Country Update ISSUE 82309 043 OCT 2013 “ With just a point and click of my camera, I can help change the destiny of my ” community. page 15 page 4 page 6 page 24 page 30 world bank ongoing IFC Investment afghanistan group support operations and advisory reconstruction services projects trust fund / The World Bank Group in Afghanistan/3 ARTF Scorecard CONTENTS ongoing assesses NEWS operations performance world bank page 6-23 group support 7 results On September 3, 2013, the page 4 -5 page 6-8 ‘Higher education takes World Bank released the new education and training promising shape ’ Afghanistan Reconstruction page 4 Trust Fund (ARTF) Scorecard, page 9-10 World Bank projects and financial sector which provides information on programs the fund’s overall performance page 11-12 and results achieved through International Finance health ARTF financed projects and Corporation page 13-17 programs. It contributes to Afghanistan infrastructure the preparation of the annual Reconstruction Trust Fund results 15 ARTF Financing Strategy. The page 5 page 18-20 ‘Community monitoring Scorecard uses an integrated Interim Strategy Note, rural development improves project quality ’ results and performance 2012-2014 page 21 framework, which is organized social safety net in a four pillar structure that Japan Social groups indicators along the Development Fund page 22-23 urban development results chain. As the ARTF administrator, the World Bank works to sup- Report on higher education provides port satisfactory performance policy options of the ARTF portfolio to ensure ifc investment and advisory services that projects and programs On September 01, 2013, the World Bank laboratories, residential facilities, libraries, projects are achieving the intended released a new report, ‘Higher Education and transport and internet facilities. At results in development within in Afghanistan: An Emerging Mountains- the same time, it also needs to catalyze page 24-29 the context of the Afghanistan private participation in the provision of cape’. This is the first time that the Bank National Development Strategy has undertaken an in-depth study of the higher education with caution on quality. higher education sector in Afghanistan, Quality is a major issue both in public and afghanistan 37 results and Millennium Development private higher education institutions. Des- which provides a wide-ranging and reconstruction trust ‘Women gardeners gain Goals. The scorecard is not evidenced-based review. It surveys a va- pite sincere efforts from the government fund money and confidence’ intended to provide informa- riety of higher education systems, policies and universities, some major obstacles re- page 30-37 tion on specific projects. More and reforms from the modern world par- main. Putting a quality assurance system detailed information can be ticularly in areas where Afghanistan faces and good mechanisms for staff develop- page 30-31 the greatest higher education policy chal- ment and retention in place are important what is the artf found on the ARTF website lenges. It also provides a menu of policy issues that need to be tackled. This report how the artf works under portfolio information. options for policy makers in Afghanistan’s has some recommendations in this regard, The scorecard is available on: higher education system. particularly to lift academic achievements page 32-37 The report finds that Afghanistan still to an internationally comparable standard ongoing projects www.artf.af has much to achieve in access, particularly over time. in women’s participation in higher educa- c The full report is available on: tion, which constitutes only 19 percent of www.worldbank.org.af total enrollment. The country needs infra- structure to enhance access: class rooms, 4/  Country Update/ / The World Bank Group in Afghanistan/5 WORLD BANK GROUP SUPPORT Interim Strategy Note, World Bank projects with other multilateral and bilateral agen- cies across a number of sectors where aid expects to launch up to three new or next 2012-2014 of the Afghanistan National Development tance for the country’s reconstruction and phase projects during the coming quarter. Strategy goals. More than $2.88 billion have transition toward political, economic, and and programs coordination and government ownership are most critical. IFC is working closely with the World Bank The World Bank’s approach been disbursed to Government of Afghani- social stability. and Multilateral Investment Guarantee Agen- stan (GoA) to help cover recurrent costs, such As of September 2013, JSDF’s total Since April 2002, the World Bank has com- c For information about completed projects: cy (MIGA) on joint programs to maximize its is to support the GoA in as civil servants’ salaries, and over $2.09 bil- commitment had reached $81.3million. A mitted over $2.69 billion for development www.worldbank.org.af – Projects & impact. IFC Advisory Services also collabo- implementing elements of lion had been made available for investment number of JSDF financed projects have so far and emergency reconstruction projects, and Programs. rates closely with the World Bank in the Doing the most important National projects. been completed. four budget support operations in Afghanis- Business Indicator Reform project and the c For more information: Priority Programs (NPPs) in c For more information: Incentive Program in supporting key reforms tan. This support comprises over $2.2 billion in grants and $436.4 million in International affecting the private sector. a way that will build legi- See page 30 http://go.worldbank.org no-interest loans known as ‘credits’. The Finance Corporation c For more information: timacy and capacity of the Bank has 22 active projects in Afghanistan See page 24 institutions. Japan Social with net commitments of more than $1.01 The International Finance Corporation (IFC), One of GoA’s greatest Development Fund billion. The World Bank has provided advice to the World Bank Group’s private sector deve- lopment arm, continues to work with its Afghanistan priorities will be to build help the government manage donor funds investment and advisory service partners in Reconstruction Trust domestic sources of growth The Japan Social Development Fund (JSDF) was established by the Government of Japan effectively and transparently. The Bank also supports the government by providing ana- Afghanistan. IFC Investment Services now has a committed investment portfolio tota- Fund and jobs to replace donor/ in 2000 as a means of supporting activities military assistance and to which directly respond to the needs of poor lytical work on the economy, public admi- ling some $131 million in five companies, The Afghanistan Reconstruction Trust Fund sequence NPPs to concen- and vulnerable groups, enhance their capaci- nistration, gender, poverty, opium economy, which include commitments in the financial, (ARTF) is a partnership between the interna- ties, and strengthen their empowerment and and public finance management. telecommunication, and hospitality sectors. trate on foundational invest- tional community and the Afghan govern- participation in the development process. The Bank has actively supported key re- IFC is exploring investment opportunities ments for growth. Under ment to improve effectiveness of the recons- The fund is administered by the World Bank. forms, particularly in the fiscal and public across the manufacturing, financial markets, truction effort. As of July 30, 2013, 33 donors this Interim Strategy Note The Government of Japan and the World administration spheres, and through its and infrastructure sectors, and undertakes have contributed over $6.42 billion, making period, the Bank’s program Bank agreed to set up a special window with- budget support operations. It has advo- senior-level business development missions ARTF the largest contributor to the Afghan in the JSDF to support activities in Afghani- cated building capacity and legitimacy of to Afghanistan on a quarterly basis. is built around three inter- budget – for both operating costs and deve- stan under a multi-year program of assis- the state, and channeling donor resources IFC Advisory Services is very active in Afgha- locking themes: lopment programs. ARTF’s support for natio- through the government to ensure invest- nistan with eight active projects during the nal priority programs, operating costs of go- • Building the legitimacy ments are aligned with national priorities. reporting period. Two projects were success- To this end, the World Bank works closely fully completed in the previous quarter. IFC vernment operations and the policy reform and capacity of institu- agenda is contributing to the achievement tions. • Equitable service deli- very. • Inclusive growth and jobs. Country Update/ 6/  results higher education takes promising shape ONGOING OPERATIONS • Core universities in Afghanistan, such as Nangarhar University, are attracting thousands of students as they rebuild infrastructure, increase resources, and improve “ /education and training qualifications of teaching staff. • Under the World Bank and ARTF’s Strengthening Higher Education Program, basic operational Second Education performance has been restored in 12 core universities across the country. When I first came • Students now have the opportunity to access internet resources for their studies, thanks Quality Improvement here, I was unfamiliar with to IT equipment funded by the program. Program (EQUIP) the internet and T c IDA Grant $65 million now I have learned about ucked in every available space, in stairwells and c ARTF Grant $283 million under trees, engineering students from Nanga- rhar University are taking their final exams.It is EQUIP’s objective is to increase equitable ac- computers and the end of term at Afghanistan’s second largest university, located in the eastern province by the same how to use them, not only cess to quality basic education, especially for girls, through school grants, teacher training name. and strengthened institutional capacity with for friends but also for Thousands of students are already clamoring to take support from communities and private pro- ” these students’ places next year. Space and budget limi- viders. Program interventions are primarily tations will allow only 2,000 to be accepted, says Profes- targeted towards general education, teacher training and education management. The studies. sor Arifullah Mandozai, dean of the engineering faculty. “Engineering is one of the most important subjects program is fully aligned with the Afghanistan to study because it builds our country,” says Mandozai. National Education Strategic Plan and sup- “That’s why we need the best students, teachers, and ports the institutional development of the program staff of the Ministry of Education. –Zia Ulhaq, student, Nangarhar University equipment here to help them.” Thanks to support from the Strengthening Higher Education Program (SHEP), Under EQUIP II, all teachers have re- financed by the World Bank and the Afghanistan Re- ceived training in pedagogy and content construction Trust Fund (ARTF), Nangarhar University is specific subjects. In addition, a total of 356 already making great strides, he says. Internet connection a great gift schools have been constructed, 521 are un- At Nangarhar University, SHEP provided funds to Now, 13 faculties in such diverse subjects as econo- der construction and a further 176 schools construct the bright new two-storey engineering buil- mics, medicine, law and Sharia, and literature, offer are planned to be built under the addition- ding with 11 classrooms, a large conference room, com- classes to about 10,000 students, notes Dr. Mohammad al financing of $250 million approved in puter lab and the dean’s office. In addition, repairs were Saber, the university chancellor. “Without support from September 2012 by the ARTF Management done to old wings. SHEP, our budget would be too limited. SHEP is a very Committee. Chancellor Saber says about 50 laptops have been important source of funding for us. Without it, we could purchased for a large computer lab and a segment of do very little,” Saber says. the campus is now wireless so students can log on with Strengthening The objective of SHEP, which closed at the end of June their own computers. All the university’s IT equipment Higher Education 2013, was to progressively restore basic operational per- formance at a group of core universities. SHEP began in was purchased through SHEP, notes Saber. Using a new laptop, student Zia Ulhaq, 20, says there Program (SHEP) 2005 with a grant of $40 million, and originally suppor- isn’t any other facility in Jalalabad that allows free inter- ted six universities (Kabul, Balkh, Herat, Kandahar, Nan- net use. “When I first came here, I was unfamiliar with c IDA Grant $60 million garhar, and Kabul Polytechnic), mainly in the areas of the internet and now I have learned about computers c ARTF Grant $5 million physical infrastructure and improvement of staff deve- and how to use them, not only for friends but also for lopment, curriculum, and equipment. Closed: June 2013 studies.” With additional funding in 2010, six more universities The university chancellor says students are “now The program aimed to restore basic op- (Bamyan, Khost, Takhar, Jawzjan, Al-Beroni and Kabul connected with the whole world to do research, or erations at 12 core universities including in Education University) received assistance. connect with other professional people to help solve Kabul (Kabul Polytechnic University, Kabul their problems. This is a great gift.” University, Kabul Education University), and 8/  Country Update/ ongoing operations / The World Bank Group in Afghanistan/9 nine regional universities (Balkh, Herat, to training institutions to plan and cus- Kandahar, Khost, Bamyan, Kapisa, Takhar, tomize their programs and establish link- Juzjan, and Nangarhar) through partnership ages with employers. The project has three programs with universities in the region, components: introduce new ones. The selected schools and and in Europe and USA, as well as through Component 1: Mainly focuses on the es- institutions will be provided development competitive block grants. In June 2010, ad- tablishment of the Afghanistan National grants. ditional resources of $20 million equiva- Qualifications Authority, Afghanistan Component 3: This component is specifi- lent through the World Bank’s IDA Crisis National Qualifications Framework, and cally directed towards developing an infra- Response Window were approved to scale up Awarding Boards. The documents developed structure for in-service training for technical these activities which added six more public so far are being exposed in phases to the teachers and to build a pool of master train- universities (Bamyan, Takhar, Jouzjan, Khost, stakeholders. ers. It is proposed to train 750 technical Kabul-Education and Alberoni Universities), Component 2: The National Institute of teachers and at least 60 master trainers by in line with the priorities identified in the Management and Administration, set up the end of the project. National Higher Education Strategic Plan. under the project, implements competency- Component 4: This component finances SHEP ended on June 30, 2013. based curricula for its academic programs. the technical assistance cost for a skills team, Achievements under the project include The first batch of about 1,500 students in as well as costs of third party monitoring partnerships with overseas universities for Accounting, Management and ICT graduated and evaluation, and a public awareness cam- academic support, block grants for univer- in July 2011. Of this, 1,058 students were giv- paign. The public awareness campaign will sity development, the preparation of stra- en diplomas by the University of Jyvyskala, sensitize high school graduates on the type tegic plans, modernization of curricula in Finland. The project provides aid to five other of training provided by various institutions as key faculties, support to curriculum revision institutions under the Ministry of Education well as the quality of the training. across all public universities, initiation of the that requires them to broad-base their gov- quality assurance process, human resource erning councils and develop linkages with development of faculty (Masters and PhD employers. / financial sector programs in foreign universities), training Component 3: Under this component, in administration, improved equipment for training is provided to youth, as well as to libraries, laboratories, teaching-learning ac- some vulnerable groups. The implementing Afghanistan tivities, and upgraded physical facilities. agency is the National Skills Development The World Bank has agreed to provide Program unit, and nearly all of the programs Financial Sector $4.9 million through the ARTF for a Project contracted out for the training of about 7,500 Rapid Response Preparation Grant (PPG) for the Ministry of youth, marginalized farmers and chronically Higher Education and universities essential- poor women have been completed. Project ly to prepare a new higher education project c IDA Grant $19 million that is planned to commence in 2014. Second Afghanistan A teacher at the National Institute of Management The project is assisting the Da Afghanistan Afghanistan Skills Skills Development and Accounting whose Component 1: This component essentially Component 2: This component includes a Bank (DAB) to develop a set of action plans students are benefiting focuses on (a) the formulation of a detailed program for the recognition of schools and to improve banking supervision and imple- Development Project Project from the Afghanistan Skills Development Project. The TVET strategy and plan which would also be institutes that have already implemented ment a modern payment system for effi- c IDA Grant $20 million c IDA Grant $55 million project’s objective is to in line with the National Priority Program some good practices to improve academic cient and transparent payment transactions. increase the number of 1, National Education Strategy Plan-II, and management, reform school administration, Specifically, the project aims to allow DAB to immediately employable c ARTF Grant $18 million The project’s objective is to increase the po- graduates by building the Interim Strategy Document published attempts to find placements for students or accurately assess the financial situation of 10 tential for employment and higher earnings a high quality technical by the government, and an implementation to establish linkages with local industries, commercial banks through audits conducted The project is designed to increase the num- and vocational education program; (b) developing quality standards curricular reform at the local level, and of graduates from Technical and Vocational in accordance with international standards. and training system ber of immediately employable skilled per- Education and Training (TVET) schools and that is equitable, market for skills delivery; (c) designing and imple- practical steps to deal with student welfare, The audits will lead to the development of sons by building in stages a high-quality institutes through improvements in the skills responsive, and cost- menting a labor market information system etc. Such schools and institutes will be given action plans to address weaknesses that are Technical Vocational Education and Training effective. and an overall MIS for the TVET system; (d) an award of $30,000 in kind. The second step delivery system. The project focuses on pro- identified, with oversight from DAB. The pro- system that is equitable, market respon- viding incentives to schools and institutes capacity building of monitors and inspec- will consist of selecting a number of schools ject also aims to modernize the national pay- sive, and cost effective. More specifically, the offering formal TVET programs through a tors of schools and institutes accredited by and institutes (approximately 15 over the ment system with the goal of reducing the project aims to develop a demand-driven challenge fund scheme, while strengthening DMTVET; and (e) conducting certification life of the project) which, through a detailed use of cash transactions, currently the main vocational education and training system, the institutional system for TVET as a whole. examinations for TVET graduates and related business plan, demonstrate a willingness means of making payments in Afghanistan, and encourage the provision of autonomy The project has four components: activities. to sustain these good practices and/or to and transitioning to electronic, card or mo- 10/  Country Update/ ongoing operations / The World Bank Group in Afghanistan/11 bile payments. The project will also provide Transactions Law and the Credit Reporting World Bank analysis the anticipated decline further support to the Afghanistan Institute Regulation. IFC has also helped draft a best in foreign aid could reduce Afghanistan’s of Banking and Finance (AIBF) to allow it to practice leasing law. growth prospects to about half of its current scale up its activities, in order to increase the The Collateral Registry was officially average. Poverty rates are persistently high availability of banking sector skills. launched in February 2013. The procurement and labor market pressures are increasing The audits of the 10 commercial banks process of the PCR has been completed and with 400,000 to 500,000 young people enter- started in November 2011 and ended in the contract with the selected technical bid- ing Afghanistan’s labor force every year. June 2012. The procurement process of the der was signed in March 2013, after which By 2015, the results of the project are ex- National Card and Mobile Payment Switch implementation work began. A vendor has pected to increase customs revenue, improve was completed and the contract awarded also been identified for the modernization of the enabling environment for private invest- in August 2013. The implementation of the the human resources management system ment in mining and ICT sectors, decrease the payment switch has started with the Afghan and the contract should also be signed short- prices for GSM broadband services, improve Payment System. The procurement process ly. The PCR is scheduled to be operational by the legal and regulatory environment for of the Automated Transfer System is in pro- March 2014. land management and administration as gress and should be completed by April 2014. The Mid-Term Review (MTR) of the pro- well as produce more opportunities for cost- AIBF is scaling up its activities, with a focus ject took place between February 24 and saving in public infrastructure projects. on the banking and microfinance sector, with March 6, 2013. The MTR concluded that the support from various development partners. project needed to be restructured as activi- ties to strengthen the capacity of DAB have / health had limited impact. The Financial Sector Financial Strengthening Project will therefore be Sector Strengthening closed and key remaining activities will be Afghanistan transferred to the Financial Sector Rapid Project Response Project. HIV/AIDS Prevention c IDA Grant $8 million Project (AHAPP) Public Financial c IDA Grant $10 million The project supports the Afghanistan National Development Strategy’s vision to Management Reform c ARTF Grant $2 million establish a modern and competitive financial closed: November 30, 2012 Projects sector. The project will specifically strength- The Development AHAPP was designed to strengthen national en the capacity of DAB through moderniza- c IDA and ARTF Grant $120 million A six-day old baby tion of its IT systems (off site supervision and being examined at the Kholm District Hospital Policy Programmatic capacity to respond to the epidemic by scal- human resource management). It will also A series of five operations support ing up prevention programs targeting vulner- develop necessary financial infrastructure Afghanistan’s efforts to establish a trans- outside Mazar-i-Sharif. The hospital is funded Series: able population sub-groups with enhanced risk. These vulnerable groups included inject- such as a public credit registry, movable col- parent and well-functioning public financial by the Strengthening Health Activities for Rural Promoting Economic ing drug users, sex workers and their clients, lateral registry, and AIBF. management system to ensure better use of Poor Project which aims Through this project, IFC also provides public resources. The grants initially concen- to improve the health Growth and Fiscal and prisoners. The project also aimed to technical assistance to the central bank in or- trated on funding consulting firms to support and nutrition status improve the knowledge of HIV prevention der to establish two basic financial sector in- government officials in carrying out procure- of Afghans, focusing especially on women Sustainability among the general population, strengthen frastructures: (i) a Public Credit Registry (PCR) ment and treasury operations, but have now and children and the c IDA Grant $50 million surveillance of HIV prevalence and high risk that will provide lenders with information for shifted emphasis to building capacity in pro- underserved areas of the behaviors, map and estimate the sizes of country groups engaged in high risk behavior, and efficient risk assessment on borrowers; and curement and audit functions in the Treasury The grant aims to finance GoA’s efforts to (ii) a Collateral Registry for movable property Department of the Finance Ministry. The pro- promote economic growth and fiscal sustain- use communications and advocacy to reduce that will provide lenders with the ability to jects contributed to the establishment of the ability. The reforms supported by the project stigma related to HIV and AIDS. effectively use borrowers’ property as collat- current modern legal framework for public respond to some of the most important de- The AHAPP grant closed on November 30, eral. IFC’s involvement includes support to financial management and to the implemen- velopment challenges Afghanistan will face 2012. The Ministry of Public Health/National DAB on enactment of the Secured Lending tation of systems to support this framework. during transition and beyond: according to AIDS Control Program priority interven- 12/  Country Update/ ongoing operations / The World Bank Group in Afghanistan/13 tions are now being financed through the Strengthening Health Activities for the Rural System Enhancement Poor Project until the next phase of support for Health Action in is fully operationalized under the System Enhancement for Health Action in Transition Transition (SEHAT) (SEHAT) project by end September 2013. Program c IDA Grant $100 million Strengthening Health c ARTF Grant $270 million Activities for Rural c Multi Donor fund for health results Poor Project (SHARP) innovation $7 million c IDA Grant $79 million On February 28, 2013, the World Bank c ARTF Grant $46 million Board of Executive Directors approved a c JSDF Grant $17.9 million $100 million grant to support the System c Multi Donor trust fund for health Enhancement for Health Action in Transition program. The program aims to expand the results innovation $12 million scope, quality and coverage of health servic- es provided to the population, particularly for SHARP aims to improve the health and the poor, in 22 provinces, and to enhance the nutritional status of Afghans, focusing es- Ministry of Public Health’s (MoPH) steward- pecially on women and children, and the ship functions. The project will support the underserved areas of the country. The project provision of basic health and essential hos- supports Afghanistan’s Health and Nutrition pital services in both rural and urban areas. Sector Strategy, which is the blueprint for the It will also strengthen the national health government’s health sector program for the system and MoPH’s capacity at central and Information Technology period 2008-2013. provincial levels, so it can effectively perform students at the Afghan The Afghanistan Mortality Survey shows tivity and enable more users to access high Telecom Corporation in its stewardship functions. that significant progress has been made The program, financed in the amount strengthening sub-national government; / infrastructure quality mobile and internet services. It will Kabul. The students are on all fronts including the reduction of ma- studying under a scheme of $407 million, will be jointly supported strengthening the healthcare financing di- also help mainstream the use of mobile ap- funded by the Information ternal and child mortality. Similarly routine data show increase in the number of health through a contribution of $30 million from rectorate; developing regulatory systems Afghanistan plications to improve public service delivery and program management in strategic sec- and Communication Technologies Sector GoA, $100 million from an IDA Grant, $7 and capacities for ensuring quality phar- Development Project, facilities and female health workers, and im- proved performance of the health sector as million from Norwegian Health Results maceuticals; working with the private Information and tors in the government. The project will help which aims to expand Innovation Trust Fund, and $270 million sector; enhancing capacity for improved develop the local IT industry by expanding connectivity, mainstream measured by key performance indicators. from ARTF. The project includes the following hospital performance; strengthening human Communication the pool of skilled and qualified IT profes- the use of mobile applications in strategic The project is envisaged to close as planned on September 30, 2013. three components: resources for health; governance and social Technologies (ICT) sionals, and supporting the incubation of ICT companies in Afghanistan. sectors in government, and support the Component 1: Sustaining and improving accountability; strengthening the Health the basic package of health services and Information System and use of information Sector Development Project implementation has taken off development of the local IT industry. essential package of hospital services: technology; strengthening health promotion and major contracts are being implemented supports the implementation of these and behavioral change; and improving fidu- Project – three contracts for the installation and services through performance-based ciary systems. c IDA Grant $50 million commissioning of approximately 1,000 partnership agreements between MoPH and Component 3: Strengthening program kilometers of fiber optic cables; and one non-governmental organizations, which will management: supports and finances costs The project builds on the success of earlier contract for the establishment of a shared deliver health services as defined in these associated with system development and projects and catalyzes the next phase of ICT government mobile services delivery packages. stewardship functions of the MoPH including development in the country. It will support platform. Consultants are also supporting Component 2: Building the stewardship incremental operating costs at central and policy and regulatory reforms and strategic the government to revise the ICT sector capacity of MoPH and system development provincial levels and technical assistance. infrastructure investment to expand connec- policy, develop a government mobile strategy, by supporting the following thematic areas: Country Update/ ongoing operations 14/  / The World Bank Group in Afghanistan/15 results community monitoring improves project quality “ • A new community monitoring program to improve the quality of construction of infrastruc- ture projects is showing positive results in its pilot project. This work is my • The monitoring is conducted by the ARTF Supervisory Agent, International Relief and Dev- elopment, contracted by the World Bank to strengthen technical supervision of ARTF infras- pleasure. Before I tructure projects. • The program is also benefitting the monitors who receive training and earn a daily wage for was jobless, but from this their work. work, I can learn a H ” abib Rahman, 22, feels like a magician – he only needs to point his smart tele- lot. phone, snap some pictures, and 150 ki- lometers away in Kabul, qualified engi- neers overseeing repairs to the Sarjal Canal ensure local contractors address the construction problem that Habib has photographed. –Habib Rahman, community monitor, “With just a point and click of my camera, I can help change the destiny of my community,” says Nangarhar Province Habib. “If a contractor is mixing cement by hand, instead of a proper machine, or the construction materials aren’t right, or our workers are not pro- tected with shoes and helmets, then I can make this right, and help my people.” Habib is part of a new community monitoring program conducted under the ARTF Supervisory Agent (SA) program. In order to strengthen the World Bank’s technical supervision of Afghanistan Pilot project shows results Reconstruction Trust Fund (ARTF) infrastructure The pilot project under IRDP uses community monito- projects, the SA, International Relief and Develop- ring to supervise canal construction. Some 13 irrigation improve the regulatory framework for mobile telecommunications, and implement a Emergency Power The project was closed on March 31, ment (IRD), was contracted to conduct third party canal construction projects, impacting about 20 com- 2013 after completion of all works, except munities in nine provinces, are checked by two com- mobile innovations support program. Three Rehabilitation the Naghlu hydropower plant. A Project monitoring on four projects implemented by the Government of Afghanistan (GoA). munity monitors (CMs) at each site. The monitors were firms have also been contracted to carry out a pilot skills development program aimed at Project (EPRP) Preparation Grant was approved in June 2013 that covers funding for completion of Habib regularly checks one project in Surkhrod selected by villagers, and sent for a month-long training district, west of Jalalabad, the capital of eastern and taught to use smart phones to photograph poten- developing a pool of skilled and qualified IT c IDA Grant $105 million the remaining mechanical works from EPRP. tial problems, collect data, and send their information professionals. Nangarhar Province.“This work is my pleasure and c ARTF Grant $20 million Additionally, preparation of a new project is great duty,” he says. “Before I was jobless, but from to the head office in Kabul for prompt review. Optical fiber cable construction is pro- underway to finish other mechanical works gressing; about 50 kilometers of duct- Closed: March 31, 2013 this work, I can learn a lot and also help my com- All relevant material is immediately shared with the in Naghlu, as well as to cover some new civil munity.” Ministry of Energy and Water (MEW). The results so far ing has been completed. The Ministry of works required for safe and efficient opera- The project aimed to provide improved The three-year program to monitor the Educa- demonstrate that deviations/construction errors are Communications and IT adopted an open tion of the plant. and more reliable supply of electricity tion Quality Improvement Program (EQUIP), Irriga- responded to and fixed within 10-14 days of initial iden- access policy for the national backbone net- to Kabul residents. It rehabilitated and tion Restoration and Development Program (IRDP), tification. MEW reports back to IRD when the problem work, ensuring non-discriminatory access to expanded the city distribution networks; National Emergency Rural Access Program (NERAP) has been addressed and IRD then asks the CM to verify. wholesale internet bandwidth for all firms. connected the Kabul city grid to the future and National Solidarity Program (NSP) will report CMs are all members of the Community Develop- Some 450 Afghans have been trained under North East Transmission System to allow on the physical progress and quality of construc- ment Councils (CDC) to ensure link back to the wider the IT skills development program. for the import of lower cost power from tion of subprojects,identify project and cross cut- community as the councils provide a natural entry point Uzbekistan; began rehabilitating the 100 ting trends, recommend actions to address them, for acquiring local knowledge and promoting commu- MW Naghluhydropower plant (the largest and track progress of GoA’s efforts to address iden- nity participation. Early feedback from stakeholders hydro generation station in Afghanistan) tified shortcomings and recommend ways to im- shows that this progress in coordination and participa- and the associated transmission line; and prove implementation of these projects. tion is highly appreciated. restructured and commercialized the power utility to improve service delivery. 16/  Country Update/ / The World Bank Group in Afghanistan/17 Irrigation Customs Department (ACD) to consolidate track the implementation of the Afghan Pakistan Transit Trade Agreement, both coun- Restoration and the customs modernization process, improve governance, and improve the release of le- tries have agreed to start initial exchange of Development Project gitimate goods in a fair and efficient manner. selected customs data through secure email. The project aims to achieve this through Work is simultaneously being undertaken (IRDP) (i) countrywide computerization of customs to start C2C cooperation at Hairatan at the c IDA Grant $97.8 million clearance operations; (ii) installation of ex- border with Uzbekistan, and at Sherkhan ecutive information systems for customs, Bandar at the border with Tajikistan. A draft c ARTF Grant $48.4 million allowing real-time monitoring of operations; Memorandum of Understanding between c Government Funds $2.5 million (iii) development of possible options for Afghan Customs and Tajik Customs has been cross-border customs-to-customs coopera- exchanged and comments of both Customs The project builds upon and scales up ac- tion; (iv) provision of selected customs infra- incorporated. tivities supported under the completed structure to enable modernized operations; Infrastructure development is in full swing World Bank-financed Emergency Irrigation and (v) technical assistance to support the with six large and 23 smaller contracts com- Rehabilitation Project closed in December development of a regulatory, administrative, pleted. Construction is at various stages of 2012. It supports the rehabilitation of irri- and institutional framework for customs. progress at Kandahar, Khost, Kabul, Nimroz gation systems serving some 300,000 hec- Automation through the installation and Andkhoi, while design and documents tares of land, and design and construction of Automated System for Customs Data are being finalized for construction activities of a limited number of small multi-purpose (ASYCUDA), specifically through the full at Farah ICD. dams and related works, while establishing Declaration Processing System (DPS) is func- tional at almost all the major Custom Houses. hydro-meteorological facilities and services. As of July 2013, 97 sub-project proposals, ASYCUDA DPS has also been implemented at Sustainable costing $51.5 million had been prepared; 94 major border crossings at Islamqala, Andkhoi Development of sub-project proposals costing $46.6 million and Torkhum. Currently, Customs processes were approved, of which 79 sub-projects more than 95 percent of trade by value elec- Natural Resources tronically. Further roll out of ASYCUDA to the costing $38.7 million had been awarded, and construction work of 20 sub-projects costing remaining Custom Houses and border cross- Project $13.5 million had been completed. A pre- ings is underway, with Farah expected to be- c IDA Grant $92 million feasibility study of 22 dams in the north river come operational by October 2013. basin was completed in January 2013 and The ASYCUDA Risk Management mod- The project supports measures to enhance a feasibility study of 7 out of the 22 small ule, piloted successfully at Kabul Airport, is regulatory capacity, foster private sector de- dams will be completed soon. now also operational at Jalalabad and Kabul velopment and adherence to international A truck driver from Inland Customs Depot (ICD). The process for standards. It is helping the government to Jalalabad and his migration from ASYCUDA++ to ASYCUDA ensure that revenues from valuable resourc- companions wait for Second Customs World (web based) is well advanced, with the pilot of the international transit module es are available to the whole country and are transparently managed. The project is also Industries Transparency Initiative (EITI) and clearance from Afghan customs to take scrap Reform and Trade metal to Pakistan for sale. implemented successfully at the Torkhum- providing technical support to the Ministry has been awarded ‘candidate’ status by the The Second Customs Sherkhan Bandar axis. The DPS version of of Mines and Petroleum in national pro- EITI secretariat in Oslo. An EITI Secretariat Reform and Trade Facilitation Project ASYCUDA World is expected to be imple- jects such as the MesAynak Copper project, and the National Multi Stakeholders Group, Facilitation Project is continuing with reforms to (SCRTFP) mented at Kabul ICD by October 2013. The process for setting up of an Executive Hajigak Iron Ore project, and other national priority projects. with a broad participation of government, private sector, and civil society groups, have assist the Afghan Customs Department to consolidate c IDA Grant $50.5 million Information System in ACD is underway. Data In addition to strengthening the Ministry’s been established to run and oversee EITI im- the modernization process to improve governance migration is currently underway to make the capacity to supervise and promote the min- plementation processes in Afghanistan. EITI, and the release of SCRTFP builds on the overall success module operational. ing sector, the project is helping the gov- now in a very active phase, conducted the legitimate goods in a fair of the completed Emergency Customs and efficient manner. The pilot for setting up a possible Customs ernment move towards its goal of ensuring process towards production of its first and Modernization and Trade Facilitation to Customs (C2C) data exchange interface transparency and good governance in the second independent reconciliation report, Project and continues with the ongoing re- between ACD and Pakistan Customs is un- sector. GoA has taken the important step and is also preparing the validation process. forms. The project is assisting the Afghan derway at Torkhum border crossing. To fast of endorsing the principles of the Extractive 18/  Country Update/ ongoing operations / The World Bank Group in Afghanistan/19 Afghanistan . Rural Enterprise Development Project (AREDP) c IDA Grant $30 million c ARTF Grant $5.10 million AREDP aims to enhance economic mobili- zation and activities by organizing the ru- ral poor into Savings Groups (SGs), Village Savings & Loan Associations (VSLA) and Enterprise Groups. The project then provides technical support to these groups so as to build a financial discipline through savings and internal lending practices, and technical support to enterprises. To date, the program has mobilized over 3,500 Savings Groups with a membership of some 41,800 rural poor (49 percent women) in 500 villages. The SGs have saved over $1.5 million and members have accessed more than 10,400 internal loans for productive and emergency purposes with a repayment rate of 95 percent. To generate economies of scale, 68 Village Savings & Loan Associations have also been established as federations of / rural development 2 kilometers (km) of all-season roads, reduce Local village residents walk the SGs, and are maintaining accurate and travel time to essential services, and enable across the 60-meter long up-to-date records of accounts with good rural communities to access essential servic- suspension bridge over Afghanistan Rural es more frequently. the Panjshir river, near Urrow village. The bridge governance structure in place. On average each VSLA has $3,300 as loan-able capital, Access Project As of August 31, 2013, half of the total 1,000 km secondary roads and 1,000 km of has changed the lives of the villagers and saved which is further boosted with a seed grant injection. This improves access to finance for (ARAP) the total 1,300 km tertiary roads have been lives by allowing the sick and injured to get medical group members who would like to increase designed. Construction of 100 km of second- c IDA Grant $125 million attention much more productivity or engage in entrepreneurial ary and 300 km of tertiary roads has started. quickly. The bridge was built with funds from the activities but cannot access such funds Over 1,000 linear meters of secondary bridg- ARAP aims to enable rural communities Afghanistan Rural Access from commercial banks or microfinance es and 500 meters of drainage works have Project, which aims to across Afghanistan to benefit from improved institutions. been contracted out and construction work provide rural communities access to basic services and facilities through access to basic services started. The project has disbursed approxi- all-weather roads. The project is expected to and facilities through all- mately $12.5 million and is expected to close season roads. increase the number of people living within by March 2018 20/  Country Update/ ongoing operations / The World Bank Group in Afghanistan/21 AREDP also works towards strengthening percent of villages). It is financed together An electricity engineer at Banda Miralamji village market linkages and value chains for rural with several bilateral contributors, and more shows off the power enterprises by providing technical support than $33 million of IDA funds and over $390 board at a micro hydro to over 450 Enterprise Groups (58 percent million from ARTF have been disbursed under power facility built using funds from the National women) and 150 Small and Medium this phase. Since inception in 2002, over $1.3 Solidarity Program, which Enterprises that have been selected for their billion have been disbursed as block grants supports small-scale potential as key drivers of rural employment directly to CDCs’ bank accounts that are used reconstruction and development activities. and income generation. AREDP uses to address their community development The facility generates Community Development Councils as an priorities. electricity for the village entry point into communities and is currently from canal water, easing working in 20 districts of five provinces: c For more information: the lives of residents by allowing them the use of Parwan, Bamyan, Nangarhar, Balkh, and http://www.nspafghanistan.org electrical and electronic Herat items such as computers, cell phone chargers, and washing machines. National Emergency Third Emergency Rural Access Project National Solidarity (NERAP) Program (NSP) c IDA Grant $152 million c IDA Grant $40 million c ARTF Grant $80 million c ARTF Grant $750 million c JSDF Grant $15 million NERAP aims to provide year-round access to basic services and facilities in the rural areas GoA’s flagship program is in its third phase to enhance the well being of the population and aims at generating a strong sense of and promote economic growth in the coun- ownership and social stability while enhanc- try. Under the project, secondary roads are ing service delivery and security through em- being rehabilitated by the Ministry of Public powerment and development activities that Works and tertiary roads by the Ministry of communities identify, plan, manage, and Rural Rehabilitation and Development. monitor on their own. There are over 31,000 As of August 31, 2013, 1,025 km of the total elected Community Development Councils 1,123 km secondary roads and 1,188 km of (CDCs), democratically elected through se- the total 1,197 km tertiary roads have been / social safety net istration of the public pension schemes; and cret ballot, mandated with governance rehabilitated. Secondary roads have gener- (ii) develop administrative systems for safety responsibilities and are proving to be an ef- ated more than 1.5 million labor days of fective mechanism nationwide for ensuring employment and the tertiary roads over 1.8 Afghanistan Safety nets interventions, with focus on targeting and benefit payment delivery, to deliver cash equitable development, representing the million labor days. Out of the total budget Nets and Pensions benefits to the poorest families in targeted rights and demands of over 18 million rural of $232 million allocated for road rehabili- pilot districts. community members. The NSP and its 29 tation, drainage works, and routine main- Support Project Under the original project,the Ministry of Facilitating Partners have worked through tenance, approximately $220 million have c IDA Grant $20 million Labor, Social Affairs, Martyrs and Disabled these CDCs to identify and implement some been disbursed. The project is expected to (MoLSAMD) has already put in place key 55,300 small-scale reconstruction and devel- close by the end of 2013. Started in late 2009, the project had an initial elements of a reformed and modernized opment activities in over 39 sub-sectors such budget of $7.5 million. Recently the World public sector pension system which includes as roads, drinking water, sanitation, irriga- Bank Board of Executive Directors approved a revised institutional and human resources tion, bridges, health, and education. a $12.5 million additional grant to finance (HR) structure of the Pension Department, The NSP is active in 359 of Afghanistan’s continuation of the project. The objectives a comprehensive new management 364 districts and all 34 provinces (about 90 of the project are to: (i) improve the admin- information system, a set of improved 22/  Country Update/ ongoing operations / The World Bank Group in Afghanistan/23 business processes, fiscal forecasting models for revenues and expenditures, and a new charter of accounts of the pension system. The HR officers in a number of ministries Urban Water Sector were also trained on the proper procedures for deducting and remitting pension Project payments, and on new forms and procedures c IDA Grant $17 million for submitting pension applications under the new system. The project’s objective was revised in 2010 Under the safety net, MoLSAMD has to assist GoA to develop the capacity of designed, implemented, and evaluated a the Afghanistan Urban Water Supply and multi-phased safety nets cash transfer pilot, Sewerage Corporation (AUWSSC) for opera- whereby each phase incorporated lessons tional management and investment plan- learned from the previous phase. The pilot ning, and implementation. program over the past two years has provid- Despite a difficult operating environment, ed support in cash transfers to over 16,000 institutional development results achieved poor and vulnerable families (around 80,000 by AUWSSC are significant since its creation individuals) in eight selected districts of five two years ago, and include: (i) increase in provinces. The Ministry has adopted this pro- water production, storage and distribution gram under the name of Afghanistan Social capacity; (ii) expansion of water supply op- Protection Program (ASPP). eration from 16 to 42 towns; (iii) significant Under the additional financing, the project reduction of water losses from 60 percent will build on successes of the Public Sector to 35 percent; (iv) large increase in metered Pension Program modernization to initiate customer connections; (iv) achieving best administrative reforms in the Martyrs and in South Asia of number of staff per 1,000 Disabled Pension Program focusing primarily connections; (v) revision of water tariff after on the operation of the central office andsup- seven years and made effective from June 11, porting the digitizing of beneficiary data. 2012; and (vi) significant improvement in rev- The project is supporting MoLSAMD to de- enue collection, progressing steadily towards velop a system of identification of the poor self-financing operation and maintenance. and explore benefit delivery for safety nets In view of the above and the fact that the through financial institutions, and eventually project’s development objectives appear contribute to the system development of the achievable, the closing date for the project new ASPP program. was extended by two years, and now sched- knowledge, improve product quality, boost Facility for the New Market Development Family businesses such uled to close on June 30, 2014. productive capacity, acquire new technolo- is managed by GIZ IS, which was selected as this restaurant have / urban development gies, and develop and implement business through an international competitive bid- benefitted from various initiatives to start new plans to increase their presence in both ding process (the contract was signed in businesses and improve Afghanistan New domestic and export markets. The project September 2012). The Facility for New skills and knowledge. specifically aims to support some 750 enter- Market Development is operational in the Market Development prises and 10 business associations through four cities and has already received 391 ap- a cost sharing facility to access business de- plications while 163 agreements have been Project velopment services. The project is expected signed so far. c IDA Grant $22 million to create around 1,500 jobs in the short term with much higher job growth over the longer The project aims to pilot a business develop- term. ment program in the four urban centers of The project is implemented by the Ministry Kabul, Mazar-e-Sharif, Jalalabad and Herat, of Commerce and Industry. The General which are the major hubs of economic ac- Director of the Private Sector Development tivity. It will help enterprises gain market Department acts as the Project Director. The 24/  Country Update/ / The World Bank Group in Afghanistan/25 Investment Services IFC Investment and Advisory Services Projects Overview IFC’s investment portfolio / Current Strategy and Development Impact Overview in Afghanistan has more than doubled since FY08 IFC’s investments have had a transforma- The International Finance Corporation, the IFC Advisory Services is very active in from approximately $58 tional impact (in terms of access to finance World Bank Group’s private sector develop- Afghanistan with eight active projects dur- ing the reporting period in Investment million to $131 million as of and outreach) in the microfinance sec- ment arm, is following an integrated strat- end June 2013. It is cur- tor through the First Microfinance Bank egy focused on improving the investment Climate, Access to Finance, Public Private (FMFB-A). FMFB-A is the first licensed private climate, building capacity through technical Partnerships, and Sustainable Business rently focused on the micro sector microfinance bank in Afghanistan. It assistance, and supporting selective invest- Advisory areas. Two projects were success- finance, services (hotel), and has reached out to about 45,000 borrowers ments in sectors with high development im- fully completed in the previous quarter and up to three new or next phase projects are telecommunications sectors. (25 percent of the current market penetra- pact and job creation (infrastructure, finance, These investments in- tion) of which 16 percent are women. agribusiness and services). This strategy is expected to start in the coming quarter. Similarly, IFC has had significant im- in line with the joint Bank Group’s Interim IFC Advisory Services also collaborates clude: pact in the telecommunication sector of Strategy for Afghanistan (ISN-FY12-14). closely with the World Bank in the Doing • Telecommunications Afghanistan through IFC’s investment in IFC is working closely with the World Bank Business Indicator Reform project and the Incentive Program in supporting key reforms (MTN, a joint project MTN, and more recently Roshan Telecom. The and MIGA on joint programs to maximize with MIGA - $60 milion, telecommunication sector has evolved sig- its impact. A workshop was held in Dubai, affecting the private sector. nificantly over the last few years in terms of in early 2013, to explore further opportuni- IFC Investment Services now has a com- Roshan Telecom - regulation, private investment, penetration, ties to work together with the Bank on joint mitted investment portfolio totaling some $65million), and growth. From fewer than 60,000 tel- transformational impact projects. IFC and $131 million in five companies. It is also exploring investment opportunities in the • Hotel sector (Kabul- ephones, Afghanistan now has over 15 mil- MIGA have also collaborated on one of the Serena Hotel - $3 mil- lion mobile telephone subscriptions and half telecommunication projects (MTN). Recently manufacturing, financial markets, and in- of rural households own a mobile telephone. IFC Advisory Services supported the estab- frastructure sectors, and undertakes senior- lion), lishment of the first collateral registry under level business development missions to • Financial markets the Bank’s Financial Strengthening Program. Afghanistan on a quarterly basis. (First Microfinance Bank - $2m equity and trade facility with Afghanistan International Bank). 26/  Country Update/ IFC / The World Bank Group in Afghanistan/27 / Advisory Services Projects Secured Lending and Public Credit Afghanistan Farmer team worked with a network of ten accred- ited training providers and trained 107 train- Registry and Small and ers, who delivered 226 BE workshops and c Harakat Grant $300,000 and $370,000 trained 3,429 individuals including 1,191 Medium Enterprise women (34.7 percent against the target of IFC is providing technical assistance to the Training Project 20 percent) across 10 provinces. The impact assessment of BE workshops central bank, DAB, through IDA’s Financial Sector Strengthening Project to establish a (FaST Phase 2) conducted in July 2012 indicated that 91 Public Credit Registry and Collateral Registry percent of the private sector respondents ex- for movable property. c Project cost: $1.095 million The Public Credit Registry project aims to pressed positive impact of the BE training on c DFID Grant $520,000 their company performance. The survey re- assist DAB establish a best practice credit vealed that 100 percent of the private sector registry for collecting, managing, and dis- IFC’s Business Edge™ aims to improve the respondents applied the skills learnt to their seminating credit information in order to (i) business performance and competitiveness work in varying degrees. Approximately half strengthen its supervisory capacity, (ii) assist of firms and individuals, and to create jobs of the respondents in the private sector said the banking sector in adopting better credit in developing countries. This is achieved by that their revenues increased after the BE risk management practices; and (iii) improve strengthening the management skills of mi- training. access to finance for existing and future cro, small, and medium enterprises (MSMEs), banking sector clients by enabling them to as well as middle managers of larger firms convert good payment histories into ‘repu- by providing them access to Business Edge’s Afghanistan tational collateral’ thereby reducing the need practical training solutions. The overall goal of this initiative is to en- Licensing Reform for significant levels of physical collateral. During the period March to September hance business performance and increase Project – Phase 1 2013, and after the conclusion of the pro- the revenues of MSMEs by developing their curement process and the signing of the c Harakat Grant $1.2 million managerial capacities using Business Edge contract between DAB and the selected (BE). The project will build the capacity of lo- technical bidder, IFC provided implementa- The objective of the project is to support the cal training providers to deliver BE manage- tion support to DAB. This included on-site Ministry of Commerce and Industry (MoCI) ment training to 3,500 individuals (700 of support during working meetings between in promoting an investment climate condu- which are women) reaching 500 MSMEs. IFC DAB and the technical provider as well as off- cive to the private sector by enacting reform has partnered with and is building the capac- site support and follow-up. Implementation in trade licensing – a major challenge to in- ity of nine local training providers, which will support by IFC will continue until the Public vestors and entrepreneurs wishing to obtain ensure that the provision of training services Credit Registry is fully implemented and op- or renew a license due to the bureaucratic is sustainable. In addition, the project will erational, which is expected to happen by and legal hurdles. The IFC project stream- Small enterprises such as work in close collaboration with the Bank’s As a result of this work, it now takes less March 2014. lined licensing procedures by conducting a this family-run tailoring private sector development team to use the time to obtain or renew a trade license. business which machine The Secured Lending project aims to in- process mapping exercise to identify system BE platform in projects, which also include Since the project went into effect, more than embroiders traditional crease the private sector’s access to credit by bottlenecks for obtaining the six licenses Afghan designs benefit SME capacity building. 19,000 firms have obtained new licenses and strengthening lenders’ rights in movable as- and proposing simplifications in line with from the Afghanistan 23,000 firms have renewed existing licenses. Farmer and Small and sets. This will be achieved by expanding the international best practices. Parallel activi- variety of collateral lenders will accept and Completion of Phase1 Further, based on IFC’s recommendation Medium Enterprise ties to support the reform included building Training Project. The and in cooperation with the project client, promoting increased lending to MSMEs as the capacity of technical staff in the Ministry project aims to improve and demonstrated responsible for carrying out the newly re- MoCI merged the departments of Business business performance well as improving risk management through Licensing and Central Business Registration and competitiveness more effective collateral arrangements. results formed licensing process as well as estab- lishing a dialogue between the public and into a new one-stop shop. IFC continues to by strengthening management skills of IFC has supported DAB on the enactment of the Secured Lending Transactions Law and c DFID Grant $2.4 million private sectors with emphasis on the advo- monitor the impact of reform-related savings micro, small and medium on the private sector, which may contribute enterprises. the Credit Reporting Regulation and con- cacy role of the business community in en- to investment, formalization, employment, ducted training and capacity building for Phase 1 of the BE program took place from suring the sustainability of results stemming transparency, and growth. DAB and financial institutions. (See page 10 September 2008 to March 2013. The BE from the reform. for further details) 28/  Country Update/ IFC / The World Bank Group in Afghanistan/29 Leasing Development Corporate Indicator Based Grant $250,000 Governance (CG) Reform Advisory Leasing is an important tool to finance the IFC Funded (donor funding pending) (IBRA) acquisition of equipment, machinery, and Grant $565,000 The Corporate Governance Project aims to other productive assets and is particularly help the financial sector improve perfor- beneficial for MSMEs. The project will thus Under the umbrella of the IBRA Project, the mance and increase access to finance by expand MSMEs’ access to finance and sup- investment climate team is providing techni- promoting better CG practices in selected port the development of the alternative cal assistance to GoA aimed at policy areas commercial banks. This three-year project financing tool which, in turn, will increase measured by the Doing Business Report. The was launched in FY13 and aims to support competition in the financial marketplace. Doing Business Indicators include 10 core DAB in its supervision activities through IFC is providing advice to GoA to establish areas. In its first year the project has been building its capacity to better enforce CG an effective legal and tax framework for leas- focusing on four indicators including: start- regulations on banks and financial institu- ing. The project is focusing on creating a level ing a business, construction permits, getting tions in the country; build the capacity of the playing field between leasing and other cred- credit and protecting investors. In addition to Afghan Institute of Banking and Finance to it instruments for tax purposes (completed) working on these four indicators, the project launch Corporate Governance training for and supporting the enactment of a best aims to include two more indicators (regis- banks; and advance the CG agenda for the practice leasing law (ongoing). The work on tering property and trade across borders) in financial sector on an ongoing and sustain- the leasing law is done in partnership with its work plan for the coming year. able basis. DAB. Afghanistan DABS Kandahar Construction Permit Management Support Project Contract Grant $1.05 million USAID $1.9 million The IFC investment climate team has been advising the city of Kabul on streamlining Da Afghanistan Breshna Sherkat (DABS), the and simplifying construction permit proce- national power utility, operates and man- dures. This advisory project aims to create ages electric power generation, import, a coherent and efficient construction per- transmission, and distribution throughout mit regulatory framework, thereby reducing Afghanistan. the burden on the private sector in terms of IFC is supporting DABS to improve the time, and procedures, and increasing the pre- operational and financial efficiency of the dictability of the process at the national and Kandahar Operating Centre by strengthen- sub-national level. ing management, and establishing a mo- The city of Kabul, with bile technical response team through the advice from the IFC introduction of a performance-based man- investment climate agement services contract with the private team, is streamlining and simplifying construction sector. permit procedures, which IFC has undertaken due diligence on the will reduce the burden project, issued andaccepted a proposed pro- on the private sector in terms of time and ject structure, and launched a request for procedures, and increase qualifications. The project is currently ahead the predictability of the of schedule. process at the national and sub-national level. 30/  Country Update/ / The World Bank Group in Afghanistan/31 The Afghanistan AFGHANISTAN RECONSTRUCTION TRUST FUND Reconstruction Trust Fund As of July 22, 2013, there were 22 active The Afghanistan Reconstruction Trust Fund The Recurrent Cost (RC) Window projects funded through ARTF, with a com- The Afghanistan Reconstruc- (ARTF) is a partnership between the interna- bined available commitment value of over Grant $2.88 billion tion Trust Fund (ARTF) was tional community and GoA for the improved $1.88 billion. effectiveness of the reconstruction effort. established in April 2002 To date, ARTF has disbursed $2.88 billion Since 2002, 33 donors have contributed over as a temporary means to c Full details of investment activities are through the government’s operating budget. $6.42 billion, making ARTF the largest contri- provided in the ARTF Quarterly Reports: Domestic revenues continue to be insufficient finance the government’s butor to the Afghan budget for both opera- www.artf.af ting costs and development programs. ARTF’s to cover the costs of government. The ARTF wage bill. ARTF has now de- Recurrent Cost Window has therefore ensured support for national priority programs, ope- veloped into the main multi- the basic functioning of government including rating costs of government operations and donor funding mechanism in the policy reform agenda is contributing to the delivery of services such as healthcare and the country, financing both / How ARTF works education. Given that around 60 percent of the the achievement of the Afghanistan Natio- nal Development Strategy goals. non-uniformed Afghan civil service is account- the essential running costs Donors contribute funds into a single ac- ed for by teachers, the Ministry of Education of government as well as count, held by the World Bank in the USA. The has in general received about 40 percent of to- Management key Afghan National Deve- ARTF Management Committee makes deci- tal ARTF resources. Ministries of Public Health, The World Bank is administrator of the fund. sions on proposed allocations at its monthly Foreign Affairs, Labor, and Social Affairs and lopment Strategy programs The Management Committee consists of the meetings, and those decisions are translated World Bank, Islamic Development Bank, Asian Higher Education have also been major recipi- across the country. The into funds through Grant Agreements signed ents. It should also be highlighted that the RC Development Bank, UNDP and Ministry of objectives of ARTF are to: between the World Bank and the Government Window resources are national in scope, en- Finance. The Management Committee meets suring the payment of salaries of around 62 • Position the national of Afghanistan. regularly in Kabul to review ARTF finances ARTF allocations are made through two percent non-uniformed civil servants in all 34 budget as the key vehicle and approve funding proposals. Once a quar- ‘windows’: the Recurrent Cost Window and ter, donors meet to discuss broader strategy provinces of the country. Steady year-on-year to align the reconstruc- the Investment Window. The Recurrent Cost increases in operating costs across government with the government and ARTF management tion program with natio- Window reimburses the government for a mean the RC Window accounts for a declining in the steering committee. share of the overall budget. Nevertheless, the nal development objec- certain portion of eligible and non-security related operating expenditure every year. The RC Window still finances around half of the tives. Donor Contributions Investment Window provides grant financing Donor contributions have increased year af- non-security costs of government. • Promote transparency for national development programs in the de- ter year, with new donors joining and older and accountability of velopment budget. donors increasing their levels of contribu- The Investment Window reconstruction assis- tion. Over the last few years the ‘preferenced’ The Investment Window has in the last tance. portion of donor contributions has been years increased significantly in volume and the main factor driving growth. The agreed scope. Since SY1389 (year 2010) investment • Reduce the burden on ARTF rule is that donors may not ‘preference’ commitments have exceeded recurrent cost limited government more than half of their annual contributions. commitments. Disbursement rate on ARTF capacity while promoting This rule is to ensure that ARTF has suffi- investment as of July 22, 2013 is 54 percent. capacity-building over cient funding to finance the Recurrent Cost Decentralized and national rural develop- Window and that it retains some flexibility ment programs, such as NSP, NRAP, and edu- time. in the approval of projects in support of the cation, have been strongly supported by ARTF. • Enhance donor coordi- National Priority Programs (NPPs). nation for financing and policy dialogue. Country Update/ ARTF 32/  results / The World Bank Group in Afghanistan /33 women gardeners “ gain money and confidence Many of these women can’t read or write and • The kitchen gardening initiative of the ARTF-financed National Horticulture and Livestock Project emphasizes female empowerment and gender equality. the garden has kept them • Rural women are encouraged to take responsibility for their small farms, earn income for busy and given them an their families, and get a measure of independence. ” • Started in 2013, the project supports the National Priority Program ‘National Comprehensive Agriculture Production and Market Development’ to increase productivity and production income. of horticultural products and improve animal production and health. It is supported by a $100 million grant from the ARTF. M other of three Sabria Nawabi tends her – Sabria Nawabi, kitchen garden farmer, Balkh Province small, but burgeoning, plot of vege- tables on the outskirts of Mazar-i-Sharif in Balkh province in northern Afghanis- tan. She is proud that her newly cultivated gardening talents supports her family. Nawabi says her family now earns about 30 percent more income since she joined the National Horticul- ture and Livestock Project (NHLP) project funded by the Afghanistan Reconstruction Trust Fund (ARTF). The program’s objective is to promote adoption of improved production practices by Afghan farmers, and enhance sustainability, effectiveness, and efficiency. During the first quarter of 2013, NHLP distributed ve- getable seeds to 5,644 kitchen garden farmers as well as 600 hoes, trowels and water sprays to lead farmers in Samangan, Takhar, Jawzjan, Sar-e-pul, Baghlan, Kun- duz and Balkh provinces The kitchen gardening component of NHLP empha- them regular training at farmer field schools on topics sizes female empowerment and gender equality as ranging from pest control to marketing techniques. rural women are encouraged to take responsibility for At these schools, held every few weeks, women are their small farms, earn income, and get a measure of taught techniques for such things as compost making, independence, says Ahmad Fahim Jabari, an NHLP offi- or organic pesticides. Recently, Nawabi learned that a cial based in Mazar-i-Sharif. simple pepper and garlic spray on tomato plants helps Each morning, Nawabi silently tends rows of toma- deter insects. “We used poisonous chemicals before toes, eggplant, radishes, and corn ripening on the these schools taught us how to use safer ways for our family’s one jirab of land [or one-fifth of a hectare]. It families and customers,” says Nawabi. is her pleasure to do this work, she says, because she In fact, Nawabi has enjoyed learning so much that now provides the primary source of income for her she was recently made lead farmer for six groups of 25 family. Her husband helps prepare the field, but she is women farmers each, in her area of Shir Abad village in in charge after that. Deh Dadi district. Now, she is paid an additional $100 a month for this duty that requires her to organize and run farmer field schools with NHLP support. Taught new techniques “Many of these women can’t read or write and the In Balkh province since 2011, about 3,400 women have garden has kept them busy and given them an income,” been recruited for the kitchen gardening initiative that remarks Nawabi. provides prospective female farmers with seed kits for 16 types of vegetables, and cultivation tools,and offers 34/  Country Update/ ARTF / The World Bank Group in Afghanistan/35 / ongoing projects A local farmer showing Afghanistan Afghanistan On-Farm a secondary canal system waterway filter Agricultural Inputs Water Management that allows farmers to filter trash and Project (AAIP) Project detritus, and direct water flows according Grant $74.75 million Grant $41 million to requirements to their farmlands. The Afghanistan On-Farm In an effort to increase adoption of im- This pilot project is designed to support on- Water Management proved crop production technologies, the farm water management investments in Project deals with water use optimization, AAIP was approved on June 17, 2013, allo- five regions (Central, Eastern, Southwest, reduction of water loss cating $74.75 million. The agriculture sector Northeast, Northern) covering a total of and development of is central to Afghanistan’s economy employ- 10,000 hectares. The project will improve more efficient irrigation techniques. It is being ing 60 percent of the nation’s workforce. As agricultural productivity in project areas by implemented in areas such, strengthening institutional capacity enhancing the efficiency of water use. Based where the Emergency of the Ministry of Agriculture, Irrigation and on the recommendations made by the Mid- Irrigation Rehabilitation Project has been Livestock (MAIL), and increasing investments Term Review Mission in February 2013, the successfully undertaken for safety and reliability of agricultural inputs project was restructured to improve the dis- and farmers have shown is invaluable to support continued increase bursement profile and bring it to a satisfac- keen interest in better water usage. of agriculture productivity. tory closure by its current grant closing date The project will build the requisite insti- of June 30, 2014. The restructuring involved tutional capacity in the ministry for carrying the scaling down of the physical infrastruc- out their public mandate in the agricultural ture investments by $16 million. The revised inputs sector. Firstly, the project will improve target for command area for area serviced the technical and economic efficiency of the by on-farm infrastructure modernization is value chain of certified wheat seed. Secondly, 10,000 hectares as opposed to the original building on the legal and regulatory frame- target of 52,500 hectares. work that the project helped build during the Currently contracts for 49 irrigation preparation phase, the project will develop schemes with total command area of 8,398 the necessary accredited facilities for plant hectares have been awarded (total $3.8 mil- quarantine networks and quality control of lion). Construction of eight of these schemes agro-chemicals. Thirdly, guided by the re- with a command area of 788 hectares has sults of field surveys carried out during the been completed and another 41 schemes preparation phase, the project will design with a command area of 7,611 hectares are and pilot test a demand-led action plan to under construction. improve and develop market based input de- All 175 irrigation associations have been livery systems for seeds and agro-chemicals. registered following procedures in the The sustainability of these interventions will Afghan Water Law and Irrigation Associations be supported by capacity building programs By-Laws. The project is going through an im- involving civil servants, farmers and traders. plementation support mission and any cor- The expected results of the project are an rective measures, based on the findings of increase in wheat seed multiplication factors, the review, will be taken. increased production of certified wheat seed, improved listing of plant quarantine pests and diseases, improved product samples tested for pesticides residues, and increased number of bad pesticide samples intercepted Country Update/ ARTF 36/  land project preparation, as well as facilita- path for long term results; and improve ser- Afghanistan Power tion of community development agreement vice delivery. The project will finance the costs Sector Development implementation; (vi) capacity/governance to associated with: (a) building capacity of front strengthen public private partnership capa- line legal service providers to deliver key legal Project bility, and support Civil Society Organizations services; (b) increasing scope and quality of Grant $60 million (CSOs) for accountability, project implemen- legal aid; (c) improving access of the people tation agencies, and communications. to legal information and civil legal education; The project supports GoA in increasing ac- The grant aims to achieve the following: (d) improving management and provision of cess to grid power, and the quantity of power 1) Five large infrastructure investments – legal services by central justice institutions; available to consumers in the target urban public, or public-private – optimized to de- and (e) building project management capac- centers of Pul-e-Khumri, Charikar, Gulbahar, liver public goods under uncertainty, ready to ity. The project has been effective since May and Jabul-Seraj. It consists of the follow- begin construction alongside or prior to next 31, 2012 and the implementing agencies are ing three components: distribution system round of large extractive investments; the Supreme Court, Ministry of Justice, and rehabilitation; rehabilitation of transmis- 2) Travel times for both extractive industries Attorney General’s Office (AGO). sion switchyard associated with Naghlu and and general public to remain at least con- There has been progress in several of the Mahipur Hydropower Stations; and institu- stant or at best, improved along a critical re- components and sub-components: the im- tional capacity building and project manage- source corridor highway; plementation infrastructure is almost in ment support to the Ministry of Energy and 3) Skills provision (public and private) closely place; the terms of reference for the Human Water (MEW). targeted to extractive industry investor re- Resource Management Strategy for all jus- With delays, design work is completed, quirements, enabling 70-80 percent local tice institutions is under discussion; capital while the majority of materials have arrived. employment in direct jobs in the sector, es- investment plans are under implementation; Installation works are currently ongoing. The timated to be around 5,000-8,000 in the ini- the development of the legal aid road map is project is supporting the energy efficiency tial years, depending on timing and scale of about to be contracted; civil service reform activities of MEW through the setting up of investments; in the AGO has been advancing according an Energy Efficiency Unit. A consultant has 4) Benefits increased in wider economy to plan; a plan for the three-phase reform of The grant will help finance the costs as- The proposed site of been selected to carry out a national aware- through national and local firms supplying the regulatory framework is under discus- sociated with (i) technical assistance for the Hajigak Pass Iron ness program for energy efficiency which is part of 15 moderate capability sub-catego- sion with stakeholders; and training assess- preparation and implementation of capacity ore mine viewed from ries of goods and services for Amu Darya and ments for all judicial institutions are under Kalu Village, the nearest expected to run until July 2014. Also another building programs; (ii) recruitment of some settlement to the contractor has been procured for three en- Aynak, plus 50 percent (by value) of low capa- preparation 2,400 managerial, common function and site. The Afghanistan ergy efficiency demonstration programs. The bility goods and services; professional staff for key positions in select- Resource Corridor Project will enable the project was recently restructured, extending it to January 31, 2015. 5) Effective land acquisition enabled along proposed road, rail, and transmission routes Capacity Building ed line ministries; (iii) a management intern- country to derive broader ship program; (iv) training of civil servants; economic benefits from through land title clearance; for Results and (v) project management, monitoring and the development of its extractive industries. Afghanistan Resource 6) Ongoing community benefit shar- ing around major extractive investments Facility Project for evaluation. Local village residents are The Ministry of Finance and the looking forward to the Corridor Project through implemented community develop- Afghanistan Independent Administrative Reform and development that will ment agreements. provide jobs and a better Grant $70 million Grant $100 million Civil Service Commission are jointly im- standard of living. The Program is slated to take place from plementing this project. Since inception in December 2013 to December 2018. January 2012, the project has made notable The grant will prepare a platform of ‘hard’ and The project will assist the government in ‘soft’ infrastructure enabling Afghanistan to improving the capacity and performance of progress in a number of areas. Most core derive broader economic benefits from the ARTF Second Judicial select line ministries in carrying out their operational policies have been approved by development of its extractive industries. The mandates and delivering services. This will the Government and the first Tier 3 Capacity grant will focus on four components: (i) in- Reform Project be achieved through the implementation of Building for Results (CBR) proposal (Ministry frastructure corridor investment preparation Grant $85.5 million specific capacity and institution building pro- of Agriculture) has been developed and re- which includes private investment support, grams, which include systematic monitoring cently reviewed by an independent expert road rehabilitation, and key road mainte- The objective of the Justice Service Delivery of and reporting on results. The project will group. CBR provides three levels of support nance; (ii) livelihood component consisting Project for Afghanistan is to increase access support the government’s effort to improve with Tier 3 being the highest level, requiring of a matchmaking facility to increase local to and use of legal services. The project seeks the capacity and performance of core line more ambitious reforms and results. content as well as skills matchmaking; (iii) to implement the Government’s National ministries responsible for national priority environment and social impacts component Priority Program; mitigate the impact of the programs. including land identification and support to transition; put the system on a sustainable Country Update/ ARTF 38/  Kabul/Aybak/Mazar-e- National Horticulture Sharif Power Project and Livestock Project Grant $57 million (NHLP) Closed: March 31, 2013 Grant $100 million The project aimed to provide reliable and The National Horticulture and Livestock percent of target farmers adopting regular quality power to consumers in target areas Project, effective since January 2013, has livestock inoculation (or veterinary field units of the cities of Kabul, Aybak, and Mazar-e- a total funding of $100 million including stocking inputs recommended in extension Sharif. The project was extended for a third initial allocation of $50 million. The project messages); and 75 percent reduction in ani- time on June 17, 2012, bringing the cumu- will contribute to the overarching goal of mal brucellosis prevalence in target areas. lative extension period to 39 months, to increased productivity and overall produc- Under the Horticultural Production provide adequate time to complete the re- tion of horticultural products and improved Component, as of 30 June 2013, NHLP plant- maining project activities and thus allow animal production and health. The technical ed 1,204 hectares of new orchards during full completion of the Project Development strategy for achieving this objective is based the spring campaign, some 60 percent of Objective. on the delivery of extension and investment which in new provinces. This is a substantial The Kabul rehabilitation work has been support through strengthened systems. achievement, as it represents 240 percent of completed. Delays were experienced as a re- The project has three components: (i) hor- the annual target for the activity in 2013 and sult of difficulties in accessing right of way ticultural production; (ii) animal production the fall campaign – with an additional 800 to construction sites, especially from Kabul and health; and (iii) implementation man- hectares planned – yet to take place. Similar Municipality, institutions and other land- agement and technical assistance support. substantial achievements for the first semes- lords, and pole procurement. There were These activities will be implemented in 100 ter vis-a-vis annual targets for the year were concerns due to transformer failures in the focus districts spread over time as conditions recorded for the rehabilitation of orchards distribution system brought about by over- warrant in up to 22 target provinces. (1,000 hectares actual vs. 140 hectares tar- loading and poor quality equipment. The project aims to promote adoption get for 2013), and kitchen gardening (8,075 The project was closed on March 31, of improved production practices by target schemes vs. 8,000 schemes annual target). 2013 after completion of some outstand- farmers, with gradual rollout of farmer-cen- ing tasks in the Mazar-e-Sharif distribution tric agricultural services systems and invest- sub-project. As DABS could not provide ad- ment support. Service delivery centered on ditional materials as originally agreed, they farmers will promote increased participation were imported and handed over to DABS for of beneficiaries in defining the type of ser- installation. vices required and in the delivery itself. The The Mazar-e-Sharif and Aybak substations project will also promote improved ratio of have been energized but have not been com- overall costs reaching beneficiaries as direct missioned or handed over to DABS due to investments. The aim is thus to promote sus- failure of some equipment and incompletion tainability, effectiveness, and efficiency. of some remaining civil works in Aybak. The By the end of its six-year project cycle, Ministry of Energy and Water is looking to ad- the NHLP aims to achieve the following key dress these issues. results: 97,500 target farmers exposed to a horticulture production practice,who under- stand it and its benefits; 6,000 hectares of orchards rehabilitated directly and indirect- ly; 8,000 hectares of new orchards (includ- ing vineyards) established with at least 70 percent survival rate; 800 hectares of grape trellising; 500 hectares of dry land horticul- Note: All dollar figures are in US dollar equivalents. ture (new pistachio groves planted); 20,000 IDA, the International Development Association, is the kitchen gardening schemes established; 50 World Bank’s concessionary lending arm. The World Bank Group in Afghanistan www.worldbank.org.af Abdul Raouf Zia phone +93 700 280 800 infoafghanistan@worldbank.org photos © Graham Crouch/World Bank House 19, Street 15, Wazir Akbar Khan, Kabul, afghanistan ©World Bank, Oct 2013