On December 4, the CAREC Institute held its Third Water Virtual Policy Dialogue on “Water Infrastructure in Central Asia: Promoting Sustainable Financing and Private Capital Participation.” The dialogue brought together leading water sector experts from the CAREC region to discuss issues and policies for long-term sustainable financing of the water sector in Central Asia.
Director of the CAREC Institute Mr. Kabir Jurazoda welcomed the participants and speakers of the dialogue and noted that with the growing demand for water due to high consumption and water intensity agricultural production, governments in Central Asia need innovative strategies to make more productive and efficient use of this vital resource. To support the CAREC governments with knowledge, the CAREC Institute conducts research on water, climate change and agriculture, produces reports and policy briefs with important policy recommendations, and organizes capacity building trainings and policy dialogues. Aspects of sustainable financing of the water infrastructure are one of research areas of the CAREC Institute. In 2023-2024, the CAREC Institute implements research to analyze gaps in financial management of the water sector in Central Asia. The purpose of the study is to analyze the critical financing needs of the water sector, understand the main priorities of water infrastructure and identify the water financing gap for regional and national water infrastructure in Central Asia.
Dr. Iskandar Abdullaev, visiting professor at the Centre for International Development and Environmental Research of Justus Liebig University in Germany and former employee of the CAREC Institute, spoke about the challenges of water sector financing in Central Asian countries based on the recent CAREC Institute report “Water Infrastructure in Central Asia: Promoting Sustainable Financing and Private Capital Participation.” Countries in the CAREC region still face some barriers in the water sector, such as large losses of irrigated agricultural water; risks in the public, state-owned and heavily regulated water sector make foreign direct investment, private financing and other forms of financing unattractive; and the water infrastructure built for the Soviet large collective farms became difficult to manage and largely unsuitable for modern agricultural production. Dr. Abdullaev recommended that the Central Asian governments implement more market-oriented policies which can encourage private companies to invest in water services. Involving private partnerships could bring more technological innovation to the water sector, increasing the efficiency of water resource development and use. Countries need to create an enabling investment environment in the water sector, through improved infrastructure and relevant economic and financial regulations to support private funding to bridge the sector’s financing gap.
During the open dialogue, leading water sector experts in Central Asia – Mr. Shakhboz Akhmedov, Country Manager Uzbekistan of Sungrow Power Supply Ltd., Dr. Caroline Millow, GIZ Green Central Asia Project Lead, Dr. Georg Petersen, Water Resources Expert at HYDROC Germany, Dr. Stanislav Chuyev, Senior analyst at the Eurasian Development Bank, Dr. Bakhrom Gaforzoda, national expert from Tajikistan and Dr. Azizbek Karimov, national expert from Uzbekistan – spoke about various policy measures and global best practices that Central Asian countries can implement in developing water infrastructure and promoting private sector participation in the sector.
Expert recommendations underscore a critical need for improved policy dialogue between scientists and policymakers. Enhancing collaboration between these two sides is vital, ensuring that policymakers actively listen to the insights of scientists, and vice versa. Moreover, there’s a call for better coordination not only among Central Asian countries but also with international institutes engaged in water projects within the region.
A key takeaway is the importance of well-coordinated infrastructure projects, coupled with enhanced public awareness about these initiatives. Legislative improvements, including reforms in land ownership policies, emerge as another crucial area for discussion, with an emphasis on public-private partnerships. Incorporating effective anti-corruption measures around infrastructure projects, promoting transparency, and actively engaging the private sector in water infrastructure projects are essential components of the envisioned path forward.
The collaboration between the public and private sectors is crucial for addressing the complex and evolving challenges in the water sector. It allows for a combination of public resources and private sector efficiency, ultimately contributing to the sustainable development and management of water resources. This partnership ensures that water infrastructure projects are not only well-funded but also effectively and sustainably implemented for the benefit of communities.
The experts recommend the creation of a comprehensive strategy accompanied by detailed tasks to efficiently implement water-related projects. A well-structured strategy, delineating clear tasks and responsibilities, will be instrumental in ensuring the successful and timely execution of water projects in the region. This strategic approach aims to enhance coordination, mitigate potential challenges, and ultimately contribute to the effective and sustainable development of water infrastructure in Central Asia.
All materials and recording of the policy dialogue have been uploaded to the CAREC Institute’s e-learning platform and are accessible to a broad audience across the CAREC region and beyond.