Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in Turkmenistan based on a desk review. The review 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 GPP 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 executive summary, indicative maturity rating, key achievements, potential pathways forward and timeline of key events related to advancing sustainable public procurement.
• "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 to promote knowledge sharing and support training activities at ADB. It will be revised and improved as new information is uncovered and advances are made. If you have new information, please contact ychu@adb.org.

The Government of Turkmenistan has committed to the 2030 Agenda for Sustainable and aligned its national development vision outlined in the Programme of the President of Turkmenistan on Socio-economic Development of the Country (2019-2025) with the 17 Sustainable Development Goals. The updated Nationally Determined Contribution mentions green public procurement as a potential instrument for climate financing and sets out several priority actions that sustainable procurement can contribute to achieving in the energy, agriculture, forestry and waste sectors. However, no detailed policy or action plan on sustainable procurement exists.

The 2014 Law on Tenders promotes the participation of local suppliers, including small and medium enterprises (SMEs) and organizations of disabled persons through domestic preferences and limited participation tenders. It does not however promote environmentally-friendly procurements. However, it opens the door to such practices by setting “most economically advantageous” bid as the basis of tender award. The Law also explicitly states that non-price criteria can be considered, a clause that could be interpreted to include environmental criteria (although not explicitly stated in the Law). However, the enabling framework for sustainable procurement remains weak with few institutions, tools and monitoring mechanisms in place to support.

Despite this, several government ministries have designed sustainable procurements under international donor-financed projects. These procurements include the purchase of energy-efficient street lighting and electric vehicles to serve as taxis in the capital city of Ashgabat. In addition, local businesses have shown interest in adopting green practices and technologies in the electric vehicle and waste sectors. ADB is currently working with the Ministry of Energy to develop an energy efficiency roadmap.

>> Visual snapshot of Sustainable Procurement Maturity Level

E-Procurement Portal:

https://turkmenportal.com/en/catalog/turkmenistan-tenders

Key Achievements

• Green public procurement cited in NDC as a potential climate financing tool
  
• Law on Tenders promotes domestic preferences, especially for SMEs and public organizations with disabled persons
  
• Sustainable public procurements have been supported in international donor financed projects for street lighting and electric vehicles
  
• Smart “city” projects in Ashgabat and resort zone of Awaza offer potential to pilot sustainable public procurements in many sectors
  
• Local private sector appears interested in shifting to green technologies
  

Ongoing Work

• A draft law on energy efficiency is being considered by the Parliament
  
• Energy efficiency standards to regulate the import of high-energy consuming appliances (air conditioners, refrigerators, lighting) under development
  
• Waste management strategy and vehicle emission standards under development within UNDP project
  

Potential pathways forward

• Conduct pilot sustainable procurements focused on water efficiency, energy efficiency, electric vehicles, local food production, tree planting, SMEs and disabled persons
  
• Support policy dialogues to raise awareness of the potential of sustainable procurement to achieve the nation’s development goals
  
• Conduct market readiness assessments to identify potential of private sector to provide competitive market responses to sustainable procurements
  
• Design a dedicated policy and action plan to promote sustainable procurement or integrate the concept in sectoral policies
  
• Raise awareness on the importance of procurement monitoring indicators and systems, including to track sustainability criteria
  

>> Timeline of Implementation of Sustainable Procurement Activities

2014

2021

2022

Law on Tenders sets most economically advantageous tender as tender award basis

National Strategy of Turkmenistan on Climate Change sets out climate mitigation strategies

National Action Plan for Gender Equality in Turkmenistan for 2021-2025 adopted

Updated National Determined Contribution cites sustainable public procurement as a climate financing tool

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.

Sustainable public procurement has recently been recognized in Turkmenistan as a policy tool to achieve its sustainable development ambitions. The 2022 Nationally Determined Contribution (NDC) of Turkmenistan cites green public procurement as a potential financial instrument for the low-carbon transition and post-pandemic economic recovery (p. 47). The NDC outlines the country’s plan to systematically move ‘towards a green economy, use of modern environmentally friendly and resource-saving technologies in the industry and social sphere’ (p. 40). However, no specific policy or plan to promote sustainable public procurement has been developed to date.

The Government has officially adopted the 2030 Agenda for Sustainable Development. A National Working Group on the implementation of the SDGs has been established and several State and sector programmes adopted to align with the SDGs, including the Programme of the President of Turkmenistan on Socio-economic Development of the Country (2019-2025).

Climate change is a concern to the country. As the largest producer of natural gas in Central Asia with the fourth largest reserves in the world, the country has a carbon-intensive economy with average per capita emissions higher than the global average. Intense warming is being experienced across

the country at a faster pace than the global warming rate, due to the country’s arid desert climatic conditions. Decreasing precipitation and water scarcity is threatening the country’s water supply and agriculture activities. The NDC sets an ambition of 20% reduction of greenhouse gas emissions (GHG) by 2030 compared to 2010 emission levels. This ambition has been reported to be expanded to achieving net zero by 2050 in a 2022 press release about Turkmenistan’s accession to the Global Green Growth Institute (GGGI) - however, this target has not been stated in any official document.

The Government has made several policy commitments that sustainable public procurements can be designed to contribute to achieving, including:

• Energy efficiency: The Government has drafted a new draft Law of Turkmenistan "On energy saving and energy efficiency" that is under consideration in the Mejlis/Parliament of Turkmenistan. The National Building Code was updated in 2022 to include improved energy efficiency requirements for residential buildings. Energy audits of street lighting systems have been carried out in the city of Ashgabat, leading to the installation of LED lighting across the city with more planned to come. Minimum energy efficiency standards are under development to regulate the imports of high energy consuming appliances (e.g. air conditioners, lighting, refrigeration).
  
• Water efficiency: Water scarcity is a key concern for the Government as a consequence of climate change. Technologies to reduce water consumption are being promoted in GEF-financed projects, including drip irrigation, rainwater harvesting and water metering systems.
  
• Women, Persons with Disabilities and Vulnerable Social Groups: The National Program for the socio-economic development of Turkmenistan for the period 2011-2030 provides social benefits for disabled people and families with children. The Government’s commitment to equal opportunity for women is further outlined in its National Action Plan for Gender Equality in Turkmenistan for 2021-2025 and Law "On State guarantees of equal rights and equal opportunities for women and men.”
  

• Local small and medium enterprises, especially in the agricultural sector: The 2009 Law of Turkmenistan "On state support to small and medium enterprises/SME” prioritizes support for SMEs. The domestic consumer goods sector currently has low market competitiveness, especially in the food industry. Expansion of the agri-food sector is an important domestic priority.
  
• Tree Planting: Turkmenistan joined the international "Trees in Cities” program coordinated by UNECE and planted 25 million seedlings in its cities. Tree planting in urban areas is seen as a climate adaptation measure as part of nationwide greening plans.
  
• Waste and Air Pollution: Work is ongoing to develop drafts of a National Strategy on Waste Management and Programme on Improving the State Monitoring and Control of Air and Water Pollution under UNDP financing. Vehicle emission standards are under consideration to limit air pollution in cities.
  
• Refrigerants: The Government signed the Kigali Amendment to the Montreal Protocol designed to limit the use of hydrofluorocarbons (HFCs) and committed to reduce HFC consumption by 35% by 2020 with support from the United Nations Industrial Development Organization (UNIDO). This signals a commitment to adopt more environmentally friendly air conditioning and refrigeration equipment.
  

Sustainable cities initiatives are being supported in a UNDP project in two distinct locations in Turkmenistan - the capital city of Ashgabat and the new resort zone of Awaza on the Caspian Sea. The project focuses on piloting efforts to introduce green practices in public facilities, including through the introduction of energy-efficient street lighting, sustainable transport, electric vehicles and improved waste management. It aims to be a model for the whole of Turkmenistan by piloting the more sustainable and inclusive urban development.

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.

Public procurement in Turkmenistan is regulated by the Law of Turkmenistan “On tenders for the supply of goods, performance of work, provision of services for state needs” dated December 20, 2014 No. 158-V.

A core objective of the public procurement system is to expand participation of small and medium-sized businesses (SMEs) in Turkmenistan and public organizations of disabled persons (Article 3). Procuring entities may apply a preference for tenders involving participation and public organizations of disabled people (Article 8.3d). Tenders can be designed to limit participation to only suppliers in Turkmenistan or state enterprises or public organizations of disabled persons or allow foreign entities to participate with local branches in Turkmenistan (Article 13.1). In addition, contracting authorities can limit bidding to SMEs in Turkmenistan and/or require the use of only local labor and/or raw materials (Article 13.2).

The Procurement Law allows procuring entities to consider non-price criteria including qualification, price, schedule of works, quality and others. (Article 25.3) The basis of the award is the “most economically advantageous” bid. These provisions potentially open the door for sustainability criteria to be considered. However, the Procurement Law does not specifically promote sustainability criteria or sustainable procurements.

Pillar 3: Institutions & Capacity

No government agency has been assigned responsibility to promote sustainable public procurement.

On public procurement, Turkmenistan does not have a centralized procurement body. Individual government agencies and state-owned companies are responsible for conducting their own tenders.

On international environmental projects, the Ministry of Foreign Affairs of Turkmenistan and the Ministry of Agriculture and Environmental Protection of Turkmenistan are the main responsible public bodies. They coordinate all international environmental projects and actively cooperate with international partners in their implementation (NDC, p. 43).

Other national ministries that may be involved with sustainable public procurement include the: Ministry of Environment and Agriculture, Ministry of Finance and Economy, Ministry of Energy, Ministry of Industry, the Committee on Water Management, Ministry of Construction, Ministry of Trade and Foreign Affairs.

Many private environmental firms and NGOs working on environmental protection issues exist in Turkmenistan (NDC p.47). For example, the Nature Preservation Society of Turkmenistan has been running a campaign to improve waste collection waste in residential areas starting with plastic waste and expanding to glass and paper..

On training, a SDG Training Centre has been established to promote education and awareness raising on the 2030 Agenda for Sustainable Development at the Institute of International Relations under the Ministry of Foreign Affairs. However, no specific training on sustainable public procurement was found in this desk review.

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.

The Chamber of Industry and Trade is the primary private sector group in Turkmenistan, responsible for promoting the development of Turkmenistan’s economy and managing relations with foreign partners. The Union of Industrialists and Entrepreneurs has the mandate to support SMEs in Turkmenistan.

The NDC states that private enterprises and firms in the country have begun to implement practices related to energy efficiency, energy conservation, renewable energy, water conservation and waste management (p. 47). For example, a local company "Paýhas Merkezi" became the official distributor in Turkmenistan of a Chinese company that sells Volkwagen electric vehicles. The company provided 10 electric vehicles and 5 charging stations procured by the Transport and Communications Agency under the Cabinet of Ministers in October 2022 for use as city taxis.

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.

Procurement Practices

In recent years, the Government has successfully procured environmentally friendly technologies. Under the UNDP/GEF project “Sustainable Cities in Turkmenistan: Integrated Development of Green Cities in Ashgabat and Avaza”, an energy audit of street lighting systems was carried out and 258 LED lights installed at a pilot site. The Ministry of Energy has set a target to install 162,000 additional LED light bulbs by the end of 2024. The Ministry of Energy is promoting other energy efficient technologies including installation of cable power lines and efficient power transformers as part of its climate mitigation actions to reduce GHG emissions (NDC, p. 39). As mentioned above, the Transport and Communications Agency procured 10 electric vehicles for use as taxis in the “smart” city of Arkadag.

Environmental technologies are being integrated into the construction of new administrative buildings, including improved thermal insulation and electricity and gas metering devices to monitor usage. (NDC, p. 40)

Sustainability Criteria

The Government has not yet developed specific criteria to guide the design of sustainable procurements. However, a 2013 assessment explored the potential for developing “clean infrastructure” in Turkmenistan through private-public partnerships (PPP). The study encouraged “life-cycle” thinking

for infrastructure projects to ensure projects are efficient over their entire life-time rather than being cheap to build and expensive to run or decommission. It provides a menu of environmental, social and economic criteria that can be integrated into PP projects aligned with green and social procurement principles (pp. 36-38).

Building Codes

The National Building Code has been updated to specify mandatory energy efficiency requirements for residential buildings, under a UNDP project.

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.

No monitoring system for public procurement was identified in this desk review.

Projects Supported by ADB

Other Initiatives supported by National/International Agencies

Through technical assistance on Improving Energy Efficiency and Capacity under the National Power Grid Strengthening Project, the ADB is supporting the Ministry of Energy to develop an energy efficiency road map, implement the International Financial Reporting Standards (IFRS), and ensure project management skills transfer.

UNDP/GEF project “Sustainable Cities in Turkmenistan: Integrated Development of Green Cities in Ashgabat and Avaza” (2016-2021) supported energy audits of street lighting systems and installation of new LED lighting. Other supported activities include policy development in the renewable energy and waste sectors, city-wide sustainability plans, national incentives and standards for fuel efficiency of imported cars.

UNDP/GEF project "Improving energy efficiency in the housing construction sector of Turkmenistan", supported the reviewed of building codes to include energy efficiency requirements in the sections "Residential buildings" and "Roofs and roofing".

Green Climate Fund (GCF): Turkmenistan began cooperation with the GCP in 2020 and has launched a new project to develop a National Adaptation Plan.

References

ADB Member Fact Sheet, 2023. Turkmenistan.

Government of Turkmenistan, 2014. Law of Turkmenistan “On tenders for the supply of goods, performance of work, provision of services for state needs” dated December 20, 2014 No. 158-V

Government of Turkmenistan, 2021. National Action Plan for Gender Equality in Turkmenistan for 2021-2025

Government of Turkmenistan, 2021. National Climate Change Strategy (updated).

Government of Turkmenistan, 2021. National Strategy of Turkmenistan on Climate Change.

Government of Turkmenistan, 2022. Updated Nationally Determined Contribution.

OECD, 2019. “Chapter 8 - Investment in sustainable infrastructure in Turkmenistan”, Sustainable Infrastructure for Low-Carbon Development in Central Asia and the Caucasus - Hotspot Analysis and Needs Assessment.

President of Turkmenistan, 2019. Program of the President of Turkmenistan on Socio-economic Development of the Country for 2019-2025.

United Nations Economic Commission for Europe (UNECE), 2013. Assessment on Clean Infrastructure Development in Turkmenistan.

World Bank, ADB, 2021. Turkmenistan - Climate Risk Country Profile.

World Bank, Global Public Procurement Database “Turkmenistan country profile for 2021.

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