The World Bank’s Board of Executive Directors approved on Thursday a $50 million grant to help Tajikistan accelerate its sustainable and resilient economic growth, the World Bank announced in a press release.
The grant financing from the International Development Association for the Tajikistan Development Policy Operation (DPO) is aimed at supporting Tajikistan’s key reforms and efforts to improve the business environment, strengthen public sector governance, enhance resilience to shocks and increase poverty reduction and improvements in the quality of people’s lives.
According to the World Bank Country Manager for Tajikistan, Ozan Sevimli, is committed to undertaking critical reforms to strengthen its economy, develop local drivers of growth and enhance government systems to protect the poor from shocks.
Tajikistan plans to accomplish that by enabling an environment for private sector growth and strengthening the governance and sustainability of public finance, among other things.
The new development policy operation is the first one in a decade between the World Bank and the government of Tajikistan and – in line with its reform priorities as spelled out in the National Development Strategy up to 2030 – will support Tajikistan’s resilience and sustainability of economic growth and its efforts to create an environment for better and more productive jobs domestically while raising the living standards of its citizens.
Tajikistan still struggles to enable productive job creation by overcoming the structural bottlenecks while remaining highly exposed to external shocks despite two decades of steady economic growth and poverty reduction.
Per the official data, the private sector accounts for only 3 to 4 percent of GDP: about 13% of formal employment, 15% percent of total investment, and 30% of industrial output.
The government of Tajikistan will also get additional help from the World Bank to improve the financial and commercial frameworks of the Rogun Hydropower Plant (HPP) Project and enhance its technical, environmental, and social sustainability.
The $15 million in grant financing comes from the International Development Association for the Technical Assistance for Financing Framework for Rogun Hydropower Project in Tajikistan (TA).
If it develops in a financially, environmentally, and socially sustainable manner, the Rogun HPP Project, which is currently under construction, can potentially generate significant economic, social, and environmental benefits not only for Tajikistan but also for other countries in the Central Asia region
The project will be critical in meeting Tajikistan’s domestic energy demands, especially during the winter, and also support neighboring countries through the export of surplus electricity.
