ADB Allocates More Funds for Afghanistan Reconstruction

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will provide more grant funds to Afghanistan to support essential reconstruction work and economic development.

ADB’s Board of Directors today agreed to temporarily suspend a planned phaseout of exceptional allocation of its Asian Development Fund (ADF) - ADB’s concessional financing facility - to Afghanistan in 2011 and 2012, making additional funding available.

"A significant drop in assistance from ADB has been avoided. We are one of the largest development partners in Afghanistan. This will cancel out the potentially disruptive effects on ADB operations, which are so important for the reconstruction and development of the country," said Juan Miranda, Director General of ADB's Central and West Asia Department.

ADB’s assistance in Afghanistan is centered on three multitranche financing facilities covering transport, energy, and irrigation. Along with the ring road, ADB is aiming to complete the construction of a railway line connecting Mazar-e-Sharif to the border town of Hairatan - which handles half the country’s imports - and to make further improvement in electricity transmission and distribution over the next two years.

ADB will now provide $548 million in financing for 2011-2012, as compared with $386 million under the planned phaseout. This will help Afghanistan address cost overruns linked to a national ring road, and some irrigation and energy projects which were not included when ADB prepared its operations program.