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World Bank signs $325m economic development deal

KABUL: The World Bank signed on Wednesday a $325 million grant deal with the Finance Ministry to fund economic development, social services and institutional reforms in Afghanistan.

Acting Minister of Finance and Chief Advisor on Infrastructure and Technology to the President of Afghanistan Mohammad Humayon Qayoumi and World Bank Country Director for Afghanistan Shubham Chaudhuri today signed a new financial package totaling $325 million in grants, said a statement by the ministry.

“The financing Agreement of the three projects signed today with the World Bank, totally worth $ 325 million. It will be implemented in line with the requirements and priorities of the government and the people of Afghanistan to support economic empowerment, service delivery and institutional reforms,” said, acting Finance Minister Humayon Qayoumi, Speaking about the new financing package.

“The new financial package includes $200 million grant to the Eshteghal Zaiee – Karmondena (EZ-Kar) (creating job opportunity) Project, $50 million grant to the Cities Investment Program (CIP)and $75 million grant to finance the Tackling Afghanistan’s Government HRM (Human Resource Management) and Institutional Reforms (TAGHIR). I acknowledge the valuable contribution made by the World Bank to fund these major projects,” he added.

The new financial package included $200 million grant to the EshteghalZaiee – Karmondena (EZ-Kar) Project, which aims to strengthen the enabling environment for economic opportunities in Afghan cities where there is a high influx of displaced people. The grant includes $150 million from the International Development Association (IDA), the World Bank Group’s fund for poorest countries; and $50 million from the Afghanistan Reconstruction Trust Fund (ARTF), administered by the World Bank on behalf of 34 donors.

To improve the sustainability and livability of nine provincial capital cities by strengthening municipal capacity, management, and infrastructure. The grant comprises $25 million from IDA and $25 million from the ARTF. $75 million grant to finance the Tackling Afghanistan’s Government HRM (Human Resource Management) and Institutional Reforms (TAGHIR) project, which will strengthen the capacity of selected line ministries. The grant includes $25 million from IDA and $50 million from ARTF.

“Access to job opportunities and better services is the most crucial need of Afghan people specially the returnees and internally displaced Afghans at this particular time. These new grants are significant step forward in the path to help the Government of Afghanistan strengthen its service delivery capacities and meet its key policy objectives through boosting institutional reforms, ”said Shubham Chaudhuri, World Bank Country Director for Afghanistan.

The EZ-Kar Project applies a whole of community approach and aims to increase economic and job opportunities in the cities with a high influx of returnees and internally displaced people. This will be pursued by increasing the returnees’ access to civil documents, providing short-term employment opportunities, improving market enabling infrastructure, and supporting investor friendly regulatory reforms.

The project will be implemented by the Ministry of Economy, Ministry of Foreign Affairs (MoFA), Independent Directorate of Local Governance (IDLG), and Kabul Municipality. The Ministry of Refugees and Repatriation (MoRR) will also play a key role. Among other initiatives, the project will support the increase in capacity of MoFA to provide consular services as well as help Afghan refugees in Pakistan access information that will facilitate their economic and social integration in Afghanistan.

The CIP will provide technical assistance to the Government in its implementation of the “Municipal Incentive Fund” under the new Municipal Law for Afghanistan and will instill a culture of “Evidence-Based” municipal investment planning in nine major provincial capital cities in the country. In parallel, the CIP will expand municipal service delivery and rehabilitate basic municipal infrastructure in the selected provincial capital cities. The project complements the ARTF-financed Kabul Municipal Development Program and the IDA-supported Urban Development Support Project.

The TAGHIR project replaces the Capacity Building for Results (CBR) Facility and will assist the Government of Afghanistan to deliver its key policy priorities through merit-based recruitment and administrative reforms in 16-lineministries. The project will support up to 1,500 new civil service positions to enable the ministries to meet objectives and deliver on their priorities. The Independent Administrative and Civil Service Reform Commission will lead the project implementation.

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