World Bank, Afghanistan Sign $691 Million Grant Package

(Last Updated On: April 10, 2018)

Finance Minister Eklil Hakimi and World Bank Country Director Shubham Chaudhuri on Tuesday signed a new financing package worth $691million to help revitalize Afghanistan’s economy and improve access to quality healthcare.

The newly approved financing aims to help Afghanistan increase access to quality healthcare, modernize state-owned banks, and expand regional telecommunication connectivity, e-government services and create enabling environment for private sector investment.

“Improving the quality of health services, strengthening the banking infrastructure and digitizing government systems will enhance our ability to deliver better and quality services to our people,” Finance Minister Hakimi said.

 “This contribution demonstrates the continued commitment and support of international community helping the government of Afghanistan implement priority reforms for sustainable development,” he added.

At the time of signing the agreement, Health Minister Ferozuddin Feroz, Minister of Communication and Information Shahzad Aryobee and Ethel Sennhauser, acting Vice President of World Bank for South Asia Region were also present.

Health Minister Ferozuddin Feroz said that part of the package will be spent on providing healthcare services to rural areas in the country.

The financing package includes grants of $231 million provided by the International Development Association (IDA), the World Bank’s fund for the poorest countries, as well as $425 million from the Afghanistan Reconstruction Trust Fund (ARTF), and $35 million from the Global Financing Facility (GFF), both managed by the World Bank.

“Afghanistan is implementing an ambitious reform program in a context of strong budget pressures imposed by low domestic revenue, though improving, massive security spending and enormous development needs,” said Shubham Chaudhuri, World Bank Country Director for Afghanistan. 

“In this challenging environment, we remain committed to helping the Government of Afghanistan further improve service delivery to the Afghan people. For example, the new health project will improve health and nutrition services for the entire population of the country in all 34 provinces.”

The total support of $691 million consists of three grants:

  • $600 million to the Afghanistan Sehatmandi (Health) Project to increase the utilization and quality of health, nutrition, and family planning services across Afghanistan. IDA will provide $140 million, while ARTF is expected to provide an additional $425 million, supplemented by a $35 million grant from GFF. The project will be implemented by the Ministry of Public Health;
  • $51 million from IDA to the Afghanistan Digital CASA 1 Project to increase access to affordable internet, attract private investors to the sector, and improve the Government’s capacity to deliver digital government services, by supporting a regionally integrated digital infrastructure and creating enabling environment. The Ministry of Communications and Information Technology will be the implementing agency; and
  • $40 million from IDA to the Modernizing Afghan State-Owned Banks Project that aims to strengthen corporate governance and enhance operational efficiency of state-owned banks. The project, to be implemented by the Ministry of Finance, will contribute to the modernization, transparency, and efficiency of the three Afghan state-owned banks: New Kabul Bank, Bank Millie Afghan and Pashtany Bank, and will modernize their IT infrastructure and develop sustainable business models to support inclusive growth.

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