Kazakhstan Digital Acceleration for an Inclusive Economy (DARE) Project

active

Prospective

The largest landlocked country in the world located at the crossroads of Europe and Asia, Kazakhstan, is a resource-rich, upper-middle-income economy that – prior to the Coronavirus (COVID-19) pandemic – demonstrated robust economic growth and poverty reduction but remained largely dependent on its natural resources and vulnerable to climate change. Despite being a landlocked country, Kazakhstan has multiple international gateways, ensuring sufficient international capacity for current needs; however it would need to quadruple to cater to the strategic connectivity objective of 100 Mbps per household. The Government of Kazakhstan (GoKZ) has been able to achieve some progress in improving digital connectivity. It has deployed various instruments to address infrastructure gaps and ensure universal service. However, those do not address last mile connectivity needs and continuous efforts are needed to achieve the ambition of 100 Mbps per household, and sizable access, quality, and affordability challenges persist.The DARE Project will contribute to GoKZ's long-term green, resilient and inclusive development (GRID) objectives, including accelerating economic diversification underpinned by resilient and affordable digital infrastructure. The project will also finance critical regulatory reforms to promote private sector investments in the telecom sector and strengthen foundational enablers to spur growth of new digital markets, such as cloud and data infrastructure.Component 1: Resilient Digital Infrastructure. This component aims to finance the rollout of high-quality climate-resilient and low carbon digital infrastructure in villages covered under the GoKZ “250+” program and will first cater to four unserved and underserved regions of Kazakhstan (Akmola, Turkestanskaya, West Kazakhstan, and East Kazakhstan), connecting households, public institutions, businesses and mobile towers. The component will seek to leverage private capital for infrastructure investments towards deploying climate-resilient, low-carbon measures and future-proof digital connectivity infrastructure, leveraging matching grants to be provided to qualified internet service providers (ISPs) and MNOs towards access to digital infrastructure (US$90 million) – deploying backhaul and access networks to households, businesses and public institutions in selected areas. Matching grants will be provided to qualified ISPs.Component 2: Enabling Environment for Digital Economy. This component aims to support telecommunications investments under Component 1 through improving Kazakhstan’s regulatory environment as well as to lay the grounds for development of cloud and data infrastructure market. Component will finance technical assistance (TA) activities to improve the telecom sector’s regulatory effectiveness and reduce market-entry barriers, while refining the regulatory framework to be more climate-informed. It will also aim to strengthen the data protection regulatory framework to grow Kazakhstan’s data and cloud industries. Component 3: Project Management and Implementation Support. This component will finance support to the Borrower’s project management and implementation of project-associated activities, including procurement, financial management (FM), monitoring and evaluation (M&E), project communications, as well as environmental and social safeguards and citizen engagement. It will cover the operating costs of the Project Implementation Unit (PIU). This component will also help strengthen the technical and functional capacity of the PIU, including the recruitment of expert consultants in key areas and the facilitation of on-the-job learning and competency transfer, including in disaster and climate risk management skills. It will also support independent audits, M&E (including collecting gender disaggregated data) and quality assurance to ensure compliance with best procurement and FM practices.Consistent with the GoKZ’s strategic priorities, the proposed DARE Project is fully aligned with the World Bank Group (WBG) Country Partnership Framework (CPF) for Kazakhstan for the period FY20-25. The DARE Project supports two priority areas identified by the CPF that remain critical for the economic recovery following COVID-19: (i) promoting inclusive growth; (ii) securing sustainable, resilient, and low carbon growth. In particular, under CPF Focus Area 1 (Promoting Inclusive Growth) the proposed DARE Project underpins Objective 1 (Strengthening Environment for Private Sector Development) and Objective 3 (Strengthening Connectivity Infrastructure and Regional Services Delivery for Better Local and Regional Integration) by supporting legal and regulatory reforms leveling the playing field in telecom, while improving digital connectivity and broadband service delivery. Under Objective 7 (Preserving and Restoring Natural Capital) of CPF Focus Area 3 (Securing Sustainable, Resilient, and Low Carbon Growth), the DARE Project will enhance the resilience of the digital connectivity infrastructure.

FY17 - Information and Communications Technologies

World Bank Group

Project

Broadband, Telecommunications, Government