The Asian Infrastructure Investment Bank (AIIB) is quickly establishing itself as a significant force in Uzbekistan and the broader Central Asian region. Despite being a relatively young institution, AIIB has swiftly become the second-largest multinational development bank in the world by membership. This infrastructure-focused bank has already made a notable impact in Uzbekistan, where it is set to host its annual meeting in 2024.
Zacharias Ziegelhöfer, Senior Investment Specialist – Water & Urban at AIIB, discusses a little bit about the Bank and one of its flagship projects here in Uzbekistan; the Rural Infrastructure Development Project (RIDP), which has been addressing pressing infrastructure needs for communities around Uzbekistan.
Can you tell us a little bit about AIIB as a bank and its role in Uzbekistan?
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that focuses on building Infrastructure for Tomorrow, meaning the development of green infrastructure that is environmentally, socially and economically sustainable. We now have 109 members of the Bank worldwide, and Uzbekistan was one of our founding members, when we launched in 2016.
Uzbekistan is an exciting market for the AIIB, as it is growing rapidly and has made significant progress in advancing its reform agenda in recent years. So far, the AIIB has provided financing to 13 projects in Uzbekistan, including across green energy, waste management and sewerage and sustainable financing, totaling over USD2 billion.
The recent visit of H.E. Shavkat Mirziyoyev to the AIIB headquarters reinforced our mutual commitment to work together. As a result of the high-level meeting in Beijing, a three-year investment program was signed to prioritize investments in the country, including in water, transport and energy. The AIIB is also hosting its 2024 Annual Meeting in Samarkand in September, which will be a highly anticipated event, and underlines our commitment to the region. 2024 is a big year for the AIIB in Uzbekistan.
This year we have seen substantial progress in the completion of the inaugural AIIB project in Uzbekistan on Rural Infrastructure Development. It is a unique project that is designed to help build infrastructure in remote villages. And you have been leading this project since the start. Can you tell a little bit about yourself, your role within the bank and a brief overview of your responsibilities?
I am a senior investment specialist at the AIIB, currently leading on the bank’s water and urban projects in Uzbekistan. I lead our project teams in preparing projects for approval, and then implementation and monitoring of projects once they are underway. Also, as a project lead, I am the point of contact of the project to the client.
AIIB project teams are composed of environmental, social, procurement, financial and technical experts – covering all the areas required through implementation. My role is to make the best of our teams’ expertise and work closely with the client to ensure projects are successfully completed.
You have been to Uzbekistan many times. What have you enjoyed about the country and what potential do you see in the country?
Uzbekistan is a very dynamic and fast-growing country, and investors and the population are keen to embrace opportunities in the country; I could feel this when I visited. You really get a sense that the country’s young population is looking to embrace opportunities and capitalize on Uzbekistan’s position at the crossroads between East Asia, South Asia, and Europe.
At AIIB, our teams are very diverse with colleagues coming from more than 50 countries including East and South Asia as well as Europe, and given the diverse cultural heritage of Uzbekistan, all of our team members usually find interesting aspects in the culture of Uzbekistan to connect to with their own cultures.
Personally, I always enjoy the food when I visit Uzbekistan, particularly plov, Gijduvan shashlik and Olot Samsa!
AIIB has a wide investment portfolio in Uzbekistan and it is growing. We know you are a project lead of five projects here. Can you give us some information about your priorities in this market?
For Uzbekistan, water is a major challenge, and this is also currently our largest sector at AIIB in the country. Uzbekistan is a downstream riparian. Most of Uzbekistan’s water resources come from neighbouring countries, and Uzbekistan faces water stress, which is likely to be exacerbated by climate change. Much of the existing water infrastructure in the country dates from before independence and is energy intensive to operate and inefficient with water. Thus, one of the key tasks is to increase water use efficiency. It is also crucial to improve access to water supply and sanitation services. Geographically at AIIB, we currently focus our water operations on Western Uzbekistan in particularly on Bukhara, Khorezm and the Republic of Karakalpakstan.
So, at projects in Bukhara, Khorezm and the Republic of Karakalpakstan, AIIB is investing in improving access to drinking water through better pipe systems, supporting the government of Uzbekistan in introducing water metering at key water distribution centers and in residential settings, as well as in physical infrastructure to support water companies in improving performance and service.
Alongside this, we are rolling out wastewater treatment infrastructure to reduce environmental and safety risks. Irrigation infrastructure is also vital as this accounts for more than 90% of Uzbekistan’s water use, and we’re currently engaging with the government on this in Tashkent region.
There’s a lot of work to be done in this space in Uzbekistan, but we’re really proud of the positive impact AIIB’s projects have had, and we’re looking forward to achieving much more.
The Rural Infrastructure Development Project was approved in 2019. Can you tell us a little bit about it? What are the impacts?
The Rural Infrastructure Development Project (RIDP) was AIIB’s first project in Uzbekistan, and it’s been very successful. The focus is on improving infrastructure across rural areas in Uzbekistan, especially at the basic infrastructure and village level.
The project is community-driven, meaning that investments are prioritized and selected by the communities themselves. Therefore, we are investing directly in services and infrastructure that are tailored to local community needs, and those communities are more engaged in the success of each part of the project. Women have been particularly involved in these selection processes.
We have found that communities have typically requested investments in water infrastructure, so we’ve improved access to drinking water, wastewater services and irrigation. Other priorities have included improving roads and footpaths, and electrification. We have also worked closely with our co-financing partner, the World Bank, on the RIDP.
To date, 193 sub-projects under the RIDP have already been completed, benefiting more than 361,000 people, over half of whom have been women.
The improvements these projects have made have enabled people to spend more time working, travelling and with their families, rather than spending valuable time accessing basic services.
There’s much more to come in the RIDP, with 430 further sub-projects being implemented at various stages. This includes 128 drinking water supply systems, 140 street repairs, 53 village school developments, and many more.
How does AIIB work with partners and choose the most impactful projects to support?
We strive to be a partner of choice to our clients – we describe ourselves as client-centric. We aim to be fast-moving and responsive while maintaining high standards across all aspects of our projects.
AIIB teams engage closely with clients and country leads, from the very beginning, and we’re in constant contact at all stages, whether face-to-face or virtual.
Likewise, we are typically led by our clients. We receive requests for projects, which we then evaluate in terms of alignment with our priorities and how we could partner to be as impactful as possible.
Once a project has passed AIIB’s screening process, we engage with clients in a fully-fledged project preparation process, so that we can maximise the impact of our investment and involvement.
This year, AIIB will have its Annual Meeting in Samarkand. What does this say about AIIB in Uzbekistan, and what can we expect from it?
AIIB’s Annual Meeting is the Bank’s flagship event, so it is a major sign of the Bank’s commitment to and confidence in Uzbekistan for it to be hosted in Samarkand this year.
The Annual Meeting is a great opportunity for AIIB’s leadership and most senior stakeholders to come together and discuss the Bank’s priorities and agenda, and for engagement with the wider public and business community.
I’m really looking forward to being there and meeting many more of our Uzbek friends!
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