ADB, UK $90M Grants to Help Afghanistan Revive War-Torn Irrigation

News Release | 23 September 2009

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and United Kingdom are extending grants of almost $90 million to help Afghanistan improve its ageing irrigation systems and provide flood protection, as part of a government plan to promote economic growth and reduce poverty.

The grant funds are being provided through the Water Resources Development Investment Program, a multitranche financing facility, which will provide $303.3 million over 10 years. The government has highlighted the importance and identified investments of $2.5 billion for irrigation and water management under its new Afghanistan National Development Strategy.

Agriculture provides a living for about two-thirds of all Afghans and generates about 50% of the country's gross domestic product. However, reliable production is largely dependent on quality irrigation, and the current infrastructure is in need of substantial rehabilitation with new infrastructure also needed. The country's prolonged civil conflict has also weakened institutions responsible for managing and developing irrigation and water resources.

"Thirty years of civil unrest has severely degraded water infrastructure and the capacity of the institutions that manage it, and the program will increase the productivity of irrigated agriculture through the rehabilitation and development of new infrastructure, capacity building and the strengthening of institutions," said Thomas Panella, Senior Water Resources Management Specialist, in ADB's Central and West Asia Department.

The first tranche of the financing facility will support infrastructure improvements in the Balkh River Basin and the Nangahar Valley, which contain areas of prime agricultural land. Funds will be used to establish and train river basin agency staff and water user associations, and to prepare a reform plan for the Nangahar Valley Development Authority, a state-run enterprise. Flood protection works along the Amu Darya River that borders Tajikistan, and is prone to severe flooding and erosion, will also be financed.

The first tranche work will upgrade irrigation infrastructure covering around 100,000 hectares in the north and east of the country, with some farmers expected to see their incomes rise by around 27%. Improved irrigation increases opportunities for high value added crop production and will help reduce the strong economic incentives to grow opium poppy.

ADB will provide 93% of the first tranche funding, and will administer a $3.3 million equivalent cofinancing grant from the Government of the United Kingdom to prepare a Helmand Basin Water Resources Master Plan. The Government of Afghanistan will supply $1 million equivalent, while participating farmers will make in-kind contributions of $1.9 million for operations and maintenance for a total investment cost of $92.8 million. The estimated project completion date for the full investment program is March 2019, and the Ministry of Finance is the executing agency.