At least one new Current investment Potential national and At least one energy At least one investment decision decisions on energy regional investments investment projects energy investment includes inter- /intra- infrastructure rarely identified selected takes account of regional implications. take into account transboundary the transboundary implications implications. Source: RISK RATING Government Reports, World Bank country CASs, pipeline of investments Medium OUTPUT 2 Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Risks Energy-water linkages: Expand data management No robust recent First generation Framework for Robust, independent Political tensions around inter- Improve understanding to enhance energy/water analysis of links integrated energy- decision support analysis of energy- state dialogue on links between of the linkages between analysis between energy and water model is system evolves from water links exists energy and water prevent water and energy, facilitate water undertaken and continued analytical and recognized by constructive approaches to regional dialogue regarding shared work national counterparts. regional cooperation cooperative management Regional of water and energy, and Hydrometeorology investigate investments at program signed the regional level. Regional organizations are too weak to be able to convene substantive inter-state dialogue on water-energy There is no dialogue on water and energy, limited to individual national discussions Source: WB AAA / other door-funded AAA Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Regional dialogue on at Regional dialogue Program Concept Engagement and Analytics contribute least two priority water & continues to falter Note completed and ownership of to evidence-based energy issues facilitated due to political financing identified analytics by regional transboundary by regional and national tensions and no analytics of regional institutions. dialogue. organizations. strong regional hydrometeorology, institution to lead. winter energy, water CAREC and IFAS have productivity, and potentially important basins’ water energy role to play balance. Source: Government Reports; CAREC/IFAS reports CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Strengthened regional IFAS—not active in A consortium of IFAS identifies its IFAS is facilitating organizations capacity to regional water-energy advisors to assist IFAS added value in the regional water and ANNEXES facilitate regional dialogue dialogue to develop ASBP-3 is region on water and energy dialogue operational. energy linkages. Source: Government reports / IFAS reports / WB AAA reports Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Climate change (CC) CC implications Range of existing and Continued analytical National governments adaptation implications currently poorly planned national work develops consider CC recognized for both understood at both and regional CC CC adaptation adaptation options energy and water. national and regional adaptation activities options for national for both water and level. identified with IFAS. governments, with energy sectors, First generation of CC regional coordination based on available adaptation analytical by IFAS information and data work undertaken IMPACT WEIGHTING Source: RISK RATING 25 percent Government reports, ESMAP and GFDDR reports High OUTPUT 3 Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Risks Water productivity: IFAS’ capacity in Institutional capacity Needs assessment Capacities IFAS facilitating The likelihood of achieving Address infrastructure and agricultural water varies between for institutional strengthened, based transboundary this output is related to the management opportunities management countries; strengthening of on needs assessment dialogue on willingness of riparian countries to increase the productivity strengthened, and Limited institutional agriculture capacities agricultural water to work together on the issue of and efficiency of water use in communication between linkages between within IFAS management agricultural water productivity. both agriculture and energy national agricultural water riparian states on Capacities need to be sectors. specialists improved agricultural water; strengthened, and a number of sensitivities need to be clarified Limited capacity of from the start. IFAS in agriculture Source: Government reports; Research institute reports; IFAS reports. 45 46 ANNEX II: Continued Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Infrastructure Opportunities Riparian Ag Water TOR for an Consultant reports and management and constraints to Forum established assessment of on infrastructure opportunities (including improve agricultural with high-level constraints and and management investments) for increased water productivity experts from riparian opportunities agreed constraints and agricultural water are not systematically countries by riparian countries opportunities for productivity identified analyzed, are not increased agricultural identified at a water productivity transboundary level, available and reflecting and are not owned by priorities of riparian riparian governments countries. Report identifies a number of agreed national and/or transboundary investment opportunities. Source: Government reports; Research institute reports; IFAS reports; Consultants report(s) Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 National action plans for No countries have National report Countries have Donors have provided increasing agricultural prepared national on infrastructure translated report into funds to prepare at water productivity actions plans to and management a national action plan least two national prepared improve agricultural constraints and action plans water productivity opportunities for increased agricultural water productivity available Source: Government reports; Research institute reports; IFAS reports Indicator Baseline 2010/11 Milestone 1 Milestone 2 Outcome 2014 Understanding of regional Existing national Strategic Framework Analytics continued; Decisions on new water productivity is plans/investments for Prioritization of Initial investment investments in at reflected in national do not take into Irrigation Investments options identified at least two countries plans, policies and/or account adequately and hydropower national level. are based on analysis investments of at least environmental investments of ways to improve two countries demands or regional water productivity needs. within energy and water sectors IMPACT WEIGHTING Source: RISK RATING 25 percent Government reports, research institute reports High CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 ANNEXES 47 Annex III: CAEWDP Progress prepared under the Third Aral Sea Basin Program (ASBP-3) with contributions from all countries. Report to October 2011—Executive The WB has also established a panel of advisors Summary to provide independent advice to regional institu- tions and individual countries for capacity building CENTRAL ASIA ENERGY-WATER DEVELOPMENT (e.g., energy-water linkages and models for power PROGRAM ROGRESS REPORT TO OCTOBER 2011 interconnection) and external scrutiny of investment HIGHLIGHTS studies. The Central Asia Energy-Water Development Establishment of a Knowledge Base and Program (CAEWDP) Swiss trust fund became effec- Energy-Water Analytical Infrastructure: tive in July 2010, providing additional support to Diagnostic studies have been completed on the World Bank (WB) activities that started in 2009. benefits of regional trade and energy infrastructure The purpose of the trust fund was to provide seed needs. Results of the studies were discussed with financing to establish a foundation for a longer- the CAREC-ESCC meeting and follow-up activities term program to build energy and water security for approved at ministerial meetings. In support of pro- Central Asia through enhanced regional coopera- moting better understanding of energy-water link- tion. The rationale for the program is underscored by ages, a draft first-generation demonstration model continuing challenges to effective management of has been completed. Furthermore, a model inven- transboundary water and energy resources, such as tory of existing basin models was undertaken as the the further deterioration of energy trade and conflict request of national specialists. A regional recon- between Tajikistan and Uzbekistan over hydropower naissance on analytical needs has been completed, development. Notwithstanding, the CAEWDP has and four of six national energy-water consultations achieved several critical milestones in each of the completed and documented. These consultations Program’s three21 main components, which are sum- are helping to develop nationally relevant analysis marized below and further elaborated in the report. and buy-in from governments and will support a Financial Summary: At end October 2011, roadmap for future analytical work, data sharing US$900,000 (including administrative fees) out of and institutional platform. An assessment of energy US$1 million of the Swiss contribution has been and agricultural vulnerability to climate change for disbursed and/or committed, and the remaining Uzbekistan has been completed and similar studies amount is expected to be fully disbursed by July are being replicated in other Central Asia countries. 2012. This complements total WB spending of about Supporting Priority Pre-investment Studies: US$1.6 million. The Swiss funds have been vital and Concept notes prepared under the Program have led critical to establishing the building blocks for the to financing for the Central Asia Hydrometeorology Program and leveraging other trust funds (in excess Modernization Project of US$27.7 million, and of $500,000). contributed to leveraging further funds to add to Regional Partnerships and Institutional the US$50 million grant available to Tajikistan for Strengthening: The WB has taken a lead role in a Pilot Program for Climate Resilience under the supporting two core regional entities, a regional Climate Investment Fund. An updated feasibility water institution, International Fund for Saving the study of the Central Asia—South Asia transmission Aral Sea (IFAS) and the Energy Sector Coordinating line (CASA 1000) is completed and environmental/ Committee (ESCC) of the Central Asia Regional social assessment has been initiated. A similar study Economic Cooperation (CAREC), to help build a of Uzbekistan/Afghanistan/Pakistan transmission strong regional platform and facilitate collabora- line has been contracted; and the riparian program, tion with key regional institutions. The ESCC—with to enhance transboundary dialogue regarding the representatives of all five countries (including Assessment Studies for the proposed Rogun hydro- Afghanistan)—is implementing an agreed energy power and regional reservoir project, is underway. action plan, with regular involvement of senior Donor Consultations and Partnerships: In government officials and ministers. IFAS has addition to cooperating with a broad set of donors completed its milestone, Third Aral Sea Basin Plan, 21 CAEWDP’s three components include: energy, energy-water, and water productivity 48 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 who support IFAS and ESCC, the WB has also formed important complements to CAEWDP, especially in partnerships with USAID through their regional Uzbekistan, Kyrgyzstan and Tajikistan. energy trade program (RESET) and a set of climate Completing the Swiss Seed Program: change studies. The WB is also working closely with Remaining tasks include: completing the roadmap ADB to link ADB’s regional energy master plan- for future energy-water analytical work; confirming ning study to the CAEWDP through the ESCC. A a program of collaboration with IFAS; continuing multi-year, multi-donor trust fund (MDTF) has been support of Panels of Experts, particularly for ripar- established and is operational, to ramp up CAEWDP. ian dialogue on the Rogun Assessment studies and The UK (DFID) has become the first to join the MDTF completing investment assessments (i.e., Uzbekistan/ with discussions with government of Russia, EC, Afghanistan/Pakistan transmission line, financing Islamic Development Bank and the Government of options for CASA 1000). We recommend the needs Switzerland continuing. assessment for water productivity management be Early Lessons: The challenges of strengthen- taken up by the multi-donor trust fund to enable ing regional cooperation to build energy and water more detailed national-level assessments. security remain significant. Regional organizations Moving Forward: A separate document— remain weak and lack strong political support; “CAEWDP Moving Forward”—outlines the specific political dynamics have soured further between activities proposed for the Program, building on the Uzbekistan and Tajikistan, and Uzbekistan appears foundations established under the Swiss CAEWP to be withdrawing from regional initiatives across a seed fund. Specifically, the work program for the variety of sectors. On the positive side, the regional first phase of MDTF funding is described, along with organizations continue to function; producing (for a proposed second phase of activities. Given early example) the ASBP-3 Management Plan, and interest lessons and political dynamics, the MDTF-supported and understanding of regional cooperation is strong programs will emphasize projects that have strong among technical specialists. The diagnostics confirm national benefits (focusing on direct investments the benefits of increased cooperation and some in energy and water security) within a regional recent actions by the countries are encouraging. framework. Accelerated WB programs at the national level are SUMMARY OF PROGRESS UNDER CENTRAL ASIA ENERGY-WATER PROGRAM SEED FUND The following table summarizes progress according to the components specified in the WB/SECO Administrative Agreement. It includes all activities under the Central Asia Energy-Water Program, including activities fully or partially funded under WB budget and non-CAEWP trust funds. Status is given in bold; remaining tasks are noted in italics. ANNEXES DISBURSED/ COMMITTED COMPONENT INDICATORS AND STATUS (AT SEPTEMBER 2011) (US$000S) Establishment of a ◗◗ First generation model and roadmap for future analytical work, data sharing and institutional platform: Draft first-generation demonstration knowledge base and model successfully demonstrated to WB technical specialists with roll-out to Central Asian specialists started in October; model energy-water analytical inventory completed; a regional reconnaissance on analytical needs completed, and four22 of six national energy-water consultations infrastructure completed, synthesized and documented. Remaining tasks: Complete two remaining energy water consultations and demonstration model and share results in a cohesive roadmap. (Note: Due to limited engagement with Uzbekistan and Turkmenistan, the roadmap may not be a consensus product but will outline the priorities and principles for a regional analytical tool). The institutional platform is to be addressed later due to political sensitivities in the region; however, the WB continues to work with national and regional organizations to maintain momentum. 320 ◗◗ Needs assessments on four key themes: Completed for three themes—energy supply/demand balance, regional trade, and water-energy linkage. These needs assessments were agreed through ESCC23 (with representation IFAS), with accompanying work plans. Winter energy options assessment drafted. Assessment of energy and agricultural vulnerability to climate change for Uzbekistan completed to draft final stage. Methodology for energy vulnerability applied to other countries through USAID. Remaining tasks: Finalize reports on climate change vulnerability Regional partnerships ◗◗ Panel of advisors established: Experts identified and contracted. and Institutional ◗◗ International advisors provide expertise: Advisors supported IFAS to develop ASBP-324; International advisors for Rogun Assessment strengthening Studies providing scrutiny and reports to riparian stakeholders; also see capacity building. Remaining tasks: Additional expertise to key issues (e.g., riparian dialogue). ◗◗ Agreement on collaboration with key regional institutions: ESCC energy action plan approved October 2009 (updated Nov 2010); Donor 290 statement in support of ASBP-3 plan of IFAS December 2010. Remaining tasks: Agreement on implementation support for ASBP-3. ◗◗ Two capacity building events: September 2009 workshop on energy-water linkages (with three international experts); July 2010 capacity building day on models for power interconnection (two international experts); Energy-water linkages consultations (four international experts); capacity building priorities identified by ESCC to be implemented in partnership with CAREC Institute. Priority pre-investment ◗◗ Concept notes and financing for three high priority projects: Regional Hydrometeorology Project approved for total financing of US$27.7 studies million (“Central Asia Hydrometeorology Modernization Project”) taking effect November 2011; PPRC grant of US$50 million for Tajikistan; CASA 1000 feasibility update completed and environmental/social assessment initiated, as well as MoU signed among 180 four participating countries; Feasibility study of Uzbekistan/Afghanistan/Pakistan (UAP) transmission line underway. Remaining tasks: Complete UAP assessment. Donor consultation/ ◗◗ Action plan with results framework: Completed. partnerships ◗◗ Agreement on MDTF and donors involved: MDTF established and UK (DFID) contribution secured July 2011, with discussions ongoing 45 with Government of Russia, EC and Islamic Development WB and the Government of Switzerland. Total ◗◗ (Includes administrative fees of $65k) 900 22 Due to political circumstances the team was unable to conduct energy-water consultations in Turkmenistan and Uzbekistan; however efforts are still underway to ensure these consultations take place. 23 ESCC: includes representation from Afghanistan, Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan. Turkmenistan has recently become a member. ESCC products are reviewed semi-annually in a meeting of Senior Officials from each country, and annually in a Ministerial Conference. 24 ASBP-3: Aral Sea Basin Plan-3 consolidates a package of regional projects to improve management of the Aral Sea Basin, based on proposals from all countries. 49 50 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 ANNEX IV: National and Regional Investment and Technical Assistance Activities Supporting Energy and Water Security25 COUNTRY NAME PURPOSE STATUS SECTOR(S) KAZ Energy Efficiency Project Improve energy efficiency in the public sector Proposed Energy Moniak Electricity Increase and improve the supply of electricity in Southern Ongoing Energy Transmission Project Kazakhstan Alma Electricity Improve the reliability and quality of electricity supply to Ongoing Energy Transmission Project consumers in the Almaty region North-South Transmission Increase and improve the electricity supply to businesses Proposed Energy Project—3 and households of eastern and southern Kazakhstan through (i) the expansion of transmission capacities and (ii) the integration of renewable energy capacity Irrigation and Drainage Under discussion with the Government of Kazakhstan Proposed Water Improvement Project II Productivity (IDIP2); Syr Darya Control and Improve water resource and environmental management in Proposed Water North Aral Sea Project II the Syr Darya Basin Productivity (SYNAS2) KYG Emergency Recovery Restore and ensuring uninterrupted energy supply of basic Ongoing Energy Project energy services Energy Supply, Reduce losses and revenue leakages through establishment Proposed Energy Accountability and of transparency and accountability framework for power and Reliability Improvement financial flows in Severelectro Project (ESARIP) Development Policy Reforms to improve transparency, accountability and Ongoing Energy Lending financial viability, including in the energy sector Heating and Energy Technical Assistance—Identify viable heating options and Ongoing Energy Efficiency Assessment related energy efficiency measures in urban areas Public Expenditure Review Technical Assistance—Analyze and prepare recommendations Ongoing Energy in Energy Sector on improving sector’s financial sustainability Irrigation Rehabilitation Investment Lending—improve irrigation service delivery on a Ongoing Water Project sustainable basis that will contribute to increased agricultural Productivity productivity among irrigation farmers. This will be achieved through further development of water users associations (WUAs) and rehabilitation and modernization of irrigation and drainage infrastructure. Additional Financing Water Investment Lending—(i) improve irrigation service delivery Ongoing Water Management Improvement and water management for the benefit of a sustainable Productivity Project increase in irrigated agricultural productivity; and (ii) improve national water resource governance for the benefit of water users and the nation as a whole. TAJ Energy Loss Reduction Reduce losses in electricity and gas systems and improve Ongoing Energy Project (ELRP) financial viability of energy sector companies Winter Energy Crisis: Technical Assistance—Identifying options for addressing Completed Energy Electricity Supply and Tajikistan winter power shortages through 2020 Demand Alternatives Heating and Energy Technical Assistance—Identify viable heating options and Ongoing Energy Efficiency Assessment related energy efficiency measures in urban areas Nurek HPP Rehabilitation, Technical Assistance—Improve safety, sustain/increase Ongoing Energy Safety and Sedimentation capacity and extend life-span of Nurek HPP Management Studies (under ELRP) Rogun HPP Assessment Technical Assistance—Assess feasibility of Rogun HPP Ongoing Energy Studies 25 Inclusive of CAEWDP and other grant funding. Bank budget, IBRD and IDA lending. ANNEXES 51 COUNTRY NAME PURPOSE STATUS SECTOR(S) Ferghana Valley Water Investment Lending—(i) increase the coverage of drained Ongoing Water Resources Management and irrigated areas in Bobojon Gufarov and Kanibodom Productivity Project & Additional districts; and (ii) strengthen the early warning system of the Financing Kayrakkum dam as well as carry out a geotechnical survey for assessing the risks associated with said dam. Public Employment for Investment Lending—improve the availability and access Ongoing Water Sustainable Agriculture to food in poor rural areas of Khatlon Region through: Productivity (i) income transfers from public works programs to renovate irrigation and drainage infrastructure, (ii) increased crop production as a result of improved irrigation and drainage infrastructure, and (iii) supporting development of improved policies and institutions for water resource management. TURK N/A Currently no investment or technical assistance activities in the energy or water sector; the program is exploring opportunities. UZB Uzbekistan Energy Improve EE in industries by a credit line and capacity building Ongoing Energy Efficiency Facility for activities (incl. EE Strategy for industries) Industrial Enterprises Talimarjan Transmission Improve the reliability of the electricity supply to residential Ongoing Energy Project and business consumers in South-Western Uzbekistan Advanced Electricity Reduce technical and commercial losses and support Ongoing Energy Metering Project improved demand-side management GEF Sustainable Agriculture Promote EE and RE in rural areas, including capacity building Proposed Energy and Climate Change activities Mitigation Project Rehabilitation and Upgrade Improve reliability of distribution network will help to reduce Proposed Energy of Electricity Distribution technical and non-technical losses System Rehabilitation of the Improve living conditions of population in Andijan and Proposed Energy District Heating Systems in Chirchik cities through rehabilitation of the heating and hot Andijan and Chirchick cities water supply systems Energy Efficiency Strategy Technical Assistance—Energy efficiency strategy and Ongoing Energy for Industrial Enterprises policy that will enable the government to systematically and effectively target energy efficiency savings in the manufacturing sector Global Gas Flaring Technical Assistance—Overcome the barriers to reducing gas Ongoing Energy Reduction Partnership flaring by sharing global best practices and implementing country specific programs Wind Power Potential Technical Assistance—Identify the areas for large-scale wind Ongoing Energy Assessment, within power development in Uzbekistan Talimarjan Transmission Project Rural Enterprise Support Investment Lending—increase the productivity and financial Ongoing Water Project and Additional and environmental sustainability of agriculture and the Productivity Financing profitability of agribusiness in seven districts within these seven regions through the provision of financial and capacity building support to farmers and agribusinesses. Ferghana Valley Water Investment Lending—improve agricultural production in Ongoing Water Resources Management areas affected by waterlogging, and to reduce damage to Productivity Project housing and infrastructure from rising ground water levels and salinity in the project districts located in the Ferghana Valley. 52 CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP)  |  PROGRESS REPORT 2012 ANNEX IV: Continued COUNTRY NAME PURPOSE STATUS SECTOR(S) Drainage Irrigation and Investment Lending—(a) increase productivity of irrigated Ongoing Water Wetlands Improvement agriculture, employment and incomes in Karakalpakstan, Productivity Project one of the poorest regions in Central Asia; (b) improve the water quality of the Amu Darya river by the safe disposal of drainage effluents, and enhance the quality of wetlands in the Amu Darya delta; and (c) development of institutions for improving water management, operation and maintenance (O&M) of the irrigation and drainage systems and for promoting sustainable irrigated agriculture through participatory irrigation management. South Karakalpakstan Investment Lending—restore irrigation and improve water Proposed Water Water Resources management in the project area in a sustainable and Productivity Improvement Project financially efficient manner. Karshi Project Investment Lending—increase the reliability, efficiency and Proposed Water sustainability of the pumped water supply from the Amu Productivity Darya to the Karshi irrigation command area (400,000 ha) in the Kashkadarya Oblast on which the livelihood, employment, and income of more than 2 million people depend, thereby avoiding a potential social catastrophe in case of complete or partial breakdown of the KPC—KPC being the main source of water supply in the Oblast for irrigation, domestic and industrial uses. Ferghana Valley Water Investment Lending—improve agricultural production in all Proposed Water Resources Management three oblasts in the Ferghana Valley. Productivity Project Regional Central Asia Energy-Water A multi-year program, working at the regional and national Ongoing All Sectors Development (CAEWDP) levels, fosters sustainable energy and water resources Program management for sustainable development and shared prosperity in the six countries of the Aral Sea basin Regional Dialogue Improve understanding of the linkages between water and Ongoing Energy-Water energy, facilitate regional dialogue regarding cooperative management of water and energy and investigate investments at the regional level; and promote regional dialogue on at least two priority water & energy issues facilitated by regional and national organizations. Central Asia Energy-Water Reconnaissance and national consultations to expand Ongoing Energy-Water Modeling and Analysis— data management and analysis to enhance energy/water Phase 1 management Central Asia Improve accuracy and timeliness of hydrometeorology Ongoing Energy-Water Hydrometeorology services in CA so that clients have the infrastructure and Modernization Project capability to sustainably observe, forecast and deliver weather, water and climate services that meet the country’s identified economic and societal needs Climate Change initiatives Climate change (CC) adaptation implications recognized for Ongoing and Energy-Water both energy and water: Energy Vulnerability study completed proposed for Uzbeksitan and study for TAJ + regional consolidation; and vulnerability of Agricultural Systems study completed for Uzbekistan. Potential for expansion to other KAZ, TAJ and KYG (tbd subject to funding) ANNEXES 53 COUNTRY NAME PURPOSE STATUS SECTOR(S) Rogun Riparian Dialogue Demonstrating international standards in analysis and Energy-Water dialogue in transboundary water management, through Panels of experts, Information program, Independent studies on sensitive issues (hydrology verification, power supply alternatives, and institutional mechanisms) Mercados’ study as part of The power systems of Central Asian countries were modeled Ongoing Energy ESCC/CAREC using a Cost-minimization Generation/Transmission Expansion Model. The Model results indicate: (i) a great reduction in the system operation costs can be realized with the integrated operation of the power system for all 5 countries; and (ii) more than 1.5 billion USD can be saved in just 3 years of joint operation. CASA-1000 Project The First Phase of CASAREM, would Support 1,300 MW of Ongoing Energy Clean Electricity Trade Between Central Asia (Kyrgyz Republic & Tajikistan) and South Asia (Afghanistan & Pakistan)