The World Bank Agriculture Modernization Project (P158372)
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91. Institutional capacity for implementation and sustainability. Institutional capacity risk is assessed as Substantial
because some agricultural public institutions are likely to resist reforms. This risk can be further exaggerated by the
relatively low investment in capacity building compared to that in infrastructure. This risk will be mitigated by the WBG’s
support to implementation of the adopted Agricultural Strategy, where one out of nine strategic priorities is to reform
public institutions for making them fitter to support market orientation of agriculture. The risk will also be mitigated by:
(i) carrying out a dialogue with the oversight agencies such as MOF and MIFT to trigger necessary reforms; (ii) allocating
a sufficient budget under AMP for attracting the global experts to guide reforms of the agricultural research institutes,
extension services, and other MOA departments; and (iii) partnering with the EU and other donors to support reforms.
92. Technical design. Technical design risk is assessed as Substantial due to a large number of the planned project
activities. This risk will be mitigated by the allocation of the adequate budget for project management at both central
and regional levels to ensure a day-to-day support to implementation. It will be also be mitigated by the targeted WB
support and collaboration with the donors to design and implement some of the proposed project activities.
93. Environmental and social risks:
a. The overall environmental and social risk is assessed as Substantial, although environmental risk is rated
as Moderate. Although AMP will provide a series of economic and social benefits, it may also generate
some adverse environmental risks and impacts associated with the following: increased environmental
pollution with waste, noise, dust, air and water pollution, impacts on biodiversity and ecosystem services;
health hazards and labor safety issues. Most of them are expected to be typical for small and medium scale
construction and rehabilitation works, agriculture production and fruit/vegetable processing activities.
These risks and impacts would be mitigated through development of appropriate environmental and social
instruments that will be incorporated into the bidding documents for construction works and Credit Line
guidelines concerning activities of PFIs and credit beneficiaries, and through regular monitoring and
reporting on ESF compliance.
b. Although no incidents of forced or child labor have been reported in the horticulture sector in Uzbekistan,
reputational risks are present given prior history of forced evictions, forced and child labor in the country.
The project will not finance cotton farms or enterprises related to the cotton and textile value chain.
Through its support to agricultural research institutes in Component 1, the project will finance applied
research on seed development, which may include research on cotton seeds. The identified social risks
need to be mitigated with sufficient awareness, capacity-building, and monitoring systems during project
implementation. The project will utilize screening and monitoring mechanisms described in ESMF and LMP
to mitigate any risk of child and forced labor among beneficiaries supported by the project. Sub-loan
agreements will be immediately terminated, and full repayment of any sub-loans found to be associated
with forced labor.
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