88706
                                         Republic of Uzbekistan

           South Karakalpakstan Water Resources Management Improvement Project

                                             Chair Summary*

                                               June 12, 2014

        Executive Directors approved an IDA Credit in the amount of SDR 156.9 million (US$ 242.5 million
equivalent) and an IBRD Loan in the amount of US$18.3 million to the Republic of Uzbekistan for the
“South Karakalpakstan Water Resources Management Improvement Project” (R2014-0111[IDA/R2014-
0193]) on the terms and conditions set out in the President’s Memorandum. The Minutes will reflect that Ms.
Aviel wished to be recorded as abstaining.

        Directors supported the proposed operation to restore irrigation and improve water management in the
project area in a sustainable and financially efficient manner. They noted the importance of improving
irrigation management to reduce poverty and create shared prosperity in one of the poorest parts of
Uzbekistan. Directors welcomed the operation’s approach to improve sustainability and financial viability by
reducing dependence on energy-intensive pumping in the lower Amu Darya River, while strengthening
institutions and capacities and promoting crop diversification away from cotton and towards higher value
crops. Directors underscored the importance of translating project outcomes into tangible benefits for the
poor and vulnerable, especially women and children, and to manage with due diligence the relevant social
risks, including resettlement.

        Directors recognized the holistic approach that the Bank has pursued through specific project-level
interventions as well as through continuous country dialogue and collaboration with international agencies
and donors, sector analytic work and policy dialogue. Directors emphasized the transformational nature of the
project and were encouraged by the measures that have been taken in eliminating the occurrence of child
and/or forced labor in the project area. They welcomed Management’s reiterated commitment to the credible
and independent Third Party Monitoring and Feedback Mechanism as part of their multi-pronged approach to
address child and forced labor in Uzbekistan and to monitor compliance very closely with all project
covenants. They underscored the importance of strong commitment to continued close cooperation with the
ADB, CSOs, private sector, and particularly the International Labor Organization, including on its Decent
Work program and monitoring missions, to make further progress on these issues.        Directors furthermore
encouraged the Bank to approach development partners to secure funding for Third Party Monitoring and
systemic capacity building. They underscored the importance of continued engagement with Uzbekistan on
further agriculture and cotton sector reforms, for which the proposed project will lay important foundations.
Finally, Directors looked forward an update in early 2015.

_____________________
*This summary is not an approved record.