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World Bank, Afghanistan Sign $350mn Package to Support Government Reforms

31 Jul 2018 Wadsam Afghanistan Business News

The Afghan Ministry of Finance and World Bank signed a new package of grant agreements valued at USD 350mn to improve efficiency and effectiveness in government operations for better revenue mobilization and service delivery.

The agreement was signed between Mohammad Humayon Qayoumi, Afghanistan’s acting Minister of Finance, and Shubham Chaudhuri, World Bank Country Director for Afghanistan on Monday in the presence of Hartwig Schafer, a new appointed World Bank Vice President for South Asia.

“This new World Bank support is fully aligned with the Afghanistan National Peace and Development Framework, which will strengthen the policy framework to support state effectiveness, private sector investment, growth, poverty reduction, and improve public financial management ,” said Qayoumi at the signing ceremony.

The package consists of:

         $300 million for the Incentive Program Development Policy Grant (IP-DPG), including $90 million from the International Development Association (IDA), the World Bank Group’s fund for the poorest countries, and $210 million from the Afghanistan Reconstruction Trust Fund (ARTF), administered by the World Bank on behalf of 34 donors. The IP-DPG aims to help the Government of Afghanistan continue maintaining a stable macroeconomic environment and pursue an ambitious program of policy reforms to support economic growth, private sector investment, poverty reduction, and improved public financial management.

         $50 million for the Public-Private Partnerships and Public Investment Advisory Project, which aims to develop a pipeline of feasible private and publicly funded projects to further develop Afghanistan’s infrastructure. The project will be financed by a $20 million grant from IDA and $30 million co-financing from ARTF.

According to a statement from the World Bank, the new financing package supports reforms in the business environment, the energy sector, and land administration to promote economic growth and employment and reduce poverty for all Afghans.

Schafer, who is currently visiting Afghanistan to discuss reforms and development progress in the country with the Afghan government and its international partners, spoke about Public-Private Partnerships and Public Investment Advisory Project.

“This is a step towards maximizing the financing available for Afghanistan’s development. By mobilizing private capital for large investments, this project can boost progress towards some of Afghanistan’s key development priorities. It is a way to create partnerships that can benefit not only the Government and private sector businesses, but most importantly the people of Afghanistan.”

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