Ministry of Finance

Two grant agreements worth $128 million were signed between the Ministry of Finance of Afghanistan and the World Bank, covering two key sectors – Farm Water Management Project and Hydropower Rehabilitation Project.

The Ministry of Finance in a statement said $45 million of the funds has been allocated as “additional grant to the ongoing On Farm Water Management Project (OFWMP). OFWMP will continue to support efforts to improve agricultural productivity by enhancing the efficiency of water use through the rehabilitation of small-scale irrigation schemes, and helping farmers adopt new agricultural practices.”

The remaining $83 million of the grant has been allocated to finance the Naghlu Hydropower Rehabilitation Project (NHRP), which aims to improve dam safety and to increase the supply of electricity at the Naghlu Hydropower Plant.

According to Finance Ministry the project will help enhance the reliability of the electric power system and benefit both households and industries, thereby stimulating economic development and growth.

“Both these projects outline the government’s position to improve on water usage in Afghanistan and utilize them for the economic and social development of the Afghan people,” said HE Eklil Hakimi, Finance Minister of the Islamic Republic of Afghanistan.“They are also intended to improve irrigation, improve access to electricity, boost jobs creation and provide more opportunities for employment in the agriculture sector in rural areas. In this context, the Afghan government values its partnership with the World Bank and our international partners contributing generously to the ARTF; we look forward to continued cooperation in the various sectors in the years ahead to boost economic development in Afghanistan.”

Robert Saum, World Bank Country Director for Afghanistan, said “As the country continues to overcome challenges of fragility and conflict, both projects will help create job opportunities, foster economic prospects,and provide for better social cohesion and stability.”

Being the Afghanistan Reconstruction Trust Fund (ARTF) Administrator, the World Bank and ARTF have implemented four projects and conducted multiple well-received sector development studies to improve the power sector since 2001.

This allowed for significant progress in addressing the physical as well as institutional challenges of the sector, the Finance Ministry, said adding that the Naghlu Hydropower Rehabilitation Project is expected to help enhance the reliability of the electric power system and benefit both households and industries, stimulating economic development and growth. The local population is also expected to benefit from employment opportunities during the project repair and rehabilitation phase. The project will also help mitigate climate change as it increases available power from Naghlu, which as a hydropower plant emits close to zero greenhouse gas emissions.

The overall responsibility for the implementation of theNaghlu Hydropower Rehabilitation Project will rest with the Afghanistan’s power utility, Da Afghanistan Breshna Sherkat (DABS). The Ministry of Agriculture, Irrigation and Livestock (MAIL) will continue to implement the On Farm Water Management Project.