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ADB, Afghan Government Sign Key Infrastructure Agreements

KABUL, AFGHANISTAN (01 February 2009) - Afghanistan's push to rebuild its shattered infrastructure received much needed support today with a further $266 million in grant financing from the Asian Development Bank (ADB).

Four project agreements targeting energy, road transport, and the agricultural sector were signed at a ceremony in Kabul attended by Afghan Finance Minister Anwar Ul Haq Ahady and representatives of ADB.

A $164 million grant, part of ADB's $570 million Energy Sector Development Investment Program, will finance a 60 kilometer transmission line from Kunduz to Taloqan, the distribution of power in Kunduz and Baghlan municipalities, the development of small hydropower plants, and a gas project in Sherberghan.

In the transport sector, a $60 million grant will help upgrade some 400 kilometers of national roads and maintain another 1,500 kilometers of paved roads. The grant, part of ADB's $400 million Road Network Development Program, will also provide funds to cover cost increases in sections of the Ring Road currently under construction.

In the agriculture sector, a $30 million Agriculture Market Infrastructure Project will develop market facilities and help establish standards in the livestock and horticulture industries. The project will invest in five slaughterhouses as well as a number of small-scale packing, grading and cold storage facilities for the horticulture sector. The project also will establish laboratories to certify product quality, provide technical support for domestic and export product markets and help build the capacity of the government to create and implement sanitary standards.

At the signing ceremony Finance Minister Anwar Ul Haq Ahady praised ADB's focus on developing Afghanistan's infrastructure.

"ADB's investments are helping to provide the foundation for sustainable economic growth and poverty reduction", the Minister said.

Craig Steffensen, Country Director of ADB's Afghanistan Resident Mission, stressed that the $266 million in grants underscores ADB's long-term partnership with Afghanistan.

"Afghanistan is a founding member of ADB, and we are deeply committed to supporting its reconstruction and development," Steffensen said, adding that the investments in Afghanistan's energy, road transport, and agriculture sectors can be maximized with increased attention to timely project implementation.

Japan's ambassador to Afghanistan, H.E. Mr. Hideo Sato, welcomed ADB's new energy sector project, which will be complemented by a $12 million grant investment project that will construct mini-hydroplants in Badakhshan and Bamyan provinces. The project will be financed through the Japan Fund for Poverty Reduction, administered by ADB.

"Japan is pleased to support the development of mini-hydropower in two of Afghanistan's poorest provinces", he said. The Ambassador noted that to date, Japan has financed more than $100 million in project activity in Afghanistan through the ADB-administered Japan Fund for Poverty Reduction.

At the June 2008 Paris International Conference in Support of Afghanistan, ADB pledged up to $1.3 billion in assistance over the coming five year period, making it Afghanistan's fourth largest donor. All of ADB's assistance is aligned with the Government's Afghanistan National Development Strategy.

As of December 2008 ADB had committed some $1.78 billion for Afghanistan's reconstruction and development through approved loan and grant financed projects, technical assistance activities, donor cofinanced grant investment projects, and private sector investments.

About ADB

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region, including Afghanistan.

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