| Project Detail |
Project Name
Issyk-Kul Environmental Management and Sustainable Tourism Development Project
Project Number
55250-001
Country / Economy
Kyrgyz Republic
Project Status
Approved
Project Type / Modality of Assistance
Grant
Loan
The project will (i) strengthen the quality and sustainability of tourism infrastructure in Cholpon-Ata and enhance livability by developing green, climate-resilient, safe, and inclusive spaces, including universal access for people with disabilities and older people; (ii) improve the environmental and health conditions of Issyk-Kul District by ensuring that the wastewater generated in Cholpon-Ata is adequately treated to protect the Issyk-Kul biosphere; and (iii) provide planning and capacity building support to the Cholpon-Ata Mayors Office to ensure sound tourism management, and to Cholpon-Ata Vodokanal to improve the quality and reliability of wastewater management services to both residents and tourists. The project will contribute to a more sustainable, balanced, and diversified economic development in the overall area of Issyk-Kul Lake and AlmatyBishkek Economic Corridor (ABEC).
Project Rationale and Linkage to Country/Regional Strategy
Country context. The Kyrgyz Republic is a landlocked lower- to middle-income country with a per capita gross domestic product (GDP) of $1,607.30 in 2022. It had a small but quickly growing tourism industry before the coronavirus disease (COVID-19) pandemic, contributing an average of 5.1% to GDP from 2015 to 2019, but dropping to 8.4% in 2020 because of the pandemic. In 2019, the government launched its 20192023 tourism development plan with goals to enhance the countrys reputation as a tourism destination and increase the industrys contribution to above 7.0% of GDP by 2023. The tourism industry has significant potential for growth, given its unique position to attract tourists from surrounding countries with large populations such as the Russian Federation, the Peoples Republic of China, and India.
Economic significance of tourism. The ABEC area is the primary source of tourism for the Kyrgyz Republic. It attracts about 6 million visitors annually. The Issyk-Kul region is particularly popular because of its rich ecological, cultural, and biological diversity, and Issyk-Kul Lake is one of the main attractions. Cholpon-Ata, a resort town with a population of 14,237, is the preferred destination for about 80% of tourists who visit the lake, and about 350,000 visitors were recorded in 2018. The projected number of tourists visiting Cholpon-Ata is about 380,000 in 2028 and 480,000 in 2038. New hotels and guesthouses, along with the necessary supporting infrastructure, have been constructed since about 2012. However, the quality and availability of tourism infrastructure and related environmental facilities remain underdeveloped. Most of the facilities, which are predominantly remnants from the Soviet era, are of low quality and require substantial investment in upgrades and expansion to accommodate a further influx of tourists. As a labor-intensive industry, tourism can play a role in reducing poverty, provided the economic benefits are equitably distributed. Increased foreign arrivals can diversify the economy and positively impact other sectors, making the development of this industry a crucial national goal for economic diversification and employment.
Issyk-Kul Lake environment to be preserved. The Issyk-Kul Biosphere Reserve spans more than 43,000 square kilometers. Issyk-Kul Lake is the 10th largest lake and the second largest saline lake in the world by water volume. It is both oligotrophic (nutrient-poor) and endorheic (lacking conventional outflows) and its waters are saline and not used as a source of drinking water or irrigation. The salinity is relatively low and unusually rich in oxygen. The Issyk-Kul Lake watershed includes 118 mainly glacier-fed rivers and streams, but only 40 of them discharge to the lake, Zhergalan River and Tyup River being the largest. A significant proportion of inflow to the lake (estimated to be up to 40%) is from groundwater. The observed overall trend of decreasing water levels of Issyk-Kul Lake since the beginning of the 21st century can be associated with climate change and water use in the catchment for domestic, industrial, and agricultural uses. The lakes water quality is reasonably good, but previous studies have suggested that the lake is polluted by a variety of substances, including (i) sewage and domestic wastewater discharged into rivers, (ii) sewage from septic tanks and pit latrines seeping in via groundwater, and (iii) significant levels of nitrates and phosphates that are present in untreated wastewater. If such sources continue to pollute the lake or increase in magnitude, combined with population and tourism growth, there is a risk that the lake could eventually transition from being oligotrophic to being at least mesotrophic and beyond.
Climate change risks. The Kyrgyz Republic faces various climate-induced hazards and experiences moderately high levels of disaster risk. Cholpon-Ata in the Issyk-Kul region faces a significant risk of heatwaves, drought, and landslides. Average annual temperatures in the Kyrgyz Republic have risen by about 1.1
C between 1960 and 2010. The rate of warming has accelerated during 19902010. Warming trends were reported across all the Kyrgyz Republics regions and at all altitudes. The climate projections suggest a very high future probability of severe drought conditions under higher emission pathways. The elevated temperatures resulting from climate changes are likely to result in more evaporation from soil and surface water bodies, potentially resulting in drier summer conditions. The impact of climate change on climatic-hydrological factors such as rainfall and evaporation will further affect the lakes water level (footnote 14). The temperature increase because of climate change would extend the tourism season and the number of tourists, which will put more stress on tourism infrastructure.
Inadequate wastewater management and poor environmental management of tourism sites and facilities. In Cholpon-Ata, the aging wastewater network is severely dilapidated and poorly maintained. Only 43.1% of the population is connected to the wastewater network, while about 30%40% of tourism facilities and resorts are not yet connected to it and use a mix of septic tanks and holding tanks that are poorly maintained. The 40-year old wastewater treatment plant (WWTP) is in poor condition and discharges partially treated or untreated sewage. The WWTP lacks proper biological treatment and the equipment required for a proper treatment, and receives only a fraction of the design flow (up to 3.5 million liters per day during the summer) because of a lower contributing population, limited sewerage system coverage, and poor collection systems. The excessive pressure on the current infrastructure because of the unregulated tourism growth and the lack of proper wastewater treatment, the low coverage, and the poor environmental management of the lake shore area are largely responsible for the lakes pollution and pose a great risk to its environment and inhabitants, thus lowering visitor satisfaction. The situation is exacerbated by the rising global temperatures and extreme climate events that result in more frequent river and flash flooding (footnote 14). Improperly designed and maintained septic systems result in sewage overflow into watercourses during heavy rainfall, and the absence of well-managed solid waste facilities, public toilets, and sanitation facilities at the lake shore worsens the situation.
Insufficient tourism enabling infrastructure. Cholpon-Ata attracts the highest number of tourists in the whole of Kyrgyz Republic and is the leading summer resort in the country. Critical challenges confronting its tourism industry are (i) limited capacity in tourism strategic planning to accommodate both public and private sector investment; (ii) scarce incentives and support mechanisms to foster micro, small, and medium-sized enterprises (MSMEs); (iii) shortage of skilled workers, especially women who are paid lower wages and younger people who face higher rates of unemployment; and insufficient opportunities for training to fill the gap in tourism and hospitality education. Cholpon-Ata City does not have a clear tourism development strategy and appropriate and sustainable tourism assets.
Poor environmental management of tourism sites and facilities. The quality of tourism assets is low, and they are poorly maintained. The developed tourism destinations have poor access, insufficient public services, and inadequate safety facilities such as signage, fencing, and streetlights. The lack of visitor centers limits the opportunity to collect fees and inform visitors about tourism offers; and the inefficient management and conservation of green spaces and heritage sites, along with the lack of public trails for walkers and cyclists, reduces visitor satisfaction and creates safety risks. The ABEC Tourism Master Plan (footnote 17) developed in December 2019 identified critical tourism investment projects for the ABEC area and Cholpon-Ata. The government prioritized the tourism facilities under the project that would improve the range, quality, and environmental performance of tourism assets.
A project loan is the most appropriate modality for the following reasons: (i) clear physical components to be implemented within a defined geographical area; (ii) strong link with other ongoing projects in the Issyk-Kul Lake area toward the lake conservation objective; and (iii) capacity building and institutional-strengthening activities that target the entities in charge of the operation and maintenance (O&M) of project components, i.e., Cholpon-Ata Mayors Office and Cholpon-Ata Vodokanal.
Continued and systematic support in Issyk-Kul region. The Asian Development Bank (ADB) has provided support for the protection of Issyk-Kul Lake and sustainable economic development of the region since 2009. This comprised (i) the Issyk-Kul Sustainable Development Project, which was completed in 2018 and mainly improved the water supply networks and their coverage in Balykchy, Cholpon-Ata, and Karakol; and (ii) the ongoing Issyk-Kul Wastewater Management Project, which is expanding the sewerage network and rehabilitating wastewater treatment facilities in Balykchy and Karakol. These interventions provide a solid foundation for ADBs additional supportimproving the environment of the Issyk-Kul region by expanding the coverage of sewerage services and improving the wastewater treatment facilities in Cholpon-Ata to fill critical service gaps and mitigate pollution risks.
Lessons. The project builds on key lessons from ADBs earlier experience with water supply and sanitation. The previous projects had faced implementation difficulties because of (i) delays in the preparation of the detailed engineering designs; (ii) prolonged procurement processes and late contract awards; and (iii) limited capacity of executing and implementing agencies for procurement and financial management. These lessons prompted the following measures: (i) advance actions supported through the small expenditure financing facility to improve readiness; and (ii) close coordination with the executing agency on the ADB Procurement Policy (2017, as amended from time to time) and the Procurement Regulations for ADB Borrowers (2017, as amended from time to time) as well as evaluation support to reduce procurement delays. Further measures will be considered for the future: (i) strengthening the effectiveness of project management through improved communication with and engagement of the executing agency and the steering committee, (ii) enhancing the capacity for O&M and revenue generation to improve sustainability, and (iii) instituting an annual project staff performance review by the executing agency.
Government policy and alignment with ADB Strategy 2030. The Kyrgyz Republics long-term National Development Strategy for 20182040 and its medium-term National Development Program until 2026 emphasize the development of urban infrastructure, clean water, sustainable tourism, and environmental sustainability, which are directly aligned with the projects outcomes. In the updated Nationally Determined Contribution, the country highlights climate adaptation measures in the water resources sector by improving climatic resilience of drinking water supply and sanitation infrastructure, stimulating more efficient water use, and implementation of green funding mechanisms to reduce the vulnerability of cities and regions. The project is aligned with ADBs Strategy 2030. It will support Strategy 2030s operational priority 7 by expanding trade and investment opportunities in the Issyk-Kul Lake area and by protecting the lake, which is of regional and global significance for sustainable tourism development and biodiversity conservation. The project also supports operational priorities 1, 2, 3, 4, and 6. The project is consistent with country partnership strategy and it is well aligned with the Central Asia Regional Economic Cooperation (CAREC) Program Strategy 2030 and the CAREC Tourism Strategy 2030, along with its Regional Tourism Investment Framework (20212025)all of which support regional tourism, improved sanitation, waste and environmental management, and tourism infrastructure in the CAREC region. The project is also in line with the ABEC Tourism Master Plan.
Impact
Sustainable, balanced, and diversified economic development improved with a focus on innovation and environment-friendly technologies. |
