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Aid for Afghanistan
ADB Review [ November 2004 ]

ADB plans $1 billion in assistance to Afghanistan from 2005 to 2008, President Chino tells international conference on securing the country’s future

BERLIN, GERMANY

The Asian Development Bank (ADB) will provide about $1 billion in assistance to Afghanistan for 2005–2008, ADB President Tadao Chino announced earlier this year at an international conference in Berlin on the country’s future.

“The challenges facing Afghanistan today are large and complex. Clearly, the country requires longer-term commitments and significant amounts of technical and financial support for its new policies and development programs from the international community,” Mr. Chino told the conference, “Afghanistan and the International Community—a Partnership for the Future.”

“I am pleased to announce that ADB will consider assistance to Afghanistan in the order of $800 million in the form of highly concessional Asian Development Fund (ADF) loans and grants during 2005–2008, subject, of course, to the outcome of ongoing ADF negotiations and the future availability of ADF,” he said.

He said that in addition to the $800 million, the organization has identified loan and equity investments of up to $100 million in partnership with local and foreign investors, as well as guarantees of about $100 million to catalyze private sector investments in Afghanistan. ADB will also seek cofinancing in support of its programs and projects, he said. Furthermore, ADB will continue to provide technical assistance to the Central and South Asia Trade and Transit Forum, where issues pertaining to subregional trade and transport may be discussed.

The 2-day conference is reviewing the broad plans contained in the Afghan Government report, “Securing Afghanistan’s Future.” The report, prepared in collaboration with ADB, International Monetary Fund, United Nations Development Programme, United Nations Assistance Mission for Afghanistan, and the World Bank, sets out a comprehensive framework for the country’s reconstruction and development.

Afghanistan’s President Hamid Karzai and international delegates will also examine the security and political progress of the country, which is emerging from decades of conflict and civil strife.

Mr. Chino praised the Government’s strong commitment to political, economic, and social reforms, and solid progress in tackling difficult issues of governance. Mr. Chino said, “Afghanistan has made good use of aid provided. For instance, government compliance with the terms and conditions of the ADB-financed $150 million Postconflict Multisector Program approved in 2002 was exemplary.”

ADB has fully translated its pledge of $500 million at the Tokyo Conference in 2002 into a comprehensive assistance portfolio of loans and grants addressing priority reconstruction needs, including those to be approved in 2004. ADB has followed three basic principles in its support for Afghanistan’s reconstruction: build capacity, establish appropriate policy and institutional frameworks, and rehabilitate essential infrastructure. At the Government’s request, ADB has focused its operations on the transport, energy, natural resource management, governance, and financial sectors.

The Government has welcomed the diversification of ADB’s program to include increased support for private sector investments and guarantees, and reliance on official and commercial cofinancing, Mr. Chino added.

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