The package will help Afghanistan with refugees, expand private-sector opportunities for the poor, boost the development of five cities, expand electrification, improve food security, and build rural roads. The financing includes grants from the International Development Association (IDA), the World Bank’s fund for the poorest countries, as well as contributions from the Afghanistan Reconstruction Trust Fund (ARTF – managed by the World Bank) and from other partners, including Denmark, Germany and Japan.
“This approval of new grants confirms the World Bank Group’s strong commitment to the people of Afghanistan in helping them overcome the daunting development challenges facing the country,” said Shubham Chaudhuri, World Bank Country Director for Afghanistan. “Despite steady and encouraging progress by the government in several areas -- including institutional reforms, revenue generation, provision of basic services in health, education, and rural access sectors -- much more needs to be done to improve economic growth and prosperity.”
The new funding, approved by the Board of Executive Directors, aims to support efforts of the Government of Afghanistan to stimulate growth and ensure service delivery during a time of uncertainty when risks to the economy are significant. The international troop withdrawal, begun in 2011, coupled with political uncertainties, have resulted in a slowdown of economic growth, while government budget pressures are increasing as security threats mount and drive people from their homes.
The six grants of USD 520,000,000 consist of:
- USD 205.45 million in additional financing from IDA, donors and the ARTF to the Citizens’ Charter Afghanistan Project to support communities with internally displaced persons and returnees from Pakistan;
- USD 100 million from IDA to the Inclusive Growth Development Policy Grant to support reforms that expand access to economic opportunities for the vulnerable and promote private sector development;
- USD 20 million from IDA to the Urban Development Support Project to strengthen urban policy-making in national agencies, and strengthen management and service delivery in five provincial capital cities;
- USD 60 million from IDA to the Herat Electrification Project to provide access to electricity to households, institutions and businesses in selected areas of Herat Province;
- USD 29.45 million from IDA and donors to the Afghanistan Strategic Grain Reserve Project to finance establishing strategic wheat reserves and improve the efficiency of grain storage management;