CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM ANNUAL REPORT 2017 © 2018 The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: +1 (202) 473-1000 Internet: www.worldbank.org The 2017 CAEWDP Team Christina Leb, CAEWDP Program Manager Husam Mohamed Beides, Energy Development Pillar Lead Nagaraja Rao Harshadeep, Energy-Water Linkages Pillar Lead Pieter Waalewijn, Water Productivity Pillar Lead Abena Akuffo-Akoto, Partnership Specialist Manon Cassara, Field-based Program Liaison Togzhan Alibekova, Program Assistant and M&E Mariya Pak, Communications ACKNOWLEDGMENTS CAEWDP is a regional knowledge and technical assistance partnership administered by the World Bank and funded by Switzerland, the United Kingdom, the European Commission, and the United States of America. The report benefited from inputs from the teams in the Sustainable Development Network Vice Presidency (Kathrin Hofer, Takhmina Mukhamedova, Daryl Fields, Julia Komagaeva, Philippe Ambrosi, Pier Francesco Mantovani). Led by Christina Leb who provided oversight and guidance, the CAEWDP team drafted, coordinated production of the report and provided technical review. Editorial review was provided by Meriem Gray (Communications Officer) and the Europe and Central Asia External Communications team. Valuable comments were provided by David Michaud, Sascha Djumena and Sameer Shukla. DISCLAIMER This work is a product of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. RIGHTS AND PERMISSIONS The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: +1 (202) 522-2422; email: pubrights@worldbank.org. PHOTO INFORMATION Unless otherwise noted, all photos are ©World Bank. CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM ANNUAL REPORT 2017 CAEWDP | Annual Report 2017 1 CONTENTS ACRONYMS AND ABBREVIATIONS...................................................................................................................... 2 EXECUTIVE SUMMARY....................................................................................................................................... 5 1. ENERGY AND WATER RESOURCES DEVELOPMENT IN CENTRAL ASIA............................................................ 11 1.1 REGIONAL AND COUNTRY CONTEXT........................................................................................................ 12 1.2 ENERGY AND WATER CHALLENGES IN 2017............................................................................................ 13 2. CENTRAL ASIA ENERGY-WATER DEVELOPMENT PROGRAM (CAEWDP).......................................................... 14 2.1 CAEWDP GOALS AND APPROACH............................................................................................................ 15 2.2 CAEWDP 2.0 COMPLETION..................................................................................................................... 17 2.3 ACTIVITIES SUMMARY 2017................................................................................................................... 18 ENERGY DEVELOPMENT PILLAR........................................................................................................... 19 ENERGY-WATER LINKAGES PILLAR........................................................................................................ 20 WATER PRODUCTIVITY PILLAR.............................................................................................................. 22 2.4 CAEWDP 3.0 INCEPTION........................................................................................................................ 23 3. TRUST FUND MANAGEMENT AND FINANCIAL OVERVIEW............................................................................... 25 3.1 PROGRAM ADMINISTRATION.................................................................................................................. 26 3.2 COMMUNICATION, OUTREACH AND DONOR ENGAGEMENT....................................................................... 26 3.3 FINANCIAL OVERVIEW............................................................................................................................ 27 ANNEX I – DESCRIPTIONS OF PROGRAM ACTIVITIES......................................................................................... 28 ENERGY DEVELOPMENT PILLAR.................................................................................................................... 28 ENERGY VULNERABILITY TO CLIMATE CHANGE....................................................................................... 28 CENTRAL ASIA REGIONAL ECONOMIC PROGRAM (CAREC ENGAGEMENT).................................................. 29 CASA-1000 ADVISORY SUPPORT FOR THE REGIONAL TRADE INITIATIVES (2 RETFS): THE KYRGYZ REPUBLIC AND TAJIKISTAN................................................................................................ 30 TAJIKISTAN WINTER ENERGY PROGRAM................................................................................................ 30 ADVISORY SUPPORT FOR THE PHASE I OF NUREK HYDROPOWER REHABILITATION PROJECT (RETF)............ 31 KYRGYZ REPUBLIC: HEATING EFFICIENCY IMPROVEMENT........................................................................ 31 ENERGY-WATER LINKAGES PILLAR................................................................................................................ 32 CENTRAL ASIA KNOWLEDGE NETWORK................................................................................................. 32 TECHNICAL ASSISTANCE FOR DEVELOPING WATER INFORMATION SYSTEMS IN CENTRAL ASIA.................... 33 CLIMATE ADAPTATION AND MITIGATION PROGRAM FOR ARAL SEA BASIN SERIES OF PROJECTS II................ 34 CENTRAL ASIA WATER RESOURCES MANAGEMENT (CAWARM) PHASE-I PROJECT....................................... 34 TAJIKISTAN WATER INFORMATION SYSTEM STUDY TOUR.......................................................................... 35 WATER PRODUCTIVITY PILLAR...................................................................................................................... 35 ANALYSIS OF WATER SUPPLY AND SEWERAGE SERVICES IN CENTRAL ASIA............................................... 35 ANNEX II – RESULTS FRAMEWORK................................................................................................................... 37 ANNEX III – RESULTS CHAIN 2017.................................................................................................................... 40 2 CAEWDP | Annual Report 2017 ACRONYMS AND ABBREVIATIONS ADB Asian Development Bank ALRI Agency for Land Reclamation and Irrigation ASBP Aral Sea Basin Program ASBP-2 Second Aral Sea Basin Program ASBP-3 Third Aral Sea Basin Program BRI Belt and Road Initiative BT Barki Tojik CA Central Asia CAEWDP Central Asia Energy-Water Development Program CAHMP Central Asia Hydrometeorology Modernization Project CAMP4ASB Climate Adaptation and Mitigation Program for the Aral Sea Basin CAPS Central Asia Power System CAREC Central Asia Regional Economic Cooperation CARECenv Regional Environmental Center for Central Asia CASA-1000 Electricity Transmission and Trade Project for Central Asia and South Asia CAsKADe Central Asia Knowledge Alliance for Development CAWaRM Central Asia Water Resources Management CAYFWater Central Asia Youth Forum on Water CoP Community of Practice CSOs Civil Society Organizations C4D Collaboration for Development DAC Donor Advisory Committee DSS Decision Support System DFID United Kingdom Department for International Development DH District Heating EAP Energy Action Plan EEU Eurasian Economic Union EC European Commission EC-IFAS Executive Committee of the International Fund for Saving the Aral Sea EPC Engineer Procurement ContracT ESCC Energy Sector Coordinating Committee ESIA Environmental and Social Impact Assessment EU European Union EWP Energy Work Plan GDP Gross Domestic Product CAEWDP | Annual Report 2017 3 GEF Global Environment Facility GFDRR Global Facility for Disaster Reduction and Recovery GKU German-Kazakh University GoK Government of Kazakhstan GoT Government of Tajikistan HPP Hydropower Plant HVDC High-voltage Direct Current ICWC Interstate Commission on Water Coordination IDA International Development Association IWRM Integrated Water Resources Management JWG Joint Working Group MEWR Ministry of Energy and Water Resources M&E Monitoring and Evaluation MDTF Multi-Donor Trust Fund NEGK National Electrical Grid of Kyrgyz Republic OSHC Open Stock Holding Company PIU Project Implementation Unit RETF Recipient Executed Trust Fund SCO Shanghai Cooperation Organization SDG Sustainable Development Goals SECO State Secretariat for Economic Affairs (Switzerland) SOP Series of Projects TA Technical Assistance TAPI Turkmenistan–Afghanistan–Pakistan–India (Pipeline) TF Trust Fund ToR Terms of Reference TTL Task Team Leader TWG Technical Working Group UNEP United Nations Environment Programme UNRCCA United Nations Regional Centre for Preventive Diplomacy USAID United States Agency for International Development WB World Bank WIS Water Information System WSS Water Supply and Sanitation EXECUTIVE SUMMARY 6 CAEWDP | Annual Report 2017 This report presents the highlights and progress of through activities that fall under three cross-cutting the Central Asia Energy-Water Development Program components: Analytical Development, Institutional (CAEWDP). The reporting period for this Annual Report Strengthening, and Investment Preparation. is the calendar year from January to December 2017. The Analytical Development component aims at The report also covers the completion of CAEWDP 2.0 strengthening the enabling environment through the and the preparation for CAEWDP 3.0, which started in generation of knowledge. The Institutional Strengthening January 2018. component enables capacity building by promoting dialogue processes and investments, networking, ABOUT THE PROGRAM and knowledge sharing. The Investment Preparation component aids governments in the preparation of The Central Asia Energy-Water Development Program investment related documents and studies. Together was initiated in 2009 with the goal to support the these three components help increase regional Central Asia countries (Kazakhstan, the Kyrgyz Republic, cooperation to advance sustainable development and Tajikistan, Turkmenistan and Uzbekistan) to promote build climate resilience, goals that are inherent to energy energy and water security through regional cooperation. and water security. The long-term vision of the Program is to catalyze economic growth and livelihood security within Central PROGRAM ACHIEVEMENTS TO DATE Asia through regional cooperation and integrated energy and water development initiatives. CAEWDP is designed Between 2009 and 2017 CAEWDP completed two as a catalytic program that aims at precipitating policy Program phases: CAEWDP 1.0 from 2009 to 2011 and change, institutional effectiveness, investments and CAEWDP 2.0 from 2011 to its completion in 2017. increased coordination among beneficiary through CAEWDP 2.0 engaged in thirty-eight activities, fifteen of targeted Bank and recipient executed grants. which focused on Energy Development, seven on Water Productivity, and sixteen on Energy-Water Linkages. CAEWDP is implemented by the World Bank through a The activities that CAEWDP undertook in Central Asia multi-donor trust fund financed by the State Secretariat contributed to investment projects in the amount of for Economic Affairs of Switzerland (SECO), the around US$ 1.7 billion.1 From 2011 to 2017, CAEWDP Department for International Development of the catalyzed six investment projects: 1) Nurek Hydropower United Kingdom (DFID), the United States Agency for Rehabilitation Project Phase I (US$ 350 million), 2) International Development (USAID) and the European Climate Adaptation and Mitigation Program for the Aral Commission (EC). Sea Basin (CAMP4ASB) (US$ 45 million, plus additional financing of US$ 19 million in pipeline), 3) Central CAEWDP is structured around three pillars: Energy Asia-South Asia Electricity Transmission and Trade Development, Water Productivity, and Energy-Water Project (CASA-1000) (US$ 1.17 billion), 4) CASA-1000 Linkages, to reflect the Program’s goal. The objective Community Support Project for the Kyrgyz Republic (US$ of the Energy Development Pillar is to promote and 11 million), 5) Heat Supply Improvement Project in the analyze high-value energy investments that focus on Kyrgyz Republic (US$ 46 million), and 6) Central Asia energy security, efficiency, trade and accountability, Hydrometeorology Modernization Project (CAHMP) (US$ infrastructure planning and institutional development. 28 million, plus additional financing of US$ 11.5 million The Water Productivity Pillar aims to enhance the in pipeline). The Program will continue its operation with productive and efficient use of shared water resources a third Program phase, CAEWDP 3.0, which starts in in the various water related sectors through capacity January 2018. building, institutional strengthening and investment planning. The Energy-Water Linkages Pillar aims to improve the understanding of linkages between energy and water at national and regional levels and to explore the future impact of regional climate change. 1. Total project costs are reported based on Project Appraisal Documents (PADs). PADs are available at www.documents. The Program implements its objective within each pillar worldbank.org 1. Total project costs are reported based on Project Appraisal Documents (PADs). PADs are available at www.documents.worldbank.org CAEWDP | Annual Report 2017 7 HIGHLIGHTS OF CAEWDP SUPPORTED implementation support to the CASA-1000 Project. In ACTIVITIES IN 2017 2017, CAEWDP facilitated implementation of the country- specific Environmental and Social Impact Assessments In 2017, with the completion of CAEWDP 2.0 in (ESIAs) for the Kyrgyz Republic and for Tajikistan. December, the Program finalized 13 activities: seven under Energy Development, one under Water Productivity, CAEWDP conducted an analysis of Water Supply and and five under Energy-Water Linkages. Sewerage (WSS) Services in Central Asia. The activity examined the WSS sectors, determined the problem One of the long-term goals of CAEWDP is to support areas, and proposed policy reforms towards improved activities that contribute to eliminating winter energy access, quality, efficiency, and sustainability of WSS shortages in Central Asia. In 2017, the Program services. These findings improved fact-based dialogue completed three activities that reduce energy shortages with client countries for sector reform and informed and improve heating sector efficiency in the Kyrgyz decision-making in the WSS sector. Republic and Tajikistan. The Program’s Kyrgyz Republic: Heating Efficiency Improvement activity conducted The Program contributed to regional institutions by groundwork to prepare the Heat Supply Improvement connecting different groups of experts and youth, and by Project, which addresses the challenge of providing linking energy and water sectors via virtual and face- reliable and affordable heating supply to the people to-face networking events. Before 2017, the Central of the Kyrgyz Republic in urban and rural settings. In Asia Knowledge Network activity established new and October of 2017, the World Bank’s Board of Executive enhanced existing Communities of Practice (CoPs). In Directors approved the Project.2 Similar work was 2017, this activity established a new Central Asia Youth conducted in Tajikistan, where the Tajikistan Winter Forum on Water (CAYFWater) CoP in collaboration with Energy Program focused on supporting pre-investment the German-Kazakh University (GKU) to provide a greater studies to enhance winter energy security in Tajikistan. voice to young people. The first meeting of CAYFWater As a result, the Nurek Hydropower Rehabilitation Project members took place in 2017 in the Kyrgyz Republic. Phase I investment project was approved in May, 2017. CAEWDP assisted with investment preparation through Furthermore, the Program strengthened regional Advisory Support for the Phase I of Nurek Hydropower institutions by providing technical assistance and creating Rehabilitation Project Recipient Executed Trust Fund learning opportunities. In 2017, the Technical Assistance (RETF). Additionally, in Tajikistan, the Program completed for Developing Water Information Systems in Central the Energy Vulnerability to Climate Change activity, which Asia provided analytical foundations for the Central Asia provided the most current climate change projections for Water Resources Management Program (CAWaRM).3 Tajikistan, information on climate change impact on the Additionally, the program facilitated the Tajikistan Water energy sector, and adaptation measures for the country. Information System Study Tour activity for Tajik water experts. Two study tours, to Armenia and the USA, At the regional scale, CAEWDP facilitated dialogue and introduced the Tajik experts to the Water Information strengthened institutions on energy trade within and Systems (WISs) and Decision Support Systems (DSSs) outside of Central Asia. In 2017, in the context of the used in water management sectors abroad. This activity Central Asia Regional Economic Cooperation (CAREC) provided timely knowledge to Tajikistan, as the country platform, the Program facilitated dialogue on building a is reorganizing its energy and water sectors and rolling more coordinated and integrated regional energy out the establishment of a national WIS, based on the market. The Program facilitates inter-regional energy findings and recommendations of an earlier CAEWDP trade by providing technical assistance and project financed assessment. 3. This program was restructured, after the World Bank (WB) took the decision in early 2017 to pursue water information system (WIS) development support at national level rather than to push for a 2. World Bank Press Release October 17, 2017 http://www.worldbank. regional program. CAEWDP engagement on this agenda will continue 2. org/en/news/press-release/2017/10/27/world-bank-to-help-kyrgyz- under the third World Bank Press Release October 27, 2017 http://www.worldbank.org/en/news/press-release/2017/10/27/world-bank-to-help-kyrgyz-republic- republic-improve-efficiency-and-quality-of-heat-supply improve-efficiency-and-quality-of-heat-supply funding phase. 3. This program was restructured, after the World Bank (WB) took the decision in early 2017 to pursue water information system (WIS) development support at national level rather than to push for a regional program. CAEWDP engagement on this agenda will continue under the third funding phase. 8 CAEWDP | Annual Report 2017 PROGRAM ADMINISTRATION AND LOOKING FORWARD DISBURSEMENTS CAEWDP will continue to provide support at the national This year, the CAEWDP core team supported the closure and regional levels with the program development of the remaining Phase 2.0 grants, while setting up objective to strengthen the enabling environment to the next phase of the Program. Additionally, the team promote energy and water security at regional level and developed Monitoring and Evaluation (M&E) and in the beneficiary countries. Moving forward, the CAEWDP Communication and Outreach strategies. A new Multi- 3.0 pillar structure and content will be adjusted with an donor Trust Fund (MDTF) was established in November for increased focus on facilitating energy and water security. implementation of CAEWDP 3.0 starting in January 2018. Some of the guiding principles for Phase 3.0 include: A cumulative total of US$ 10.7 million was disbursed through CAEWDP activities by the end of 2017 (Figure 1). • Treating national activities as building blocks to During the Program lifetime, the Energy-Water Linkages achieve energy and water security at the Pillar accounted for about 44 percent of program activity regional level financing, while the Energy Development Pillar accounted for 34 percent. The remaining funding was for the Water • Increasing emphasis on capacity building for, and Productivity Pillar (7 percent) and strategic program within, institutions and on dialogue to management (15 percent), which included dissemination catalyze investments and outreach activities, as well as the preparation of the Program’s next funding phase (Figure 2). • Including Afghanistan as a new Program beneficiary country in addition to the five Central Asian Republics. FIGURE 1 — CUMULATIVE PHASE 2.0 PROGRAM DISBURSEMENTS (US$ MILLIONS, 2012-2017) 12 10.682 10 8.873 8 US$ million 6 5.357 3.925 4 2 0.539 0.327 0 2012 2013 2014 2015 2016 2017 CAEWDP | Annual Report 2017 9 Efforts are underway to establish and shape CAEWDP 3.0. Strong support exists among the beneficiary countries and development partners for the continuation of the CAEWDP’s integrative and adaptive approach. The concept for the third funding phase was presented to the Donor Advisory Committee (DAC) for consultation in December 2016. In 2017, the documents for CAEWDP 3.0 inception were reviewed according to the DAC feedback and approved in July. CAEWDP 3.0 is operational since January 2018. FIGURE 2 — PROPORTION OF TOTAL PROGRAM ALLOCATION PER PILLAR IN 2017 (%) 15% 7% 44% 34% Program Management Energy Development Pillar Water Productivity Pillar Energy-Water Pillar CHAPTER 1. ENERGY AND WATER RESOURCES DEVELOPMENT IN CENTRAL ASIA 12 CAEWDP | Annual Report 2017 1.1 REGIONAL AND COUNTRY CONTEXT resources, but do have significant hydropower potential. Thus, these fossil energy poor upstream countries are When the Soviet Union dissolved in 1991, the five keen to further develop their hydropower resources—an Central Asian republics gained their independence. enterprise that could turn these countries into major Almost as soon as the countries started building their electricity exporters. However, the development of nations, they joined the World Bank (WB): Kazakhstan hydropower projects upstream has been regarded by joined first in June of 1992 followed quickly by the the downstream countries as having the potential to others with Tajikistan joining last in June of 1993. negatively impact their economies. The issue and the Throughout its engagement, the WB has supported the reason for regional tension is rooted in the timing of the Central Asian countries’ efforts to improve peoples’ flow of the shared waters; the downstream countries living standards and promote economic growth. utilize water for spring and summer irrigation while Among other projects, the WB and the United Nations upstream countries desire to release water in winter Environment Programme (UNEP) supported the efforts of for power production. If the upstream states were to the International Fund for Saving the Aral Sea (IFAS) by release water based on their own needs, there would be assisting in the preparation of the first Aral Sea Basin insufficient releases for the downstream crops during Program (ASBP)—an action program to stabilize and the growing season. Over time, these differences in restore the zone around the Sea, improve transboundary development paths led to inadequate transboundary water management, and develop the capacity of water management and to the weakening of the regional organizations. As the first ASBP proved to be CAPS—a major loss for the region, as this system largely beneficial, the WB continued its engagement with IFAS by met the needs of its consumers and reduced the overall participating in the preparation of and supporting follow- energy costs. up for ASBP-2 (2003-2010) and ASBP-3 (2011-2015). Starting in 2009, the WB partnered with the Central In recent years, however, the regional integration Asian governments and development organizations processes have intensified. In 2017, the ongoing (including the Government of Switzerland’s State political transition in Uzbekistan resulted in solving some Secretariat for Economic Affairs (SECO), the United border demarcation issues, reopening of checkpoints, Kingdom’s Department for International Development establishment of new international flight routes, (DFID), the European Union (EU), and the United States increasing regional trade, reconnecting power lines, Agency for International Development (USAID)) to and expressing the potential interest in collaborating promote energy and water security in Central Asia in the on large hydropower plant (HPP) construction. The new context of a changing global environment through the chair of the of Executive Committee of International Central Asia Energy-Water Development Fund for Saving the Aral Sea (EC IFAS)—Turkmenistan— Program (CAEWDP). has demonstrated interest in reviving the regional dialogue on integrated water and energy management. Although the Central Asian countries collaborated within The country hosted the Central Asian International IFAS, their partnerships on water management, energy Environmental Forum in June of 2017 and proposed trade through the Central Asia Power System (CAPS), and development of the fourth Aral Sea Basin Action Program other sectors weakened over time. One reason for this (ASBP-4). On a larger scale, trends to increase regional split is rooted in the national development strategies, security and economic integration through regional which were tied to the nations’ geographic locations and organizations such as the Shanghai Cooperation natural resources availability. The basin’s downstream Organization (SCO), Eurasian Economic Union (EEU), and nations of Kazakhstan, Turkmenistan, and Uzbekistan Central Asia Regional Economic Cooperation (CAREC) are rich in hydrocarbons, ensuring their energy security; and via regional initiatives such as China’s Belt and the Kyrgyz Republic and Tajikistan lack these energy Road Initiative (BRI) are evident as well. CAEWDP | Annual Report 2017 13 1.2 ENERGY AND WATER CHALLENGES Central Asian countries continue to look for power IN 2017 trade opportunities outside the region. For example, Turkmenistan expressed its interest to supply energy Developments in 2017 show that the Central Asian by transit via Afghanistan to Tajikistan in autumn countries are working towards regional integration in and winter. Kazakhstan is looking to Azerbaijan as the water and energy sectors. While upstream Kyrgyz a new export outlet for its increasing natural gas Republic and Tajikistan continued to express their production and as an alternative to already existing intent in building large HPPs, Uzbekistan expressed routes. Uzbekistan is considering participating in the its willingness to negotiate the development projects Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI) within internationally accepted rules; it also signed project. This past year, countries participating in the a Memorandum of Understanding with the Kyrgyz CASA-1000 project, which will allow the export of surplus Republic on cooperation in the implementation of the hydroelectricity from Tajikistan and the Kyrgyz Republic Kambarata HPP-1 construction project. During the 25th to Pakistan and Afghanistan, have made significant anniversary of the Interstate Commission for Water progress in the project infrastructure procurement, Coordination (ICWC) — the first regional institution set including signing construction contracts for power up in Central Asia after the dissolution of the Soviet transmission lines in Afghanistan. Progress in the CASA- Union, tasked to control efficient use and protection of 1000 project has increased market interests in future the waters, develop regional common water management third party access to this investment. policies, and determine annual limits of water use for each state—the countries adopted a resolution that Climate change pressure is increasing in Central Asian underlined the significance of intensifying the work to countries. The 2014 WB research on climate change improve legal and institutional mechanisms for interstate showed that increasing precipitation and glacial melt water cooperation.4 will lead to increased water availability and flood risk in Central Asia in the coming decades. Tajikistan, the Regional power trade negotiations and deals intensified Central Asian country most vulnerable to considerable in 2017. The Kyrgyz Republic began delivering electricity climate change risks—prone to floods, mudslides, to Uzbekistan in June after signing an agreement on and earthquakes—faced heavy rains and strong winds power trade. Transmission lines are being built and which resulted in a mudflow in June of 2017. About 700 restored to re-connect Tajikistan’s and Uzbekistan’s people were affected, losing their livelihoods, livestock, grids,5 enabling Tajikistan to supply surplus electricity properties, and critical social infrastructure. In July, WB to Uzbekistan in 2018. In May, Uzbekistan and approved US$ 50 million for the Strengthening Critical Turkmenistan signed a memorandum envisioning Infrastructure Against Natural Hazards Project the transmission of electricity from Turkmenistan in Tajikistan. to Kazakhstan and the Kyrgyz Republic through Uzbekistan’s power grid. Additionally, Uzbekistan is making efforts to restore a single energy ring with all its Central Asian neighbors: the Kyrgyz Republic, Kazakhstan, Tajikistan, and Turkmenistan, with a possible extension to Afghanistan. In addition to strengthening power trade within the region, CAEWDP 3.0 will continue to support country efforts to re- establish full regional interconnectivity to support inter- regional power trade. 4. Resolution Central Asian International Scientific-Practical Conference “The 25 Years of Water Cooperation in Central Asia: Lessons Learnt 4. Resolution Central Asian International Scientific-Practical Conference “The 25 Years of Water Cooperation in Central Asia: Lessons Learnt and and Future Outlook” Future Outlook” 5. Tajikistan became fully isolated from Uzbekistan and the Central Asia Power System 5. Tajikistan (CAPS) became fullyin 2009. from Uzbekistan and the Central Asia Power System (CAPS) in 2009. isolated CHAPTER 2. PORTFOLIO AND PROGRAM ACTIVITY SUMMARY CAEWDP | Annual Report 2017 15 2.1 CAEWDP GOALS AND APPROACH Environmental Centre for Central Asia (CARECenv). Coordination with other development partners assists CAEWDP is a knowledge and technical assistance CAEWDP to meet program goals, align development multi-donor trust fund (MDTF) administered by the World and engagement approaches (e.g. through linkages to Bank. It is designed as a catalytic program that aims at the Blue Peace Program, Berlin Process, and the South precipitating policy change, institutional effectiveness, Asia Regional Trade and Integration Program/SARTIP), investments and increased coordination through targeted cooperate on program activities (e.g. with the EU-Central Bank and recipient executed grants. (For examples see Asia Enhanced Regional Cooperation on Environment, section 2.2 below) Climate Change and Water/WECOOP project), and catalyze new investments and projects (e.g. Smart CAEWDP’s goal is to promote energy and water Waters) (Figure 3). security for the countries of Central Asia—Afghanistan, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, Collaboration with other development partners and and Uzbekistan—through enhanced regional cooperation. regional institutions forged new partnerships and Since its inception in 2009, CAEWDP has received US$ facilitated new projects. The Kazakh-German University 12 million in support from bilateral and multilateral plays central role in development of the regional donors including the Government of Switzerland through Academic Network established by CAEWDP . It was the State Secretariat for Economic Affairs (SECO), established as part of the Berlin Process, which was the European Commission (EC), the United Kingdom’s launched in 2008 as an offer by Germany to the Department for International Development (DFID), the countries of Central Asia to support them in water United States Agency for International Development management and transboundary cooperation. The (USAID), and the World Bank Group. Swiss Blue Peace Initiative, launched in 2014, includes an educational track, which contributes to training the The Program is created on the basis of partnerships with next generation of water professionals. The Initiative governments, thus the Program activities reflect national supports the Central Asia Youth Forum on Water Network aspirations and priorities. CAEWDP also partners with established by CAEWDP . In 2014 and 2015, both regional organizations whose mandates are to convene networks participated in the research project competition discussions on regional issues, such as the International among Masters students organized under CAEWDP’s Fund for Saving the Aral Sea (IFAS), Central Asia Regional Central Asia Knowledge Network (CAKN) activity. The Economic Cooperation (CAREC), United Nations Regional contest was not only very popular, it also led to the US$ Centre for Preventive Diplomacy (UNRCCA), and Regional 9.5 million USAID funded Smart Waters project. These FIGURE 3 — CAEWDP LINKAGES WITH OTHER PROGRAMS AND INSTITUTIONS Germany IFAS Institutions UNRCCA USAID ASBP – 3/4 Berlin Process (2008) Smart Waters Project German-Kazakh University CARECenw SDC Blue Peace CAKN Academic Initiative (2014) Network CAKN Youth Network NEXUS Advisory Support SECO WECOOP CAREC ESCC SARTIP CAEWDP Activity Development Partner Non-CAEWDP Activity Institution ADB DFID EU 16 CAEWDP | Annual Report 2017 FIGURE 4 — CAEWDP 2.0 PILLAR AND OUTCOMES STRUCTURE Energy Investment Development Preparation Support policy and Expanded water and investments decisions energy infrastructure for the highest investments, value mix of with early results resources Energy-Water Regional Linkages Institutions Three Improve understanding of linages between water Strong physical, intellectual and Three Pillars and energy and facilitate regional dialogue management hubs for regional cooperation and dialogue Outcomes Diagnostics Water and Analysis Productivity Better identify the Increase productivity costs, bene ts, and ef ciency of water opportunities use in both agriculture and risks of and energy sectors cooperation to national interests contests, which involve CAKN’s Academic and Youth energy, and strengthening the information base. networks, are now regularly organized by CARECenv and 3. Water Productivity: This pillar addresses infrastructure the Kazakh German University. and management opportunities to increase the productivity and efficiency of water use in both CAEWDP’s role in strengthening regional cooperation agriculture and energy sectors. and leveraging the energy-water nexus is significant, given the geographic and institutional complexities of Each of the program pillars aims to engage in activities Central Asia’s energy and water linkages. The Program’s based on three key outcomes: long-term goals are to reduce winter energy shortages, enhance water productivity, and increase electricity trade • Analytical Development (Technical Assistance), within and outside the region. Hence, CAEWDP 2.0 is or the upgrade of the knowledge foundation and structured around three pillars to reflect these establishment of sound energy-water diagnostics goals (Figure 4): and analytical tools 1. Energy Development: This pillar supports policy • Institutional Strengthening, or the shaping of and investment decisions for the highest value mix strategies and strengthening of national and of energy resources at the regional levels — both regional institutions and dialogue within Central Asia and at the broader regional level. It promotes and studies high-value energy investments • Investment Preparation, or the identification of that focus on energy security, energy efficiency, trade and priority infrastructure investments. accountability, infrastructure planning and institutional development. Additional activities also promote better All three outcomes are closely intertwined. Analytical coordination among the development partners working in development provides the technical foundations and this region. “know-how”; institutional strengthening builds the capacity of agents, whereas investment preparation 2. Energy-Water Linkages: This pillar seeks to improve the helps to identify investment options. The combination understanding of the interconnections between energy of these three outcomes provides a comprehensive and water at the national and regional levels by: exploring pathway to promote regional cooperation. the future impact of climate change, facilitating regional dialogue regarding cooperative management of water and CAEWDP | Annual Report 2017 17 TABLE 1 — CAEWDP ACTIVITIES DURING PHASE 2.0. Analytical Institutional Investment   Development Strengthening Preparation Total Energy Development 6 3 6 15 Water Productivity 6 0 1 7 Energy-Water Linkages 5 6 5 16 Total 17 9 12 38 2.2 CAEWDP 2.0 COMPLETION and became one of the three main components of the CAREC ESCC’s Energy Action Plan (EAP) and Energy Work The second phase of CAEWDP (CAEWDP 2.0) closed Plans (EWPs).6 The six-country riparian consultations to on 31 December 2017. From 2011 to 2017 CAEWDP review the Rogun HPP assessment studies provided a 2.0 contributed to the strengthening of the region’s platform for open discussions and transparency on the institutions by increasing human and institutional study findings. This arguably established an enabling, capacity, improving regional coordination over energy and shared knowledge base for the ongoing dialogue among water issues, and helping the countries in the region concerned countries. prioritize their energy and water sector development pathways. The Program’s success has been recognized, The activities that CAEWDP undertook in Central Asia and in 2017, CAEWDP prepared for its third funding leveraged US$ 1.7 billion7 in investment projects and phase launched in January 2018. other grant funded projects. Some of the investment projects catalyzed by CAEWDP during 2011 to 2017 Since the inception of CAEWDP 2.0 in 2011, the period include: 1) Nurek Hydropower Rehabilitation Program has engaged in thirty-eight activities (Table Project Phase I (US$ 350 million), 2) Climate Adaptation 1), fifteen of which focused on energy development, and Mitigation Program for Aral Sea Basin (US$ 45 seven on water productivity, and sixteen on energy-water million), 3) Central Asia-South Asia (CASA) 1000 Project linkages. Thirty-seven out of thirty-eight activities were (US$ 1.17 billion), 4) CASA-1000 Community Support completed. One activity, the Uzbekistan Water Resources Project (the Kyrgyz Republic) (US$ 11 million), 5) Heat Assessment, was dropped, as it became clear that it Supply Improvement Project (the Kyrgyz Republic) (US$ could not be completed within CAEWDP 2.0 duration. 46 million), and 6) Central Asia Hydrometeorology Modernization Project (CAHMP) (US$ 28 million). CAEWDP uses targeted small to medium size grants Additionally, CAEWDP activities initiated projects funded by (US$ 60,000 – 700,000) to catalyze changes in policy other development partners and trust-funded programs. or institutional effectiveness and/or to bring about larger For example, the Global Facility for Disaster Reduction investments. For example, CAEWDP funded participation and Recovery (GFDRR) provided US$ 1.2 million grant of Bank and external energy experts in the CAREC for Strengthening Early Warning of Mountain Hazards in Energy Sector Coordination Committee (ESCC) facilitated Central Asia.8 USAID funded CARECenv project on “Smart inclusion of water-energy nexus considerations in the Waters” for US$ 9.5 million. Figure 5 illustrates examples ESCC agenda. The CAREC Engagement Project convened of how individual CAEWDP activities contributed to new Eurasia energy experts to commence a dialogue on investments and grant funded projects. energy issues in Central Asia. As a result, the issue of energy-water linkages was recognized by the ESCC 6. Read more here: https://www.carecprogram. org/?publication=energy-action-plan-framework-2010- 6. Read more here: https://www.carecprogram.org/?publication=energy-action-plan-framework-2010-2012-completion-report and https://www. 2012-completion-report and https://www.carecprogram. carecprogram.org/?publication=carec-2020-strategic-framework-for-central-asia-regional-economic-cooperation-program-2011-2020 org/?publication=carec-2020-strategic-framework-for-central-asia- regional-economic-cooperation-program-2011-2020 7. Total project costs are reported based on Project Appraisal Documents (PADs). PADs are available at www.documents.worldbank.org 7. Total project costs are reported based on Project Appraisal 8. Read more: https://www.gfdrr.org/en/strengthening-early-warning-mountain-hazards-central-asia-bank-executed Documents (PADs). PADs are available at www.documents. worldbank.org 8. Read more: https://www.gfdrr.org/en/strengthening-early-warning- mountain-hazards-central-asia-bank-executed 18 CAEWDP | Annual Report 2017 FIGURE 5 — FROM CAEWDP TO INVESTMENTS AND GRANT-FUNDED PROJECTS Central Asia Heat & Energy Ef ciency Technical Assistance Energy Sector Assessment of the Building to Central Asia Power Supply Options Study Type: Sector of the Kyrgyr 2011 Coordingating Non-lending Hydrometeorology Committee Type: Republic & Tajikistan Type: Modernization First CA Climate Non--lending Non-lending Project (CAHMP) Knowledge Forum Type: Central Asia Knowledge Type: Non-lending Network Type: Non-lending Non-lending Event Energy Sector Development in Tajikistan Energy Sector Dialogue Type: Heat Ef ciency Kazakhstan & Improvement Type: lending Second CA Climate Non-lending Knowledge Forum Type: Uzbekistan Type: Non-lending Non-lending Event Advisory Support of the Regional Tajikistan Winter Energy Program Type: Trade Initiatives Non-lending Project Type: RE-Grants Central Asia Climate Mitigation & Hydrometerology Adaptation Program Advisory Support for the Phase I Nurek Modernization Smart Waters Strengthening Early for the Aral Sea Central Asia Hydropower Rehabilitation Project Type: Project (CAHMP) (USAID Grant) 2017 South Asia Warning of Mountain Basin (CAMP4ASB) RE-Grant Hazards in Central Electricty Transmission & Asia (GFDRR Grant Trade Project Nurek Hydropower Rehabilitation Project (CASA-1000) Phase I (active) Investments Projects CASA-1000 Community Support in Kyrgyz Republic CAEWDP Activity Heat Supply Improvement Project Future CASA-1000 Community Support Grant Funded Projects in Tajikistan (pipeline) 2.3 ACTIVITIES SUMMARY 2017 outcome. The Water Productivity pillar had one ongoing activity under Analytical Development. The Energy-Water CAEWDP contributes to the World Bank’s portfolio Linkages pillar completed five activities: two in Water, Energy, and the ECA region through direct under Institutional Strengthening and three under contributions to advisory services and analytical Investment Preparation. activities. Over the course of the 2017 calendar year, the Program completed thirteen activities (Table 2). Of these A summary of the 2017 portfolio of program activities activities, one was new, while twelve were continuing is provided in the next section for each of the three from the previous years. pillars. In addition to the summary, the next section also presents contributions of the Program’s activities to the In 2017, the Energy Development pillar constituted broader CAEWDP goals of promoting regional energy the majority of ongoing activities. Out of seven and water security and regional cooperation. More activities under this pillar, one fell under Institutional comprehensive activity descriptions and updates are Strengthening and six under the Investment Preparation included in Annex 1. TABLE 2 — CAEWDP ACTIVITIES DURING 2017. Analytical Institutional Investment   Development Strengthening Preparation Total Energy Development 0 1 6 7 Water Productivity 1 0 0 1 Energy-Water Linkages 0 2 3 5 Total 1 3 9 13 CAEWDP | Annual Report 2017 19 Energy Development Pillar focused on enhancing energy sector dialogue among the Central Asian states and ensuring coordination of donor Many of the current energy challenges are the result of assistance through funding CAEWDP’s participation in the collapse of the region’s water and power coordination CAREC ESCC meetings. policies, that were implemented during the Soviet era, and the adherence to different development strategies The recent change in regional energy cooperation, such subsequently pursued by the newly independent as Uzbekistan’s plans to improve ties with neighboring five Central Asian republics. The current generation countries has sparked hope for a new era of regional capacities of the Kyrgyz Republic and Tajikistan are cooperation between Central Asian countries. Using this linked to the agreed regime of summer water releases momentum, during the 2017 CAREC ESCC meetings in to downstream irrigation. The winter energy shortages Tajikistan, Kazakhstan, and Turkmenistan, the CAEWDP are estimated around 25 percent,9 yet the summer team presented the audience with specific measures power capacity surplus (driven by the releases for that could gradually move the countries from the current irrigation) is left unused with high levels of spillage at status of electricity markets to a more coordinated and hydroelectric plants. With aging infrastructure, weak integrated regional market. Presentations made by the institutional capacity and low productivity arising from WB energy team as part of CAEWDP CAREC ESCC funded subsidy policies and suboptimal tariff structures, these activity demonstrated how harmonization would allow hydropower facilities and the national electricity sectors more efficient electricity trade and utilization of regional are inefficient and do not reach their full economic energy resources. In these meetings, the WB team potential. Reforms are needed to increase institutional presented a concept of a three-stage transition path that capacity for better planning, management, and energy could be considered by the stakeholders in the future for use efficiency. the development of regional energy markets in Central Asia including: CAEWDP’s Energy Development pillar aimed to analyze and support high-value investments focused on winter 1. Establishing inter-governmental agreement on the energy security, energy efficiency, enhancing trade and development of a Central Asian energy cooperation accountability, infrastructure planning and institutional agenda to express commitment to regional energy development. The 2017 program activities reflected cooperation and to create an intergovernmental those objectives. Below is the list of seven10 activities framework for regional energy cooperation. completed under this pillar during 2017 calendar year. 2. Stage 1: Expanding opportunities for regional trade Energy Vulnerability to Climate Change (Investment by identifying priority infrastructure projects to increase Preparation) activity was competed in 2017. The objective cross-border interconnection, increasing bilateral and of this activity was to help the Government of Tajikistan regional electricity trades, synchronizing transmission understand energy sector vulnerabilities to climate networks, and identifying the responsibilities of a regional change and build resilience through the development of transmission company for regional network coordination coordinated adaptation policies with other Central Asian and monitoring. countries. The activity produced a “Tajikistan country- level assessment of energy sector vulnerability to climate 3. Stage 2: Developing a regional electricity market change and measures to build resilience” report, which design and functions including the regulatory structure provides the most current climate change projections for and framework for transmission access and pricing, the Tajikistan, information on climate change impact on the regional grid code and regional market rules, and the energy sector, and adaptation measures for the country. regional regulatory entity with regional market oversight responsibilities and representation from participating Central Asia Regional Economic Program (CAREC Central Asian countries. Engagement) Phase II (Institutional Strengthening) activity 9. Fields, 9. Daryl; Kochnakyan, Fields, Daryl; Artur; Mukhamedova, Kochnakyan, Artur; Mukhamedova, Takhmina; Takhmina; Stuggins, Gary; Besant-Jones, John. 2013. Tajikistan’s Winter Energy Crisis : Electricity Stuggins, Supply and Gary; Besant-Jones, Demand John. 2013. Tajikistan's Alternatives. World Winter Bank Study. Washington, DC: World Bank. Energy Crisis : Electricity Supply and Demand Alternatives. World Advisory 10. Bank Support for the Regional Study;. Washington, DC: WorldTrade Initiatives Bank. © World Project Bank. for the Kyrgyz Republic and Advisory Support for the Regional Trade Initiatives Project for https:// Tajikistan are reported as a single activity. openknowledge.worldbank.org/handle/10986/15795 License: CC BY 3.0 IGO. 10. Advisory Support for the Regional Trade Initiatives Project for the Kyrgyz Republic and Advisory Support for the Regional Trade Initiatives Project for Tajikistan are reported as a single activity. 20 CAEWDP | Annual Report 2017 The CAEWDP team plans to continue its engagement Stock Holding Company (OSHC) Barki Tojik, Tajikistan’s with CAREC ESCC under CAEWDP 3.0. The team plans national power company which was acting as a Grant to promote regional energy trade by recommending Implementing Agency, to facilitate the preparation a conceptual vision for regulatory and technical of Phase I of the Nurek Hydropower Rehabilitation harmonization of the Central Asian transmission grid, Project (HRP). The development objective of the Nurek providing institutional capacity building support and by Hydropower Rehabilitation Project is to rehabilitate and developing the regional electricity market. restore the generating capacity of three power generating units of the Nurek Hydropower Plant, improve the CASA-1000 Advisory Support for the Regional Trade efficiency of the generators, and strengthen the safety of Initiatives Recipient Executed Trust Funds (RETFs): The the Nurek dam. Kyrgyz Republic and Tajikistan (Investment Preparation) recipient-executed activities formed part of the US$ In March of 2017, the GoT and WB, acting as the 1.17 billion World Bank CASA-1000 investment project. administrator of grant funds provided under CAEWDP The role of these activities was to facilitate the initial signed an agreement to extend the grant to the GoT in preparatory work for the project, which aims to facilitate the amount of US$ 250,000 for the Nurek Hydropower 1,300 megawatts in electricity trade between Central Rehabilitation Project. Asia (the Kyrgyz Republic and Tajikistan) and South Asia (Afghanistan and Pakistan). During 2017, the CAEWDP The Grant supported activities which enhanced project RETFs for the Kyrgyz Republic and Tajikistan supported preparation and implementation readiness in three preparation of Environmental and Social Impact ways. First, additional Nurek HRP site investigations Assessments (ESIAs) in both countries. including geotechnical investigations, seismic analysis, and flood management assessments were conducted Tajikistan Winter Energy Program (Investment and informed the project design and safety measures to Preparation) focused on supporting pre-investment be undertaken during project implementation. Second, studies to enhance winter energy security in Tajikistan. bidding documents for the key procurement package The activity focused on two areas: the efficiency of for power plant rehabilitation were developed. Third, the heating stoves and other heating solutions, with a focus Dam Safety Panel of Experts (PoE) established under on rural areas and the rehabilitation of the Nurek Hydro this activity provided independent review and expert Power Plant (HPP). advice on the project design, dam safety, and other technical aspects during the project preparation. In 2017, a pilot program aimed at testing newly developed efficient heating stoves prototypes in Kyrgyz Republic: Heating Efficiency Improvement selected areas of the Republic of Tajikistan took place. (Investment Preparation) activity was completed in 2017. The results of the pilot program were presented to the The activity addressed the challenge of providing reliable Government of Tajikistan (GoT), development partners, and affordable heating supply to the people of the Kyrgyz and stakeholders in Spring of 2017. The team also Republic in urban and rural areas. In July 2017, the conducted a workshop to disseminate the generated CAEWDP team provided a training on efficient and clean knowledge and share the Efficient Stoves and Heating stove production to the Kyrgyz stove producers. The work Options Strategy Report. performed by the team between 2016 and 2017—the activity duration—informed the design of an investment The CAEWDP team assisted the GoT in preparation of lending component of the IDA financed project: Heat the Nurek HPP rehabilitation investment project by aiding Supply Improvement Project. The project was approved in the preparation of the feasibility reports, preparing by the WB Board in October 2017. bidding documents, and formulating contracts for consultants who prepared the rehabilitation design. The Energy-Water Linkages Pillar studies and reports produced by the activity helped with the assembly of the investment project package for the In Central Asia, the sectors most at risk from climate WB Board, which approved the project in May of 2017. change are agriculture, energy, and water resources. Climate change challenges and increasing water scarcity Advisory Support for the Phase I of Nurek Hydropower highlight the interconnectedness between these various Rehabilitation Project (RETF) (Investment Preparation) sectors. In agriculture, which is critical for the largely activity provided critical advisory support to the Open rural livelihoods in the region, productivity (including CAEWDP | Annual Report 2017 21 in both rainfed and irrigated systems) is sensitive to with its own financial resources, the continuation of the variations in rainfall, hydrologic flows modulated by preparation of the affiliated Bank investment project snow accumulation and melt, system storage, and was discontinued and this activity financed technical evapotranspiration. Energy systems are sensitive to assistance (TA) for the Kazakh government, which hydrologic changes (e.g., in the case of hydropower), pursues climate adaptation and mitigation objectives demand changes (e.g., in warmer areas in summer), with national financing. the impact of extreme events on transmission systems, as well as mitigation actions (e.g., in the case of Central Asia Water Resources Management (CA- fossil fuels). Key areas to address climate vulnerability WARM) Phase-I Project (Investment Preparation) aimed include: increasing clean energy and energy efficiency, to improve national and regional water resources strengthening disaster-risk management, as well as information management and analysis systems by improving water and other natural increasing their accessibility and reliability at the resources management. national and regional scales. It also supported dialogue with national working groups, the Regional Working CAEWDP’s Energy-Water Linkages pillar seeks to improve Group (RWG), and the Regional Steering Committee the understanding of the connections between energy (RSC). In early 2017, the WB decided that establishment and water at the national and regional levels through of WIS will be pursued through national portfolio exploring the future impact of climate change, facilitating engagements rather than through a regional program regional dialogue, and strengthening the knowledge and the affiliated WB project was dropped. Activities networks. The 2017 program activities reflected to support WIS establishment at the national level will these objectives; the activities completed in 2017 are continue under CAEWDP 3.0. described below. Technical Assistance for Developing Water Information Central Asia Knowledge Network (Institutional Systems in Asia Central (Investment Preparation) Strengthening) activity aimed to foster cooperation, provided analytical foundations for the Central Asia knowledge exchange, youth engagement, and innovative Water Resources Management Project (CAWaRM), which methods among regional institutions in the areas aims to strengthen water information management of water, energy, and climate issues. The team, in systems partnership with the World Bank Institute (WBI), by increasing accessibility, reliability, and analytical established a Central Asian Knowledge Network, capacity of water resources information. This activity which helped to establish new and enhance existing supported development of the concept for a needs Communities of Practice (CoPs) and linked these CoPs assessment to roll out WIS establishment in the Vakhsh together via in-person activities and virtual platforms. sub-basin, an activity that will be implemented with CAEWDP 3.0 financing. In 2017, the National Cross-Sectoral Working Group in the Kyrgyz Republic—a CoP established by CAEWDP Tajikistan Water Information System Study Tour activity— developed a methodology for mudflow hazard (Institutional Strengthening) was organized in response prediction, which was presented to the Ministry of to plans of the newly established Ministry of Energy Emergency of the Kyrgyz Republic. Additionally, in 2017, and Water Resources (MEWR) to design and establish this activity established the Central Asia Youth Forum on a Water Information Center in Tajikistan. The activity Water (CAYFWater) CoP in collaboration with the German- supported the organization of a study tour for Tajik water Kazakh University (GKU) to provide a greater voice to experts to visit Armenia and the USA in order to equip young people. The first meeting of CAYFWater members them with additional knowledge on Water Information took place in Summer of 2017 in Kyrgyz Republic. Systems (WISs) and Decision Support Systems (DSSs). In each country, the experts examined local water Climate Adaptation and Mitigation Program for Aral Sea management organizations, observed a demonstration Basin Series of Projects II (Investment Preparation) had of WIS at work, received hands-on experience with an objective to build upon the Climate Adaptation and automated water services in the field, and attended Mitigation Program for the Aral Sea Basin (CAMP4ASB) discussion sessions. investment project and support Kazakhstan’s participation in CAMP4ASB. As Kazakhstan decided to pursue climate mitigation and adaptation activities 22 CAEWDP | Annual Report 2017 TABLE 3 — ACCESS TO IMPROVED WATER SOURCES IN 201013 Access to improved water sources in 2010 (% of population) National Urban Rural Afghanistan 50 78 42 Kazakhstan 95 99 90 Kyrgyzstan 90 99 85 Tajikistan 64 92 54 Turkmenistan 84 97 72 Uzbekistan 87 98 81 Central Asia 74 94 64 Water Productivity Pillar Access of the population to improved drinking water Regional water challenges relate chiefly to the sources is wide spread within the region: Tajikistan, availability, efficiency and productivity of water use. with 64 percent, has the lowest access rate in the Population and economic growth are increasing stress region; Kazakhstan, with 95 percent is at the top. Water on the region’s natural resources.11 supply and sanitation (WSS) systems are generally characterized by aging, poorly maintained assets. Water resources are by and large directed to vast agricultural production (89 percent of total abstraction) There is a strong need for countries in the region to on over 10 million hectares. With very low rainfall and manage their water endowments more productively and low humidity levels in the plains, water is the limiting efficiently, as this plays a large role in determining their factor in agricultural livelihoods and irrigation has been capacities to achieve water and energy security. The essential for agricultural development along the Syr CAEWDP Water Productivity pillar seeks to address these Darya and Amu Darya, and it provides jobs to the majority challenges through support to increasing productivity of rural populations. During the Soviet Union era, water and the efficiency of water use in the water and energy allocation and irrigation system infrastructure was well sectors. The 2017 program activity—and more so those maintained and operated with massive funding from of previous years and planned CAEWDP activities— the central government. This situation has changed reflected these objectives. dramatically with important changes in policy, technical management and institutional capacity. The changes from The sole activity completed by the Program under this a planned economy to a market economy with differences pillar in 2017 is Analysis of Water Supply and Sewerage in land tenure, water rights and farm organization have Services in Central Asia (Analytical Development). led to a collapse of the state collective farms with a The activity conducted a diagnostic of the status and not yet very successful smaller private farming sector challenges in the water supply and sanitation (WSS) and an overall deterioration of infrastructure and cross- sector in Tajikistan and Uzbekistan by examining the country management of infrastructure. A major flipside WSS sectors, determining the problem areas, and of this diversion of water to irrigate the vast agricultural proposing policy reforms towards improved access, fields in the region is that it has contributed to severe quality, efficiency, and sustainability of WSS services. environmental problems in the Aral Sea basin. The findings and recommendations provided in two reports produced during the activity period improved fact- 11. If the Central Asian population continues to grow by 1.5 percent based dialogue with client countries on sector reform annually, the region will become water stressed by 2050, water and informed decision-making in the WSS sector. short in 2080 and water scarce within 100 years Commonly used thresholds for water stress, water shortage and water scarcity are 1,700, 1,000 and 500 m3 per person per year, respectively. These measures are limited in that they do not reflect the efficiency of use of water. 12. Data from 2010. Source: http://www.fao.org/nr/water/aquastat 11. If the Central Asian population continues to grow by 1.5 percent annually, the region will become water stressed by 2050, water short in 2080 and water scarce within 100 years Commonly used thresholds for water stress, water shortage and water scarcity are 1,700, 1,000 and 500 m3 per person per year, respectively. These measures are limited in that they do not reflect the efficiency of use of water. 12. Data from 2010. Source: http://www.fao.org/nr/water/aquastat CAEWDP | Annual Report 2017 23 2.4 CAEWDP 3.0 INCEPTION • Training activities and knowledge sharing at all levels (policy-making, technical, and administrative) CAEWDP 1.0 and 2.0 demonstrated that the Program raise comfort levels and strengthen the ability of objectives can be successfully achieved in an stakeholders to better manage energy and water environment of limitations to regional cooperation. resources, lead to greater awareness of the regional More recently, the countries in the region have made inter-dependence, as well as the need to apply an significant commitments and progress in terms of incremental approach to addressing competition over regional cooperation, promising a more enabling these resources. environment for Program activities in the future. As the political transition in the region present potential new • Coordination of the wide range of development opportunities for cooperation, it will become increasingly partners supporting identical and similar objectives in important to continue engagement in Central Asia. This the region will multiply the impact of the activities of engagement aims at further strengthening national each individual organization, by avoiding duplication and regional institutional capacities and the enabling and taking advantage of complementarity. environment for national priorities and regional priorities to eventually converge. This will be a long-term The integration of these lessons resulted the following process, which will require continued commitment from adjustments of the Program for the next funding phase of development partners. CAEWDP (CAEWDP 3.0): In July 2016, development partners (WB, SECO, EC, DFID, • The program development objective shifts to greater and USAID) agreed on the development a new funding emphasis from water productivity to water security, phase for CAEWDP . From July 2016 onwards, the CAEWDP reinforcing the need “to strengthen the enabling team prepared a Concept Note for CAEWDP 3.0, which environment to promote energy and water security at was approved at the July 2017 DAC meeting between the regional level and in the beneficiary countries.” the World Bank and development partners. In November 2017, SECO committed to US$ 3.5 million funding for the • Afghanistan, a key riparian country in the Aral Program’s third phase and a new Multi-Donor Trust Fund Sea basin, joins Kazakhstan, the Kyrgyz Republic, was created for implementation start in January 2018. Tajikistan, Turkmenistan and Uzbekistan as a Program beneficiary country. The Program development objective of CAEWDP 3.0 is to strengthen the enabling environment to promote • The pillar structure and content are adjusted with energy and water security at the regional level and in the an increased focus on facilitating energy and water beneficiary countries of Afghanistan, Kazakhstan, the security as the guiding principles of the entire Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. Program. CAEWDP 3.0 integrates the lessons learned from the Program’s previous engagement in the region. The main • National activities have an important role as building points considered for the CAEWDP 3.0 design include: blocks to achieve energy and water security at the regional level. • Successful facilitation of regional cooperation on energy and transboundary water resources • Increased emphasis is put on capacity building for, management requires sustained and continued and within, institutions and on dialogue to catalyze engagement, as well as a dedicated presence on-the- investments. ground to facilitate dialogue. • Presence of the CAEWDP team in the region • Solutions that address national issues, related to is increased to facilitate regional dialogue and energy and water use efficiency (e.g. solutions for implementation of regional and national initiatives. the winter energy crisis and increasing irrigation efficiency), will benefit regional cooperation, as windows of opportunity open. 24 CAEWDP | Annual Report 2017 The objective will be achieved through a Program that is to move forward on the regional level will ebb and flow built on three pillars: (i) Energy Security pillar: Supporting and CAEWDP 3.0 will maintain the flexibility to respond policy and investment activities at national, bi/multi-lateral to changing insights and shifting political priorities and and regional levels to improve the security and economic opportunities. The program will maintain and further efficiencies of energy supply; (ii) Water Security pillar: strengthen the linkages with the country-based projects Supporting activities related to water use aspects at and programs, as well as seek synergies between these the national, bi/multi-lateral and regional levels, as well and the regional initiatives of the World Bank and other as for national integrated water resources management development partners. and development (IWRM) to achieve water security, and (iii) Energy and Water Linkages pillar: Supporting A central focus of CAEWDP 3.0 will be to continue to activities related to the intersection of energy and water work with development partners to: deepen efforts (water-energy nexus) at the national, bi/multi-lateral and to establish the parameters for cooperation at the regional levels; performing IWRM activities that link two technical and institutional levels, strengthen available or more countries, including those related to climate databases, harmonize sectoral policies and regulations change, as well as facilitating regional and cross-border to facilitate cross-border connectivity and trade, and to dialogue processes. The Program is structured in a facilitate dialogue. CAEWDP 3.0 will implement activities matrix framework (Figure 6) in which the three thematic that have proven successful in creating platforms pillars are implemented through activities that fall under for dialogue and information exchange, such as the four crosscutting components13: (1) Data and Diagnostic Central Asia Knowledge Network, as well as scale-up Analysis; (2) Institutions, Capacity and Dialogue; (3) analytical work that shows clear potential to inform Supporting Investments, and (4) Program Management. policy reform and investments. Additional emphasis will be placed on strengthening the sectoral capabilities at CAEWDP 3.0 will support national, as well as cross- the national level as building blocks to facilitate cross- border efforts, to strengthen energy and water security. border engagement and regional cooperation in the National activities, such as institutional strengthening future. Capacity-building activities will be implemented and efficiency improvements, contribute to, and present at the national and regional levels and will also be used fundamental building blocks to achieve energy and to create opportunities for technical experts from the water security, sustainable development and climate various beneficiary countries to collaborate with resilience at the regional level. Although the overall each other, gain trust and exchange their knowledge objective and long-term goals are clear, the opportunities across borders. 13. Some activities may touch on more than one component e.g. diagnostic analysis that supports identification of investments. FIGURE 6 — CAEWDP 3.0 PILLAR AND COMPONENT STRUCTURE CAEWDP 3.0 Energy Security Pillar: Regional & National Energy Energy Linkages Water Generations/Transmission/Trade/Use Security Security Water Security Pillar: Data and Diagnostic Analyses Regional & National Water Use; National IWRM Institutions, Capacity and Dialogue Linkage Pillar: Regional Dialogue & Water Resources Cooperation; Regional & National Energy-Water Supporting Investments Linkages Program management 13. Some activities may touch on more than one component e.g. diagnostic analysis that supports identification of investments. CHAPTER 3. TRUST FUND MANAGEMENT AND FINANCIAL OVERVIEW 26 CAEWDP | Annual Report 2017 3.1 PROGRAM ADMINISTRATION The knowledge management component of Communication and Outreach Strategy yielded The end of 2017 saw the completion of the CAEWDP eight outputs in 2017. The team produced blogs second phase (CAEWDP 2.0). In 2017, the core team on knowledge networks and water use efficiency in supported the closure of grants in the second phase, irrigation. Additionally, three project reports,14 two short while setting up the third phase (CAEWDP 3.0) of activity videos on CAEWDP and efficient stoves (Kyrgyz the Program. The team developed a Monitoring and Republic: Heating Efficiency Improvement activity), and Evaluation (M&E) system for the Program as well as the 2016 Annual Report were produced and uploaded raising support from the donor community. A new Trust to the CAEWDP website. The activities undertaken Fund was created for implementation of CAEWDP 3.0 to increase knowledge sharing through updating the with launch in January 2018. Program website and adding new content resulted in increased website traffic; the CAEWDP English language 3.2 COMMUNICATION, OUTREACH AND site was visited 3,654 times by 2,040 unique visitors, DONOR ENGAGEMENT who downloaded 628 documents in fiscal year 2017 (between July 2016 and June 2017). This is a significant CAEWDP started implementation of the Communication increase in comparison with fiscal year 2016: 173 and Outreach Strategy in 2015. This Strategy, which is website visits and 141 unique visitors. Additionally, the focused on supporting program delivery and boosting team started working on the CAEWDP impact report and impact-focused outreach activities, was presented program brief for publication in 2018. and approved at the November 2014 DAC meeting. The outreach activities performed by the CAEWDP under the umbrella of the new Strategy aimed to strengthen knowledge sharing and increase key internal and external stakeholders’ understanding of CAEWDP . Since 2016, the Strategy was implemented through two components: knowledge management and communications. In 2016, an Outreach and Dissemination Trust Fund was developed to support CAEWDP outreach and dissemination related activities starting March 2016. 14. World Bank. 2017. Central Asia energy-water development program : annual report 2016 (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/ en/979261502174391564/annual-report-2016 Aldayarov, Mirlan; Dobozi, Istvan; Nikolakakis, Thomas. 2017. Stuck in transition : reform experiences and challenges ahead in the Kazakhstan power sector (English). Directions in Development. -- Energy and Mining. Washington, D.C. : World Bank Group. http://documents.worldbank. org/curated/en/104181488537871278/Stuck-in-transition- reform-experiences-and-challenges-ahead-in-the-Kazakhstan-power- sector Myroshnychenko, Yuriy; Owen, Kirby. 2016. Enhancing regional power trade in Central Asia (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/ en/672501486549955103/Enhancing-regional-power-trade-in- Central-Asia 14. World Bank. 2017. Central Asia energy-water development program : annual report 2016 (English). Washington, D.C. : World Bank Group. http:// documents.worldbank.org/curated/en/979261502174391564/annual-report-2016 Aldayarov, Mirlan; Dobozi, Istvan; Nikolakakis, Thomas. 2017. Stuck in transition : reform experiences and challenges ahead in the Kazakhstan power sector (English). Directions in Development. -- Energy and Mining. Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/104181488537871278/Stuck-in-transition-reform- experiences-and-challenges-ahead-in-the-Kazakhstan-power-sector Myroshnychenko, Yuriy; Owen, Kirby. 2016. Enhancing regional power trade in Central Asia (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/672501486549955103/Enhancing- regional-power-trade-in-Central-Asia CAEWDP | Annual Report 2017 27 3.3 FINANCIAL OVERVIEW The program disbursement rate increased during 2017. Total disbursements in 2017 representing 99.9 percent A cumulative total of US$ 10.7 million was disbursed of total allocations was due the closing of the remaining under CAEWDP 2.0 activities by the end of the Program CAEWDP 2.0 activities that were under implementation (Figure 8). Among Program pillars, Energy-Water in 2017 and closing with the second funding phase on Linkages accounted for about 44 percent of Program December 31, 2017. At the close of the second funding financing, while Energy Development accounted for 34 phase, US$ 245,681.77 was the remaining balance in percent. The remaining grant funding was allocated the CAEWDP 2.0 MDTF. As per agreement among all for Water Productivity (7 percent) and strategic development partners, this remaining balance will be program management, which includes dissemination transferred to the new CAEWDP 3.0 MDTF to benefit and outreach activities, as well as the preparation of implementation of the third funding phase. CAEWDP 3.0. The proportions of allocations are outlined in Figure 7. FIGURE 7 — PROPORTION OF TOTAL FIGURE 8 — CUMULATIVE CAEWDP 2.0 PROGRAM ALLOCATION PER PILLAR DISBURSEMENTS (US$ MILLIONS, 2012-2017) IN 2017 (%) 12 10.682 10 8.873 8 15% US$ million 6 5.357 7% 3.925 4 44% 2 0.539 0.327 0 2012 2013 2014 2015 2016 2017 34% FIGURE 9 — ANNUAL PROGRAM DISBURSEMENTS (US$ MILLIONS, 2012-2017, EXCLUDING PROGRAM MANAGEMENT COSTS) Program Management Energy Development Pillar Water Productivity Pillar Energy-Water Pillar 3.5 3.0 2.5 US$ million 2.0 1.5 1.0 0.5 0.0 2012 2013 2014 2015 2016 2017 28 CAEWDP | Annual Report 2017 ANNEX I – PROGRAM ACTIVITIES’ DESCRIPTIONS 15 15. The total number of activities described under this Annex (12 activities) does not match the total number of activities implemented by the end of 2017 fiscal year (13 activities) due to the following adjustment: Advisory Support for the Regional Trade Initiatives Project for the Kyrgyz Republic and Advisory Support for the Regional Trade Initiatives Project for Tajikistan are reported as a single CASA-1000 Advisory Support activity. The main impacts related to changes in average winter ENERGY DEVELOPMENT PILLAR temperatures by the 2050s are reduced demand (-34%) for space heating due to warmer winters and an up to Activity Title 10% increase in hydropower production. Under the arid Energy Vulnerability to Climate Change scenario, Nurek hydropower production is reduced by Activity Status up to 40%, and Rogun by up to 55%. The main impacts Completed related to changes in average summer temperatures by CAEWDP Grant Amount the 2050s are: increased demand for space cooling, a US$48,695 decrease in Nurek hydropower production by 25%, and a Task Team Leader decrease in Rogun hydropower production by 35%. Daryl Fields and Abena Akuffo-Akoto The changes in frequency, timing, and intensity of extreme The objective of this activity was to help the Government events will affect power generation, transmission, of Tajikistan understand energy sector vulnerabilities and distribution. Additionally, the changes in weather to climate change and build resilience through the patterns will impact agriculture, hydropower, construction, development of coordinated adaptation policies with transportation, communication, public utilities, and other Central Asian countries. The assessments housing sectors. Considering that about 61% of performed as part of this activity provided the most Tajikistan’s economy is weather sensitive, the financial current climate change projections for Tajikistan, the impacts of climate change could be devastating. impact on energy sector, and adaptation measures. These findings can guide Tajik decision-makers on The implementation of strategies and the adaptation current and future investments into the energy sector. plan provided by the CAEWDP team are divided into three stages: (1) initial information gathering, scoping The assessment performed by this activity, due to and capacity building; (2) institutional and policy uncertainties over future greenhouse gas emissions and reform; and (3) practical actions. The recommendations other factors that influence climate change, used four include the following: investing prudently in new climate change scenarios (arid, hot-dry, central, warm- energy supplies; implementing robust decision-making wet) to evaluate potential climate change impacts. The processes; improving use of monitoring, forecasting scenarios were developed to look at impacts by the and modelling; strengthening institutional capacity years 2030 and 2050. Each scenario considered two and knowledge networks; expanding climate change additional sub-scenarios: (1) including the impact of the resilient hydropower engineering; expanding climate construction of the Rogun hydropower plant (HPP) and change resilient transmission and distribution (2) without the Rogun HPP , but with other smaller HPPs engineering; enhancing regional coordination; and operating instead. The analysis of both sub-scenarios improving energy and water efficiency. showed increases (+5%) in annual energy supply due to climate change under the warm-wet climate scenario, This study raises awareness on the scope of the issues where runoff increases. Under the arid climate scenario, that climate change may bring and knowledge on climate where runoff decreases, decreases in energy supply change adaptation measures that may mitigate climate were found in both cases (-10% with Rogun, -5% risks in Tajikistan. The knowledge generated by this without Rogun). activity contributed to regional discussion of climate change issues and measures to combat them. 15. The total number of activities described under this Annex (12 activities) does not match the total number of activities implemented by the end of 2017 fiscal year (13 activities) due to the following adjustment: Advisory Support for the Regional Trade Initiatives Project for the Kyrgyz Republic and Advisory Support for the Regional Trade Initiatives Project for Tajikistan are reported as a single CASA-1000 Advisory Support activity. CAEWDP | Annual Report 2017 29 Activity Title 2015 EWP is anchored in CAREC 2020 (the strategic Central Asia Regional Economic Program (CAREC framework for the CAREC Program 2011-2020) and the Engagement) Energy Strategy, which together provide the basis for Activity Status determining future priorities in the energy sector for Phase I: Completed; Phase II: Completed the region. CAEWDP Grant Amount US$340,987(Phase II) During the second phase of the CAREC Engagement, Task Team Leader the activity focused on 1) enhancing energy sector Husam Mohamed Beides dialogue among the Central Asian states and 2) ensuring coordination of donor assistance through This activity focused on developing platforms for regional funding CAEWDP’s participation in all three levels of investment, analysis, and dialogue in the Central CAREC ESCC meetings. Because CAREC ESCC oversees Asian energy and water sectors, while focusing on implementation of an EAP and specific analytical and two institutions: The Central Asia Regional Economic capacity-building initiatives, it served as a unique Cooperation (CAREC) Energy Sector Coordinating platform that convened energy experts and decision- Committee (ESCC) and—during Phase I—the Executive makers from CAREC countries. Committee of the International Fund for Saving the Aral Sea (EC-IFAS). This activity funded CAEWDP’s CAEWDP energy team has participated in CAREC engagement with the CAREC ESCC and EC-IFAS. ESCC meetings; commissioned studies and capacity building events that corresponded with the ESCC CAREC ESCC is a regional platform that facilitates Energy Work Plan (EWP) framework; presented dialogue on energy issues in Central Asia. The dialogue findings of studies implemented under the ESCC occurs through three levels of CAREC ESCC meetings: EWP; provided recommendations during CAREC SOMs The CAREC Energy Sector Coordinating Committee and CAREC MCs; tracked and discussed ESCC EWP (ESCC) level, the CAREC Senior Officials Meeting (SOM) progress; and collaborated with CAREC members and level, and the CAREC Ministerial Conference (MC) level— development partners to coordinate implementation of the highest level of CAREC ESCC meetings. The ESCC the decisions made during the SOMs and MCs. During primarily focuses on energy issues, while the entire these engagements, CAEWDP team members shared CAREC Program— a partnership of 11 countries and six information on other CAEWDP activities including: Energy multilateral development partners—covers four sectors: Sector Vulnerability to Climate Change, Progress on transport, trade facilitation, trade policy, and energy. The the CASA-1000 Project, The Central Asian Knowledge first phase of the CAREC Engagement activity started in Network, The Basin Economic Allocation Model, Central 2009 when the CAEWDP WB team participated in several Asia Water and Energy Data Portal, and Enhancing CAREC ESCC meetings chairing the meeting sessions on Regional Power Trade in Central Asia. regional energy cooperation and energy-water linkages. During those meetings, the WB team supported the Additionally, CAEWDP supported the EC-IFAS’s efforts Asian Development Bank (ADB) in developing CAREC in preparation for the Third Aral Sea Program Plan ESCC’s Energy Action Plan (EAP). (ASBP-3)— a long-term action program for Central Asia focused on of sustainable development, water resources The ESCC’s EAP for 2010-2012 was approved in 2009. management, and environmental protection. It was implemented over ten ESCC meetings, during which time the ESCC members provided guidance, The most significant benefits of this activity were 1) oversight, and decisions for individual activities. The integrating energy-water linkages into the CAREC energy WB (represented by CAEWDP), ADB, and USAID funded agenda, 2) strengthening institutional capacity of CAREC and executed the individual activities in conjunction ESCC, and 3) preparing ASBP-3. In this context, the with ESCC members. The EAP was structured on activity helped to prepare region wide water and energy three core elements or pillars focused on: 1) Energy strategies; create and disseminate knowledge on the demand/supply balance and infrastructure constraints; technical, economic, and political issues pertaining 2) Regional dispatch and regulatory development; and to cooperation; and increase coordination among 3) Energy-Water Linkages. These pillars were reflected development partners, in particular the ADB and WB. in the ESCC Energy Work Plans (EWPs). The 2013– 30 CAEWDP | Annual Report 2017 Activity Title Guarantee and signing and approval of financing CASA-1000 Advisory Support for the Regional agreements with the World Bank, European Investment Trade Initiatives (2 RETFs): The Kyrgyz Republic and Bank, and the Islamic Development Bank. Tajikistan. Activity Status Activity Title Completed Tajikistan Winter Energy Program CAEWDP Grant Amount Activity Status US$1,149,483 Completed Task Team Leader CAEWDP Grant Amount Husam Mohamed Beides US$580,624 Task Team Leader This activity was a part of the US$ 1.1 billion16 CASA- Takhmina Mukhamedova and Yabei Zhang 1000 investment project. The role of this activity was to facilitate the initial preparatory work for the investment The objective of this activity was to support pre- project. The CASA-1000 Project aims to facilitate 1,300 investment studies that focus on enhancing winter megawatts in electricity trade between Central Asia energy security in Tajikistan. The activity focused on (the Kyrgyz Republic and Tajikistan) and South Asia two areas: Efficiency of heating solutions in rural areas (Afghanistan and Pakistan) by creating conditions for a and rehabilitation of the Nurek Hydro Power Plant (HPP). sustainable market. This CAEWDP activity supported the The activity successfully completed the pre-investment investment project by providing technical assistance to studies and contributed to four follow-up investment the Kyrgyz Republic and Tajikistan to complete domestic projects: Nurek HPP Rehabilitation Project (funded by WB, procedures essential for the financial agreements to AIIB, and EDB), CASA-1000 Community Support Project enter into force. (CSP) in Kyrgyz Republic (WB funded), CASA-1000 CSP in Tajikistan (WB funded), and Heat Supply Improvement This activity operated as a Recipient Executed Trust Project (WB funded). Fund (RETF) and supported the local working groups (WGs) during the preparatory phase of the CASA-1000 Two sub-activities under this larger activity—the project. In Tajikistan, the grant was managed by the Supervision Support to The Nurek HPP Studies and Open Stock Holding Company (OSHC) Barki Tojik (BT)— Design of a Nurek HPP Rehabilitation Program—carried Tajikistan’s implementing agency—which used the out the following duties: assisted the Ministry of Energy grant to receive assistance from legal and commercial and Water Resources (MoEWR) and Barki Tojik (BT) consultants. The consultants provided commercial and in the preparation of feasibility reports for the Nurek legal inputs on CASA-1000 legal agreements: Subsidiary HPP’s rehabilitation; assisted BT in the preparation Agreement, Project Implementation Agreement, of Terms of References, bidding documents, and and Host Government Agreement. The consultants contracts for consultants who prepared the rehabilitation also facilitated preparation of the country-specific design; reviewed and commented on reports and Environmental and Social Impact Assessment (ESIA), recommendations from the consultants; and supported work on two high-voltage converter stations tender, the preparation of a phased rehabilitation program for CASA-1000 Joint Working Group’s (JWG) business- the Nurek HPP that took into account financing and related travels, and audit of the implementation agency. operating constraints. In the Kyrgyz Republic, the RETF was managed by Open Joint-Stock Company (OJSC) National Electrical Grid of This activity implemented the Efficient Stoves and Kyrgyz Republic (NEGK). OJSC NEGK operated similar Heating Solutions task which included an assessment to BT: It used the RETF to fund preparation of the of heating and cooking needs in rural single family ESIA, JWG meetings, the OJSC audit, and other legal homes, an assessment of heating needs in rural public and commercial consulting services. The consultants buildings, an analysis of heating models most commonly facilitated the preparation of the draft Revenue used in homes and public buildings, the design and Management Plan, Host Country Agreement, Government testing of cleaner and more efficient stoves, 16. The CASA 1000 project catalyzes support of a wide number of multi and bilateral development partners including the World Bank, Islamic Development Bank, European and bilateral development Investment partners Bank, including theEuropean Bank World Bank, for Reconstruction and Development, the US and UK Governments and the World Islamic Bank Bank,Afghanistan administered Development Bank,Trust Reconstruction European Investment Fund Bank for European Reconstruction and Development, the US and UK Governments and the World Bank administered Afghanistan Reconstruction Trust Fund   CAEWDP | Annual Report 2017 31 a study of the stove supply chain (stove manufactures, Barki Tojik (BT), Tajikistan’s national power company. distributors, and retailers), and options for scaling up In March of 2017, the GoT and WB, acting as the provision for the new stoves. After the assessment administrator of grant funds provided by multiple donors phase, the CAEWDP team decided to test the heating under CAEWDP , signed an agreement to extend the grant stoves in Tajikistan and in the Kyrgyz Republic—which to the GoT in amount of US$ 250,000 for the Advisory has similar winter energy security issues as Tajikistan. Support for Phase I of Nurek Hydropower Rehabilitation In collaboration with the governments of the Kyrgyz Project. The GoT, using BT as the implementing agent Republic and Tajikistan, the CAEWDP team launched under a Subsidiary Agreement, facilitated the preparation two pilot programs. The programs installed energy- of Phase I of the Nurek Hydropower Rehabilitation efficient heating stoves in 51 low-income households in Project. Under this agreement, CAEWDP advises BT. the Kyrgyz Republic and 40 stoves in rural households, schools, and kindergartens in Tajikistan. The activity focused on the provision of consultants’ services for: 1) Additional Nurek HPP site investigations The Efficient Stoves and Heating Solutions task developed to inform the project design and safety measures to be new cleaner, energy-efficient heating technologies. undertaken during the Nurek HPP implementation; 2) The pilot projects in the Kyrgyz Republic and Tajikistan engagement with an experienced international project showed that the innovative heating stoves use 45 to 50 management consultant to assist with the detailed percent less fuel; need refueling every 10 to 15 hours design of the rehabilitation and dam safety works, the (compared to the previous 2 to 3 hours); and reduce tendering processes, and supervision of the works; and carbon monoxide emissions by 50 percent and fine 3) engagement with experienced international experts particulate (PM2.5) emissions by over 90 percent. for the Dam Safety Panel to provide an independent review and expert advice on dam safety and other The outcomes of both tasks conducted under this technical aspects during the project preparation and activity informed new winter energy related investment implementation periods. projects. In both Tajikistan and the Kyrgyz Republic, the respective US$ 10 million CASA-1000 CSP and US$ 12 By 2017, this activity helped finalize feasibility studies million CASA-1000 CSP projects will include provisions for the US$ 350 million Nurek Hydropower Rehabilitation for heating stoves. In Tajikistan, the studies on the investment project. The outcomes of the studies will help rehabilitation of the Nurek HPP led to a US$350 million design an investment program to extend Nurek HPP’s investment project that will improve the operational lifetime, increase its generation output, and HPP’s performance. enhance dam safety. Activity Title Activity Title Advisory Support for the Phase I of Nurek Kyrgyz Republic: Heating Efficiency Improvement Hydropower Rehabilitation Project (RETF) Activity Status Activity Status Completed Completed CAEWDP Grant Amount CAEWDP Grant Amount US$245,582 US$250,000 Task Team Leader Task Team Leader Kathrin Hofer and Yabei Zhang Artur Kochnakyan and Takhmina Mukhamedova This activity aimed to address the challenge of providing The objective of this activity was to provide support reliable and affordable heating supply to the people of to the existing investment project—Nurek Hydropower the Kyrgyz Republic. The activity focused on aiding both Rehabilitation Project Phase I. This investment project urban and rural areas of the Republic. To meet public aims to improve access to affordable energy in winter and residential heat demand in urban areas, the activity for the Tajik population by rehabilitating and restoring focused on households connected to the district heating the generating capacity of three power generating (DH) system and included two components: Scoping units of the Nurek Hydropower Plant (HPP), improving priority investments to improve the efficiency and their efficiency, and improving the safety of the Nurek reliability of the DH system and recommending policy Dam. The activity—a sub-project under the umbrella reforms that would support implementation of priority investment project—provides advisory support to OSHC investments and the transition towards consumption- 32 CAEWDP | Annual Report 2017 based billing. The CAEWDP team, in close collaboration Network, which helped to establish new and enhance with the Bishkekteploset DH company, developed the existing Communities of Practice (CoP) and linked investment plan. The plan contains: A detailed list of these CoPs together via in-person activities and virtual investment measures and implementation steps, the platforms. All CoPs are linked to each other vis virtual cost of each investment measure based on local market collaboration platform—Central Asia Knowledge prices, the estimated energy cost savings and other Alliance for Development (CAsKADe)—under World benefits associated with each measure, and detailed Bank Collaboration for Development (C4D) platform. guidance on remaining preparatory work and timetables. The activity supported five CoPs during the 2014-2017 period; four of these CoPs are currently operational The activity also focused on households in the rural with one scheduled to start next year. This activity will areas of the Kyrgyz Republic. It helped to improve continue in CAEWDP 3.0. access to more efficient heating technologies for homes and public buildings by: Assessing the demand and CA Knowledge Network coordinates five CoPs. Regional supply for individual heating technologies, conducting Cross-Sectoral Working Group (CWG) in Kazakhstan CoP , outreach activities to increase awareness of the established in 2012 by GIZ’s Climate Adaptation Project benefits of improving heating technologies, supporting for Central Asia, analyzes water-related disasters, devises the development of five locally-adapted prototype risk reduction approaches, and communicates them to stoves that have thermal efficiencies of at least 70 decision makers. This CoP helped to establish another percent, implementing a pilot project in 51 low income CoP: National Cross-Sectoral Working Group in the Kyrgyz households, and informing the design of an investment Republic in 2015, and recently established a similar lending component on clean and efficient heating stoves. CoP in Tajikistan, which still needs to be operationalized. These CWGs have an impact on decision-making in the These activities informed and prepared a follow up World region: Recommendations proposed by the Working Bank investment project–Heat Supply Improvement Group on the Shardara Dam’s safety issues (2014) Project. The project will improve reliable and efficient and mudflows (2015-16) were adopted by the Kazakh heat supply for households with and without access to Government in 2014 and 2016, respectively; in 2016, a centralized heat supply and therefore will support the the Kyrgyz CWG submitted an Appeal to the Government Government’s long-term strategy in the heating sector to implement mudflow protection measures that would of meeting winter heat demand, modernizing the DH reduce the risk of mudflows nationwide. In 2017, the system, and increasing heat and hot water tariffs. The Kyrgyz CWG developed a methodology for mudflow investments will improve heat supply for more than hazard prediction, which was presented to the Ministry of 215,000 people by installing 1.8 kilometers of district Emergency of the Kyrgyz Republic. heating pipelines, 1,931 substations, 4,020 hot water meters, and 14,000 heating stoves. Through the CA Knowledge Network, the CWG CoPs are linked with the German-Kazakh University (GKU), ENERGY-WATER LINKAGES PILLAR which is a part of Academic Network in Central Asia CoP . The activity established this CoP in 2014; currently Activity Title it consists of knowledge institutions from five Central Central Asia Knowledge Network Asian countries. CWG CoPs and Academic Network CoP Activity Status facilitated students’ contribution to the development of Completed three mobile apps: Creating an e-Journal on IWRM for CAEWDP Grant Amount GKU, digitalizing hydrometrical data for the Kazhydromet, US$429,982 and providing mobile access to kzwater.kz for the Task Team Leader International Fund for Saving the Aral Sea. Linking these Julia Komagaeva CoPs allowed the young professionals work hand-in-hand with practitioners. The objective of this activity was to foster cooperation, knowledge exchange, youth engagement, and innovative The Central Asia Youth Forum on Water (CAYFWater) CoP methods among regional institutions in the areas was established in 2017 in collaboration with the GKU to of water, energy, and climate issues. The CAEWDP provide a greater voice to young people. The first meeting team, in partnership with the World Bank Institute of the first CAYFWater members took place in Summer (WBI), established a Central Asian (CA)Knowledge of 2017 in Kyrgyz Republic. The participants explored CAEWDP | Annual Report 2017 33 the avenues of further development and utilization of the regional approach was designed to knit and complement network. National network coordinators were selected country-level approaches to establish an open, coherent for each Central Asian country, including Afghanistan, to and easy to maintain regional water resource information improve outreach activities. Currently, the CAYFWater is system. The global review took advantage of World Bank working on the development of an online platform, which lessons from other regions. The tasks under this activity will improve communication between the participants. were implemented as complimentary to other national initiatives such as the National Water Resources The CA Knowledge Network facilitates cooperation in Management Project in Kyrgyz Republic, the Tajikistan water resource management issues between the World Second Public Employment for Sustainable Agriculture Bank Group and its development partners, such as and Water Resources Management Project (PAMP II), UNESCO, USAID, UNEP , and OSCE. In 2014 and 2015, the the proposed Reimbursable Advisory Services (RAS) in Network partnered with the Regional Environmental Centre Turkmenistan, and the preparation of the for Central Asia (CAREC) and launched a research project CAWARM Project. competition among Masters students from Central Asia countries. The panel jury received 49 research project The national assessments were initiated during a proposals, 20 of them were selected as winners and technical mission in August to September 2015 within received funding for research. Impressed by the project the framework of the CAWaRM project preparation outcomes, USAID provided 10 million-dollar funding mission. Workshops that convened stakeholders from to CAREC to continue CAEWDP Knowledge Network water-related institutions were organized in Kazakhstan, activities focused on Academic Network and Masters the Kyrgyz Republic, Tajikistan, and Uzbekistan. students contest. In Turkmenistan, based on the structure of water management within the Government, consultations The CA Knowledge Network built a network which offers were held with individual ministries. In the activity target advice to its members through in-person and virtual forms country—Tajikistan—the tasks were completed under of knowledge sharing, facilitates experience exchange, Second Public Employment Project for Sustainable and aids regional cross-sectoral collaboration. The Agriculture and Water Resource (PAMPII). These efforts Network helps equip national knowledge institutions with led to the development of design parameters of a cutting-edge information and skills to build the capacity national Water Information System (WIS). The system of Government officials and other professionals in water, is designed based on a comprehensive assessment energy, agriculture, and climate change-related issues. of data collection, reporting, analysis and incorporates This activity will continue implementation with a new grant modern information and communication technologies. financed under CAEWDP 3.0. Similar projects have been completed in the Kyrgyz Republic and Kazakhstan. At the regional scale, the Activity Title activity worked with the Regional Working Group (RWG) Technical Assistance for Developing Water and Regional Steering Committee (RSC), which were Information Systems in Central Asia established specifically to design and implement Activity Status CAWaRM. The role of the RWG is to recommend regional Completed investments and defines linkages to national priorities. CAEWDP Grant Amount The RSC is a decision-making body that provides US$478,804 guidance to RWG. Task Team Leader Daryl Fields and Nagaraja Rao Harshadeep The activity collected data to produce the Global Review of Good Practices—a document that provides The objective of this activity was to provide analytical information about IWRM tools, capacity building foundations for the Central Asia Water Resources experiences, and technologies. The draft document is Management Project (CAWaRM), which aims to currently being converted into an e-learning platform strengthen water information management systems (Spatial Agent), which can be viewed globally and by increasing accessibility, reliability, and analytical enables access to hundreds of relevant documents. capacity of water resources information. The activity focused on three scales: National action plans, regional This activity increased the understanding of the state of assessment, and global review. The national action water information management systems in Central Asia plans cover all of the countries in Central Asia. The and identified opportunities to support modernization 34 CAEWDP | Annual Report 2017 in water management systems. Due to difficulties Activity Title encountered in CAWaRM preparation, the WB decided Central Asia Water Resources Management to restructure the engagement and to pursue WIS (CAWaRM) Phase-I Project establishment through national engagements rather than Activity Status pursuing a regional project. Completed CAEWDP Grant Amount Activity Title US$309,494 Climate Adaptation and Mitigation Program for Aral Task Team Leader Sea Basin Series of Projects II Nagaraja Rao Harshadeep and Daryl Fields Activity Status Completed This activity supported the preparation of the CAWaRM CAEWDP Grant Amount Phase-I Project, which aims to improve national and US$129,047 regional water resources information management Task Team Leader and analysis systems by increasing their accessibility Philippe Ambrosi and reliability at the national and regional scales. The activity supported dialogue with national working groups, The objective of this activity was to build upon the the Regional Working Group (RWG), and the Regional Climate Adaptation and Mitigation Program for the Steering Committee (RSC). It also helped draft a World Aral Sea Basin (CAMP4ASB) investment project and Bank safeguard document and the funding proposal for support Kazakhstan’s participation in CAMP4ASB the current investment project. Additionally, the activity through CAMP4ASB SOP II. This activity conducted produced an Institutional Primer, an institutional review a preparatory work for the CAMP4ASB SoP II, which document that identifies public domain data services enables Kazakhstan, like other CAMP4ASB participating that could be used in this and other activities. countries, Tajikistan and Uzbekistan, to benefit from enhanced access to climate change data services, At the national scale, this activity facilitated discussions new tools, and partnerships with other Central Asian through National Focal Points (NFPs)—representatives countries. Additionally, the activity worked on preparation who were assigned by the local governments, upon of the next phase of CAMP4ASB, which will support the CAEWDP team request, to work with national Technical Kyrgyz Republic’s and Turkmenistan’s participation in Working Groups (TWGs) to explore possible national the program. activities to be funded by the CAWaRM Phase II Project. Some of the activities identified included technical The activity supported the preparation and facilitation modernization, data management, and infrastructure of a CAMP4ASB meeting of delegates from Kazakhstan, investment activities. Three assigned NFPs—from the Kyrgyz Republic, Tajikistan, Uzbekistan, the Executive Kazakhstan, Turkmenistan, and Uzbekistan—signed GEF Committee of the International Fund for Saving the Aral endorsement letters for the CAWaRM regional grant of Sea (EC-IFAS), and the Regional Environmental Center US$ 9 million, allowing the CAEWDP team to draft an for Central Asia (CAREC) in January, 2016 in Almaty, application for GEF funding. Kazakhstan. During the meeting, participants reviewed CAMP4ASB’s proposed timeline, implementation At regional scale, this activity facilitated discussions arrangements, and responsibilities. The CAEWDP team through the RWG, which works with NFPs to identify worked with the Kazakh Ministry of Energy and Ministry regional activities that can be funded by this project, of Agriculture and developed the CAMP4ASB SOP II to and through the RSC, which is a decision-making body the concept stage. Currently Kazakhstan is interested in that provides guidance to the RWG and approves or undertaking this activity with its own funding resources. declines the RWG’s recommendations. The first RWG This grant contributed to the preparation of a broader TA meeting took place in February 2016, with seven activity to support Kazakhstan’s national efforts. participants from four Central Asian countries, and eight representatives from regional organizations. The participants emphasized their strong desire for Tajik participation in the project program development. CAEWDP | Annual Report 2017 35 Additionally, the activity prepared the Environmental and USA. This activity allowed the Tajik experts to learn from Social Management Framework (ESMF), a substitute for the Armenian and American experiences with Water a World Bank required Environmental and Social Impact Information and Decision Support Systems. At each Assessment (ESIA) used when it is impossible to identify location, the experts visited local water management the number and location of the investment activities. The organizations, observed a demonstration of a water ESMF was appropriate for this activity due to the pre- resource information systems, had hands-on experience appraisal state of the investment project. with automated water services in the field, and attended lectures and discussion sessions. During the 2015 to 2017 timeframe, the CAEWDP team undertook several missions to Central Asia. The team This activity helped the Government of Tajikistan to visited all five countries with objectives to prepare the inform its new National Water Sector Reform Program set of regional activities, follow-up on the preparation (NWP) (2016-2025), which aims to introduce IWRM of national work programs, and initiate the financing principles in the country. One of the focal points of the discussions. Due to difficulties in reaching agreement NWP is the decentralization of service delivery. In this on a regional implementation partner, it was decided to context, this activity strengthened the capacity of the pursue WIS development at national level rather than Tajik water experts in MEWR and ALRI to implement the through a regional project. NWP . Additionally, the activity increased local experts’ understanding of the WIS. Activity Title Tajikistan Water Information System Study Tour WATER PRODUCTIVITY PILLAR Activity Status Completed Activity Title CAEWDP Grant Amount Analysis of Water Supply and Sewerage Services in US$118,820 Central Asia Task Team Leader Activity Status Bobojon Yatimov Completed CAEWDP Grant Amount The objective of this activity was to sponsor a Water US$243,975 Information System (WIS) study tour—a sub-activity Task Team Leader under the WB PAMP II investment project. The knowledge Pier Francesco Mantovani gained upon the completion of this CAEWDP sponsored activity helps the Tajik water experts establish and The objective of this activity was to provide a diagnostic manage the establishment of a national WIS of the status and challenges in the water supply and in Tajikistan. sanitation (WSS) sector in Central Asian countries. This activity examined the WSS sectors, determined the A scoping study, completed in December 2016 under problem areas, and proposed policy reforms towards the PAMP II, provided a comprehensive analysis of the improved access, quality, efficiency, and sustainability of existing institutional and organizational arrangements, WSS services. technical capabilities, and physical facilities available for monitoring, validation, collection, analysis, transfer, use, The activity analyzed the Tajik and Uzbek WSS sectors and dissemination of hydrological, hydro-meteorological, in three areas: 1) the legal, financial, and institutional and water quality data within the newly established perspectives; 2) the sector status and government Ministry of Energy and Water Resources (MEWR), the objectives for the sector; and 3) the available policy Agency for Land Reclamation and Irrigation (ALRI), options. The first area examined six policy cycle phases: and other concerned agencies at the national level in Issue identification, agenda setting, policy preparation, Tajikistan. The request for design and establishment of legislation, policy implementation, and policy evaluation. the Water Information Center was negotiated with the The second area evaluated five WSS objectives: Service MEWR and agreed within the framework of the PAMP II. quality, efficiency, financial sustainability, equity, and social accountability. Each objective was rated on a CAEWDP funded fourteen water experts from Tajikistan scale from 1 (lowest rating) to 5 (highest target rating). to attend the WIS study tour in Armenia and California, 36 CAEWDP | Annual Report 2017 According to the results in the first area, the Government This activity generated knowledge on the status of Uzbekistan (GoU) has recognized the challenges of the WSS services in Tajikistan and Uzbekistan. faced in the WSS services sector and approached the The project findings improved fact-based dialogue issue via the decentralization process; however, there and informed decision-making in the WSS sector. is not a clear strategy for further sector development. Specifically, the results informed decision-making Additionally, it was noted that parts of the legal for the GoU in improving the organizational structure framework were outdated, contradictory, inconsistent, of its water utilities. As with Uzbekistan, Tajikistan and lacked customer orientation, which usually leads to is also reconsidering its operational and regulatory uncertainties in application. The evaluation of the WSS organizations for WSS services. sector’s status showed that the Uzbek WSS sector is below the regional average in terms of service quality, financial sustainability, and social accountability. To address the issues identified during this activity, the study recommended the following reforms: (1) from 2016 to 2021, separately re-examine the social support system and WSS tariff setting; (2) from 2018 to 2023, design regionalization and integrate it into a national master plan; and (3) from 2020 to 2025, strengthen consumer relations. The analysis of the WSS sector in Tajikistan showed that Tajikistan is aware of the existing WSS issues, but there are institutional and technical resistance to change. The legal framework needs improvements to cover cost-based tariff schemes and client orientation. The sector is missing an overall development strategy and therefore has no clear distribution of responsibilities among institutions. In the evaluation of the WSS sector’s status, Tajikistan ranked below the regional average on efficiency, financial sustainability, equity, and social accountability; while service quality ranked above the regional average. To address the existing issues in the WSS sector, the study proposed the following measures: (1) from 2016 to 2021, modernize standards and procurement procedures and build-up tendering capacity; (2) from 2018 to 2023, implement regionalization outside large cities and support solutions for smaller settlements; and (3) from 2020 to 2025, separate the social support system from the WSS tariff scheme, modernize customer relations, introduce technical auditing and evaluate policy results. CAEWDP | Annual Report 2017 37 ANNEX II – RESULTS FRAMEWORK This annex contains: implications, and (iii) program activities being coordinated and supported through a multi-donor trust 1. Summary of the Program objective and goal progress fund have been achieved. The indicators supported: (i) against outcome indicators the existence of institutional and analytical frameworks for improved water dialogue, and (ii) understanding of 2. Depiction of CAEWDP Results Framework (goal and regional water productivity being reflected in national outcome level) outlining the planned and achieved plans, policies or investments have been partially program goal and development outcomes by 201617 achieved. To address the first partially achieved objective, a report on the legal analysis of transboundary Results indicators were rated as being either achieved (3 water management frameworks was produced. To out of 5), or partially achieved (2 out of 5) by the close address the second partially achieved indicator, CAEWDP of 2016. The three indicators included: (i) investment / supported analytical outputs, although it would require policy options to strengthen stability and predictability of additional time for countries to fully institutionalize those power supply; (ii) investment decisions on national level lessons into national or regional policies and plans. water/ energy projects that integrated transboundary TABLE II.1 — CAEWDP RESULTS FRAMEWORK (TRUNCATED VERSION) GOAL Indicator Regional cooperation catalyzes long- Indicator: Regional organizations and national bodies have the capacity to term economic growth and livelihood support trans-boundary dialogue on regional cooperation. security in Central Asia and provides a catalyst for continued economic growth and increased income. DEVELOPMENT OBJECTIVE Indicator Strengthened mutually beneficial Three investment or policy options initiated to strengthen stability and regional cooperation enhances energy predictability of power supply, with at least two options targeted to the security and water security. Kyrgyz Republic and Tajikistan. At least two investment decisions on national level water or energy projects include a clear understanding of their trans-boundary implications. Program activities are coordinated and donor supported through a Multi Donor Trust Fund (MDTF). Institutional and analytical frameworks for improved water dialogue across Central Asia stakeholders exist. Understanding of regional water productivity is reflected in national plans, policies or investments of at least two countries. Achieved Partially achieved Initiated No Progress Revision required 17. The Results Framework is adopted from 2016 CAEWDP Annual The Results 17. Report Framework as there is adopted was no change from 2016 CAEWDP Annual Report as there was no change in 2017. in 2017. 38 CAEWDP | Annual Report 2017 TABLE II.2 — CAEWDP RESULTS FRAMEWORK (TOP TWO TIERS) PROJECT TITLE Central Asia Energy Water Development Program (CAEWDP) GOAL Indicator Baseline Milestone 1 Milestone 2 Outcome 2017 (Impact) 2010/11 Regional Regional Disparate Agreement on Skills and CAREC ESCC has cooperation organizations and national level collaboration tools in place supported inter/ catalyzes long-term national bodies have Investments with key to facilitate intra-regional power economic growth capacity to support and fragmented Regional regional trade and included and livelihood transboundary regional institutions, dialogue for topic in EWP security to Central dialogue on regional Cooperation. supported cooperation. 20162020. EC-IFAS. Asia and provides cooperation. by Heads of Has held several a catalyst for State. transboundary continued economic dialogue events on growth and water and water increased income. management. , others; Energy Sector: Sources: Communication monitoring reports; Water Sector: DFID, EC, Finland, Germany, Switzerland, UNDP ADB, Russia, USAID, WB, other; Government Reports, World Bank country CASs, pipeline of investments; Government statistics; Existing institutions mandates and activities. CAEWDP | Annual Report 2017 39 DEVELOPMENT Indicator Baseline Milestone 1 Milestone 2 Outcome 2017 Risks OBJECTIVE 2010/11 (Outcome) Strengthened At least three Tajikistan and Needs Winter There have Regional mutually investments the Kyrgyz Assessment energy been four organizations Beneficial or policy Republic have completed coordination investments are weak regional options (two winter energy Identifying plans in targeted at to be able cooperation of which deficit. priority place. Tajikistan and to convene enhances energy targeted at activities the Kyrgyz substantive security and Tajikistan and Republic inter-state water security. the Kyrgyz initiated to dialogue on Republic) strengthen water-energy. initiated to stability and There is no strengthen predictability of dialogue on stability and power supplies water and predictability improving the energy. of power situation from supplies. 2009/10. At least two Few current Potential At least two Two energy investments investment national investments investments Decisions decisions and regional projects take into on national on water energy water selected account level water and energy investments transboundary or energy take into identified implications projects account the for effective include clear transboundary use of water understanding implications. and energy of their resources. transboundary implications. Program Active donors Draft Established MDTF fully activities are in the region, agreement MDTF with a operational. Coordinated disparate on MDTF minimum of Program and donor coordination and donor two donors activities are Supported and inefficient coordination contributing. coordinated through an based on and donor MDTF consultations supported. Sustainable No shared Analytical Analytical There is regular for improved institutional Framework framework communication water dialogue and analytical Developed agreed at between across framework with input technical relevant Central Asia exists in the From level technical stakeholders region technical between institutes in CA exists. specialists of at least states all CA states two states; Institutional links on analytics at least between three states are in place , others; Energy Sector: Sources: Communication monitoring reports; Water Sector: DFID, EC, Finland, Germany, Switzerland, UNDP ADB, Russia, USAID, WB, other; Government Reports, World Bank country CASs, pipeline of investments; Government statistics; Existing institutions mandates and activities. 40 CAEWDP | Annual Report 2017 ANNEX III – RESULTS CHAIN 2017 The result chain below outlines the activities for each of the three program pillars against: (i) planned outputs. (ii), pre-2017 outputs; and end of 2017 outputs. Pillar Components Planned outputs (indicators) Energy Development a) Energy Security in Central Asia 1. National energy plans in at least two countries take into Countries: Design and implement consideration inter- and intra-regional energy measures to alleviate severe winter trade implications energy shortages as a base for sustainable energy security 2. Pre-investment analysis completed for two options for stable and predictable winter power supply in Tajikistan & b) Intra-Central Asia trade: Enhance the Kyrgyz Republic energy trading among CA countries by transition to more efficient, 3. National energy generation institutions considered market transactions based on well- regional implications of national investments designed commercial contracts 4. Political and financial support increased for transmission c) Connecting CA to Regional Power infrastructure planning Markets: Build the foundation for development of a power market 5. At least one new investment decision includes inter-/-intra linking Central to other regions regional implications 6. Strengthened institutional Development (energy trade institutions) CAEWDP | Annual Report 2017 41 Pre 2017 2017 1. National energy plans in Tajikistan and the Kyrgyz Republic took into 1. Energy Vulnerability to Climate consideration inter- and intraregional energy trade implications (Contributes Change activity provided the most towards Component b). current climate change projections for Tajikistan, information on climate 2. Pre-investment analysis completed for 30+ options for stable and predictable change impact on the energy winter power supply in Kazakhstan, Tajikistan & the Kyrgyz Republic (Contributes sector, and adaptation measures towards Component a). for the country (contributes towards Component a). 3. Bishkek considered regional implications of national investments (Contributes towards Component b). 2. Three CAREC Energy Sector Coordination meetings: discussed 4. Tajikistan Energy Sector Action Plan for 2015-2017 and CAREC Energy Sector establishing technical group to work Coordinating Committee (ESCC) Energy Work Plan (2013-2015) supported on promoting regional electricity trade increased transmission infrastructure planning (Contributes towards (Contributes towards Component b) Component c). 3. Facilitated implementation of the The Coordination Agreement between Tajikistan and the Kyrgyz Republic Entity country-specific Environmental and was finalized (Contributes towards Component b). Social Impact Assessments (ESIAs) for the Kyrgyz Republic and the ESIA 5. One new investment decision, CASA-1000 approved March 2014, included inter for Tajikistan (Contributes towards regional implications (Contributes towards Component b). Component c). 6. Two CAREC Energy Sector Coordination meetings were held, draft of Energy 4. Supporting pre-investment studies Strategy and Work Plan 2016-2020 was discussed (Contributes towards to enhance winter energy security Component b) in Tajikistan resulted in approval of the Nurek Hydropower Rehabilitation 7. Kazakhstan Power Sector: Stuck in Transition: Based on an extensive analysis, Project Phase I investment project. detailed interviews, and system modelling, the Note aims to model various sector (Contributes towards Component a). development scenarios, quantify their costs and benefits, identify key sector challenges, and present recommended policy actions. (Contributes towards 5. Kyrgyz Republic: Heating Efficiency Component c). Improvement activity resulted in approval of the Heat Supply 8. The main objective of the planning exercise is to ensure that peak load Improvement investment project and energy demand up to 2030 is met reliably and securely in line with the (Contributes towards Component a). government’s policies at the most efficient cost. (Contributes towards Component b). The main rationale for the study is to inform the government’s US$32 billion investment plan in the energy sector which will modernize infrastructure, especially for energy, transport and irrigation, as this is one of the key development priorities for the country. (Contributes towards Component a). Stove Assessment Report: The report provides details on the tasks to be implemented under the TA component “Efficient stoves and heating solutions”. (Contributes towards Component a). 42 CAEWDP | Annual Report 2017 Pillar Components Planned outputs (indicators) Energy Development CAEWDP | Annual Report 2017 43 Pre 2017 2017 9. Assistance to Barqi Tajik (BT) on financial management contributed to its implementation of the Financial Management Improvement Program (FMIP) and apply IFRS in the head office and in more than 30 regional branches. (Contributes towards Component b). 10. The main objective of the planning exercise is to ensure that peak load and energy demand up to 2030 is met reliably and securely in line with the government’s policies at the most efficient cost. (Contributes towards Component b). 11. 21st CAREC Energy Sector Coordinating Committee (ESCC) Meeting (Islamabad, Pakistan: 11-13 April 2016)-Energy sector focal points of CAREC member countries, officials from energy ministries and agencies, and representatives from multilateral development partners discussed • Updates on the deliverables of the Energy Sector Work Plan (EWP) 2016- 2020 and • Next steps to encourage investments in the energy sector. (Contributes towards Component b) 44 CAEWDP | Annual Report 2017 Pillar Components Planned outputs (indicators) Energy-Water Linkages a) Decision support: Strengthen the 1. Expand data management to enhance energy/ knowledge base and technical water analysis capacity to manage water and energy resources at the national 2. Regional dialogue on at least two priority water & energy level, and support evidence- issues facilitated by regional and national organizations. based dialogue 3. Strengthened regional organizations capacity to facilitate b) Climate Change: Identify climate regional dialogue change risks and develop adaptation strategies in energy, 4. Climate change (CC) adaptation implications recognized and agriculture for both energy and water. c) Riparian dialogue: Facilitate 5. Strengthened analytical framework is used to support dialogue across countries to water/energy dialogue improve coordinated management and development of shared resources, including nurturing regional institutions (ECSS & EC- IFAS) and communities of practice. CAEWDP | Annual Report 2017 45 Pre 2017 2017 1. Expanded data management to enhance energy/water analysis: 1. Established a Central Asia Youth • Strengthening Analysis for Integrated Water Resources Management: A Forum on Water (CAYFWater) CoP in Technical Workshop (Ashgabat, November 4-5, 2014) (Contributes towards collaboration with the German-Kazakh Component a). University (GKU) to provide a greater • Assessment of the Role of Glaciers in Stream Flow from the Pamir and Tien voice to young people. Facilitated the Shan Mountains (Contributes towards Component b). first meeting of the CoP (Contributes • Spatial Agent Application for iPhone and Android. The mobile app towards Component c). was demonstrated at a regional workshop to promote innovation and technology in regional water resource management; three mobile apps are 2. Provided analytical foundations for being developed to answer to key information needs of the institutions the Central Asia Water Resources (Contributes towards Component c). Management Project (CAWaRM) • Basin IT Workshop (February 2014) (Contributes towards Component c). (Contributes towards Component a). 2. Regional dialogue on Rogun Assessments Climate Change, and Energy security 3. Facilitated the Tajikistan Water and trade were facilitated by regional and national organizations. Information System Study Tour which • Rogun Consultations facilitated by the World Bank (May 2011, November organized two study tours for Tajik 2012, February 2013, October 2013, and July 2014) (Contributes towards water experts (Contributes towards Component c). Component a). • United Nations Regional Centre for Preventive Diplomacy for Central Asia cooperation on a framework agreement for sharing trans-boundary waters (Vienna, March 2014) (Contributes towards Component c) • Support to the UNRCCA Trans-Boundary Water Cooperation Process convened a meeting in 2015 to discuss issues related to the interpretation and efficient application of key principles of international law in the management of trans-boundary water resources in the Aral Sea Basin (Contributes towards Component c). • Legal Analysis of the Trans-Boundary Water Management Frameworks in Central Asia A draft report has been produced (Contributes towards Component c) • Central Asia Knowledge Network Four events on trans-boundary water management were hosted in Central Asia; the umbrella Knowledge Network platform has been established and is being institutionalized (Contributes towards Component c). • CAREC ESCC Meetings (2012-2014) (Contributes towards Component a) • 2nd Central Asia Climate Knowledge Forum: Moving towards Regional Climate Resilience (May 2014) (Contributes towards Component c). 3. Strengthened regional organizations capacity to facilitate regional dialogue. • The World Bank and EC-IFAS have agreed to prepare a US$25-75 million project under the Third Aral Sea Basin Plan (Contributes towards Component c). • International Panel of Experts to assist Tajikistan in the Rogun Consultations (Contributes towards Component c) • A regional reconnaissance combined with national consultations facilitated the exchange of information on cutting edge approaches to analysis for IWRM for 231 water resources, irrigation, glacier, groundwater, energy, and environmental national experts (Contributes towards Component a) • Aral DIF Water modeling increased awareness and knowledge in publicly available global data sets (including remote sensing) and modeling platforms as a modern basis of a decision support system for IWRM for 20 technical model and data specialists from all six countries of Central Asia (inclusive of Afghanistan) (Contributes towards Component a) • Basin IT Workshop over a three-day training module was developed by the World Bank Institute based on Basin IT, a water resources management tradeoff analysis training tool, to build capacity for 22 student, young professional participants, and professors from all six countries of Central Asia (inclusive of Afghanistan) (Contributes towards Component a) 46 CAEWDP | Annual Report 2017 Pillar Components Planned outputs (indicators) Energy-Water Linkages CAEWDP | Annual Report 2017 47 Pre 2017 2017 4. Climate change (CC) adaptation implications recognized for both energy and water: • Towards Climate-Smart Solutions for Central Asia Draft (Contributes towards Component b). • Turn Down the Heat: Confronting the New Climate Normal Report (Launched November 2014) (Contributes towards Component b). • Capacity Building Workshop for Regional Scientists in Potsdam facilitated by Potsdam Institute for Climate Impact Research (PIK) (Germany, March 2014) (Contributes towards Component a). • Central Asia Technical Working Group on Climate Change, comprised of government-nominated experts from all Central Asia countries to work collegially on climate-smart solutions across sectors and borders (Contributes towards Component c). • Energy Vulnerability to Climate Change: a draft report is completed (Contributes towards Component b). 5. Capacity Strengthening for IWRM Modeling National Workshop was held with Turkmenistan specialists on a 1-2 year water program at national and regional scales. A five-day training course with professionals from all six Aral Sea Basin countries (including Afghanistan) as well as representatives of the regional water organization (Contributes towards Component a). 6. Capacity Strengthening for IWRM Modeling Final Report and annexes. (Contributes towards Component a). 7. Workshop in June 2016 in Almaty, Kazakhstan to discuss the results of the Knowledge Networks and Communities of Practice for Water-Energy and Climate Change Management Program. (Contributes towards Component c). 8. September 2016, the Water Futures Forum & Expo took place in Almaty, Kazakhstan. Over 200 policy and technical experts from government, academia, private sector, and CSOs participated at this international event. (Contributes towards Component a). 9. CAMP4ASB Regional Meeting in Almaty (Kazakhstan) June 24-28, 2016. The meeting was to review final steps towards effectiveness for the first phase of CAMP4ASB and overall implementation arrangements in collaboration with representatives from the five Central Asian countries as well as from the Executive Committee of International Fund for Saving the Aral Sea (EC-IFAS) and FAO. (Contributes towards Component b) 48 CAEWDP | Annual Report 2017 Pillar Components Planned outputs (indicators) Water Productivity a). Dam safety and rehabilitation: 1. IFAS’ capacity in agricultural water management improve dam safety and water strengthened, and communication between national management at bulk agricultural water specialists improved infrastructure facilities 2. Infrastructure and management opportunities b) Irrigation Efficiency: improve (including investments) for increased agricultural water efficiency of irrigation at the productivity identified national level through prioritization of investments opportunities, 3. National action plans for increasing agricultural water strengthening capacities and productivity prepared institutions and introducing new technology 4. Understanding of regional water productivity is reflected in national plans, policies and/or investments of at least c) Water resources diagnostics: two countries Strengthen data and analysis of water resources as a basis for 5. Understanding of water supply sector priorities policy development is improved and investments d) Water supply sector diagnostics CAEWDP | Annual Report 2017 49 Pre 2017 2017 1. IFAS’ capacity in agricultural water management strengthened, and 1. Finalized analysis of Water Supply and communication between national agricultural water specialists improved. Sewerage Services in Central Asia. • Draft Country Report for Uzbekistan “Social Impact Analysis of Water Provided recommendations to address Supply and Sanitation Services in Central Asia” presenting innovations and detected issues. (Contributes towards factors of success of local management of irrigation and drainage water Component d) management (Contributes towards Component d) • Poverty and Social Impact Analysis (PSIA) Diagnostic tool (Contributes towards Component d) • Central Asia Water Management a series of Policy Discussion Papers on Central Asia Water Resources Management, as well as Country Profiles were produced (Contributes towards Component c). 2. Draft Report “The Costs of Irrigation Inefficiency in Tajikistan” (Contributes towards Component b) • Strengthening Irrigation Governance produced a diagnostic tool and an assessment that identified key factors and conditions that are associated with good performance of local irrigation canal water management in Uzbekistan (Contributes towards Component b). • Promoting Irrigation Efficiency, the methodology for planning irrigation efficiency investments was completed and a methodology for determining the costs of irrigation inefficiency at the level of the national economy is in draft. A review of irrigation efficiency in Tajikistan is being finalized (Contributes towards Component b). 3. Social Impact Analysis of Water Supply and Sanitation Services Report was produced (Contributes towards Component d) • Analysis of Water Supply and Sewerage Services in Central Asia Draft Reports on policy recommendations for Tajikistan and Uzbekistan are under preparation, with 2 rounds of consultations in each of the four countries on the preliminary diagnostic and the policy recommendations. 4. Exploratory assessment of factors that influence quality of local irrigation water governance in Uzbekistan published. (Contributes towards Component b) • The Costs of Irrigation Inefficiency in Tajikistan published. (Contributes towards Component b) • Knowledge Sharing workshops conducted on Social Impact Analysis of Water Supply and Sanitation Services in Central Asia in November 2015 in Washington, DC and February 2016 in Tashkent, Uzbekistan. (Contributes towards Component c) 5. Draft Analysis of Water Supply and Sewerage Services in Central Asia: Challenges and Outlook Policy Options Reports – Tajikistan & Uzbekistan completed. (Contributes towards Component d) • Session “Increasing Water Use Efficiency” at the High Level Symposium on SDG 6 and Targets: Ensuring that No One is Left Behind in Access to Water and Sanitation in Dushanbe August 2016. (Contributes towards Component d). http://www.worldbank.org/en/region/eca/brief/caewdp The Central Asia Energy-Water Development Program (CAEWDP) is a knowledge and technical assistance multi-donor trust fund (MDTF) administered by the World Bank. CAEWDP’s mission is to build energy and water security for the countries of Central Asia—Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan—through enhanced regional cooperation. Since its inception in 2010, CAEWDP has received support from bilateral and multilateral donors including the Government of Switzerland’s State Secretariat for Economic Affairs (SECO), the European Commission (EC), the United Kingdom’s Department for International Development (DFID), the United States Agency for International Development (USAID), and the World Bank Group.