The overall goal of the Project is to improve competiveness of the Kyrgyz dairy sector and sustainability of Kyrgyz dairy exports. The project is directly coordinating with and complementary to two other WBG projects involved in the development of the dairy sector in Issyk-Kul region

(1) IFC Central Asia Agri-finance project, with the goal to improve access to finance for farmers, MSMES and aggregators, and improve competitiveness and access to markets for dairy value chain, and

(2) IBRD Integrated Dairy Productivity Improvement Project with the goal to enhance dairy animal productivity and milk quality on beneficiary farms. The proposed project seeks to create an effective regulatory environment necessary to attract investment to the dairy sector and increase the quantity and quality of milk for domestic and export markets.

There will be several categories of clients:

1. The central government and line ministries the Ministry of Economy, as responsible for all regulatory policy, the Ministry of Agriculture, as responsible for agrisector development, the Ministry of Health, as responsible for human health and involved in FS control.

2. Specialized agencies the Veterinary and Phytosanitary inspectorate, the Sanitary Department, the Standardization committee.

3. Regional authorities the regional governors office, the regional branches of the above mentioned agencies.

4. Public Private Dialogue platforms national (Investment Council) and regional.

5. Private sector business associations, processors and primary producers in Issyk-Kul region.

The project will consist of four main components. 1. Improvement of the business environment in the agrisector. Under this component, the project will work on general regulatory improvement in the sector. 2. Institutional reform in the area of the animal health. The project will work on regulatory and capacity building support for the creation of a unique zone, free of certain animal diseases, in Issyk-Kul region. 3. Investment policy and promotion for the dairy sector. This sub-component will focus on improving the investment policy framework and introduction of modern investment promotion tools in the region, particularly on those issues, which are more relevant to investment in the selected sector - dairy (and meat as a linked subsector). Limited capacity among government officials to work with investors is another constraint that will be addressed through this component. 4.

The project will also facilitate growth and sustainability of dairy sector in Issyk-Kul region through creation and implementation of the well-organized Public Private Dialogue (PPD). PPD is given high priority and significant attention for two reasons: (i) it is the key to ensure buy-in on the reform program by the public and private sectors as well as to identify follow up reform priorities, and (ii) it establishes a platform for the ongoing sustainability of the program after the specific World Bank Group assistance ends. While the Project will focus on a regional dairy PPD platform, this platform can be utilized across sectors to promote wider development of the Issyk-Kul region. PPD will also help ensure reforms are properly implemented by providing a regular platform to identify, monitor, and respond to issues of poor implementation With support from ongoing T&C advisory in Kyrgyzstan, local authorities have already created a PPD secretariat, so the Project will facilitate its further development and implementation including capacity building of all.