Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in the Krygyz Republic based on a desk review. It applies an analytical framework of six Pillars (or "building blocks") of SusPP systems.

The Framework is designed to make clear that countries do not need to follow a linear step-by-step path to build effective SusPP systems. Rather it is important to examine local contexts and prioritize the Pillars with the most potential in the country. No matter where a country starts, a balanced approach to implementation calls for progress on all Pillars to some degree.

This Factsheet is organized as follows:

• "Country overview" section with an maturity rating and graphic, key achievements and remaining gaps, and timeline of key events.
• "State of Play & Forward Looking Analysis" section that summarizes the research findings from the desk review for each Pillar theme.
• "Key Stakeholders Driving the Agenda" explores opportunities for ADB teams to open discussions with country counterparts and add value to the work of partners.

The Factsheet is intended to be a living document that will be revised and improved as new information is uncovered and advances are made. It is designed to support the ADB training programs on SusPP.

Public procurement accounts for 10.3% of GDP in the Kyrgyz Republiuc, ofering a powerful economic tool for the country to achieve its development goals. The Government has set a clear vision to transition to a green economy and recognized sustainable public procurement as a key implementing tool. At the local level, the city of Bishkek has set an ambition to become a smart, sustainable city with green and inclusive infrastructure.

The Kyrgyz Republic is a landlocked mountainous country with 94% of the country above 1,000 meters elevation. The country is projected to experience temperature rises significantly above the global average with loss of its ample mountain glaciers. Heat stress, flooding and landslides are expected to increase risks to human lives and livelihoods. Traffic congestion in the city of Bishkek contributes to significant air pollution with human health impacts.

>> Snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Early Stage

Key Achievements

• Clear policy commitment to green economy and SPP as an implementing tool
  
• Procurement law allows for preferences to local suppliers
  
• Support provided for SMEs including an online catalogue, annual green expos, capacity building support and fiscal incentives
  

Potential pathways forward

• Support awareness raising on the benefits of SusPP
  
• procurement law reform to allow consideration of sustainability criteria in bid evaluation
  
• Capacity building of public procurers on SusPP practices
  
• Develop monitoring system to track environmentally friendly and social procurements
  

>> Timeline of Implementation of Sustainable Procurement Activities

2011

2018

2019

2021

2022

Law “On Energy Performance of Buildings” adopted

National Development Strategy of the Kyrgyz Republic for 2018-2040 and National Development Strategy of the Kyrgyz Republic adopted

First multistakeholder consultation to coordinate efforts to promote the green economy (EU Switch-ASIA programme)

Program for the Development of a Green Economy in the Kyrgyz Republic for 2019-2023

2019 - Sustainable Development Strategy in Industry (2019-2023) endorsed

1st Green Expo held to feature environmentally friendly technologies and suppliers

2nd Green Expo, Investment Forum and Green Economy Forum held

Pillar 1: Government Vision & Awareness of SusPP

Governments that establish a clear policy vision on SusPP can accelerate the shift from procurement as an adminstrative to strategic function, making clear how SusPP can deliver on important national social and environmental goals.

Vision for SusPP

Sustainable public procurement is recognized in the country as a “crucial and effective” mechanism to implement the Green Economy concept outlined in the nation's Program on the Development of Green Economy in the Kyrgyz Republic 2019-2023. The Program sets out national policy objectives that SusPP can contribute to, including:

• Reduce energy intensiveness of GDP with increased access to reliable and timely energy
  
• Enhance energy efficiency and increase share of renewable energy sources
  
• Provide an ecologically clean good support through sustainable agriculture
  
• Transition to electrically and low-carbon (bio)fuel-powered public transport
  
• Improve waste management
  
• Promote green cities and urban development
  

The country aims to increase the share of sustainable procurements to 30% by 2023 and 50% by 2040. The main motivations for adopting sustainable procurement lie in the country’s ambition for increased multilateral and regional cooperation with Eurasian Economic Union (EEU) and World Trade Organization (WTO). The Kyrgyz Republic holds observer status to the WTO Government Procurement Agreement since 1999.

Green economy

The Kyrgyz Republic has emerged as a leader in Central Asia by establishing a strong national policy framework for its transition to a more inclusive green economy. This vision is recognized in several policy documents. The National Development Strategy 2018-2040 envisions a future with “negative CO2 emissions” as the “greenest” country in the region. This vision is reinforced in the Development Programme on Stability, Trust and New Opportunities 2018-2022, which set as an objective a transition to green procurements.

Energy Efficiency

The country adopted the first law on building energy efficiency within post-Soviet countries in 2011 and has adopted a framework of policies on climate change, waste management, organic agricultural production and recycling to reduce industrial waste. A recent Parliamentary initiative proposes a ban on production and import of plastic bags by 2024. The Law on Environmental Protection was adopted in 1999. However, few legislative updates have been made to the country’s environmental legislative framework in recent years.

Smart city - Bishkek

At the local level, the city of Bishkek has set a vision to become a smart, sustainable city. The Bishkek City is a new master-planned community, an urban expansion operation that aims to create an urban ecosystem to provide an infrastructure for Sustainable Human Development aligned with the SDGs.

Pillar 2: Legal & Regulatory Framework

Procurement law reform can be key to clear obstacles to implementation by establishing "value for money", not "lowest price", as a core procurement objective, and authorizing procurement approaches suited to SusPP.

The law on Public Procurement was ratified by Jogorku Kennesh (the Parliament) on 6 April 2022 and signed by the President on 14 April 2022. Para 47 of the amended PPL defines the term, "Sustainable public procurement - a process in which the purchasing organizations / Agent must assess the benefits not only for the organization, but also for society, while minimizing damage to the environment."

Para 4 of 2022 PPL says that "To promote local economy the Cabinet of Ministers may impose preferences to domestic goods, ban or restrictions to foreign goods."

State Owned Enterprises (SOE) have been excluded from the remit of PPL. Para 4(5) stipulates, " This Law does not regulate: procurement carried out by state and municipal enterprises; joint-stock companies, where 50 percent or more of the share in the authorized capital belong to the state, including their subsidiary business companies. The procedure for organizing and carrying out such purchases is determined by the Cabinet of Ministers of the Kyrgyz Republic."

Pillar 3: Institutions & Capacity

The central procuring body in the Kyrgyz Republic is the Public Procurement Department (PPD) under the Ministry of Finance. The PPD operates within the Ministry of Finance with a mandate to provide regulation of the public procurement system and be responsible for all procurement carried out by ministries, departments, local governments (including State owned enterprises) in accordance with the standard list of goods, services and works. Complaints about government procurement decisions are subject to review by the Interdepartmental Independent Commission.

A public body, the Promotion and Development Center (PDC) has been designated as the participating agency for international donor funded activities related to SPP, such as the Pan-European Regional Workshop on SPP organized by the UNEP European Office in Switzerland in March 2019.

The Training Center of the Ministry of Finance is responsible for public procurement training. However, the current system of training for suppliers and procuring organizations does not provide for specialized programs on

sustainable public procurement. The Green Economy Development Program 2019 highlights the need to “build capacity of suppliers and procuring organizations for the transition to SPP” as one of three key implementing actions for SPP adoption.

Courses on related topics, including the green economy, sustainable finance and green growth are available through the Alliance of Universities for Green Economy and Sustainable Development (AVZUR).

Pillar 4: Market Practices

Market dialogue throughout the procurement process helps procuring entities to choose realistic sustainability criteria and ensure suppliers succeed in delivering on sustainability commitments over the contract duration.

An innovative procurement tool under development in the country is Tandoo, an online shopping system based on eCatalogues that aims to simplify procurement from SMEs launched in September 2019. One of the main benefits is that suppliers need to only register once a year and procurers can make direct purchases without the need to prepare tender documentation. The Tandoo system initially featured four categories of products with plans to expand to 29 categories on completion of the system pilot. In order to bring Tandoo to the market, a training programme for SMEs is available in every region in the Kyrgyz Republic, starting from January 2020. The training is delivered in collaboration with the local chamber of commerce and aimed to reach 1,400 active SME suppliers within six months of launch and 2,500 SMEs in total. Each region will get a Tandoo ambassador – 30 members of the Chamber of Commerce volunteered for the programme to be trained– and, on completion, the ambassador will be available to support and train their local business communities. Online tutorials have been developed for the eCatalogue to assist SMEs and contracting entities in using Tandoo effectively. Online shopping by government bodies is a radical change for business in the Kyrgyz Republic and problems are to be expected. For this reason, dedicated SME help desks at the Ministry of Finance will provide support to purchasing entities and suppliers. Provision of access to concessional sources of financing for SMEs to access public procurements is also proposed under the Green Economy Development Program.

Green Expos have been organized in 2021 and 2022 to feature companies that offer environmentally friendly goods, works and services. In addition, several international donors are supporting activities to improve capacity of SMEs to adopt sustainability practices, including:

• A Live training workshop on “Transforming Sustainability into New Business Opportunities” that aimed to enhance Kyrgyz small and medium enterprises’ (SMEs) capacity to access sustainable public procurement and broaden their markets”. Organized in Nov 2021.
  
• Training on measures to improve the capacity of SMEs in energy efficiency (EU Switch Asia).
  

Under the EU Switch Asia program, a 2020 Study on best international sustainable consumption and production (SCP) practices was completed. The study examines the construction materials sector in the Kyrgyz Republic and outlinesthe most relevant improvements that can be implemented in the local context.

Business networks and companies committed to sustainability can be found in the country. The WasteNet.kg is a joint business platform for bringing together all parties interested in improving the waste management system in Kyrgyzstan. The network includes business structures and non-profit organizations ("waste producers"), as well as enterprises for the collection, transportation, processing and disposal of waste, experts in the field of waste management, consultants and more. The Mailuu-Suuiskiy lamp plant, the largest enterprise in the Central Asian region, produced more than 40 types of electric incandescent lamps, including energy-saving ones.

Pillar 5: Procurement Operations

Various tools and procurement approaches can be employed to help procurers more easily identify environmentally friendly goods and services and attract a competitive market response.

The vast majority of procurements award contracts on the basis of economic criteria related to the minimum bid price. A 2021 UNEP survey indicated that while adoption of SPP is low, some examples could be found in the country, such as a procurement of drinking water that included a requirement for returnable containers.

Under the EU Switch Asia program, Green Building Guidelines for introduction of building sustainability concepts throughout the lifecycle of a building and Prepared Guidelines for Enhancing Energy Efficiency in the Building Sector in Kyrgyzstan have been developed.

In terms of ecolabels, the Development Program of the Green Economy highlights the following certifications on environmental conservation and social equity to guide SPP practices:

• ISO 14000 on the environmental management system;
  
• ISO 51000 energy management standard;
  
• Fair Trade standards;
  
• FSC certification;
  
• A “bio kg” organic agricultural product standard;
  

• A national “adal” (“Halal”) standard;
  
• A CBT and guesthouse evaluation and certification system;
  
• A Green Office voluntary ecological certification, etc.
  

The Development Program prioritizes further work in this area, calling for the development of ecological certifications aligned with international standards to support sustainable procurements, including for environmental and labor standards.

Pillar 6: Monitoring & Impact Measurement

Monitoring systems are essential to gather the information needed to keep SusPP implementation on course and communicate on the benefits achieved for the country.

In 2015, all public procurement switched to the electronic public procurement system and all stages of public procurement are carried out through the publicly available web portal: zakupki.gov.kg.

The Department of Public Procurement under the Ministry of Finance of the Kyrgyz Republic on an ongoing basis conducts selective monitoring of tenders at the web portal of public procurement. The main purpose of the monitoring is to assess the compliance with the legislation in the field of public procurement by procuring entities during public procurement. A civil society initiative was launched in 2019 to monitor public procurements based on publicly available data through the e-procurement platform. However, the existing public procurement system and civil society efforts fails to provide for a proper accounting for procurements based on sustainability criteria.

To understand the benefits of shifting to energy efficiency, an assessment has been completed to understand the benefits of choosing energy efficient lighting, cooling appliances and other equipment in the Kryzyg Republic. The assessment provides key statistics that may be helpful to procuring bodies in building the business case for SPP.

Projects Supported by ADB

To come

Other Initiatives supported by National/International Agencies

UNDA (2018-2021) Participating country of the UNDA SPP Project aimed at strengthening the capacity of individual countries in the EECCA region in the field of sustainable public procurement and increasing the ability of businesses to respond to public auctions with sustainability criteria.

EBRD (2017-) Project “Kyrgyz Republic: Facilitating the participation of small and medium enterprises in public tenders conducted on the electronic public procurement system”

Resources

EBRD. Tandoo: New Opportunities for Local Small Businesses in Public Procurement in the Kyrgyz Republic.

EU Switch-Asia (2022) Plastics Use and Management: An Analysis of the current status in Kyrgyzstan, Maldives, Nepal, Pakistan and Sri Lanka.

PEFA Secretariat (2021) Public Expenditure and Financial Accountability (PEFA) Performance Assessment Report - Kyrgyz Republic 2020.

Promotion & Development Center (2019). Overview of the Current State of the Kyrgyz Republic on the Implementation of Sustainable Public Procurement.

UNEP (2021). Assessment of Sustainable Public Procurement in the Kyrgyz Republic.

UN (2022) Smart Sustainable Cities Profile Bishkek, Kyrgyzstan.

World Bank, ADB (2021) Climate Risk Country Profile - Kyrgyz Republic.

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