ADB, Afghanistan agree on new, five-year strategic partnership

Press Release - Asian Development Bank (ADB)

March 5, 2009

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and the Government of Afghanistan have forged a new Country Partnership Strategy (CPS) 2009-2013 that retains a sharp focus on investments that will bolster the country's energy, transport, and irrigation sectors.

"In addition to being one of the poorest countries in the entire Asia and Pacific region, Afghanistan is confronted with a daunting set of development challenges," says ADB Vice-President, Xiaoyu Zhao. "Pervasive insecurity and the country's still-limited human capacity constrains effective implementation not only of the Government's ambitious reform agenda, but also of physical works that will create employment and economic growth."

Approved by ADB's Board of Directors in Manila today, the new partnership strategy is closely aligned with the Afghanistan National Development Strategy and focuses on a limited number of priority sectors.

"The new CPS calls on ADB support for the provision of essential infrastructure including roads, power and irrigation facilities," says Craig Steffensen, Country Director of ADB's Afghanistan Resident Mission.

In a country where only 6% of the population has access to electricity, ADB's ongoing energy sector investments will expand the power grid by rehabilitating power substations and transmission lines, construct small to medium-sized hydropower plants, and improve power trading and interconnection with neighboring countries. ADB assistance in this sector will contribute to the government's goal of delivering electricity to 65% of urban households and 25% of rural households.

In the transport sector, the CPS calls for the completion of Afghanistan's "ring road" and the construction of new national roads, including links with neighboring countries. This will cut transport costs and raise the country's competitiveness profile.

Improved road transport is tangible evidence of Afghanistan's reconstruction. Freight traffic has increased dramatically. Complementary investments in regional road corridors and regional trade policy and facilitation will increase the value of trade with neighboring countries from about US$5 billion in 2005 to $12 billion by 2016.

ADB support for Afghanistan's agriculture sector will focus on the rehabilitation of irrigation systems. ADB's assistance will increase by 20% the area under irrigation by 2010, which in turn will lead to a significant increases in agricultural production and exports.

In addition to investment in economic infrastructure, ADB will continue to provide institutional and capacity assistance to improve institutional and development effectiveness. The focus will be on themes such as gender, on improved public financial management, procurement procedures, and corruption.