Afghanistan Reconstruction Trust Fund Report to Donors - World … · 2016. 7. 8. · Report to Donors Third Quarter of the Afghan Fiscal Year 1387 September 22, 2008 to December

With Pledged Support From:

Afghanistan Reconstruction Trust Fund Report to Donors

Third Quarter of the Afghan Fiscal Year 1387

September 22, 2008 to December 21, 2008

Prepared by the Administrator (The World Bank)

ARTF Management Committee: Asian Development Bank, Islamic Development Bank, United Nations Development Programme, World Bank

49315P

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

edP

ublic

Dis

clos

ure

Aut

horiz

ed

ARTF Quarterly Report (December 21, 2008)

i

CURRENCY EQUIVALENT

(Effective December 21, 2008)

Currency Unit = Afghani (AFN) US$ 1 = 50.07 AFN

GOVERNMENT’S FISCAL YEAR (SY1387) March 20, 2008 – March 20, 2009

Solar Year Period SY 1381 March 21, 2002 – March 20, 2003 SY 1382 March 21, 2003 – March 19, 2004 SY 1383 March 20, 2004 – March 20, 2005 SY 1384 March 21, 2005 – March 20, 2006 SY 1385 March 21, 2006 – March 20, 2007 SY 1386 March 21, 2007 – March 19, 2008 SY 1387 March 20, 2008 – March 20, 2009

Contact Information for the ARTF

World Bank Kabul Office Street 15, House 19 Wazir Akbar Khan Kabul, Islamic Republic of Afghanistan Telephone: 0700-27-60-02

Nick Krafft – Country Director – [email protected] Mariam Sherman – Country Manager - [email protected] Hugh Riddell – ARTF Coordinator – [email protected] Paul Sisk – Task Team Leader, Recurrent Cost Financing - [email protected] Nancy Zhao – Operations Advisor, Investment Financing - [email protected] N. K. Thondaiman – Financial Management Analyst – [email protected]

All documents are available on: http://www.worldbank.org/artf


ii

ABBREVIATIONS AND ACRONYMS

AEP Afghan Expatriate Program AFMIS Afghanistan Financial Management Information System AFN Afghanis – Local Currency of Afghanistan AISA Afghanistan Investment Support Agency ANDS Afghanistan National Development

Strategy ARDS Afghanistan Reconstruction and Development Services ARTF Afghanistan Reconstruction Trust Fund CAWSS Central Authority for Water Supply and Sewerage CDC Community Development Council CDP Community Development Plan CDS Capacity Development Secretarial DAB Da Afghanistan Bank DFR Donor Financial Review EQUIP Educational Quality Improvement Program FP Facilitating Partners FS Fiduciary Standards GIRA Government of Islamic Republic of Afghanistan GoA Government of Afghanistan IARCSC Independent Administrative Reform and Civil Service Commission IDA International Development Association IMF International Monetary Fund KfW Kreditanstalt für Wiederaufbau LEP Lateral Entry Program MA Monitoring Agent MC Management Committee MCP Management Capacity Program MDG Millennium Development Goal MEW Ministry of Energy and Water MFI Microfinance Institution MISFA Microfinance Investment and Support Facility for Afghanistan MoC Ministry of Communication

MoE Ministry of Education MoF Ministry of Finance MoFA Ministry of Foreign Affairs MoPW Ministry of Public Works MRRD Ministry of Rural Rehabilitation and Development MUDH Ministry of Urban Development and Housing MTFF Medium-Term Fiscal Framework NEEP National Emergency Employment Program NEEPRA National Emergency Employment Project for Rural Access NESP National Education Strategic Plan NGO Non-Governmental Organization NPBSE Non-pension-based Salary Expenditure NPP National Priority Program NRAP National Rural Access Program NSP National Solidarity Program O&M Operations and Maintenance PAM Performance Assessment Matrix PAR Public Administration Reform PBSE Pension-based Salary Expenditure PFEM Public Finance and Expenditure Management PFM Public Financial Management PPU Procurement Policy Unit PRGF Poverty Reduction and Growth Facility PRR Priority Reform and Restructuring RC Recurrent Cost SOE Statement of Expenditures TAFS Technical Assistance and Feasibility Studies TSA Treasury Single Account UNAMA United Nations Assistance Mission in Afghanistan UNDP United Nations Development Program UNOPS United Nations Office for Project Services USAID United States Agency for International Development WB World Bank


iii

TABLE OF CONTENTS

I. Administrator’s Summary of the Quarter …………………………………………………….1 II. The ARTF in Relation to the Budget and Flow of Funds …………………………………….4

III. ARTF Quarterly Donors Meeting …………………………………………………………..7 IV. The ARTF Recurrent Cost Financing ………………………………………………………….17 ANNEXES ANNEX 1: Status of Active Investment Portfolio …………………………………………………….23

ANNEX 2: Recurrent Cost Financing …………………………………………………………………55

ANNEX 3: ARTF Financial Tables …………………………………………………………………….61


iv


1

I. ADMINISTRATOR’S SUMMARY OF THE QUARTER

1. Introduction The third quarter of SY1387, through December 20, 2008, saw continued strong levels of donor support and continued progress towards delivery of the program. The total SY1387 pledge increased from US$662 million to US$695 million. Donors paid in an extra US$172 million of this pledge during the quarter, bringing the total paid in contribution to US$478 million. It is expected that 100 percent of the pledge will be collected by the end of the solar year.

Figure 1: Paid-in ARTF contributions SY1381-SY1387 ytd, US$ m

$0

$100

$200

$300

$400

$500

$600

$700

1381 1382 1383 1384 1385 1386 1387ytd

Paid-in preferencedPaid-in un-preferenced

2. Financing Activities During the third quarter ARTF committed a total of US$92 million, of which US$69 million was for recurrent expenditure, and US$23 million was for two Government investment programs. These allocations take total commitments in the first three quarters of SY1387 to US$366 million. As at the end of the third quarter SY1387, investment commitments reached US$228 million. The pipeline for the fourth quarter includes major financing for key national programs such as EQUIP and NRAP. However, given the strong demand for ARTF resources to cover the recurrent costs of government, the ability of ARTF to make these allocations depends on donors paying in the full value of their pledges for SY1387. The Management Committee reviewed five investment proposals during the quarter, valued at US$99 million1 (see Table 1). The quarter focused on infrastructure projects for power, water, roads and community-based infrastructure (NSP).

Table 1: Q3 MC Proposals Discussed & Approved

3rd Quarter Proposals Reviewed

Value US$ m

Comments/objectives

National Solidarity Program 40 • Total target allocation from ARTF is US$178m for SY1387 – depends on funds available.

• NSP II continues to roll-out across the country. ARTF Power System Development Project – phase I

35 • The project builds on the existing ARTF investments in the North East Power System.

1 Following MC review and approval funds transfer can take up to two weeks – hence the difference between commitment value during the quarter and value of projects reviewed.

SY1387 pledge: US$695m


2

3rd Quarter Proposals Reviewed

Value US$ m

Comments/objectives

• Specific objective of this investment is to increase access to grid power for the consumers in the urban centers at Aybak, Pul-e-Khumri, Charikar, Gulbahar, Jabul-Seraj, Doshi and Khenjan.

Kabul Urban Roads Improvement Project (KURIP)

18 • Responding to major increases in the population size of Kabul city (pop. 4m) Kabul Municipality’s project seeks to upgrade key roads and associated infrastructure.

• Project objective is to improve traffic flow on priority corridors or segments of the main urban roads in Kabul.

Water Resources Development Technical Assistance Project

5.5 • The project reflects government recognition that the fundamental constraint in the water sector is the limited capacity for planning, managing and implementation of a multi-sectoral water investment program.

• The project seeks to build government capacity, in Ministry of Energy & Water (MEW) to progressively undertake strategic basin planning and to improve project preparation for water resources development.

As at December 20, 2008, active ARTF investments are worth a total US$776 million (see Table 2). All investment are implemented by the government and are aligned with and are implementing the Afghanistan National Development Strategy (ANDS) – the distribution across sectors is illustrated below. The key sectors of ARTF investments are agriculture and rural development, energy and private sector development (microfinance), comprising around three quarters of the total commitment.

Figure 2: Active Investment Portfolio – by ANDS Sector (as of September 20, 2008)

Agriculture & Rural Developmemt

44%

Capacity Development5%

Energy11%

Private Sector Development

24%

Justice4%Education

6%

Transport0%

Urban Development6%


3

Table 2: ARTF Active Investment Commitments 1382 – 1387 (US$ m)

ANDS Sector SY1382 SY1383 SY1384 SY1385 SY1386 SY1387 Total US$

Justice 0 0 0 0 0 28 28 Private Sector Development 4 12 38 32 33 64 183 Energy 7 20 0 0 57 0 84 Agriculture & Rural Development 17 0 25 16 172 114 343 Transport 0 0 0 0 0 0 0 Urban Development 0 20 21 0 0 6 47 Education 0 0 5 0 27 17 49 Capacity Development 8 6 13 5 10 0 42 Total 36 58 102 53 299 228 776

Note: does not include closed investment projects. Different sectors display different disbursement profiles (see table 3). NSP, MISFA, NRAP and some capacity projects have disbursed smoothly. Overall disbursement rates in those sectors average 73 percent. Infrastructure projects have lumpier and longer disbursement profiles and have disbursement rates averaging 34 percent.

Table 3: ARTF Active Investment Disbursements 1382 – 1387 (US$ m)

ANDS Sector SY1382 SY1383 SY1384 SY1385 SY1386 SY1387 Total US$

Justice 0 0 0 0 0 0 0 Private Sector Development 2 13 21 48 34 15 134 Energy 0 3 2 2 1 15 22 Agriculture & Rural Development 8 8 0 21 152 113 302 Transport 0 0 0 0 0 0 0 Urban Development 0 0 4 3 12 2 20 Education 0 0 0 0 7 22 29 Capacity Development 3 4 5 8 8 3 30 Total 13 28 32 82 213 170 538

Note: does not include closed investment projects.

3. New Approach to the ARTF Recurrent Cost Window During the quarter, ARTF Donors and government agreed to pursue a new approach to ARTF Recurrent Cost Window operations. The decision was taken at the ARTF Quarterly Donors Meeting, December 17 2008 (see section 3). The new approach seeks to position ARTF more actively behind key government reforms, while also structuring a phased draw-down of recurrent cost support. The Recurrent Cost Window has been the main channel of ARTF resource provision: US$1.5 billion has been disbursed through this window over the seven years to December 2008, as opposed to US$741 million through the Investment Window. From SY1388 onwards, ARTF Donors and government will leverage the Recurrent Cost Window for structured policy dialogue and reforms in three areas: domestic revenue mobilization, public administration reform and private sector development. The ARTF Incentive Program proposal – laid out in full in Section 3 – mixes a phased-exit from the Recurrent Cost Window with a transition towards more performance-based allocations.


4

II THE ARTF IN RELATION TO THE BUDGET AND FLOW OF FUNDS

1. National Budget Structure The national budget is the central tool for translating the Afghanistan National Development Strategy (ANDS) into policy and implementation. The national budget consists of a Core Budget and External Budget (see Figure 3 for SY1386). The Core Budget tracks those funds that flow through the government’s treasury system and includes core operating expenditures and core development expenditures. By contrast, the External Budget includes expenditures disbursed directly by donors outside the treasury system. The External Budget (according to the budget document) represents over 70 percent of all expenditures in the country. The security sector accounted for about half of total External Budget in SY1386. All ARTF investments utilize the treasury system and thus, are reflected in the Core Budget.

Figure 3: Structure of the National Budget – SY1386 Actual

Revenues Expenditures

Domestic Revenues10%

Grants to Operating Budget

7%

Grants to Development Budget

10%

Loans and others (net)3%

External Budget70%

Operating

Expenditures15%

Development Expenditures

14%

External Budget71%

Note: External Budget is the budget figures Source: Ministry of Finance 2. Results of the SY1386 Budget Revenue Actual revenues were US$674 million in SY1386. Revenue realization fell short of the IMF target by 6 percent (0.5 percent of GDP), although revenue increased by 17 percent in absolute terms over the previous year. Two major revenue items (income tax and custom duties) missed their targets due to (i) inadequate enforcement efforts; (ii) undervaluation of petroleum imports by customs; and (iii) lower than projected imports. Expenditure Core operating budget expenditures increased by 18 percent over the SY1385 level, reaching US$1,019 million. Wages and salaries related expenditures increased by 27 percent due to new hiring (mainly in the education sector) and across the board pay increase for civil servants. Core development budget expenditures increased by 37 percent. The disbursement ratio (i.e. the comparison between actual and budgeted expenditures) was 63 percent. Although a new mechanism requiring more detailed budget proposals helped to increase the disbursement ratio, levels are still low.


5

Fiscal Sustainability The fiscal sustainability indicator (i.e. the ratio between domestic revenues and core operating expenditures) was 66 percent in SY1386 as budgeted. This was possible because both revenues and expenditures fell short of budget. 3. SY1387 Approved Budget and Mid-Year Review Budget Approval Process For the first time, the National Assembly approved the budget before the beginning of the fiscal year. Improved coordination between the Ministry of Finance and the comparatively improved capacity of the National Assembly’s Budget Committee contributed to timely approval. The mid-year review was approved by the cabinet meeting and awaits National Assembly approval in November 2008. Revenue The domestic revenues target for SY1387 is US$888 million, 24 percent and 30 percent higher than the SY1386 budget and realization, respectively. Achieving the target requires additional efforts as the tax base remains low. In the first half of SY1387 (preliminary) domestic revenues were US$364 million (41 percent of annual target). The mid-year budget review has not altered the target. The tax law amendment was approved by the lower house and now is waiting for the approval by the upper house. As of January 22 20092, domestic revenues reached US$640 million, 72 percent of annual revenue target at US$888 million. Expenditure Core operating expenditures for SY1387 are budgeted at US$1,307 million. The mid year budget review revised operating expenditures upwards by US$169 million to US$1,476 million. The increase is mainly due to:

- The teacher’s pay increase (US$43 million); - The wheat purchase (US$80 million).

As of January 22 (end of 10th month), the government spent US$1,109 million of core operating expenditures, 75 percent of the mid year review of the budget. Core development expenditures for SY1387 are budgeted at US$1,388 million. The mid-year budget review revised development expenditures upwards by US$712 million to US$2,100 million to reflect the carryover of undisbursed budget allotments from SY1386. As of January 22 (end of 10th month), core development expenditure spending was US$645 million, 33 percent of the mid year budget. Low disbursement rates are a key constraint for development. Persistent low disbursement ratios of core development expenditures hinder development objectives. They also reflect low absorption capacity of implementing agencies; poor budget formulation process by both the Ministry of Finance and implementing agencies; and the implementing capacity of donors. Although several measures have been taken to improve the disbursement ratios, they remain low through mid-SY1387. The disbursement ratios, defined as the ratios between actual disbursements and mid-year budget, improved from 41 percent in SY1384 to 54 percent in SY1385/86. However, the progress to date in SY1387 is as slow as for SY1384. The low disbursement ratio in SY1387 has two main reasons namely: (i) confusion about program

2 The ARTF quarterly reports are finalized after quarters end. Where important, we include data and information from after the quarter’s end.


6

budgeting, which had led to almost no disbursement in the first month; and (ii) unavailability of financial resources for bridge financing by the MoF. 4. Medium-Term Projections The government adopted a Medium-Term Fiscal Framework (MTFF) in October 2005. Prospects towards fiscal sustainability has further deteriorated. The January 2009 MTFF has beeen significantly downgraded the prospects for fiscal sustainability compared to the March 2008 MTFF (Table 2.8). The March 2008 MTFF projected that the ratio would exceed 100 percent in 2012/13, while the January 2009 MTFF projects that the ratio would be 69 percent, almost no change from 2007/08 actual.

Fiscal Sustainability Indicator Comparison between March 2008 MTFF and January 2009 MTFF

2007/8

(Actual) 2008/9 (Proj)

2009/10 (Proj)

2010/11 (Proj)

2011/12 (Proj)

2012/13 (Proj)

2013/14 (Proj)

08-Mar 66% 68% 70% 79% 90% 101% - 09-Jan 66% 60% 54% 58% 62% 69% 78% Gap - -8% -16% -21% -28% -32% -

Source: Ministry of Finance (MoF) 5. Public Financial Management (PFM) The Public Financial Management Performance Assessment in 2008 shows that the PFM system improved significantly between June 2005 and December 2007. Out of the 28 PFM indicators performance assessment indicators, 18 indictors improved, eight remained unchanged and two deteriorated. Key remaining challenges are (i) credibility of the budget; (ii) information from State Owned Enterprises (SOEs) and municipalities; and (iii) internal and external audits. Also, the PFM and capacity of line ministries should be greatly improved. The full assessment is available on the ARTF website.

Figure 4: ARTF and the Core Budget: SY1381-SY1387 (US$ million) SY1381 SY1382 SY1383 SY1384 SY1385 SY1386 SY13872002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9

<----------------------------Actual---------------------------------> MYR 1/A. Domestic Revenues 131 208 268 416 578 674 888B. Expenditures 346 613 968 1,091 1,570 1,986 3,577

Operating Expenditures 346 448 561 643 865 1,019 1,477Wage and Salaries n/a 282 373 411 530 671 859Goods and Services n/a 87 111 143 248 254 237Capital Expenditure n/a 61 41 48 40 28 20Other n/a 18 35 42 47 66 360

Development Expenditures 0 165 407 448 705 967 2,100C. Fiscal Balance (before grants) -215 -406 -700 -675 -992 -1,312 -2,689D. Donor Grants 208 293 487 725 715 694 1,845

ARTF 59 230 294 337 465 517 576Recurrent 59 214 235 253 299 291 276Investment 0 16 59 84 166 226 300

Other 149 63 193 388 250 177 1,269E. Fiscal Balance (after grants) -7 -113 -213 50 -277 -618 -844F. Financing 7 113 213 -50 277 618 844

External Financing (Net) n/a 100 309 107 27 169 n/aSale of Non-Financial Assets n/a 56 40 1 n/aDomestic Financing (net, including adjustment) n/a 13 -96 -213 210 448 844

Memorandum ItemsExternal Budget 824 4,222 4,581 3,005 2,715 2,367 4,859GDP 4,007 4,436 5,409 6,484 7,725 9,600 12,725 Exchange Rates 45 49 48 50 50 50 50Domestic Revenues (% GDP) 3.3% 4.7% 5.0% 6.4% 7.5% 7.0% 7.0%Expenditures (% GDP) 8.6% 13.8% 17.9% 16.8% 20.3% 20.7% 28.1%Fiscal Deficit (before grants, % GDP) -5.4% -9.1% -12.9% -10.4% -12.8% -13.7% -21.1%

Source: Ministry of Finance, IMF, World Bank.


7

III. THE ARTF QUARTERLY DONORS’ MEETING DECEMBER 17, 2008

1. Introduction The ARTF Quarterly Donors’ meeting was held in Kabul on December 17, 2008. The key objective of the meeting was to discuss and agree on the proposal for the new approach to ARTF Recurrent Cost Window operations. In addition, the Ministry of Finance tabled a formal request for additional ARTF recurrent cost support for the SY1387 operating budget, given an operating budgeted deficit resulting from the payment of teacher’s salaries at the higher rate. The ministry also updated ARTF donors on the delivery of the SY1387 budget as well as the results of the Donor Financial Review for SY1388. 2. Proposal for the ARTF Recurrent Cost Window The proposal for a new look ARTF Recurrent Cost Window was the result of a three month process of collaboration between the government and donors, facilitated by the World Bank. That process had been initiated at the September 2008 Donors’ Meeting (see Q2 ARTF Quarterly Report) at which it was decided to constitute a technical working group of interested ARTF donors to discuss options with the governments’ and to make a recommendation to the meeting of ARTF donors in December 2009. Five donor countries had participated in that process: Italy, EC, US, Germany, and the UK. The government delegation was led by Dr Mustafa Mastoor, Director of Budget, and also included the Director of Revenue, the Finance Minister’s advisers, Fiscal Policy Unit, and members of the Aid Coordination Unit. The IMF was also an active participant in the discussions given the revenue and macro-economic content of the discussions. At the Quarterly Donors’ Meeting on December 17, the World Bank presented the proposal to the broader donor group on behalf of the technical working group. The proposal was strongly endorsed by both the donors and the government and the working group was mandated to finalize the design of the scheme by the end of January 2009. The main features of the scheme are the agreement to decline ⎯by US$25 million a year⎯ the baseline level of Recurrent Cost Window support. Off-setting this automatic decline is an incentive program which has two components: the structural benchmarks scheme and the revenue matching grant scheme. Importantly, the proposal allows for potential ARTF Recurrent Cost Window allocations in the next few years of around US$270 million ⎯as per the Medium Term Fiscal Framework used in the Afghanistan National Development Strategy⎯ provided important reforms are on track. An overall precondition for the incentive component to apply, is the government remaining on track with the IMF’s Poverty Reduction and Growth Facility program and improved audit of core budget expenditures. The full proposal is attached below. 3. Discussion of SY1387 Budget The Director of Budget, Dr Mustufa Mastoor, presented delivery rates on the SY1387 national budget. The presentation highlighted weak budget execution this year and low levels of discretionary funds. This was due to a mix of unrealistic budgeting, delay in funding, cash shortage, technical and absorptive capacity in the line ministries, and deteriorating security. As of November 2008, 27 percent of the development budget had been disbursed. The October 2008 Donor Financial Review (DFR) had not yielded better information than the April DFR – and much information had been missing or provided late. Multi-year donor funding was still weak. Most worryingly, according to data provided, donors are expecting to reduce their core budget support in future years.


8

The Minister of Finance emphasized that the solution to weak budget execution was not in reducing levels of on-budget funding, but rather through continuing to improve the capacity of the line ministries, which is the single most significant factor constraining the pace of programs/projects implementation. Donors noted the need for stronger budget discipline, led by the Ministry of Finance, to reign in the practice of line ministries choosing to bypass the budget by raising funds directly from donors. They agreed with the Minister that capacity building was critical as a solution and also underlined the importance of program budgeting. The Ministry of Finance joined calls from UNAMA that donors should ensure transparency on their aid programs. Further discussion followed with regards the priority of revenue collection and the need to coordinate on salary scales for technical assistance in order to avoid undermining capacity development efforts in the line ministries.

4. Teacher’s salaries in SY1387 and ARTF The Minister of Finance presented a request for ARTF donors to consider using ARTF resources to offset the extra expenditure incurred as a result of the teacher salary increase during SY1387. He emphasized that the salary increases had been discussed with donors before they had been approved – since there was no room in the budget to pay for them otherwise. The issue was now critical, having created a US$43 million budget deficit. He presented the work that the Ministry of Education had done so far with regards teacher registration and teacher competency assessment. Donors expressed discomfort with the handling of the issue to date. It was noted that the reforms previously requested by donors had not been implemented by the Ministry of Education – but that salary payments had nevertheless been increased and paid, leading to the budget shortfall. Donors emphasized the need for budget discipline and that the government should in future be prepared to absorb trade-offs within its own budget through re-allocation rather than requesting extra funds from donors. It was agreed:

• The issue was indeed critical and urgent. In principle, donors agreed to the use of ARTF resources for this purpose, but only once performance benchmarks had been agreed with the government on future performance on critical reform areas.

• Donors would review their program budgets to identify possible flexibility for bilateral support.

• The ARTF Recurrent Cost Window would implement the response through a one-off increase in SY1387 ceiling. This would not impact the proposed (and agreed) reduction of the baseline for SY1388 from US$276m to US$250m.

5. Next steps on ARTF Financing Strategy and ARTF/Capacity Building The ARTF coordinator briefly introduced the discussion note on the proposed ARTF Financing Strategy. Donors agreed to form a working group to draw up a draft Financing Strategy for discussion at the next ARTF Quarterly Donors’ Meeting. The External Evaluation recommended that ARTF could consider providing a more coherent channel for international support for capacity development. The World Bank’s public administration reform specialist introduced a discussion on the subject. Several ideas were presented: a means for tracking and rationalizing salary supplements to civil servants; transition strategies for phasing out national and international technical assistance in ministries and building local capacity over time; and possible ARTF direct funding for coherent capacity building programs.


9

Donors urged follow-up on this issue. Government representatives also supported further work, noting that the Ministry of Finance had initiated a survey of technical assistance that would provide a good analytical basis. Some donors highlighted in particular the need for shared salary standards across the international community. It was agreed that the World Bank would circulate a discussion note to all donors and a meeting would soon be called. It was stressed that any work would be closely coordinated with the UNAMA-led task force on capacity development.


10

Proposal of the Technical Working Group: The ARTF Recurrent Cost Window Program

1. Introduction

The ARTF Recurrent Cost (RC) Window Technical Working Group was established following the September 2008 Quarterly ARTF Donor’s Meeting with the mandate to (a) assess options for the future of the ARTF RC Windows’ and (b) make a consensus proposal to the ARTF Quarterly Donors’ Meeting on December 17, 2008. Members of the Technical Working Group include: Ministry of Finance (Budget, Revenue, Fiscal Policy, Minister’s Office), US, UK, Italy, Germany, EC and the IMF. The World Bank has facilitated the six discussions. This proposal reflects these discussions, and in particular the following key points:

• Government of Afghanistan faces very real fiscal pressure through a combination of rising expenditures and sub-optimal revenue collection. The process of updating the Medium Term Fiscal Framework (MTFF) has been the basis for the strong and consistent message from Ministry of Finance that ARTF RC support will be an important part of the fiscal picture for some time. Predictability in the medium term of the availability of resources is also a key concern for the Ministry of Finance.

• ARTF Donors would like to see a predictable decline in the RC Window allocations and a shift

towards more program-based ARTF expenditures as progress is made towards operationalizing program budgeting.

• Both Government and ARTF Donors support an approach to the ARTF RC Window that is

predictable, takes account of rising fiscal pressure and that initiates the transition of ARTF to a programmatic and policy-based instrument – as recommended in the ARTF Evaluation, and endorsed by donors at the September quarterly meeting.

Summary of the Proposal The proposal laid out in detail below has the following objectives: • Predictable ARTF RC funding over the medium-term – and hence aid effectiveness • Support for Government’s core policy reforms, including domestic revenue generation • Strengthening the ARTF as a platform for policy dialogue between donors and Government • Clearer strategic objectives for the ARTF RC Window ARTF RC allocations each year would be the sum of (a) a baseline guaranteed amount of annual support and (b) a policy & performance-based incentive scheme. The baseline component will phase out over a set period – thereby establishing a predictable exit strategy from automatic ARTF support to the operating budget. This exit strategy is intended to prevent the ARTF from creating perverse incentives with regards revenue generation. The share of ARTF RC support that is linked to the government’s core reform program will increase over time. Importantly, the proposal allows for potential ARTF RC window allocations in the next few years of around US$270 million – as per the MTFF used in the ANDS. An overall precondition for the incentive component to apply is the Government remaining on track with the PRGF program and improved audit of core budget expenditures.


11

2. Context for the Proposal Afghanistan is subject to exogenous shocks. Large volumes of off-budget assistance (i.e. the External Budget) mean unpredictability for the future requirements on the core operating budget (i.e. implication of external budget investment on the future core operating expenditures). Insecurity, MDGs and public administration reform are also continuing to bring new and uncertain pressures on expenditures. Therefore, any overall and rapid decline in ARTF RC support would aggravate Afghanistan’s fiscal position, especially in the short-term. When the ARTF was established in 2002, the World Bank Board of Governors agreed on a principle whereby as domestic revenue generation increased, ARTF RC Window would decline. This principle was supported by the ARTF External Evaluation completed in August 2008, which recommended the merging of the ARTF RC and Investment windows in support of sector programs. Such a fundamental reform of the ARTF architecture will require robust program budgeting in line ministries. The program budgeting exercise is currently under review and is expected to take another several years. Given the ARTF RC Window’s volume of assistance to the operating budget, ARTF Donors and the Ministry of Finance have a stake in maintaining the government’s progress towards fiscal sustainability (operating expenditures covered by domestic revenues). Maintaining high and automatic levels of RC Window over the medium term does not maximize the incentives for revenue generation. A fixed schedule of decline in the guaranteed component of ARTF RC Window support brings greater predictability for both donors and the Government. The provision of donor financial support to a government’s budget is normally provided against commitments to and implementation of a reform program. In Afghanistan, the case for budget support through the ARTF RC Window needs to be strengthened if donor parliaments are to agree to maintain high levels of support. This proposal attempts to balance these different contextual factors. 3. A new ARTF RC Program: Key Features The new ARTF RC Window Program seeks to continue to provide the Government of Afghanistan with essential financial support that is also anchored in the core reform agenda. This agenda is critical to ensuring the possibility of future exit from ARTF RC support. The program would commence with the SY1388 budget. The key elements of the proposal are:

• Baseline: An agreement between donors, the government and the Management Committee (MC) to decline automatic ARTF RC support by US$25 million per year. This schedule is fixed and mechanical, starting in SY1388.

• Policy Incentive Scheme: An annual incentive scheme consisting of both structural reform

benchmarks and a revenue matching grant mechanism. Structural benchmarks will be based around three policy objectives. The scheme will start in the first year (SY1388), pending agreement by end January 2009 on structural benchmarks and details of the quantitative revenue matching grant scheme. See section 4 below for description & annex I and II for indicative benchmarks.

• Annual consultation between government and ARTF Donors to agree on the discrete structural

policy benchmarks. Structural benchmarks are proposed to focus on three core areas: revenue generation, public sector governance and private sector development.

• Principle of T+1: The incentive scheme has been designed to avoid intra-fiscal year un-

predictability. Structural benchmarks will be reviewed before the budget is finalized. If achieved in year T, an incentive would be made available as part of the following year’s ARTF RC support (T+1). The revenue matching grant scheme will also follow a T+1 pattern: revenue performance above a


12

certain baseline in year T will be ‘matched’ in year T+1. However, given the time lag in the availability of revenue data from the Treasury, the matching grant scheme will be reflected in the budget at the Mid Year Review. Nevertheless, the revenue department will be able to provide relatively accurate estimates even before then.

The schedule below gives (for the ANDS period) the level of baseline funding, as well as an indicative level of the annual policy incentive scheme. From SY1389, this component will also depend on revenue performance – and is therefore subject to change.

Indicative Schedule of ARTF Recurrent Window SY1387 - SY1391

Preliminary Actual Indicative

SY1387 SY1388 SY1389 SY1390 SY1391

Baseline ARTF RC support $276 $250 $225 $200 $175

Policy Incentive Scheme (includes (i) structural benchmark scheme $0 $40 $60 $70 $70& (ii) revenue matching grant)

Potential ceiling for ARTF RC Support $276 $290 $285 $270 $245 It should be highlighted that the ARTF RC Window governance (decision-making) and fiduciary arrangements remain the same under the proposed scheme:

• The two main decision making bodies will continue to perform their role as envisaged in the Board document. The ARTF Donors’ meetings are the main decision-making fora for overall ARTF strategy and direction. The Management Committee is responsible for day to day management and investment allocations. The Management Committee will continue to approve the ARTF RC “ceiling” at the start of the fiscal year. The ceiling is the maximum commitment that is made by ARTF to the operating budget.

• The existing fiduciary and disbursement arrangements will remain in place, including the Monitoring Agent contract to verify eligibility against the agreed criteria. Disbursement would continue to be made to the Single Treasury Account held by Da Afghanistan Bank, based on eligible non-security expenditures.

• In addition, no change is required to the contribution arrangements that donors sign with the World Bank or to the standard terms and conditions signed up to by all ARTF Donors.

4. ARTF Policy Incentive Scheme The proposed ARTF RC Program is designed as a multi-year, government-wide program to support the Government’s core reform program. It consists of two parts: (a) structural reform scheme; and (b) revenue generation matching grant. Together, the schemes seek to support reforms that are important not only for Afghanistan’s growth and development, but that also are pre-conditions for an exit strategy from recurrent cost support. In particular, the scheme seeks to strengthen Ministry of Finance’s role as the coordinator of ANDS implementation across government through the national budget. As the scheme proceeds, it is expected that policy discussions include more line ministries, reflecting structural benchmarks that target cross-government reforms. Preconditions for the Policy Incentive Scheme In order to be eligible for the Policy Incentive Scheme, the Government of Afghanistan must, on an annual basis:


13

• demonstrate commitment to and progress towards improved auditing and transparency on the Core Budget;3 and

• remain on track with the overall (i.e. not just revenue target) IMF PRGF program.

The Administrator is responsible for verifying that these pre-conditions are met on an annual basis.

Part I: Structural Reform Scheme The Structural Reform Scheme consists in an annual process of setting (and reviewing) benchmarks that are consistent with three broad policy objectives. The three policy objectives are:

a. Enhancing domestic revenue generation: The Poverty Reduction and Growth Facility (PRGF) program supervised by the IMF is the core framework for the government’s revenue generation program, in addition to broader macro-fiscal stability. In addition, various donor agencies support the Ministry of Finance revenue department through technical assistance. Discussions with the authorities, the IMF and donors indicate that the ARTF RC Program can further support government’s revenue measures, through strategic strengthening of existing benchmarks & commitments. This will bring ARTF RC Program into closer alignment with government’s program. This policy objective will be complemented by the quantitative revenue scheme.

• Medium-term monitoring of this policy objective at the outcome level will be undertaken in the PAM, the

PRGF and the quantitative ARTF scheme itself.

b. Strengthening public sector governance: Public administration reform (PAR), public finance management (PFM) and anti-corruption are all critical for the improved delivery of services and the broader state-building program in Afghanistan. Specifically with respect to the ARTF, PAR will be important for developing the sustainable core capacity in Government that will enhance the impact of external assistance through the Core Budget and from a longer-term perspective will reduce Afghanistan’s dependence on expensive and unsustainable technical assistance. The Government’s reform of PFM systems has demonstrated genuine improvements, as indicated by the 2008 PEFA study. These gains must be sustained if further progress is to be achieved, especially with regards to operationalizing the ANDS programs.

• Medium-term monitoring of this policy objective at the outcome level will be undertaken in the PAM, the

PEFA and through regular updates on the roll-out of core public sector reforms like the Comprehensive Pay & Grading exercise.

c. Enabling private sector development: Private sector development is critical to transition the

Afghan economy from a public sector-led to a stable private-sector led growth path. This is crucial for job creation and poverty reduction as well as for increasing the productivity and competitiveness of the Afghan economy. A broad-based economy will also support a broader tax base. ARTF Donors and Government propose to target the critical policy measures, including legislation, that underpin the enabling environment. Recognizing this is predominantly an input-based approach, as the scheme develops, this policy area could develop stronger links with outputs indices, such as the doing business indicators.

• Medium-term monitoring of this policy objective at the outcome level will be undertaken through regular

index-based studies such as the Investment Climate Assessment, the Doing Business Indicators.4 3 Following discussions with CAO, the proposed indicators of this commitment are: (a) maintaining satisfactory audit of donor activities annually, (b) the audit report on the Qatia being issued within 6 months of year end. In addition, the passing of the Audit Law and the completion of a Training Needs Assessment for the CAO are recognized as important indicators of a commitment to further improve the quality of audit.


14

Structural Reform Benchmarks The proposed structural benchmark matrices for SY1388 and SY1389 have been included in Annex I & II to this proposal. ARTF Donors and Government are not required to agree on the benchmarks for SY1388 at the Quarterly Meeting on December 17, 2008. Instead, ARTF Donors and Government are asked to approve the three policy objectives listed above. Consistent with lessons-learned from other schemes, ARTF Donors and Government agree that the matrix should have strong government ownership, should be realistic and not over-complex. Each year, a matrix of structural benchmarks will be agreed with the Government that is consistent with the three policy objectives. The process for agreeing the matrix will reflect the current Working Group structure: i.e. World Bank will lead technical discussions with the Government, but will include a core group of ARTF Donors that have technical capacity in the relevant areas. This working group will have the mandate to generate a simple matrix of benchmarks in the thematic areas. The ARTF Quarterly Donors’ Meeting in November/December will discuss and approve the matrix. The matrix will include the financial implication of meeting the benchmarks. This way, the discussions will have both buy-in amongst the broad donor community, but also be led by a streamlined technical team with the key people in Government. Annual Technical review The World Bank, in its role as ARTF Administrator, will perform a technical review of whether benchmarks have been met. This technical review will take place ahead of the November/December Quarterly Donors’ Meeting each year (this does not apply this year, as described above). The IMF will be involved where benchmarks are associated with the PRGF program. The Administrator will submit to the Management Committee (including the Ministry of Finance) the results of the technical review – thereby guiding the level of ARTF RC support to be programmed (and budgeted) in the next fiscal year. The Administrator will also submit the results of the technical review to the ARTF Donors at the same time. The Performance Assessment Matrix (PAM) will record progress on policy benchmarks on a quarterly basis.

Part II: Revenue Matching Grant scheme Recognizing that revenue generation is fundamental to fiscal sustainability, this proposal also suggests that in addition to structural policy benchmarks, ARTF establish a mechanism for incentivising strong revenue generation through a matching grant scheme. This quantitative system would be simple, transparent and in line with the Government’s objective of fiscal sustainability. It would also seek to strengthen and support the PRGF program. Providing revenue/GDP ratio does not decline over the medium-term, ARTF RC window would reward annual revenue performance above a certain baseline on a calibrated basis. As revenue figures are available in June, the incentive grant would be provided in year T+1 as part of the mid-year budget review. Provided ARTF Donors and Government agree, the Revenue Matching Grant Scheme can start in the first year of the new ARTF RC Program. This would mean that SY1387 revenue performance would, potentially, be rewarded in the SY1388 budget year.

4 The World Bank is currently discussing with GoA the design of a new ARTF project around the Doing Business Indicators.


15

Annual Schedule for the Incentive Scheme August/September: Working Group (including Government) negotiates the

matrix of Structural Reform benchmarks for following year.

November/December Quarterly Meeting: Working Group presents matrix to ARTF Donor Meeting

for approval. November: Technical Review of whether previous year’s matrix is met. December: Finalisation of budget – to include the baseline plus

Structural Reform Scheme component. June: Revenue Matching Grant scheme calculated based on

revenue data from Treasury (ARTF reflects this in the mid-year review of the budget).

Illustration of Annual Consultation and Decision Making for SY1389 onwards

Solar Year

Baseline ARTF Amount

Policy-based incentive

Revenue-basedincentive

Management Committee Decisions

Government actions

December:Confirm baseline.


November:Review past yearperformance. Set

benchmarks for next SY.

June:Confirm revenue

data from previous SY.

Approve RC “ceiling”.

Raise RC “ceiling”based on revenue

review


MTR of BudgetApprove Budget Approve BudgetApprove Budget

Solar Year





Government actions









review


MTR of BudgetApprove Budget Approve Budget

Solar Year





Government actions









review


MTR of BudgetApprove Budget Approve BudgetApprove Budget

In SY1388, given the tight timeline between the Quarterly Meeting in December and the start of the fiscal year, it is proposed that final agreement between the World Bank and the Government on the Incentive Scheme design be reached by end January 2009.


16

5. Conclusion The proposal anchors ARTF RC support within a fiscally sustainable framework – while also taking account of the expenditure pressures faced by the Government in the current Afghan context. It also positions ARTF support within the framework of the Government’s ongoing reform program: ARTF Donors are seeking to partner with the Government of Afghanistan to support core economic reforms. Thus, the proposal represents a first step towards a more programmatic ARTF, in line with the recommendations of the ARTF External Evaluation.

6. Follow up: Since the ARTF Meeting, the Working Group on the ARTF Recurrent Window has reconvened to finalise the ARTF Incentive Program. In addition, preparations are underway for the formulation of a technical group to formulate the ARTF Financing Strategy. The next Quarterly Meeting will be held in late March.

Key Decisions for ARTF Donors on the 17th December

The Working Group proposes that donors and government approve the overall program design at the ARTF meeting. This includes the following agreements:

• An agreement that the Management Committee declines the baseline of ARTF RC support by US$25 million a year, starting in the SY1388 budget cycle. Government will reflect this decision in the budget & MTFF.

• An agreement to institute the annual Policy Incentive Scheme described above (including both the Structural Reform Scheme and the Revenue Matching Grant Scheme).

• An agreement to review the ARTF RC Program after two years. • An agreement to delegate a small working group, led by the World Bank, to finalize the agreement

with Government on the SY1388 benchmarks by end January 2009.


17

IV. THE ARTF RECURRENT COST FINANCING

1. Introduction The ARTF, through recurrent cost financing, helps finance salaries and wages of over 250,000 non-uniformed civil servants (most of whom are working outside Kabul), and government’s operating and maintenance (O&M) expenditures outside of the security sector, including purchases of essential supplies. As of December 20, 2008, a total of US$1,611 million had been made available to the government over six years for recurrent cost financing of which US$1,585 million has been disbursed. The ARTF Recurrent Cost Window generally disburses 100 percent of what it allocates every year. For SY1387, the Management Committee has approved a ceiling of US$276 million in financing – the same level as approved for SY1386 (although SY1386 disbursements included US$15 million for SY1385 expenditures). In SY1386 the US$276 million disbursed by ARTF represented half of the non-security expenditures in the operating budget. The ceiling for SY1387 may increase depending on the outcome of the request for ARTF additional support for teacher’s salaries to be taken in January by the MC. 2. Recurrent Cost Financing requirements During SY1387 quarterly transfers of US$69 million from the ARTF parent account to the Recurrent Cost Window are projected. The forecast for the full year appears in Table 4 below. The quarter by quarter transfer depends on the planned pattern of presentation of expenses, which the government will determine. Making transfers in line with the transfer schedule will also ensure that at the end of the Solar Year the Recurrent Cost Trust Fund account balance will be equal to the agreed buffer of US$70 million. As of December 20, 2008, US$138 million has been transferred to finance the Recurrent Cost Window. Disbursements of US$207 million from the Recurrent Cost Window to the treasury account have been made.

Table 4: Recurrent Cost Financing Requirement for SY1387 (in US$ million)

SY1386

March 22, 2007 – Mar

19, 2008

SY1387 Mar 20, 2008

– Jun 20, 2008

SY1387 Jun 21, 2008

– Sep 21, 2008

SY1387 Sep 22, 2008

– Dec 20, 2008

SY1387 Dec 21, 2008

– Mar 20, 2009

SY1387 Mar 21, 2008

– Mar 20, 2009

Opening Balance 75* 70 70 16 25 70*

Disbursements (291)** - 123 60 93 (276) Transfers 286 - 69 69 138 276 Closing Balance 70* 70 16 25 70 70* * These balances do not include Special Account (working capital) balance of US$50 million. ** Includes disbursement of US$14.55 million made for SY1385 expenses. Carry forward of reimbursement

of prior budget year’s eligible expenses has not occurred in SY1386 and will not occur in future years because allocation should be exhausted by the end of the Solar Year.

~ US$138 million includes US$69 million to be allocated for final quarter of SY1387, and US$69 million for the third quarter that was approved in principle by MC subject to World Bank management approval of the waiver on late audits. As the waiver has been approved by the Bank’s management on December 19th, the transfer to recurrent cost trust fund will be completed shortly.


18

3. SY1387 Operating Budget Execution Table 5 presents budget and actual expenditures for SY1387 for the government’s operating budget, adjusted to exclude those ministries ineligible for ARTF financing. With ineligible ministries excluded, the eligible budgeted and actual expenditures are reflected in bold text below.

Table 5: SY1387 Budget versus Actual Expenditures (as of December 21, 2008)

Payroll AFN m

O&M AFN m

SY1387 AFN m

SY1386 AFN m

Initial Budget SY1387 (1) 43,389 15,000 58,389 53,600 Add: Mid year budget review 0 0 0 1,215 Defence, Interior, National Security, Presidential Protection Services (23,393) (3,507) (26,900) (22,748) Budget Ministries qualified for financing 19,996 11,493 31,489 32,067 Actual expenditures for year 31,585 16,648 48,233 50,634 Defence, Interior, National Security, Presidential Protection Services

(17,021) (2,493) (19,514) (21,576)

Advances (34) (4,771) (4,805) (1,279) Expenditures Ministries qualified for financing

14,529 9,384 23,913 27,779

Actual expenditures in percentage of adjusted budgeted expenditures 72.7% 81.6% 75.9% 86.6% Remaining budget 5,467 2,109 7,576 4,288 Remaining budget in percentage of initial budget 27.3% 18.4% 24.1% 13.4%

(1) Ordinary budget for the year SY1387 Source: Monitoring Agent 2nd Quarter SY1387 Report

4. SY1386 Distribution among Cost Categories Figure 4 presents the distribution of AFN 22,047 million in eligible expenditure for SY1387 among the four broad cost categories financed by the ARTF. Payroll expenditures are divided into Payroll-based salary expenditure (PBSE) comprising all payroll based salary expenditures including gross salary, food allowance, education level allowance, PRR payment and bonus payrolls. Non-payroll-based salary expenditure (NPBSE) comprises all expenditures classified in AFMIS as wages/ payroll but supported by documents other than payroll, such as assistance payments to employees and transportation expenses. O&M expenditures are broken into O&M expenditure excluding pensions (OM-P) comprising all recurrent expenditures recorded in AFMIS not included in one of the other categories, and Pensions (P) comprising pension payments by the Ministry of Labor and Social Affairs. The difference between the data presented in Table 5 bolded line “Expenditures Ministries qualified for financing” and the amount in Figure 4 below is due to the fact that the initial budget figures (Table 5) do not provide sufficient details to be able to further adjust the budget for the category “other not qualified for financing”. In other words, Table 5 reflects some budgetary expenditure which is ineligible for reasons unrelated to their ministry of origin; these expenditures are not part of the amount of AFN22,047 million whose breakdown is reflected below in Figure 4.


19

5. Recurrent Costs by Line

Ministry As of December 20, 2008, 70 percent of total disbursements of payroll and O&M expenditures were related to 5 out of 48 line ministries and independent budget agencies as shown in the Figure 6 below. 46 percent of the non-security spending was in the Ministry of Education, mainly for teachers’ salaries. Teachers represent almost half of all Afghan civil servants. As shown in Figure 5, the top six largest spending

ministries comprised approximately 73 percent of the total non-security operating budget for SY1387.

Figure 5: SY1387 Disbursements by Ministry

46%

12%

5%

4%3%

3%

27%EducationLabor & Social AffairsForeign AffairsPublic HealthHigher EducationMinistry of FinanceOther

Source: Monitoring Agent December 20, 2008 Report 5. Trends of the Eligibility of Submitted Expenditures Eligibility ARTF finances recurrent cost expenditures which meet the criteria set by the government, the ARTF Grant Agreement and the additional requirements agreed to by the Ministry of Finance and the Administrator which are termed the Fiduciary Standards. Criteria for eligibility are set out in Box 1.

Figure 4: SY 1387 Expenditures by Main Category (excluding military and other ineligible (by nature) expenditures)

(in AFN million)

13,266, 60%

612, 3%

6,645, 30%

1,523, 7%

Payroll-based salaryNon payroll-based salaryO&M excluding pensionPension

Source: Monitoring Agent December 20, 2008 Report


20

6. Current Performance For each category—payroll or O&M—of recurrent cost, Table 6 presents comparative data on submitted expenditures and actual approved expenditures, over the life of the ARTF. Table 7 presents these for 1387 in more detail. Where payments are deemed ineligible it could be according to any of the criteria described in Box 1. The expenditure and eligibility figures for SY1384 and SY1385 were restated taking into account the final deductions based on the auditors’ findings for these years. Audit findings for 1386 are not yet reflected in the 1386 eligibility ratios5. Payroll eligibilities for the last three years are SY1384 – 84.9 percent, SY1385 – 92.5 percent, and SY1386 – 89.2 percent.

5 See Annex 2 on Audit.

Box 1: ARTF Eligibility Criteria Government Regulations The Annual Budget Decree: since ARTF provides budget support to the government, expenditures can be found eligible only if they are included in the yearly budget; ARTF’s share of financing this yearly budget was approved by the ARTF Management Committee. Other. All goods and services must be procured and accounted for in accordance with government law and regulations. If expenditure does not comply with local regulations it will not be considered to be eligible for financing by ARTF. It is important to note that the Afghan procurement law allows for procurement to conform to donor requirements (article 50 sub 1). ARTF Grant Agreement All military and security related expenditures are ineligible for financing. Procurement. Capitalized goods and works need to be procured in accordance with the World Bank procurement guidelines. Fiduciary Standards Fiduciary Standards (revised as at 20 December 2004). In addition to the Afghan laws and regulations, an additional set of requirements was agreed on the timeliness of reporting and efficiency of cash management of eligible expenditures.


21

Table 6: SY1381-87 Summary of Statements of Expenditure: Submissions and Payments (US$ thousand)

O&M Payroll Total O&M Payroll Total O&M Payroll TotalUSD USD USD USD USD USD % % %

1381 Total 42,239 87,917 130,157 27,318 87,690 115,007 64.7% 99.7% 88.4%1382 Total 300,478 120,204 420,682 41,737 111,241 152,978 13.9% 92.5% 36.4%

Total 82,164 202,038 284,202 61,433 186,199 247,633 74.8% 92.2% 87.1%Total 104,100 227,858 331,958 75,014 193,520 268,533 72.1% 84.9% 80.9%Q1 13,704 35,961 49,665 13,290 35,961 49,251 97.0% 100.0% 99.2%Q2 41,219 80,727 121,945 36,403 77,039 113,442 88.3% 95.4% 93.0%Q3 35,089 69,162 104,251 25,971 62,973 88,944 74.0% 91.1% 85.3%Q4 58,172 94,453 152,626 20,024 83,342 103,366 34.4% 88.2% 67.7%

Total 148,184 280,303 428,487 95,688 259,315 355,003 64.6% 92.5% 82.9%Q1 18,415 40,710 59,125 18,415 40,710 59,125 100.0% 100.0% 100.0%Q2 41,315 91,544 132,859 33,853 87,857 121,711 81.9% 96.0% 91.6%Q3 45,135 88,293 133,428 38,437 74,757 113,194 85.2% 84.7% 84.8%Q4 73,912 103,397 177,309 20,150 85,644 105,795 27.3% 82.8% 59.7%

Total 178,777 323,943 502,721 110,855 288,969 399,824 62.0% 89.2% 79.5%Q1 43,555 79,741 123,296 43,555 79,741 123,296 100.0% 100.0% 100.0%Q2 55,595 93,281 148,876 -24,055 83,710 59,655 -43.3% 89.7% 40.1%

Total 99,150 173,022 272,172 19,500 163,451 182,951 19.7% 94.5% 67.2%

776,315 1,091,342 1,867,657 320,690 1,001,416 1,322,106 41.3% 91.8% 70.8%

Submitted by MoF to MA Approved by MA and by WB

Grand total

1384

1383

1385

1387

1386

Source: SoEs submitted to the World Bank

1. Table excluding deductions for reaching the yearly budget cap as agreed between donors and GIRA. Negative figures for O&M in SY1387 Q2 relate to the new procurement law (see point 2 at the bottom of page) 2. Negative figure for O&M in the second quarter of SY 1387 is due to recovery of expenditures reimbursed in the first quarter as the new procurement law is not accepted by the Bank. The net figure USD 19.5m for O&M comprises expenditures on pensions.

Monitoring of SY1386 expenditures is now complete. The decrease in eligibility ratio from 82.9 percent in SY1385 to 79.5 percent in SY1386 arose from change in payroll of 92.5 percent to 89.2 percent and O&M from 64.6 percent to 62 percent. Decline in payroll eligibility arose mainly because of (a) increase in missing supporting documents for the Ministry of Foreign Affairs for expenditure overseas and (b) payroll for head counts above the authorized staffing levels. O&M ineligibilities have risen because of increases in the failure to comply with procurement procedures. Of this, noncompliance with advertisement regulations was the major cause. The training of line ministry and particularly provincial staff on the new procurement law was only undertaken during SY1386: many units were still following the former law with respect to advertisement for calls for bids. Only limited ineligible expenditures (USD 14m, Table 8) are reported for the two components of O&M expenditure in SY1387. O&M monitoring, and in particular site visits, normally comes towards the latter end of the solar year. In addition, it is worth noting: 1. O&M - Pensions: the monitoring of pensions is done only after the statistical sample can be drawn from 6 months activity so the monitoring for OM-P started after the date of this report. 2. O&M: The new Procurement Law, enacted in July 2008, was not accepted by the World Bank as a basis for eligibility as such monitoring was suspended pending resolution of the issue. The government agreed to restore provisions in line with acceptable practices. Monitoring will, therefore, be carried out in the last quarter on the whole year.


22

Table 7: SY1387 Total ineligibility by main cause and category of expenditure

AFN million GIRA ARTF FS Total PBSE 116.6 3.8 448.7 569.1 NPBSE 0.0 0.0 0.0 0.0 Payroll 116.6 3.8 448.7 569.1 O&M (ex-Pension) 623.2 83.7 2.6 709.5 Pension 0.0 0.0 0.0 0.0 O&M 623.2 83.7 2.6 709.5 Total 739.8 87.5 451.3 1,278.6

Table derived from monitoring site visit findings up to and including December 20, 2008.

For definitions of column headings see Box 1.

Figure 6: SY 1387 Total Ineligibility by Main Cause (in AFN million)

Government Regulations, 740,

58%

Fiduciary Standards, 451,

35%

ARTF Grant Agreement, 88,

7%

Figure 7: SY 1387 Ineligibility by Category of Expenditure (in AFN million)

Payroll-based salary, 569, 45%O&M excluding

pension, 710, 55%


ANNEX 1:

STATUS OF INVESTMENT PROJECTS



23

Status and Ratings of Active and Disbursing ARTF Investment Projects (Amounts in US$ million)

Approved

Grant Amount

Amount

Disbursed

Amount

Available

Start Date

Closing

Date

Achievement

of Grant Objectives

Implemen-

tation

Civil Service Capacity Building (TF053940) 13.0 12.7 0.3 06/15/2005 02/28/2010 MS S

Management Capacity Program (TF090077) 10.0 0.4 9.6 10/17/2007 03/31/2010 NA NA

TA and Feasibility Study Project (TF050970) 18.5 16.8 1.7 03/08/2003 02/28/2010 MS MU

NEEP (NRAP) (TF050973) 52.8 52.8 .0 03/14/2003 03/31/2009 S S

Micro-finance Support for Poverty Reduction (TF052452) 183.3 133.8 49.5 07/10/2003 06/30/2010 S S

Kabul Power Supply (TF052541) 7.4 6.8 0.6 02/02/2004 03/31/2009 MS MS

National Solidarity Program II (TF090205) 271.5 245.3 26.2 05/27/2007 09/30/2009 S S

Rehabilitation of Naghlu Hydropower Plant (TF54718) 20.0 3.9 16.1 02/13/2005 06/30/2010 MS MS

Urban Water and Sanitation (TF054729) 41.0 20.4 20.6 02/21/2005 12/31/2008 MU U

Education Quality Improvement Program (TF054730) 44.0 28.1 15.9 06/01/2005 03/31/2009 S S

Rural Water Supply And Sanitation (TF055447) 7.7 2.4 5.3 2/26/2006 12/31/2008 MS MS

Kabul-Aybak/Mazar-e-Sharif Power Project (TF091120) 57.0 11.6 45.4 12/26/2007 12/31/2009 S S

Horticulture and Livestock Program (TF091885) 11.0 1.6 9.4 05/26/2008 12/31/2009 U U

Kabul Urban Reconstruction Project (TF092073) 5.6 0.0 5.6 05/13/2008 12/31/2009 S MS

Justice Sector Reform Project (TF092160) 27.8 0.4 27.4 07/15/2008 12/31/2009 S MS

Strengthening Higher Education Project (TF092544) 5.0 1.0 4.0 08/05/2008 12/31/2012 S S

(S: Satisfactory MS: Moderately Satisfactory, MU: Moderately Unsatisfactory, U: Unsatisfactory)

Rating Definitions Highly Satisfactory (HS) There are likely to be no shortcomings in the project’s achievement of its objectives, in

its efficiency or in its relevance. Satisfactory (S) There are likely to be minor shortcomings in the project’s achievement of its objectives,

in its efficiency, or in its relevance. Moderately Satisfactory (MS)

There are likely to be moderate shortcomings in the project’s achievement of its objectives, in its efficiency, or in its relevance.

Moderately Unsatisfactory (MU)

There are likely to be significant shortcomings in the project’s achievement of its objectives, in its efficiency, or in its relevance.

Unsatisfactory (U) There are likely to be major shortcomings in the project’s achievement of its objectives, in its efficiency, or in its relevance.

Highly Unsatisfactory (HU) There are likely to be severe shortcomings in the project’s achievement of its objectives, in its efficiency, or in its relevance.


24

1. CIVIL SERVICE CAPACITY BUILDING PROJECT (TF053940)

Contact: Mr. Nigel Peter Coulson

Approved: 02-May-05 Effective: 15-Jun-05 Closing: 28-Feb-10 [email protected] Allocated: US$13 million Disbursed: US$12.7 million Available: US$0.3 million Objective: To meet the short-term capacity needs of the Afghan Civil Service through two inter-related programs: the Afghanistan Expatriate Program (AEP) and the Lateral Entry Program (LEP). Component 1: The Afghan Expatriates Program (US$10 million) The "Afghan Expatriates" component enabled exceptionally well-qualified Afghan experts residing abroad to work as senior advisers to help key line ministries and apex agencies with institutional reforms, human resources development, and formulation and management of priority development programs Component 2: The Lateral Entry Program (US$3 million) aims to recruit a significant number of qualified Afghan professionals to ‘act’ in line civil service positions between Grades 2 and 4, on a scale of up to US$2,000 on contract for a term of 2 years, renewable once for one year and no more, with the purpose of:

• Providing short to medium term capacity to ministries primarily in agencies where the PRR effort has been slow to take off.

• Laying the foundation for the reform process in ministries and government agencies, which are currently not under the PRR process.

Training, mentoring and motivating regular post holders to work more efficiently and more effectively for the government, providing an alternative to the continued extensive use of technical assistance and consultants. Implementation Progress (AEP): To date, 98 positions (including 3 women) have been filled through the AEP in over 20 ministries and agencies. (LEP): To date 139 lateral entrants (including 4 women) have been recruited to work in over 22 ministries and agencies. All funds have now been fully committed and all of the individual contracts will be completed within the next nine months. Issues and Actions Independent evaluations were conducted of the AEP and LEP. The results of the two reviews and subsequent discussions with government (MoF and the IARCSC) identified a new, unified program with a single set of criteria for identifying needs, recruitment, remuneration and supervision. The new Management Capacity Program (MCP) has significant advantages over maintaining two separate programs to respond to the short to medium-term management capacity needs of ministries and is described in project 2 below. Please visit the Afghanistan Expatriate Program website: http://www.artfexpat.gov.af/about.html


25

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

Jun-0

5

Oct-05

Feb-06

Jun-0

6

Oct-06

Feb-07

Jun-0

7

Oct-07

Feb-08

Jun-0

8

Oct-08

Feb-09

Jun-0

9

Oct-09

Feb-10

Mill

ion

DisbursementRate: 98%

Achievement of Objectives: Implementation:

Moderately Satisfactory

Satisfactory


26

2. MANAGEMENT CAPACITY PROGRAM (TF090077) Contact: Mr. Nigel Peter Coulson

Approved: 30-June-07 Effective: 17-Oct-07 Closing: 31-Mar-10 [email protected] Allocated: US$10 million Disbursed: US$0.4 million Available: US$9.6 million Objective: To achieve sustained improved performance in the management capacity of key departments dealing with any or all of the common functions including financial management, human resource management, policy and regulatory design, and administration. This should ultimately result in improved utilization and cost effectiveness of budgetary resources and faster and better development results on the ground. The “Management Capacity Program” (MCP) would essentially support the interim buying-in of critical management capacity to line ministries to complement donor provided technical advisory assistance. The purpose would be to improve the utilization and cost effectiveness of donor resources and generate faster and better development results on the ground. This is necessarily an interim solution to address the multiple capacity challenges facing Afghanistan: a small pool of Afghan professionals; competing demands from UN agencies and bilateral donors who continue to implement projects outside the government systems; and the ongoing distortions in the remuneration levels for skilled manpower. Component 1: Provision of management services component Component 2: Program management component would strengthen the Capacity Development Secretariat (CDS) within the IARCSC. Implementation Progress Key features of the MCP include:

focus on senior-level line positions; support of common functions (procurement, financial management, human resource management,

administration, etc) and provincial and district administration; offer competitive remuneration (comparable to international organizations) to attract and retain the

required skills; strengthen Capacity Development Secretariat; oversight of program by PAR Steering Committee.

The project was declared effective in October 2007 following the completion of the project manual and the financial manual. The procurement of technical assistance to support HRM, Contracting and monitoring has been finalized and the Technical Assistance mobilized, a procurement plan for the first 70 positions has been approved, the first positions have been announced on the MCP website http://www.afghanexperts.gov.af/index.php, as funding under the Civil Service Capacity Program is fully utilized. Selection interviews for 31 positions have now been successfully completed and No Objections for 15 of these positions have been provided. Issues and Actions International technical assistance is supporting the Capacity Development Secretariat improve quality assurance and develop an outreach strategy.


27

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

Oct-07

Dec-07

Feb-08

Apr-08

Jun-0

8

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-0

9

Aug-09

Oct-09

Dec-09

Feb-10

Mill

ion

Disbursement Rate: 4%


NA

NA


28

3. TECHNICAL ASSISTANCE AND FEASIBILITY STUDIES FACILITY (TF050970)

Contact: Ms. Ludmilla Butenko

Approved: 08-Mar-03 Effective: 08-Mar-03 Closing: 28-Feb-10 [email protected] Allocated: US$18.5 million Disbursed: US$16.8 million Available: US$1.7 million

Objective: To build capacity of government by providing expertise to line ministries and developing local technical and professional capacity to define reconstruction and development projects. Component 1: Feasibility Studies and Implementation Support: Aims to identify and prepare projects for financing and implementation. This component supports the recruitment of specialized firms to undertake the feasibility studies and provide management support in the implementation of IDA and ARTF funded projects in line ministries. Component 2: Recruitment of Individual Consultants: Aims at recruiting specialists to guide the preparation and supervision of reconstruction and development activities and supervise feasibility studies on behalf of the government. Implementation Progress Component 1: A total of ten contracts have been awarded to consulting firms during the life of the project, which were mostly used for activities to support the Ministry of Mines, Ministry of Urban Reconstruction and Development, Kabul Municipality, and Ministry of Energy and Water, for a total commitment of US$18.5 million. The cumulative committed amount is almost fully disbursed, with only one contract remaining to be implemented and paid by the end of September 2008 (SMEC - Consulting Services for MUDH). Component 2: There are no individual experts currently working in the line ministries. Due to the changes in the circumstances and availability of funds directly related to the underlying sector interventions, individual TA support is being provided by the respective sector operations, both IDA and ARTF funded.

* Phase 2, amendment for which is being negotiated, would be planned to be financed under other funding

sources to MEW, if the project is identified in the first set of priority water infrastructure projects. ** TAFS financed portion of contract completed, Addendum 2 to the contract is under the IDA Natural Resources

Management Project.

Date Type US$ Million

Contractor Country Status

Jun-05 Baghdara Hydro Power Plant Feasibility Study for MEW 3.8

Fichtner GmBH& CoKG

Germany Phase I completed under TAFS*

Dec-05 Consulting Services for MUDH (Urban Plan) 2.6 SMEC Australia On-going

Mar-06 FM Consulting Services for Kabul Municipality (Urban Plan) 0.3 IPE India Completed

Jul-06 Aynak Copper Deposit Transaction Advisor 0.9 Gustavson

Associates USA Completed under TAFS**


29

Issues and Actions Judging by the activities implemented, the project has had a lower than expected impact in terms of feasibility studies and its contribution to the preparation of the public investment pipeline. In many cases, individual consultants were employed for short term assignments. To what extent the engagements of individual consultants have contributed toward capacity building in Afghanistan is difficult to assess but the impact is likely to be limited. The consulting firms engaged have provided a sound contribution to the design and management of the projects that they were supporting. For example, Gustavson Associate’s work has been instrumental in the preparation of a transparent and efficient tender process for the Aynak copper deposit. The contract has been amended to include the support to the Ministry of Mines in the negotiations with the winning bidder, however additional scope of work is being financed under the IDA project.

$0.00$2.00$4.00$6.00$8.00

$10.00$12.00$14.00$16.00$18.00$20.00

Mar-03

Sep-03

Mar-04

Sep-04

Mar-05

Sep-05

Mar-06

Sep-06

Mar-07

Sep-07

Mar-08

Sep-08

Mar-09

Sep-09

Mill

ion




Moderately Unsatisfactory


30

4. NATIONAL EMERGENCY EMPLOYMENT PROGRAM-1 (NEEP-I, TF050973) [PART OF THE GOVERNMENT’S NATIONAL RURAL ACCESS PROGRAM]

Contact: Ms. Susanne Holste and Mr. Hasan Afzal Zaidi

Approved: 14-Mar-03 Effective: 14-Mar-03 Closing: 31-Mar-09 [email protected], [email protected]

Allocated: US$52.8 million Disbursed:US$52.8 million Available:US$ 0.00 million Objective: To assist the government in providing employment in rural areas at a minimum wage, as a safety net, to as many people in as short a time as possible. This objective should be read in conjunction with the objective of government’s NRAP which is to enhance human security and promote equitable economic growth by ensuring year-round access to markets, basic services and facilities in the rural areas of Afghanistan, through promoting local productive capacity, and private sector development of essential rural access infrastructure and employment creation for the rural poor. Component 1: Road Sector Labor Intensive Public Works Component 2: Irrigation Labor Intensive Public Works Implementation Progress The National Rural Access Program (NRAP) is one of the government’s most successful national priority programs. Considering the overall country environment, the project has proven to be an effective delivery mechanism for rural infrastructure development, and has reached all 34 provinces of Afghanistan. All physical activities initiated under NEEP-1 have been completed. For both the public works and the irrigation component, the targets of the project have been substantially met, or even surpassed. The specific progress under the ARTF-funded NEEP-I is:

Performance Indicators Baseline Revised Committed Achieved to date

Roads (kms) 5,000 3,100 3,051 3,051 Irrigation 24,000 hectares

rehabilitated 15,000 hectares



rehabilitated Cross Drainage Structures

(m) n.a. 9,700 16,000 16,000

Un-skilled Labor days 4,780,000 5,200,000 5,420,000 5,420,000

Follow-up operation financed by IDA (NERAP) became effective in November 2008, and is performing satisfactorily, while further co financing from other donors have been received through ARTF for the NRAP program, and preparation for this new ARTF funded project is currently underway. Government’s new National Emergency Rural Access Project. The World Bank currently supports the NRAP through the National Emergency Rural Access Project (NERAP) which was approved by the World Bank Board on December 13, 2007, and became effective on November 17, 2008. The project s performing satisfactorily. Further co-financing from other donors have been received through ARTF for the NRAP program, and preparation for this new ARTF funded project is currently underway. Issues and Actions The project is in the closing stages, and no major issues are foreseen. Minor issues which require the attention of the Implementing Agencies (Ministry of Public Works and Ministry of Rural Rehabilitation and Development) and Implementing Partner (UNOPS) is the finalization of accounts for financial audit, and reconciliation of list of non-expendable assets purchased under the project.


31

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

Mar-03

Sep-03

Mar-04

Sep-04

Mar-05

Sep-05

Mar-06

Sep-06

Mar-07

Sep-07

Mar-08

Sep-08

Mar-09

Mill

ion



Satisfactory

Satisfactory


32

For more information on Microfinance in Afghanistan, please visit www.misfa.org.af.

5. MICROFINANCE SUPPORT FOR POVERTY REDUCTION (TF052452)

Contact: Mr. Niraj Verma, Mr. Stephen F. Rasmussen

Approved: 10-July-03 Effective: 10-July-03 Closing: 30-June-10 [email protected] [email protected]

Allocated: US$183.3 million Disbursed: US$133.8 million Undisbursed: US$49.5 million

Objective: To help Afghans improve their livelihoods using microfinance as a tool to make the transition from dependence on humanitarian assistance to economic independence and empowerment to build on entrepreneurial spirit and skills. Component 1: Microfinance Fund (Loan fund) Component 2: Capacity-building/training of Microfinance Providers Component 3: Implementation Support to MISFA and MFIs Implementation Progress Geographic Coverage: The sector has 284 branches across 24 provinces. An agreement for the provision of microfinance services by BRAC in Ghor and Daykundi was signed in December and preparatory activities began in December as well. Continuing security concerns have precluded discussion of any expansion in some provinces and have also lead to the reduction of activities in certain areas e.g. Ghazni. Sector Update: As of November 2008 and over four years of operation, the sector has more than 445,000 active clients out of which over 356,000 are active borrowers with an outstanding gross loan portfolio of over US$112.5 million. The sector has cumulatively disbursed 1,300,441 loans and an amount of more than US$547 million since start of the program. The current average loan size is US$316. Current repayment rate has come down slightly due to security constraints and staff management issues in some areas. Besides credit, MFIs have collected almost US$14 million in small savings deposits. Gender / Special Clients: At present there are almost 281,000 female clients (63 percent of the total clients). Some of the microfinance partners specifically cater to women clients. The sector employs 4,842 staff, of which 40 percent are female. MISFA has trained over 660 Afghans in microfinance. There are also 14,109 returnee clients, although this number is probably understated and is not tracked by all MFIs. MISFA Registration: MISFA has registered with AISA as an Afghan company. Twelve MISFA partner MFIs are also registered as companies under Afghan law and the others are in the process of regularizing their status or are registered under another authority e.g. FMFB-A is registered with the Central Bank. Projections: It is expected that by the end of SY1387 the sector will cover approximately 450,000 households and that growth in portfolio and number of clients will continue to be tepid due to security concerns, the onset of winter and a focus on portfolio quality. Two-thirds of the clients will remain female, an increasing number of loans will be disbursed in rural areas, and MFIs will be active in twenty-six provinces by the end of SY1387. Issues and Actions Funding Issues. US$50 million was approved in ARTF funding with an additional US$10 million from IDA and US$5 million from ARIES. MISFA has encountered some challenges disbursing funds YTD due to a new disbursement process. However, $19.1 million has been disbursed and it is anticipated that more than US$50 million will be disbursed prior to year-end 1387. MISFA is currently able to cover its operating costs from income earned on its portfolio.


33

$0.00$20.00$40.00$60.00$80.00

$100.00$120.00$140.00$160.00$180.00$200.00

Jun-0

3

Dec-03

Jun-0

4

Dec-04

Jun-0

5

Dec-05

Jun-0

6

Dec-06

Jun-0

7

Dec-07

Jun-0

8

Dec-08

Jun-0

9

Dec-09

Jun-1

0

Mill

ion



Satisfactory

Satisfactory

North East Region (Badakhshan, Baghlan, Kunduz

and Takhar) No. %

MFIs 5 33% Clients 73,800 16.5% Portfolio $23,361,052 20.8%

West Region: Badghis, Herat, Farah, Ghor, Nimroz

No. % MFIs 5 33% Clients 41,520 9.3% Portfolio $9,217,327 8.2%

North West Region (Balkh, Jawajan, Samangan, Faryab and

Sari Pul) No. %

MFIs 6 40% Clients 103,820 23.3%

Portfolio $26,748,200 23.8%

Eastern Region (Nangarhar, Nooristan, Kunar and Laghman)

No. % MFIs 7 47% Clients 40,319 9% Portfolio $7,141,398 6.4%

Capital Region (Kabul, Parwan, Kapisa, Bamyan, Daikundi, Wardak

and Logar) No. %

MFIs 12 80% Clients 179,467 40.2% Portfolio $44,602,994 39.6%

South Region: Helmand, Kandahar, Zabul, Uruzgan, Ghazni, Paktia,

Paktika No. %

MFIs 4 26.7% Clients 6,854 1.5% Portfolio $1,465,824 1.3%

Percentage Overall Outreach Total Rural Urban # of MFIs 15 Provinces 24 Clients 445,780 28% 72% Portfolio $112,536,795 24% 76%


34

6. IMPROVEMENT OF POWER SUPPLY TO KABUL (TF052541)

Contact: Mr. Sunil Kumar Khosla

Approved: 10-Dec-03 Effective: 02-Feb-04 Closing: 31-Mar-09 [email protected] Allocated: US$7.4 million Disbursed: US$6.8 million Available: US$0.6 million

Objective: The objectives of this project are to improve the availability and reliability of power supply in Kabul through the Mahipar hydropower station rehabilitation, including 110 kV of transmission lines. Measures will also be taken to improve street lighting. Component 1: Rehabilitation of Hydro Power Stations Component 2: Rehabilitation of Transmission Lines Sarobi-Kabul Component 3: Rehabilitation of Public Lighting in Kabul Implementation Progress Component 1: This component consists of the comprehensive rehabilitation of two units of 22 MW each at the Mahipar power station. The first unit was commissioned in May 2007 and the second unit is expected to be completed by December 2008. Power production in Mahipar is key for power supply in Kabul during the winter as the river feeding this power station has water only during this season (December–May) without any other competing usage. Energy produced in one unit in Mahipar can supply at least 16,000 households during the winter (assuming the average consumption of 200 kWh per month in Kabul). In addition, the alternative to produce this energy with thermal units would require 12 million liters of fuel, which would cost about USD 12 million at the current oil prices.

Component 2: The 110 kV transmission line from the hydropower stations to Kabul was dilapidated and overloaded, and the Breshna Kot substation to which it is connected was destroyed during the war. The component funded by ARTF consisted of co-financing the rehabilitation of the nonfunctional transmission line between Sarobi and Breshna Kot sub-stations. The total cost of the project was EUR 5.5 million, and out of that amount, ARTF funded EUR 1 million, which represents 18 percent of the total. This component was completed in March 2006, and the benefit of rehabilitating this line and the Breshna-Kot substation is to provide power supply to southern part of Kabul city involving about 25,000 households. In addition, this line provides back-up support to the Naghlu-Kabul line, which provides the main power supply to Kabul.

Component 3: Kabul’s street lighting system has been largely destroyed by the war. At the time the project was initiated, Kabul was almost at dark during the nights aggravating the general security in Kabul. The component funded by ARTF consisted of co-financing the rehabilitation of the main public lighting system in Kabul by providing new equipment and installations. The total cost of the project was EUR 3 million, and out of that amount, ARTF agreed to fund EUR 1 million, which represented 33 percent of the total. This component was completed in February 2005. The main benefit of the project was to rehabilitate about 116 kilometers of street-lighting circuits, which benefited about 30,000 premises in different areas of the city and improved security in these areas. Issues and Actions: Component 1 has been delayed due to changes in the initial scope of work due to the need to run most units during the winter as this station only has water during this season. The initial scope was partially to rehabilitate two units (Units 3 and 2) using some parts of the third unit (Unit 1) as it was assumed that there was not enough water flow to run three units simultaneously. During project implementation, GoA, with the help of the contractor managed to keep Unit 1 running, and decided not to cannibalize its parts any more. As a result of that, Unit 2 was not completed in 2007 as expected. In order to complete that process, KfW has agreed to finance and order missing parts to complete rehabilitation of Unit 2, which is estimated to cost about Euro 1.7 million, and provide additional funds of about US$500,000 to cover a financing gap in VSHK contract due to Euro appreciation.


35

$0.00

$1.00$2.00

$3.00

$4.00

$5.00$6.00

$7.00

$8.00

Feb-04

Jun-0

4

Oct-04

Feb-05

Jun-0

5

Oct-05

Feb-06

Jun-0

6

Oct-06

Feb-07

Jun-0

7

Oct-07

Feb-08

Jun-0

8

Oct-08

Feb-09

Mill

ion



Moderately

Satisfactory



36

7. NATIONAL SOLIDARITY PROGRAM II (NSP II) TF090205 Contact: Ms. Susanne Holste or Mr. Azmat Isa

Approved: 07-Dec-06 Effective: 27-May-07 Closing: 30-Sep-09 [email protected] [email protected]

Allocated: US$271.5 million Disbursed: US$245.3 million Available: US$26.2 million

Objective: To lay the foundations for strengthening community level governance, and to support community reconstruction and development projects that improve access of the rural communities to social and productive infrastructure and services. Component 1: Block Grants for Communities to Implement Reconstruction and Development Sub-projects Component 2: Community Facilitation and Capacity Building Component 3: Program Implementation Management Support, Monitoring and Evaluation Implementation Progress: The Second National Solidarity Project (NSP II) became effective on May 15, 2007, following on from the NSPI which closed on March 31, 2007. NSP II continues to support the 17,222 communities mobilized in the first phase while expanding the roll-out to an additional 5,396 communities. To date, the program has contracted FPs for mobilization of 23,179 communities, exceeding the target of 21,600. The reason is the strong demand from remaining communities. As of December 2008, more than 22,080 communities were mobilized. Approximately 21, 760 of these communities successfully elected Community Development Councils (CDCs) and 21,509 Community Development Plans (CDPs) were formulated. 46,011 sub-project proposals were approved of which 27,288 were completed. {About 79 percent of the sub-projects develop productive infrastructure: Water supply and sanitation (24 percent), rural roads (24 percent), irrigation (16 percent), village electrification (15 percent)} and the balance amount of 21 percent is used for human capital development projects. The November supervision mission assessed that NSP has made significant progress on the agreed actions during the Mid-term Review.

• Significant progress has been made in clearing the NSP I backlog with an additional 2,098 communities fully utilizing their BG entitlement between June and November 2008 totaling 5,500 communities.

• The sub project approval process has been expedited with 5,773 projects approved between June and November 2008.

• Number of communities contracted to date is 23,179 and has been kept within the agreed total rollout of NSP I and II to 23,700 communities.

• Work plans until the end of program have been finalized for all departments. • Data web-based reconciliation has made significant progress and is near finalization. • An FP supervisory system is in place which will improve FP contract monitoring. • An international procurement consultant was hired to head the procurement department and the

department is functioning much better. • The M&E department has been strengthened with both implementation monitoring and post

implementation monitoring being conducted more systematically. • Both the HR department and the Communications department are now staffed with strong national

teams.


37

Issues and Actions: 1) Allocation for SY1387 (Grant no. 090205): For SY1387, ARTF financing of US$178 million received blanket approval by the MC on May 13, 2008. Of the approved US$178 million, US$100 million has already been made available. An application for the release of an additional US$40 million was approved on 18 November 2008 and the grant agreement is expected to be signed shortly. 2) Funding shortfall for NSP: Funding shortfalls continue to be a problem for the program. The most recent supervision mission in November 2008 reviewed the overall implementation progress of NSPII and the pending program activities and commitments, and re-assessed the NSPII financing requirements. Based on the revised program costs and the actual funding secured to date, the mission found that there is a funding gap of some US$305 million. The financing strategy of this funding gap will include seeking additional funds from ARTF in SY 1388. This underestimation of funding requirements for NSP II can be explained by (i) the equity considerations as well as demand of rural communities for a rapid program roll-out; and (ii) an increase in the average amount of block grant per community from US$26,000 to US$32,800 due to increased number of households as displaced people returned to their villages and number of families were better established. (iii) greater community facilitation/capacity building efforts required than originally budgeted for, and (iv) unpredictable and delayed releases of funds from ARTF (precipitated by the actual flow of donor contributions paid into the ARTF) and bilateral donors for NSPII which slowed the pace of facilitation and subprojects implementation and increased the costs of contracts for Facilitating Partners (FPs) as they are unable to adjust their staffing strengths in the field. Finally the deteriorating security situation has resulted in more frequent suspensions of program activities in certain areas where the program is operating, increasing the program delivery costs. 3) Security: Security continues to be a concern for the project implementation. The security situation in the districts is very fluid and the FPs and NSP must adjust accordingly. NSP has proposed a draft chapter to the operations manual outlining the implementation model in insecure areas. One FP has been contracted for work in Kandahar which will act as a pilot for this model. This model can then be used in any districts where the security situation deteriorates.

$0.00

$40.00

$80.00

$120.00

$160.00

$200.00

$240.00

$280.00

May-07

Jul-0

7

Sep-07

Nov-07

Jan-0

8

Mar-08

May-08

Jul-0

8

Sep-08

Nov-08

Jan-0

9

Mar-09

May-09

Jul-0

9

Sep-09

Mill

ion



Satisfactory

Satisfactory


38


39

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

Feb-

05

Jun-

05

Oct

-05

Feb-

06

Jun-

06

Oct

-06

Feb-

07

Jun-

07

Oct

-07

Feb-

08

Jun-

08

Oct

-08

Feb-

09

Jun-

09

Oct

-09

Feb-

10

Jun-

10

Mill

ion

DisbursementRate: 20%




8. EMERGENCY POWER REHABILITATION PROJECT (Naghlu HPP) (TF054718) Contact: Ms. Sunil Khosla

Approved: 13-Feb-05 Effective: 13-Feb-05 Closing: 30-Jun-10 [email protected] Allocated: US$20 million Disbursed: US$3.9 million Available: US$16.08 million

Objective: To improve reliability of the power supply in Kabul. Component 1: Rehabilitation of 100 MW Naghlu Hydropower Plant in Laghman province (US$18.9 million) Component 2: Supervisory Engineer for Rehabilitation of Naghlu Hydropower Plant (US$1.1 million) Implementation Progress The contract for the rehabilitation of the Naghlu Hydropower Station with Technopromexport (Russia), and co-financed with IDA, was signed on August 30, 2006 and became effective on November 30, 2006 following the transfer of the advance payment and establishment of the letter of credit. The contract for the supervision consultant was signed on September 18, 2006 and became effective on December 27, 2006. The supervision consultant team is full time at site from July 1, 2008. The camp site has been constructed; most of the equipment for Unit 1 (Generator, excitation system, turbine, inlet valve, transformer etc.) has been designed and manufactured. The transformer has been dispatched to site. The operational acceptance test for the first unit (25 MW) is scheduled for the first quarter of 2009, the second unit for the third quarter 2009, the third unit for the fourth quarter 2009, and the fourth and final unit expected to be completed by the second quarter of 2010. Payments under the letter of credit will be made against achieving these milestones. Issues and Actions: The security situation in Naghlu area has considerably deteriorated since the previous reporting period. The supervision consultant (Fitchner, Germany) representative left the site. The visits of Minister of Energy and Water to the site have helped in persuading the contractor to continue to work. MEW is discussing with the contractor on additional security measures and appropriate compensation. The replacement options for Fitchner, Germany as the supervision consultant are also under discussion.


40

9. URBAN WATER SUPPLY AND SANITATION (TF054729) Contact: Mr. Shyamal Sarkar Approved: 21-Feb-05 Effective: 21-Feb-05 Closing: 31-Dec-08 [email protected]

Allocated: US$41 million Disbursed: US$20.4 million Available: US$20.6 million

Objective: To provide sustainable, improved water supply and sanitation services to urban areas and to build the technical and institutional foundation for the medium term. Component 1: Kabul Water Supply – Upper Kabul River Well-field, Transmission Mains and Distribution Networks. Component 2: Kabul Sanitation – Construction of New Facilities for On-site Sanitation and Municipal Solid Waste. Component 3: Provincial Towns Water Supply/Sanitation – Rehabilitation and Extension of Systems in 13 Provincial Towns. Component 4: Engineering Support and Technical Assistance to Central Authority for Water Supply and Sewerage (CAWSS) and Kabul Municipality. Component 5: Financial Support to the government’s Central Authority for Water Supply and Sewerage (CAWSS) Operations. Implementation Progress 1. Kabul Water Supply: The construction of the boreholes (11+2 boreholes are completed in Logar and 10+1 are completed in Allaudin) completed. The land acquisition process for the boreholes still require a few clarifications to be fully in line with the provisions of the project’s Environmental and Social Management Framework. Tendering for the second (pipelines and equipment for well fields and pumping stations), third (collector pipes and transmission mains), and fourth (principal and local mains) works packages was non conclusive. Meanwhile, the estimated costs of these packages have increased, and it is much beyond the allocation made under this component. At the request of the MoUD, KfW agreed to finance the second and the third works packages and the bids have been invited. The fourth package may be financed by IDA by restructuring the ongoing IDA assisted project. The bidding document is being finalized by MoUD. Re-invitation of the bids is likely in early February 2009. 2. Kabul Sanitation: The consultancies to assist Kabul Municipality in implementing the project are mobilized. Activities to provide Operations Support to the Department of Sanitation are completed and covered subjects such as public awareness campaign, management information system etc. A few contracts for goods and small works are completed, including a co-composing pilot and the construction of a workshop for the Department of Sanitation. Following rebidding, contract for Chamtala dumpsite is under finalization. No bids were received for construction of sludge/septage disposal station, and this work may be incorporated in the proposed Kabul Urban Waste Management Project. 3. Provincial Towns Water Supply/Sanitation: This project component covers Sheberghan, Mazar-i-Sharif, Taloqan, Charikar, Jalalabad, Metherlam, Gardez, Ghazni, Kandahar, Qalat and Maimana, Puli Khumri, and Zaranj. Four contracts for goods amounting to about US$10.0 million were signed in January 2007, and the goods were received in Afghanistan after due inspections at shipment. Construction of office / warehouse buildings in Kabul, Puli Khumri and Maimana, and the drilling of test wells in Zaranj, Maimana and Sheberghan are completed, and production boreholes in Taloqan are completed. Drilling and installation of production boreholes are on going at Sheberghan, Puli Khumri and Maimana. Pipe laying activities have commenced in Qalat, Kandahar, Ghazni, Charikar, Metherlam, Jalalabad, Gardez, Mazar and Sheberghan whereas works in Taloqan, Maimana and Puli Khumri are to be re-invited. Following the conduction of geo-technical investigations, the design of several reservoirs was finalized and the corresponding works were tendered. The Bid Evaluation Reports have been prepared for the corresponding contracts by MoUD. But, these are yet to be furnished to the Bank.


41

4. Engineering Support and TA: Contracts with technical support agencies are on-going on all project components. But, it is likely that the contract for Kabul Sanitation may not be extended further. Contracts with a total of seven individual advisors for MoUD, CAWSS and Kabul Municipality and nine individual consultants have been funded under this project. This technical support has/is enabled/ing the government to prepare follow-on operations for the medium-term program (IDA-financed Urban Water Sector Project (approved in FY06) and proposed Urban Waste Management Project. The Articles of Incorporation of the new Afghan Water Supply and Sewerage Corporation (AUWSSC) were approved by Cabinet and immediately published in the official gazette in July 2007. Following the recruitment of a General Manager and the other senior management staff and the transfer of assets, the new corporation is expected to enter into function in March/April 2009. 5. Financial Support to CAWSS Operations: The Financial Support to Operations of CAWSS was effective since August 2005 with about US$2 million utilized over 20 months. This support has significantly contributed to improving the management capacity in all 14 units of CAWSS, and has generated detailed technical, financial and commercial data for the first time. Elementary financial management systems are now in place in all the towns. The Financial support to CAWSS operations was terminated as of March 21, 2007 to prepare for the transition to the financial assistance to AUWSSC under the IDA-financed Urban Water Sector Project (P087860). Issues and Actions: The Grant is extended by a year and the current closing date is December 31, 2009. Some major construction contracts for Kabul water supply could not be finalized and, the grant amount net of commitment available is not adequate for the Kabul water supply contracts. These are to be financed under a different financing arrangement. At the request of the MoUD, KfW agreed to finance the second and the third works packages and the bids have been invited. The fourth package may be included in the ongoing IDA Urban Water Sector Project (P087860) by project restructuring. A request for project restructuring is awaited from the Government. Release of payment to the contractors and consultants are taking place with delay, and therefore, the expenditures incurred by the project are not reflected in the amount disbursed.

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

Feb-05

May-05

Aug-05

Nov-05

Feb-06

May-06

Aug-06

Nov-06

Feb-07

May-07

Aug-07

Nov-07

Feb-08

May-08

Aug-08

Nov-08

Mill

ion



Moderately Unsatisfactory

Unsatisfactory


42

10. EDUCATION QUALITY IMPROVEMENT PROGRAM (EQUIP) (TF054730) Contact: Mr Joel Reyes

Approved: 01-Jun-05 Effective: 01-Jun-05 Closing: 31-Mar-09 [email protected] Allocated: US$44.0 million Disbursed: US$28.1 million Available: US$15.9 million

Objective: To strengthen and support capacity of (a) schools and communities to better manage teaching/learning activities; (b) human resources (teachers, principals and educational administration personnel) and physical facilities; and (c) District Education Departments, Provincial Education Departments and the Ministry of Education (MoE). The program promotes education for girls by giving priority to female teachers and students within each component activity. Component 1: School Grants for Quality Enhancement and Infrastructure Development Component 2: Institutional and Human Resources Development Component 3: Policy Development, Monitoring and Evaluation Implementation Progress Implementation progress has been satisfactory. EQUIP has been declared a national program and is being implemented in all 34 provinces of the country. The second phase of EQUIP is being prepared with added emphasis on alignment, harmonization and capacity building for the implementation of the National Education Strategic Plan (NESP) of Afghanistan. Component 1 is being implemented satisfactorily; however, strategies for access of education in insecure regions need to consider innovative alternatives, given the increased conflict insurgency in these areas and direct attacks to schools. Community participation in ownership of schools continues to be very effective strategy to work in unsecured regions. The teacher training programs, within Component 2, will be initiated through the support of NGOs. EQUIP II will support the integration of lessons learned from different teacher training contributions in Afghanistan, as the first steps to build a Teacher Professional Development System. The institutional development investments, within Component 3 (mainly Technical Assistance to various MOE Departments), will be integrated within the umbrella of the Public Administration Reform (PAR) Program, to guarantee a more cohesive use of EQUIP supported TA, and to align with the broader institutional reforms within the MOE. The Planning Department will be a key beneficiary, to support inputs required for a Monitoring and Evaluation Framework which would support increased donor alignment and harmonization with the NESP: Presently the NESP has been reviewed by the MOE to develop more effective NESP indicators for the EMIS system to produce clean data from the successful school census in 1386, and to improve donors coordination. Achievements so far: • EQUIP has been very successful in mobilizing communities for establishing School

Management Committees and Parent Teacher Association under the quality grants enhancement subcomponent. Integrating the community participation systems within the larger institutions of the MOE (for example, quality of education, supervision and community mobilization, financial management and procurement, etc.) will be considered within EQUIP II. Strategies to deepen community understanding of quality education and to provide incentives for the sustainability of parental participation will also be included. Approximately 3,200 school committees have been organized across the country.

• There has been satisfactory progress in infrastructure development, with increased emphasis on community participation in school construction given both community requests and as a strategy to improve safety of schools in unsecured regions. EQUIP I finances the construction of 828 schools (601 through community participation 190 through nationally contracted firms and 37 through provincial education departments); the last 10 percent of these schools will be contracted during 1388. EQUIP II has so far programmed the construction of 753 additional schools (655 through community participation and 98 through nationally contracted firms).


43

• Implementation modality of a district based teacher training team scheme will be implemented through the support of NGOs. The MOE is seeking improved coordination and sharing of lessons learned between teacher training programs supported by key donors, in order to develop and integrated Teacher Professional Development Program. Registration has been completed and a survey of training needs has been prepared and analyzed, which will serve to better plan teacher training activities across the country. Teachers pay and grade with close coordination of donors and MOE is undergoing a process and certain bench marks have been developed to help in the achievement of systematic approach for this process by the end of 2009.

• EQUIP has financed approximately 500 individual technical assistance contracts in the following departments: EQUIP Coordination Unit, Curriculum Development Department, Financial Department, Procurement Department, etc. To improved TA effectiveness, EQUIP II will seek improved coordination with the Public Administration Reform (PAR) program within the MOE, to continue to support the capacity building of the regular MOE staff and new staff to be hired through the PAR program. Presently, the MOE has setup a TA review and appointed a committee to align utilization of TA with the capacity building and institutionalization development of key institutions in the MOE for long term sustainability.

Issues and Actions: Security: A major issue affecting all investment programs in Afghanistan, including EQUIP, is the increased violent attacks in the country and unsecured districts and regions. Thus, the MOE is defining different strategies to guarantee increased safety of students, especially in insecure regions. EQUIP will need to adjust some of its education service delivery mechanism also, in line with increased safety needs. Students and teachers are especially at risk; thus, strategies to guarantee their safety in school, on their way to school, and on outside events (such as teacher training) will be defined and supported through EQUIP II. Maintaining the community-based management of schools approach will remain an important strategy. Disbursement: EQUIP is finalizing EQUIP I ARTF disbursements. Despite some delays in the disbursement of the US$44 million allocated to EQUIP I, disbursement rates have increased in line with the expedited school infrastructure program. The EQUIP II ARTF proposal will be presented to the Management Committee before the end of SY1387. Planning and procurement activities for EQUIP II have already started to make sure disbursement of funds once approved is efficient. Donor coordination: Improved donor harmonization mechanisms have been put in place, and the National Education Strategic Plan (NESP)’s indicators are being updated, to improve alignment, monitoring and evaluation. EQUIP’s own indicators will continue to be align with NESP’s goals. Fiduciary: Fiduciary (Financial and Procurement) management improvement will continue to be supported, in the new institutionalized structures of the MOE (rather than in separate/parallel implementation units).


44

$0.00$5.00

$10.00$15.00$20.00$25.00$30.00$35.00$40.00$45.00$50.00

Jan-0

6

Apr-06

Jul-0

6

Oct-06

Jan-0

7

Apr-07

Jul-0

7

Oct-07

Jan-0

8

Apr-08

Jul-0

8

Oct-08

Jan-0

9

Mill

ion



Satisfactory

Satisfactory


45

11. RURAL WATER SUPPLY AND SANITATION (TF055447) Contact: Mrs. Karine Fourmond Approved: 15-Dec-05 Effective: 26-Feb-06 Closing: 31-Dec-09 [email protected]

Allocated: US$7.7 million Disbursed: US$2.4 million Available: US$5.3 million

Objective: To improve the health of rural communities by increasing awareness through integration of health and hygiene education with the provision of safe and sustainable water supply and sanitation services in eight provinces (Baghlan, Takhar, Kunduz, Kabul, Badghis, Samangan, Jawzjan, and Sari Pul); to strengthen and build the capacities of government (central and provincial) for sector development and that of NGOs, the private sector and the communities to scale up provision of safe and sustainable water supply and sanitation services. Component 1: Strengthening Capacity of Entities and Communities Component 2: Construction of Water Points and Sanitary Latrines in Rural Areas Component 3: Carrying out Studies for Developing Service Delivery Mechanism Implementation Progress After the MRRD recruited a Project Manager in August 2006, a Project Implementation Unit was established in the Watsan department of the Ministry of Rural Rehabilitation and Development. Support Organizations were mobilized in February 2007 and software activities could then be initiated. The planning phase was completed in spring 2007 with district demand collection and provincial planning having resulted in the selection of 4 target districts in each of the 8 provinces in which the project is being implemented. In these 32 selected districts, action plans for selection of sub-projects were finalized at the community level together with necessary engineering designs during the summer 2007 and Support Organisations have moved into supervision of construction activities over the past winter. Hygiene and sanitation promotion and O&M training efforts have taken place in all the project villages through mobilization of hygiene promoters / visits to households and identification / training district mechanisms and water points caretakers. A total of 948 hygiene promoter couples were trained so far (100 percent) and only 871 households are left to be visited (3 percent). A total of 27 district mechanics were trained so far (66 percent) and only 125 water point caretakers are yet to be trained (14 percent). Some 650 water points were constructed till now, which is 85 percent physical progress against the 765 water points planned and some 1,415 demonstration latrines were constructed till now, which is 47 percent physical progress against the 3,000 demonstration latrines planned. The procurement of works for gravity pipe schemes (13 contracts worth US$ 0.369m) have taken place after the procurement modalities (NCB vs community contracting) were finalized. Although the construction of 5 of them has now started, it is likely that none of the gravity pipe schemes will be completed before the winter. In addition, the MRRD has requested additional funds to improve the coverage further during this construction season by taking advantage of the systems in place under the project and the existing implementation arrangements. An Additional Financing of US$2.65m was hence approved in August 2008 to fund an additional 420 water points and 1,260 demonstration latrines, together with associated hygiene promotion efforts in 14 districts. Special provisions were also made for project provinces affected by drought and for the insecure area of Musa Qala district in Helmand province. Under the Additional Financing, software activities have now been initiated. A total of 35 community contracts worth US$1.024m are now finalized also but it is unlikely that works could start before the winter. For these reasons, it was decided to extend the project closing date by another year till December 31, 2009 and this is currently under process. In the meantime, the study for the independent review of various implementation models being previously implemented by different actors and conceptualizing the architecture of what could be a comprehensive M&E system was finally commissioned. This would represent an ideal platform for discussions on broader sector issues with other PIUs under the Rural Watsan Department but also with other sector stakeholders. Sector issues of concern to the Ministry include: optimal approach to RWSS, institutional arrangements in the sector and sector development planning.


46

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

Mar

-06

May

-06

Jul-0

6

Sep-

06

Nov

-06

Jan-

07

Mar

-07

May

-07

Jul-0

7

Sep-

07

Nov

-07

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep-

08

Nov

-08

Mill

ion





Issues and Actions: Deterioration in security conditions remain a concern and continue to affect implementation progress and quality of supervision. The construction of gravity pipe schemes is proving longer that initially expected. It also appeared that community contracting / funds flows through CDCs bank accounts and mobilization of staff in PRRD offices have faced their own constraints. Hence additional works on schedule could not take place before the winter. The government has requested a third extension of the closing date by another one year – which was granted, while taking immediate measures to improve implementation performance. In the meantime, broader sector work will continue to take place in parallel.


47

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Dec-07

Feb-08

Apr-08

Jun-0

8

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-0

9

Aug-09

Oct-09

Dec-09

Mill

ion



Satisfactory Satisfactory

12. KABUL/AYBAK/MAZAR-e-SHARIF POWER PROJECT (TF091120) Contact: Ms. Sunil Khosla

Approved: 26-Dec-07 Effective: 26-Dec-07 Closing: 31-Dec-09 [email protected] Allocated: US$57 million Disbursed: US$11.6 million Available: US$45.4 million

Objective: To provide reliable and quality power to the consumers in the target areas of the cities of Kabul, Aybak and Mazar-e-Sharif. Component 1: Distribution System Rehabilitation of part of Kabul City network. Component 2: 220 kV Substation at Aybak and interconnection with medium voltage system Component 3: Power System Rehabilitation for Mazar-e-Sharif Component 4: Institutional capacity building / support Implementation Progress Contractors for implementation of work at Kabul and Mazar-e-Sharif have been selected through international competition and have mobilized at site. The survey and vendor approval is in progress. The equipment for testing the presence of hazardous polychlorinated biphenyls (PCB) has been dispatched. The Contractor for Aybak and Mazar substation augmentation has been finalized and the contract award is under process. Issues and Actions: In consultation with DABS and MEW metering strategy for the distribution system for these areas has been finalized. The technical specifications and bidding documents of meters will be prepared based on this strategy.


48

13. HORTICULTURE AND LIVESTOCK PRODUCTIVITY PROJECT (TF091885) Contact: Mr. Usman Qamar

Approved: 26-May-08 Effective: 26-May-08 Closing: 31-Dec-09 [email protected] Allocated: US$11 million Disbursed: US$1.6 million Available: US$9.4 million

Objective: To stimulate perennial horticulture and livestock marketable output in focus areas by improving the incentives framework for private investments and strengthening institutional capacity in agriculture. Component 1: Increasing Productivity and Marketable Output of Perennial Horticulture; Component 2: Increasing Output and Productivity of Livestock; and Component 3: Capacity Building, and Monitoring and Evaluation Support Implementation Progress The mid-term review of the project was carried out in two stages, starting in June 2008 and ending November 2008. All project components (except the dairy component) now seem poised to make tangible progress. Significant progress has been made in the last six months:

• Organizational obstacles of the National Union for Horticulture Development in Afghanistan (NUHDA) have been by and large resolved, staff recruitment is in process and its value chain activities are expanding.

• Activities under the animal health component have been continuing and the semi-intensive poultry production commenced in November 2008

• Initial results from monitoring and evaluation of horticulture demonstrations show substantial increases in fruit yields.

• Although disbursements are still low, the ARTF grant is about 40 percent committed. However, because of past delays, the project is unlikely to achieve its development objectives by the current closing date (December 31, 2009). In view of this, the ratings for project implementation and achievement of objectives have been downgraded to unsatisfactory. An action plan has been agreed with MAIL that would help achieve tangible progress and outcomes in the next six months. If the desired progress and outcomes are achieved, it would represent a turn around in project performance and provide a basis for consideration of an extension of closing date. An assessment of the overall project status will be made in May/June 2009. Issues and Actions:

1. The Facilitating Partner for the dairy development sub-component has still not been contracted. The final selection of the FP was recently rejected by the Special Procurement Committee on the grounds that the selection should have been made on the least cost method. This component may now have to be dropped or curtailed in scope.

2. IMST has been slow in preparing work plans for the ten focus clusters. 3. A credible action plan for completing the project (with revised and realistic targets) and achieving

the development objectives during the extended project period, including updated project cost estimations, financing plans, and work plans is needed.

4. NUHDA still needs to register as an NGO, complete additional value chain studies for the 10 focus clusters, prepare for electing a permanent Board of Directors, and intensify their campaign for expanding membership base.

5. There is continued uncertainty regarding supplies of production inputs 6. Slow progress with gender mainstreaming (GM) and counter-narcotics activities under HLP.

Specific actions with target dates have been agreed with MAIL/IMST to address the above issues.


49

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

Jun-0

8

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-0

9

Aug-09

Oct-09

Dec-09

Mill

ion



Unsatisfactory

Unsatisfactory


50

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

May-08

Jul-0

8

Sep-08

Nov-08

Jan-0

9

Mar-09

May-09

Jul-0

9

Sep-09

Nov-09

Mill

ion



Satisfactory


14. KABUL URBAN RECONSTRUCTION PROJECT (TF092073) Contact: Ms. Soraya Goga

Approved: 13-May-08 Effective: 13-May-08 Closing: 31-Dec-09 [email protected] Allocated: US$5.6 million Disbursed: US$0 million Available: US$5.6 million

Objective: The project aims to provide improved delivery of basic urban services in vulnerable communities in Kabul through the upgrading of urban infrastructure and through enhancing the managerial capacity of Ministry of Urban Development (MoUD) and Kabul Municipality (KM). Component 1: Area Upgrading in Darwaze Lahori, Deh Afghanan, Andrabi, Murad Khanna (Kabul). Component 2: Engineering and Project Management Support. Component 3: Support on Cultural Heritage. Implementation Progress An initial supervision mission was carried out in June 2008. Progress is as follows: • Community organizations have been formed in all targeted neighborhoods • Planning and engineering design has started in all 4 neighborhoods and is complete in 2 • Work on the Environment and Social Impact Assessments (ESIA) has started and is close to

completion in all four neighborhoods. Issues and Actions: • The contract with the Engineering and Management Consultants (SMEC) should be finalized so that

the ESIA can be released. In the absence of an ESIA, civil works cannot start.


51

15. JUDICIAL REFORM PROJECT (TF092160) Contact: Ms. Lubomira Zimanova Beardsley

Approved: 15-Jul-08 Effective: 15-Jul-08 Closing: 31-Dec-09 [email protected]: US$27.8 million Disbursed: US$.4 million Available: US$27.4 million

Objective: To strengthen the centralized state justice system in Afghanistan and increase access to justice for the Afghan people. Component 1: Enhancing Capacity of Justice Institutions ($23.6 million) Component 2: Empowering the People ($2.4 million) Component 3: Strengthening Implementation Capacity ($1.75 million) Implementation Progress The fourth supervision mission took place in January 2009. Progress is as follows: 1. Enhancing Capacity of Justice Institution

• The bidding proposals for procurement of vehicles, furniture & equipment and ICT (for MoJ and SC) under evaluation ( value of about USD 7 million)

• Concept proposal for HRM for courts and prosecutorial office under preparation • TORs for Training, ICT Assessment, Design of Provincial buildings and HQ for MoJ

approved by IDA and advertised • TORs for Design and Construction of Provincial Courts and Prosecutorial Offices, TOR for

AGO HQ, TOR for Court Building Design completed and submitted for IDA approval • TORs for infrastructure managers for AGO and MOJ submitted to ARDS for procurement

2.Empowering the People • Concept Proposals for Legal Aid and Legal Outreach Programs completed and submitted to

IDA for its approval 3.Strengthening Implementation Capacity

• Project Oversight Committee (POC) established and meeting regularly. • Project Director in place since early December and Procurement Specialist hired • Positions of Engineer, Financial Manager, and Project Coordinator advertised • TORs for Project Assistant and an International Procurement Specialist finalized • Draft TOR for Board of Donors shared with the POC • Project Assistant for MoJ in place since December and Project Assistants for SC and AGO

hired • Staff working on the project received training in procurement and financial management

Issues and Actions:

• Procurement and financial management capacity in the institutions is low and they require close support from ARDS (Ministry of Economy) and PSU. Therefore making the PSU operational (recruiting core staff, equipping office, and developing an operational manual) is the project top priority. The AGO lags behind in terms of capacity and progress on project implementation. Leadership at the AGO has changed twice since the project was approved. The IDA is planning on organizing a workshop on the project for the new AGO staff and international consultants who assist the AGO. The workshop outputs should include a detailed organizational structure and processes for the project implementation. The IDA will encourage the POC to provide additional assistance to AGO.

• Phase 2: Work is ongoing to develop a proposal for Phase 2 of this project. The team expects to produce a PCN by late Spring 2009 and has been discussing potential components of Phase 2 with the justice sector institutions and local experts.


52

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

Jul-0

8

Sep-08

Nov-08

Jan-0

9

Mar-09

May-09

Jul-0

9

Sep-09

Nov-09

Mill

ion



Satisfactory Moderately Satisfactory


53

16. STRENGTHENING HIGHER EDUCATION PROGRAM (TF092544) Contact: Mr. Joel E. Reyes

Approved: 05-Aug-08 Effective: 05-Aug-08 Closing: 31-Dec-12 [email protected] Allocated: US$5.0 million Disbursed: US$1 million Available: US$4.0 million

Objective: The development objective of the program is to progressively restore basic operational performance at a group of core universities in Afghanistan, which will provide an institutional base for an agenda focusing on tertiary education development, capacity building and reform. Component 1: University Partnership Program Component 2: Block Grants to Universities and Faculties Component 3: Support for a new Higher Education Governance System Implementation Progress The ARTF resources are supporting components 1 and 2 of the Strengthening Higher Education Program, in four universities of Afghanistan: Balkh University, Kandahar University, Kabul Polytechnic University and Nangahar University. The ARTF Grant Agreement was signed in the summer of 2008, and the US$5 million provided for university partnerships and grants have been committed, and procurement of works, goods and services initiated. The Program is implementing a series of recommendations of the mid-term evaluation of the initial phase of the program (financed by IDA funds). These key actions, being implemented, include: (i) improve integration between partnership strategic support and use of block grants at the university level; (ii) identify lessons learned from the implementation of Partnerships and Block Grants to date, and incorporate learning in second phase of implementation; and (iii) improve support to the Ministry of Higher Education (MoHE) for strategic development of the higher education sector, and its management capacity and efficiency. As part of the strategic support to the beneficiary universities, the MoHE, and the overall Higher Education Sector, a series of consultations are being planned with Chancellors, Deans, and Students of various universities in Afghanistan. The MoHE is seeking donor coordination to support the process of preparation of a Higher Education Sector Development Plan (similar to the medium term strategic plan prepared for the Basic—primary and secondary—Education Sector). Issues and Actions: The four universities supported by the ARTF have prepared and updated their strategic development plans, to guarantee that the partnerships and block grants directly support the strategic efforts of the universities and faculties supported. This program has recently started its implementation. A comprehensive plan has been developed by the MOHE to guide smooth running of the program activities based on the agreed timeline with the WB. Education quality and management lessons learned from the university level implementation of partnerships and block grants investments will be documented and feed back to the general sector development strategy. Consultations with Chancellors, Deans, Teachers and Students will provide local feedback to the sector wide reforms to be defined. Participating international universities, participating as partners to Afghan Universities, have also pledge their support to the broader Higher Education sector reforms and improved policy development and quality monitoring capacity of the MoHE.


54

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

Aug-08

Dec-08

Apr-09

Aug-09

Dec-09

Apr-10

Aug-10

Dec-10

Apr-11

Aug-11

Dec-11

Apr-12

Aug-12

Dec-12

Mill

ion



Satisfactory

Satisfactory


ANNEX 2:

ARTF RECURRENT COST FINANCING



55

ARTF Recurrent Cost Financing: Monitoring & Oversight Arrangements

1. Overview of the Monitoring Process The Administrator’s oversight of the ARTF’s recurrent cost financing includes the services of a Monitoring Agent (MA), employed by the Administrator. Figure 9 gives an overview of the monitoring process. The MA reviews recurrent cost expenditures through (i) desk review of all expenditures; and (ii) site visits to test a sample of expenditures. Desk Reviews Desk reviews are applied to 100 percent of all operating budget transactions recorded in the centralized integrated financial management system. Desk reviews are carried out before the government’s reimbursement request is submitted to the Administrator. Any identified inadmissible expenditures are deducted from that month’s request for reimbursement. Site Visits Site visits provide assurance that expenditures reimbursed by the ARTF comply with the fiduciary standards agreed between the Administrator and the Ministry of Finance. Ineligible expenditures detected during site visits are deducted from subsequent payment requests to be sent to the Administrator. This system ensures that all identified ineligible expenditures are promptly regularized and recovered from the Ministry of Finance, normally in the month following their detection in a site visit. Compliance Testing The MA verifies expenditure eligibility against three main sets of criteria:

• Government of Afghanistan (GoA) standards • ARTF Provisions (Legal agreement/Grant Agreement) • Fiduciary Standards (efficiency standards set by the Administrator)

Non-compliance with any of the above-mentioned sets of standards renders expenditure ineligible for reimbursement from the ARTF. There are various eligibility sub-criteria under each of the three broad sets of standards mentioned above; for instance head-count caps under GoA standards. All payroll head-counts are compared to authorized levels; payroll costs of head-counts above authorized levels are ineligible. If a certain ministry shows high trends of ineligibility in payroll, the MA then increases the frequency of site visits, thereby capturing and reviewing a larger share of the expenditures on site. Risk-based Approach The historic trends of ineligibility over the past four years provide a good basis for planning O&M monitoring on a risk basis, tailoring the approach based on each line ministry’s performance and by the cause of ineligibility. The resulting coverage puts greater emphasis on high risk entities and high risk operations. For example, expenditures from line ministries with a history of greater ineligibility are more intensely reviewed. Reporting The MA reports to the Administrator on a monthly basis, detailing its activities. These reports provide insight into the usage of funds and findings arising from the MA’s examination of expenditures. A summary report of the MA’s findings is also shared with the Ministry of Finance.


56

Figure 9: ARTF Recurrent Cost Monitoring Process 2. Frequently Asked Questions on the ARTF Recurrent Costs Financing Why does the ARTF support the recurrent costs of the government? The government is gradually improving its own revenue base, through customs and taxation, so that it can pay its recurrent expenditures fully in the future. Improvements in revenue collection are being made. However it will take some time before the government is fully able to support its recurrent expenditures by domestic revenues. According to the MTFF (Medium-Term Fiscal Framework) as of March 2007, the government plans to cover 82 percent of recurrent expenditures by domestic revenues in SY1388. Therefore, ARTF finances part of the government’s approved recurrent expenditures except for security-related costs and land purchases. The annual budget is first approved by the Cabinet and, since SY1385, subsequently by the National Assembly. At the beginning of the fiscal year the Administrator and ARTF donors agree with the government on the volume of the financing gap in the recurrent expenditures budget to be financed by the ARTF.

Government incurs and pays recurrent cost

expenditures, comprising wages

(75%) and O&M (25%)

Monitoring Agent (MA) performs an automated Desk

Review of 100% of the recurrent cost

expenditures

Expenditures for non-qualified activities (e.g., military) and identified

ineligible expenditures by MA are deducted and a

Statement of Expenditure (SOE) is prepared for the

expenditures of the eligible activities

SOE is submitted to the Administrator and the Special (Working Capital) Account is

reimbursed

Monitoring Agent performs a risk-

based review of the SOE expenditures

Identified ineligible expenditures are

deducted from future Special (Working Capital) Account reimbursements

by the Administrator

Impact of External Audit: Ineligible expenditures identified in the annual external audit of the Government’s financial statements are reviewed by the Administrator and Monitoring Agent and deducted from future

Statements of Expenditures.


57

Why does the ARTF not fund military or security related expenses? The Articles of Agreement of the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD) (together, “the Bank”) prohibit the Bank from involvement in the political affairs of its member countries. In addition, the Articles of Agreement spell out the purposes of the Bank, which purposes have been interpreted by the Bank’s Board of Executive Directors not to permit involvement in military or security related activities of member countries. The Bank in its capacity as the trustee of the ARTF is guided by the overall purposes of the Bank, the political prohibition clause and the other provisions in the Articles of Agreement. Funding military or other security-related expenditures would be outside the Bank’s mandate and would violate the political involvement prohibition. What kinds of recurrent costs are financed by the ARTF? Each fiscal year the government and ARTF donors agree a proportion of government’s operating budget to be financed by the ARTF. Expenses up to this agreed amount are reimbursed by the ARTF during the year, as long as they adhere to the government's financial management regulations and the fiduciary standards stipulated in the ARTF Grant Agreement. To date, approximately 72 percent of recurrent costs have been for payroll expenses and 28 percent for operations and maintenance expenses. How does the ARTF Administrator monitor use of these funds? The Administrator has a contract with PriceWaterhouseCoopers (PWC) to serve as a Monitoring Agent (MA), which is responsible for reviewing expenses submitted to the ARTF by the government. The MA checks compliance with (i) government's internal controls; (ii) ARTF requirements; and (iii) efficiency standards. The MA reviews all of the expenditures codes to ensure they are eligible for ARTF funding and in line with the budget. The MA also reviews some expenses in more detail. The MA decides which expenses to examine more thoroughly by applying a carefully designed risk-based approach to monitoring. Is it possible that some expenditures are entirely unchecked by the MA? No, all expenditures are subject to certain minimum checks. How does the Bank monitor the work and performance of the Monitoring Agent? The MA is under contract with the Administrator which works closely with the MA to monitor their performance and work outputs. They meet regularly to review findings and determine follow up actions. In addition, as part of the Administrator's fiduciary framework for all operations (whether financed by the World Bank or the ARTF), an annual independent audit is conducted. The Bank follows up with the government and the MA on audit findings. The most recent audit covering SY1385 (March 21, 2006 – March 20, 2007), has been received by the administrator and reported on to the donors. The audit covering 1386 is underway. What are 'ineligible expenditures'? Firstly, as noted above, any security related expenditures are ineligible for ARTF financing. In addition, any expenditure that does not adhere to the government's budget and procurement rules, or to the reporting and cash management standards agreed with the Bank, would be ineligible. When an expenditure is found to be ‘ineligible’ it does not necessarily imply misuse or wrongdoing.


58

Does the ARTF directly finance the government’s operating budget? No. The government first funds its operating budget and after an initial review of eligibility by the MA, then submits expenditure details to the Administrator which reimburses government for the eligible amounts authorized by the MA. Ineligible expenditures are frequently detected by the MA before any reimbursement takes place. However, the monitoring process reviews expenditures at later stages to detect any further ineligible expenditure which may have been reimbursed to the government at the first stage. What is the mechanism for recouping ineligible expenditures and for that matter, misused funds after they have already been paid by the ARTF? After ineligible expenditures are detected by the MA, they are deducted from the other eligible reimbursements made by the ARTF to the government. Sometimes this happens in the same month the expenditure is submitted but often it happens later due to the lag in the monitoring process. For this reason the ineligible expenditures reported each month can vary as amounts are reconciled through an ongoing process. The same process is followed if funds have been misused but in such cases the ARTF brings the issue to the direct attention of the Ministry of Finance so that controls may be strengthened in the future. Is the government's overall performance with regard to expenditure eligibility improving? The overall trend is improving gradually. Improvements have been made in the government's compliance with agreed fiduciary standards, as well as government's own control procedures. The Bank is providing capacity-building support to the Ministry of Finance and the Control and Audit office to further improve compliance. 3. Financial Management in the National Government Audit of SY1385 The audited financial statements for the recurrent cost and investment trust funds were presented to the Administrator in December 2007. The Administrator found the reports acceptable and circulated to the donors on March 21 the results of its review. The 1386 Audit Report was due September 22, 2008 The audit of the ARTF Recurrent Cost Trust Fund and the investment trust funds has now started but difficulties in sourcing a qualified international firm to assist the Auditor General to performs the audits resulted in a six month delay in beginning the work so the audits will be late by this same period. Public Financial Management Over the last three years the government of Afghanistan established a new framework for Public Finance Management (PFM) comprising: the national budget as the main policy instrument; a commitment to transparency; centralization of accounting and payments in MoF; and a centralized computerized system to issue checks and record revenues and expenditures of the ordinary and development budgets. Parallel improvements have been made in the Da Afghanistan Bank (DAB) payment systems. The government also established a Treasury Single Account (TSA) which ensures strong fiduciary controls (including regular sweeping of revenues to the center and bank reconciliations). External audit capacity was also developed; consequently, the 2004/5 financial statements of ARTF and IDA –financed operations have been audited to international standards.


59

Procurement Management The government established a central facility for procurement that has finalized more than 527 contracts, with a total value above US$1.5 billion, using internationally accepted standards. Audit The Ministry of Finance has developed work practice tools and has carried out classroom training for 100 Internal Auditors with on-the-job-training to continue through 2008. Other ministries are developing similar programs. Analytical and Advisory Work A major review of Afghan public financial management/PEFA indicators was performed in 2005 by the Administrator. This PEFA study was updated to December 31, 2007 and a detailed report was shared with the Donors. The main findings of the assessment suggest that:

Revenue Mobilization: On “sound and fair revenue policies; revenue projection”, revenue projections are regularly updated and they are incorporated into the budget process. However, key tax policy measures have not commenced as the National Assembly has not yet approved the amendment to the income tax law. On “effective revenue administration”, the performance of the Large Taxpayer Office (LTO) has significantly improved and it currently collects 35 percent of domestic tax revenues. The Income Tax Law stipulates that basic enforcement powers for the Revenue Department of the Ministry of Finance and Mustufiats (provincial branches of the Ministry of Finance).

Budget Formulation: On “strategic, realistic, predictable multi-year framework”, the Medium-

Term Fiscal Framework (MTFF) was first formulated in 2005 to strengthen medium-term fiscal projections. The link between the Afghanistan National Development Strategy (ANDS) and the national budget is likely to be strengthened through the ongoing costing exercises. Also, the Ministry of Finance has been piloting initiatives on ‘program budgeting’ and ‘provincial budgeting’. With regard to “comprehensive, fully integrated budget”, the inclusion of data on municipalities and State-Owned Enterprises (SOEs) in the budget documentation requires further progress. On “orderly, open, participative budget process and revisions”, the budget circular must include indicative budget ceilings for the primary budgetary units and the budget process needs to be planned in such a way that the ministries and agencies have sufficient time to prepare their budget submissions. Also, despite progress on the part of the Ministry of Finance, strengthening capacities in the line ministries to prepare budget proposals is essential. On “adequate legislative scrutiny of the Annual Budget Law”, the Finance and Budget Commission is now providing training to its budget analysts and the members of the Commission.

Budget Execution: On “effective cash management”, the cash management unit of Ministry of

Finance has annual cash plan with monthly update. And all discretionary funds flows are fully consolidated through Treasury Single Account (TSA). However, cash management of line ministries and Mustufiats has little progress. On “effective debt and guarantee management”, the Ministry of Finance completed a debt management strategy in October 2005 and debt review finished a fully reconciled. On “smooth, predictable budget implementation”, a survey of arrears as well as asset registry has not yet been conducted. On “internal controls”, capacity building of internal controllers of line ministries remains an issue. On “internal audit”, in the Ministry of Finance, PRR in the internal audit department of Ministry of Finance was implemented and 200 staff was trained. Capacity building of line ministries and municipalities are still of concern. On “payroll”, the coverage of Individualized Salary Payments was increased from 23,000 in 2005 to 88,000 in 2007. On “procurement”, the Procurement Policy Unit (PPU) was established in August 2006 and Rules of Procedures for Public Procurement was issues in April 2007. Nevertheless,


60

capacity constraints have prevented line ministries to progressively take responsibility for procurement transactions.

Accounting and Reporting: On “accounting, in-year reporting”, reconciliation of government

accounting records with banking data and TSA is performing satisfactory. Undertaking roll-out of AFMIS to Mustufiats has been completed in two provinces and planned for 12 more provinces. However, developing accounting capacity of municipalities and SOEs has little progress. On “transparent and accessible external financial reporting”, the Harmonized reporting and financial reviews by the Aid Coordination Unit of Ministry of Finance in late 2007 has contributed to capture and report accurate expenditures of donor implemented projects. A remaining agenda is disclosure of SOEs annual financial results.

Treasury Operations at Present Treasury operations are advancing. Most middle management positions have been staffed. Similarly, the review of the internal controls being carried out by the MA indicates that the bank reconciliations has improved although weaknesses in payments and payroll persist. Progress on the extension of the Verified Payroll Program (VPP) has fell short of plans. These problems are being addressed. Internal Control at MoF All payment requests are subject to internal control by the MoF. The main procedures are as follows: • All payment request forms are reviewed at the line ministries by the independent MoF controllers.

Treasury will only accept payment authorization forms that are authorized by the independent controllers.

• Budget availability is verified at the MoF prior to issuance of checks. • A check authorization process is in place. 4. Capacity Building in Public Financial Management The leading cause of ineligibility of O&M is non-compliance with procurement rules. To address this problem, the MoF engaged a procurement capacity-building consultant, Charles Kendall Partners. This firm has completed a needs assessment and begun the dissemination of the procurement law and training to procurement staff. The change in the Procurement Law in July, 2008 has hampered this work which nevertheless has adjusted to this difficult. The government has agreed to restore to provisions in line with best practices.


ANNEX 3:

ARTF Financial Tables

These tables show the financial situation of ARTF at December 21, 2008. The tables are updated monthly and are available at the ARTF web site

http://www.worldbank.org/artf


AR

TF Q

uarte

rly R

epor

t (D

ecem

ber 2

0, 2

008)

61

SY 1

387

SY 1

381

SY 1

381

SY 1

382

SY 1

383

SY 1

384

SY 1

385

SY 1

386

SY 1

381-

87SY

138

1-87

SY 1

381-

87SY

138

1-87

Don

orTo

tal

Tota

lTo

tal

Tota

lTo

tal

Tota

lTo

tal

Sign

edU

n-si

gned

Tota

l%

of

Tota

lTo

tal

% o

f To

tal

Paid

-inPa

id-in

Paid

-inPa

id-in

Paid

-inPa

id-in

Paid

-inPl

edge

sPl

edge

sSY

138

7SY

138

7Pa

id-in

Paid

-in

Aust

ralia

0.00

02.

635

6.26

87.

654

5.83

62.

089

31.4

390.

000

0.00

031

.439

4.6%

55.9

211.

8%55

.921

2.0%

Bahr

ain

0.00

00.

504

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

0.50

40.

0%0.

504

0.0%

Belg

ium

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

2.82

02.

820

0.4%

2.82

00.

1%0.

000

0.0%

Can

ada

11.9

9850

.093

5.49

172

.343

58.8

6321

3.46

122

.068

0.00

09.

706

31.7

744.

6%44

4.02

314

.6%

434.

317

15.4

%D

enm

ark

5.00

05.

000

3.16

33.

916

4.34

38.

426

17.0

670.

000

3.31

220

.379

3.0%

50.2

271.

7%46

.916

1.7%

EC/E

U15

.871

52.7

2047

.595

58.7

7152

.720

73.6

150.

000

0.00

029

.535

29.5

354.

3%33

0.82

710

.9%

301.

292

10.7

%Fi

nlan

d2.

792

2.45

15.

946

0.00

02.

418

5.40

47.

915

0.00

00.

000

7.91

51.

2%26

.926

0.9%

26.9

261.

0%Fr

ance

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

5.63

95.

639

0.8%

5.63

90.

2%0.

000

0.0%

Ger

man

y10

.068

11.4

4315

.941

1.23

020

.474

55.9

9247

.444

0.00

028

.196

75.6

4011

.0%

190.

788

6.3%

162.

592

5.8%

Indi

a0.

200

0.20

00.

000

0.40

00.

200

0.20

00.

193

0.00

70.

000

0.20

00.

0%1.

400

0.0%

1.39

30.

0%Ira

n, Is

lam

ic R

epu

0.00

00.

989

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

0.98

90.

0%0.

989

0.0%

Irela

nd1.

000

1.69

91.

814

0.61

21.

276

1.45

81.

576

0.00

00.

000

1.57

60.

2%9.

434

0.3%

9.43

40.

3%Ita

ly17

.000

0.00

06.

539

0.00

09.

223

8.80

434

.073

0.00

00.

000

34.0

735.

0%75

.638

2.5%

75.6

382.

7%Ja

pan

5.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

5.00

00.

2%5.

000

0.2%

Kore

a, R

epub

lic o

2.00

02.

000

2.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

6.00

00.

2%6.

000

0.2%

Kuw

ait

5.00

05.

000

5.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

15.0

000.

5%15

.000

0.5%

Luxe

mbo

urg

1.00

00.

000

0.00

00.

605

1.56

31.

070

1.13

80.

000

0.00

01.

138

0.2%

5.37

70.

2%5.

377

0.2%

Net

herla

nds

33.6

6741

.151

46.4

1529

.664

50.8

0539

.765

39.4

630.

000

0.00

039

.463

5.7%

280.

930

9.3%

280.

930

10.0

%N

ew Z

eala

nd0.

000

0.00

00.

000

0.00

00.

628

0.00

00.

000

0.00

00.

000

0.00

00.

0%0.

628

0.0%

0.62

80.

0%N

orw

ay6.

818

29.6

309.

913

22.5

4423

.215

30.9

8022

.898

8.91

10.

000

31.8

094.

6%15

4.91

05.

1%14

5.99

95.

2%Po

land

0.00

00.

000

0.00

00.

000

0.29

00.

270

1.17

10.

000

0.00

01.

171

0.2%

1.73

00.

1%1.

730

0.1%

Portu

gal

0.00

00.

457

0.72

50.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

1.18

20.

0%1.

182

0.0%

Rus

sian

Fed

erat

io0.

000

0.00

00.

000

0.00

00.

000

0.00

02.

000

0.00

00.

000

2.00

00.

3%2.

000

0.1%

2.00

00.

1%Sa

udi A

rabi

a10

.000

5.00

05.

000

0.00

05.

000

0.00

00.

000

0.00

00.

000

0.00

00.

0%25

.000

0.8%

25.0

000.

9%Sp

ain

0.00

00.

000

0.00

00.

000

0.00

022

.038

0.00

00.

000

35.2

4535

.245

5.1%

57.2

831.

9%22

.038

0.8%

Swed

en3.

103

5.98

225

.905

12.8

3914

.680

20.1

7818

.354

1.66

30.

000

20.0

172.

9%10

2.70

33.

4%10

1.04

03.

6%Sw

itzer

land

0.67

30.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.0%

0.67

30.

0%0.

673

0.0%

Turk

ey0.

500

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

0%0.

500

0.0%

0.50

00.

0%U

ND

P0.

000

2.41

10.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

0%2.

411

0.1%

2.41

10.

1%U

nite

d K

ingd

om15

.079

47.0

9610

3.06

213

1.47

312

8.48

715

1.05

214

9.32

06.

174

0.00

015

5.49

422

.6%

731.

742

24.1

%72

5.56

825

.8%

Uni

ted

Sta

tes

38.0

0020

.000

89.5

9162

.000

73.9

000.

000

74.5

000.

000

85.0

0015

9.50

023

.2%

442.

991

14.6

%35

7.99

112

.7%

TOTA

L 18

4.76

828

6.46

138

0.36

840

4.05

045

3.92

163

4.80

347

0.61

716

.755

199.

453

686.

826

100.

0%30

31.1

9610

0.0%

2814

.988

100.

0%

Tota

l%

of

Tota

l

Tabl

e 1

- Act

ual a

nd E

xpec

ted

Don

or C

ontr

ibut

ions

Paid

-In, C

omm

itted

, Ple

dged

(U

S$ M

illion

)

SY 1

387

20-D

ec-2

008

1.

U

nsig

ned

pled

ges

are

reco

rded

bas

ed o

n a

com

mun

icat

ion

from

the

Don

or to

the

AR

TF A

dmin

istra

tor.

2.

Sig

ned

pled

ges

are

com

mitm

ents

reco

rded

bas

ed o

n co

unte

rsig

ned

lega

l doc

umen

ts c

onfir

min

g th

e pl

edge

d am

ount

. 3.

P

aid

amou

nts

refle

ct re

ceip

t of f

unds

and

con

vers

ion

to U

S d

olla

rs.

AR

TF Q

uarte

rly R

epor

t (D

ecem

ber 2

0, 2

008)

62

SY

138

1

SY

138

2S

Y 1

383

SY

138

4S

Y 1

385

SY

138

6D

ono

rC

urr

Pro

gram

Pai

d-in

Pai

d-in

Pai

d-in

Pai

d-in

Pai

d-in

To

tal

Exp

ress

edO

f whi

chU

S$

US

$U

S$

US

$U

S$

Ow

n C

urr.

US

$ E

st.

Ow

n C

urr.

US

$S

Y 1

387

Pre

fere

nce

Pai

d-in

Nor

way

NO

KC

ivil

Ser

vice

Cap

acity

Bui

ldin

g0.

000

2.91

83.

102

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

06.

020

6.02

0U

nite

d S

tate

sU

SD

Civ

il S

ervi

ce C

apac

ity B

uild

ing

0.00

04.

300

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

4.30

04.

300

To

tal

Civ

il S

ervi

ce C

apac

ity

Bu

ildin

g0.

000

7.21

83.

102

0.00

00.

000

0.00

00.

000

0.00

010

.320

10.3

20A

ustr

alia

AU

DE

duca

tion

- E

QU

IP0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

8.00

07.

622

7.62

27.

622

7.62

2C

anad

aC

AD

Edu

catio

n -

EQ

UIP

0.00

00.

000

0.00

00.

000

29.7

9711

.500

9.70

60.

000

0.00

09.

706

39.5

0429

.797

Ger

man

yE

UR

Edu

catio

n -

EQ

UIP

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

010

.000

15.7

1615

.716

15.7

1615

.716

Net

herla

nds

US

DE

duca

tion

- E

QU

IP0.

000

0.00

00.

000

0.00

04.

000

0.00

00.

000

0.00

00.

000

0.00

04.

000

4.00

0N

orw

ayN

OK

Edu

catio

n -

EQ

UIP

0.00

04.

607

0.00

00.

000

5.13

00.

000

0.00

00.

000

0.00

00.

000

9.73

89.

738

Spa

inE

UR

Edu

catio

n -

EQ

UIP

0.00

00.

000

0.00

00.

000

0.00

02.

500

3.52

50.

000

0.00

03.

525

3.52

50.

000

Uni

ted

Sta

tes

US

DE

duca

tion

- E

QU

IP0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

12.0

0012

.000

12.0

0012

.000

12.0

00T

ota

l E

du

cati

on

- E

QU

IP0.

000

4.60

70.

000

0.00

038

.928

13.2

3135

.338

48.5

6892

.103

78.8

73S

wed

enS

EK

Em

erge

ncy

Tra

nspo

rt R

ehab

ilita

tion

Pro

ject

0.00

00.

000

0.00

00.

000

0.76

78.

000

1.02

30.

000

0.00

01.

023

1.79

00.

767

To

tal

Em

erg

ency

Tra

nsp

ort

Reh

abili

tati

on

Pro

ject

0.00

00.

000

0.00

00.

000

0.76

71.

023

0.00

01.

023

1.79

00.

767

Can

ada

CA

DH

ortic

ultu

re a

nd L

ives

tock

Pro

gram

0.00

00.

000

0.00

00.

000

3.53

10.

000

0.00

00.

000

0.00

00.

000

3.53

13.

531

Uni

ted

Kin

gdom

GB

PH

ortic

ultu

re a

nd L

ives

tock

Pro

gram

0.00

00.

000

0.00

00.

000

1.97

73.

000

4.63

10.

000

0.00

04.

631

6.60

81.

977

To

tal

Ho

rtic

ult

ure

an

d L

ives

tock

Pro

gra

m0.

000

0.00

00.

000

0.00

05.

508

4.63

10.

000

4.63

110

.138

5.50

8E

C/E

UE

UR

Just

ice

Sec

tor

Ref

orm

Pro

ject

0.00

00.

000

0.00

00.

000

0.00

010

.000

14.0

980.

000

0.00

014

.098

14.0

980.

000

Italy

EU

RJu

stic

e S

ecto

r R

efor

m P

roje

ct0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

10.0

0014

.790

14.7

9014

.790

14.7

90N

orw

ayN

OK

Just

ice

Sec

tor

Ref

orm

Pro

ject

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

015

.000

2.09

82.

098

2.09

82.

098

Uni

ted

Kin

gdom

GB

PJu

stic

e S

ecto

r R

efor

m P

roje

ct0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

2.50

04.

904

4.90

44.

904

4.90

4T

ota

l Ju

stic

e S

ecto

r R

efo

rm P

roje

ct0.

000

0.00

00.

000

0.00

00.

000

14.0

9821

.792

35.8

9035

.890

21.7

92U

nite

d K

ingd

omG

BP

Man

agem

ent C

apac

ity P

rogr

am0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

3.00

05.

949

5.94

95.

949

5.94

9U

nite

d S

tate

sU

SD

Man

agem

ent C

apac

ity P

rogr

am0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

1.00

01.

000

1.00

01.

000

1.00

0T

ota

l M

anag

emen

t C

apac

ity

Pro

gra

m0.

000

0.00

00.

000

0.00

00.

000

0.00

06.

949

6.94

96.

949

6.94

9A

ustr

alia

AU

DM

icro

finan

ce fo

r P

over

ty R

educ

tion

0.00

00.

000

0.00

00.

778

1.04

50.

000

0.00

05.

000

4.76

44.

764

6.58

66.

586

Can

ada

CA

DM

icro

finan

ce fo

r P

over

ty R

educ

tion

4.70

85.

491

12.8

4724

.165

38.8

320.

000

0.00

06.

500

5.41

35.

413

91.4

5591

.455

Den

mar

kD

KK

Mic

rofin

ance

for

Pov

erty

Red

uctio

n0.

000

0.00

01.

625

2.11

01.

465

0.00

00.

000

30.0

006.

400

6.40

011

.601

11.6

01F

inla

ndE

UR

Mic

rofin

ance

for

Pov

erty

Red

uctio

n0.

000

0.00

00.

000

0.00

01.

367

0.00

00.

000

1.40

02.

216

2.21

63.

583

3.58

3N

ethe

rland

sU

SD

Mic

rofin

ance

for

Pov

erty

Red

uctio

n0.

000

0.00

00.

000

0.00

02.

500

0.00

00.

000

0.00

00.

000

0.00

02.

500

2.50

0S

wed

enS

EK

Mic

rofin

ance

for

Pov

erty

Red

uctio

n0.

000

2.22

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

02.

220

2.22

0U

nite

d K

ingd

omG

BP

Mic

rofin

ance

for

Pov

erty

Red

uctio

n0.

000

3.78

214

.542

9.31

29.

846

0.00

00.

000

10.0

0019

.830

19.8

3057

.312

57.3

12U

nite

d S

tate

sU

SD

Mic

rofin

ance

for

Pov

erty

Red

uctio

n0.

000

5.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

05.

000

5.00

0T

ota

l M

icro

fin

ance

fo

r P

ove

rty

Red

uct

ion

4.70

816

.493

29.0

1536

.365

55.0

550.

000

38.6

2338

.623

180.

259

180.

259

Aus

tral

iaA

UD

Nat

iona

l Em

erge

ncy

Em

ploy

men

t Pro

gram

0.00

00.

000

0.00

00.

778

0.00

00.

000

0.00

05.

000

4.76

44.

764

5.54

25.

542

Can

ada

CA

DN

atio

nal E

mer

genc

y E

mpl

oym

ent P

rogr

am0.

000

0.00

00.

000

1.27

73.

363

0.00

00.

000

0.00

00.

000

0.00

04.

640

4.64

0E

C/E

UE

UR

Nat

iona

l Em

erge

ncy

Em

ploy

men

t Pro

gram

0.00

00.

000

0.00

00.

000

0.00

010

.950

15.4

370.

000

0.00

015

.437

15.4

370.

000

Spa

inE

UR

Nat

iona

l Em

erge

ncy

Em

ploy

men

t Pro

gram

0.00

00.

000

0.00

00.

000

0.00

05.

000

7.04

90.

000

0.00

07.

049

7.04

90.

000

Uni

ted

Kin

gdom

GB

PN

atio

nal E

mer

genc

y E

mpl

oym

ent P

rogr

am0.

000

0.00

018

.238

13.9

090.

000

0.00

00.

000

0.00

00.

000

0.00

032

.147

32.1

47U

nite

d S

tate

sU

SD

Nat

iona

l Em

erge

ncy

Em

ploy

men

t Pro

gram

0.00

00.

000

2.00

00.

000

0.00

05.

000

5.00

016

.100

16.1

0021

.100

23.1

0018

.100

To

tal

Nat

ion

al E

mer

gen

cy E

mp

loym

ent

Pro

gra

m0.

000

0.00

020

.238

15.9

643.

363

27.4

8620

.864

48.3

5087

.915

60.4

29A

ustr

alia

AU

DN

atio

nal S

olid

arity

Pro

gram

0.00

00.

000

0.00

00.

778

0.00

00.

000

0.00

010

.000

9.52

79.

527

10.3

0510

.305

Bel

gium

EU

RN

atio

nal S

olid

arity

Pro

gram

0.00

00.

000

0.00

00.

000

0.00

01.

000

1.41

00.

000

0.00

01.

410

1.41

00.

000

Can

ada

CA

DN

atio

nal S

olid

arity

Pro

gram

10.9

850.

000

14.3

3917

.830

77.2

380.

000

0.00

012

.000

9.99

39.

993

130.

385

130.

385

Den

mar

kD

KK

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

0.00

00.

000

0.00

03.

663

0.00

00.

000

0.00

00.

000

0.00

03.

663

3.66

3E

C/E

UE

UR

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

9.69

421

.568

13.1

8022

.076

0.00

00.

000

0.00

00.

000

0.00

066

.518

66.5

18F

inla

ndE

UR

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

0.00

00.

000

0.00

01.

367

0.00

00.

000

1.10

01.

741

1.74

13.

108

3.10

8G

erm

any

EU

RN

atio

nal S

olid

arity

Pro

gram

0.00

06.

131

0.00

00.

000

22.3

978.

000

11.2

788.

000

12.6

9123

.970

52.4

9741

.219

Nor

way

NO

KN

atio

nal S

olid

arity

Pro

gram

0.00

00.

000

3.10

29.

018

10.7

2830

.000

4.45

60.

000

0.00

04.

456

27.3

0322

.847

Spa

inE

UR

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

0.00

00.

000

0.00

00.

000

5.00

07.

049

0.00

00.

000

7.04

97.

049

0.00

0S

wed

enS

EK

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

0.00

00.

000

3.67

05.

236

0.00

00.

000

35.0

005.

840

5.84

014

.746

14.7

46U

nite

d K

ingd

omG

BP

Nat

iona

l Sol

idar

ity P

rogr

am5.

723

0.00

016

.394

9.31

230

.252

0.00

00.

000

0.00

00.

000

0.00

061

.681

61.6

81U

nite

d K

ingd

omU

SD

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

13.4

4513

.445

13.4

4513

.445

13.4

45U

nite

d S

tate

sU

SD

Nat

iona

l Sol

idar

ity P

rogr

am0.

000

10.0

000.

000

25.0

000.

000

50.0

0050

.000

15.0

0015

.000

65.0

0010

0.00

050

.000

To

tal

Nat

ion

al S

olid

arit

y P

rog

ram

16.7

0725

.825

55.4

0378

.789

172.

957

74.1

9368

.237

142.

430

492.

111

417.

918

Ger

man

yE

UR

Priv

ate

Sec

tor

Dev

elop

men

t0.

000

0.00

00.

000

3.19

90.

000

0.00

00.

000

0.00

00.

000

0.00

03.

199

3.19

9T

ota

l P

riva

te S

ecto

r D

evel

op

men

t0.

000

0.00

00.

000

3.19

90.

000

0.00

00.

000

0.00

03.

199

3.19

9G

erm

any

EU

RP

ublic

Adm

in R

efor

m0.

000

0.00

00.

000

3.19

90.

000

0.00

00.

000

0.00

00.

000

0.00

03.

199

3.19

9T

ota

l P

ub

lic A

dm

in R

efo

rm0.

000

0.00

00.

000

3.19

90.

000

0.00

00.

000

0.00

03.

199

3.19

9N

orw

ayN

OK

Rur

al W

ater

Sup

ply

and

San

itatio

n0.

000

0.92

12.

326

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

03.

248

3.24

8U

nite

d S

tate

sU

SD

Rur

al W

ater

Sup

ply

and

San

itatio

n0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.40

00.

400

0.40

00.

400

0.40

0T

ota

l R

ura

l Wat

er S

up

ply

an

d S

anit

atio

n0.

000

0.92

12.

326

0.00

00.

000

0.00

00.

400

0.40

03.

648

3.64

8N

orw

ayN

OK

Ski

lls D

evel

opm

ent P

rogr

amm

e (N

IMA

)0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

20.0

002.

797

2.79

72.

797

2.79

7U

nite

d S

tate

sU

SD

Ski

lls D

evel

opm

ent P

rogr

amm

e (N

IMA

)0.

000

0.00

00.

000

0.00

00.

000

3.00

03.

000

0.00

00.

000

3.00

03.

000

0.00

0T

ota

l S

kills

Dev

elo

pm

ent

Pro

gra

mm

e (N

IMA

)0.

000

0.00

00.

000

0.00

00.

000

3.00

02.

797

5.79

75.

797

2.79

7R

ussi

an F

eder

atio

US

DS

tren

gthe

ning

Hig

her

Edu

catio

n P

roje

ct0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

1.00

01.

000

1.00

01.

000

1.00

0T

ota

l S

tren

gth

enin

g H

igh

er E

du

cati

on

Pro

ject

0.00

00.

000

0.00

00.

000

0.00

00.

000

1.00

01.

000

1.00

01.

000

Uni

ted

Sta

tes

US

DT

echn

ical

Ass

ista

nce

Fea

sibi

lity

Stu

dies

0.00

01.

500

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

1.50

01.

500

To

tal T

ech

nic

al A

ssis

tan

ce F

easi

bili

ty S

tud

ies

0.00

01.

500

0.00

00.

000

0.00

00.

000

0.00

00.

000

1.50

01.

500

Gra

nd

To

tal

21.4

1556

.565

110.

084

137.

516

276.

577

137.

662

195.

998

333.

660

935.

817

798.

155

Tab

le 2

- E

xpre

ssed

Do

no

r P

refe

ren

ces

By

Pro

ject

s P

aid-

In, C

omm

itted

, Ple

dged

D

ecem

ber

20, 2

008

(US

$ M

illio

n)

Ple

dg

edP

aid

-in

SY

138

7T

ota

l SY

138

1-87

AR

TF Q

uarte

rly R

epor

t (D

ecem

ber 2

0, 2

008)

63

As

of:

SY13

81-8

7C

omm

Dis

burs

edC

omm

Dis

burs

edC

omm

Dis

burs

edC

omm

Dis

burs

edC

omm

ited

Dis

burs

edC

omm

Dis

burs

edC

omm

Dis

burs

edSY

1381

-87

20-D

ec-0

8La

st M

onth

SY13

81SY

1381

SY13

82SY

1382

SY13

83SY

1383

SY13

84SY

1384

SY13

85SY

1385

SY13

86SY

1386

YTD

YTD

Tota

lTo

tal

Dis

burs

edAv

aila

ble

Dis

b.Ye

ar E

ndYe

ar E

ndYe

ar E

ndYe

ar E

nd

Year

End

Ye

ar E

nd

Year

End

Ye

ar E

nd

Year

End

Year

End

Year

End

Year

End

SY13

87SY

1387

Com

mite

dD

isbu

rsed

Rat

e(a

)(b

)(c

)(c

)(d

)(e

)(f)

(g)

(h)

(g) -

(h)

(h) /

(g)

TF0

5057

7 - R

ecur

rent

& C

apita

l Cos

ts C

ompo

nent

Wag

es40

.953

145.

769

179.

321

174.

213

216.

199

203.

000

139.

313

1098

.769

0.00

0 -

O

&M

13.6

5551

.164

55.2

7779

.035

84.0

1587

.549

43.6

3841

4.33

30.

000

-

Deb

t Ser

vice

, IM

F0.

767

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.76

70.

000

-

Deb

t Ser

vice

, ID

A2.

770

3.87

00.

000

0.00

00.

000

0.00

00.

000

6.64

00.

000

-

Deb

t Ser

vice

, AD

B0.

000

0.55

70.

000

0.00

00.

000

0.00

00.

000

0.55

70.

000

-

Bulk

Con

tract

s1.

067

12.7

820.

557

0.00

00.

000

0.00

00.

000

14.4

050.

000

-

D

isbu

rsem

ents

(A)

59.2

1221

4.14

423

5.15

525

3.24

830

0.21

329

0.55

018

2.95

115

35.4

720.

000

S

peci

al A

ccou

nt(O

peni

ng) B

alan

ce (B

)0.

000

51.5

0050

.603

50.0

0050

.000

50.0

0050

.000

50.0

00

Net

Dis

burs

emen

ts(In

cl. A

dvan

ces

& A

djus

tmen

ts)

(C)

155.

000

110.

712

195.

000

213.

246

258.

000

234.

553

280.

000

253.

248

299.

000

300.

213

286.

000

290.

550

138.

000

182.

951

1611

.000

1585

.472

0.00

025

.528

98%

U

pdat

ed S

peci

al A

ccou

nt B

alan

ce *

51

.500

50.6

0350

.000

50.0

0050

.000

50.0

0050

.000

50.0

00

TF0

5057

8 - M

onito

ring

Age

nt [

2]2.

000

0.66

80.

777

1.40

72.

311

2.64

14.

640

2.15

87.

001

2.53

43.

500

4.79

83.

139

2.39

220

.229

16.5

980.

662

3.63

182

%

Clo

sed

Inve

stm

ent P

roje

cts [

3]TF

0508

55 -

UN

DP

Pol

ice

Pr. 1

& 2

4.83

64.

836

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

4.83

64.

836

0.00

00.

000

100%

TF05

2081

- M

icro

finan

ce fo

r Pov

erty

Red

uctio

n0.

000

0.00

01.

000

0.35

80.

000

0.33

50.

000

0.30

60.

000

0.00

00.

000

0.00

00.

000

0.00

01.

000

1.00

00.

000

0.00

010

0%TF

0523

66 -

UN

DP

Pol

ice

30.

000

0.00

016

.800

16.8

000.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

016

.800

16.8

000.

000

0.00

010

0%TF

0524

75 -

Tele

com

& M

icro

wav

e Li

nk0.

000

0.00

03.

000

0.15

03.

130

1.02

90.

000

3.06

90.

000

1.52

2-0

.119

0.24

10.

000

0.00

06.

011

6.01

10.

000

0.00

010

0%TF

0524

82 -

Kabu

l Roa

ds a

nd D

rain

age

Syst

em0.

000

0.00

03.

000

0.00

00.

000

2.91

00.

000

0.00

0-0

.172

-0.1

13-0

.031

0.00

00.

000

0.00

02.

797

2.79

70.

000

0.00

010

0%TF

0527

35 -

Stre

ngth

enin

g Fi

nanc

ial C

apac

ity o

f the

Gov

ernm

ent

0.00

00.

000

5.10

02.

046

0.00

00.

255

0.00

01.

380

-1.0

410.

378

0.00

00.

000

0.00

00.

000

4.05

94.

059

0.00

00.

000

100%

TF05

3939

- N

atio

nal S

olid

arity

Pro

gram

0.00

00.

000

0.00

00.

000

27.0

0026

.618

71.9

0047

.582

58.5

0082

.038

12.2

9212

.454

0.00

00.

000

169.

692

168.

692

0.00

01.

000

99%

Subt

otal

Clo

sed

Inve

stm

ent P

roje

cts

[3]

4.83

64.

836

28.9

0019

.354

30.1

3031

.147

71.9

0052

.337

57.2

8783

.825

12.1

4212

.695

0.00

00.

000

205.

195

204.

195

0.00

01.

000

100%

Cur

rent

Inve

stm

ent P

roje

cts [

4]TF

0509

70 -

Tech

nica

l Ass

ista

nce

Feas

ibili

ty S

tudi

es0.

000

0.00

08.

000

2.52

36.

000

3.88

14.

500

2.90

50.

000

3.28

10.

000

3.02

40.

000

1.16

618

.500

16.7

800.

000

1.72

091

%TF

0509

73 -

Nat

iona

l Em

erge

ncy

Empl

oym

ent P

rogr

am0.

000

0.00

016

.620

8.31

00.

000

8.31

020

.200

0.00

016

.000

20.2

000.

000

15.1

190.

000

0.88

152

.820

52.8

200.

000

0.00

010

0%TF

0524

52 -

Mic

rofin

ance

for P

over

ty R

educ

tion

0.00

00.

000

4.00

02.

202

12.0

0012

.635

38.3

0021

.207

32.0

0048

.477

33.0

0034

.219

64.0

0015

.037

183.

300

133.

778

1.90

849

.522

73%

TF05

2541

- Ka

bul P

ower

Sup

ply

0.00

00.

000

7.43

50.

000

0.00

02.

901

0.00

01.

508

0.00

01.

402

0.00

01.

029

0.00

00.

000

7.43

56.

840

0.00

00.

595

92%

TF05

3940

- C

ivil

Serv

ice

Cap

acity

Bui

ldin

g0.

000

0.00

00.

000

0.00

00.

000

0.00

08.

000

2.38

45.

000

4.24

30.

000

4.97

90.

000

1.08

113

.000

12.6

860.

000

0.31

498

%TF

0547

18 -

Reh

abili

tatio

n of

Nag

hlu

Hyd

ropo

wer

Pla

nt0.

000

0.00

00.

000

0.00

020

.000

0.00

00.

000

0.00

00.

000

0.16

00.

000

0.07

10.

000

3.68

420

.000

3.91

60.

000

16.0

8420

%TF

0547

29 -

Urb

an W

ater

Sup

ply

and

Sani

tatio

n0.

000

0.00

00.

000

0.00

020

.000

0.00

021

.000

3.62

80.

000

3.47

50.

000

11.5

060.

000

1.75

541

.000

20.3

650.

000

20.6

3550

%TF

0547

30 -

Educ

atio

n - E

QU

IP0.

000

0.00

00.

000

0.00

00.

000

0.00

05.

000

0.00

00.

000

0.49

027

.000

6.51

212

.000

21.1

1044

.000

28.1

121.

707

15.8

8864

%TF

0554

47 -

Rur

al W

ater

Sup

ply

and

Sani

tatio

n0.

000

0.00

00.

000

0.00

00.

000

0.00

05.

000

0.00

00.

000

0.59

00.

000

0.63

32.

650

1.16

77.

650

2.39

00.

082

5.26

031

%TF

0900

77 -

Man

agem

ent C

apac

ity P

rogr

am0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

010

.000

0.00

00.

000

0.40

010

.000

0.40

00.

000

9.60

04%

TF09

0205

- N

atio

nal S

olid

arity

Pro

gram

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

171.

500

136.

325

100.

000

108.

991

271.

500

245.

316

5.31

526

.184

90%

TF09

1120

- Ka

bul-A

ybak

/Maz

ar-e

-Sha

rif P

ower

Pro

ject

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

57.0

000.

000

0.00

011

.613

57.0

0011

.613

0.00

045

.387

20%

TF09

1885

- H

ortic

ultu

re a

nd L

ives

tock

Pro

gram

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

11.0

001.

566

11.0

001.

566

0.00

09.

434

14%

TF09

2073

- Ka

bul U

rban

Rec

onst

ruct

ion

Proj

ect

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

5.60

00.

000

5.60

00.

000

0.00

05.

600

0%TF

0921

60 -

Just

ice

Sec

tor R

efor

m P

roje

ct0.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

027

.750

0.40

027

.750

0.40

00.

400

27.3

501%

TF09

2544

- St

reng

then

ing

Hig

her E

duca

tion

Proj

ect

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

0.00

00.

000

5.00

01.

000

5.00

01.

000

0.00

04.

000

20%

Subt

otal

Cur

rent

Inve

stm

ent P

roje

cts

[4]

0.00

00.

000

36.0

5513

.035

58.0

0027

.727

102.

000

31.6

3253

.000

82.3

2029

8.50

021

3.41

822

8.00

016

9.84

977

5.55

553

7.98

09.

413

237.

575

69%

TO

TA

L C

OM

MIT

& D

ISB

. [1+

2+3+

4]16

1.83

611

6.21

726

0.73

224

7.04

234

8.44

129

6.06

745

8.54

033

9.37

541

6.28

846

8.89

260

0.14

252

1.46

136

9.13

935

5.19

326

11.9

7923

44.2

4610

.075

267.

733

90%

Not

e: *

Incl

udes

US

$50

mill

ion

Spe

cial

Acc

ount

adv

ance

plu

s ad

just

men

t for

any

tim

ing

diffe

renc

e.

(US$

mill

ion)

.

T

able

3 -

ARTF

Com

mitm

ents

& D

isbu

rsem

ents

Dec

embe

r 20,

200

8

AR

TF Q

uarte

rly R

epor

t (D

ecem

ber 2

0, 2

008)

64

US$

Mil.

R

epor

t Dat

e :

SY 1

381

SY 1

382

SY 1

383

SY 1

384

SY 1

385

SY 1

386

SY 1

387

SY 1

387

Tota

lTo

tal

Tota

lTo

tal

Tota

lTo

tal

Tota

lTo

tal

Actu

alAc

tual

Actu

alAc

tual

Actu

alAc

tual

Actu

alFo

reca

st ², 3

SOU

RC

ES O

F FU

ND

S (A

+B)

A.

Net

Don

ors

Con

trib

utio

ns (

A1-A

2)18

4.24

028

4.38

237

8.77

440

4.09

445

9.99

665

4.24

648

3.40

671

0.10

3

A

.1.

Don

ors

Con

tribu

tions

18

4.76

828

6.46

138

0.36

840

4.05

045

3.92

163

4.80

347

8.24

069

5.10

3

A

.2.

IDA

fees

min

us In

vest

men

t Inc

ome

0.52

72.

079

1.59

4-0

.044

-6.0

76-1

9.44

3-5

.166

-15.

000

B.

Cas

h C

arrie

d-O

verr

(=D

pre

viou

s ye

ar)

119.

524

155.

966

238.

070

302.

789

293.

893

426.

679

426.

679

USE

S O

F FU

ND

S (C

+D)

C.

Dis

burs

emen

ts (

C1+

C2+

C3+

C4)

¹64

.717

247.

940

296.

670

339.

375

468.

892

521.

461

354.

793

580.

060

C.1

Rec

urre

nt w

indo

w -

Dis

burs

ed b

y D

AB59

.212

214.

144

235.

155

253.

248

300.

213

290.

550

182.

951

276.

000

W

a ges

40.9

5314

5.76

917

9.32

117

4.21

321

6.19

920

3.00

016

3.45

1

O&M

13.6

5551

.164

55.2

7779

.035

84.0

1587

.549

19.5

00

Oth

er4.

604

17.2

100.

557

0.00

00.

000

0.00

00.

000

C.2

. In

vest

men

t win

dow

0.00

015

.589

58.8

7383

.969

166.

145

226.

113

169.

449

300.

000

C.3

. P

ass-

thro

ugh

to L

OTF

A (U

ND

P P

olic

e)4.

836

16.8

000.

000

0.00

00.

000

0.00

00.

000

0.00

0

C

.4.

Fee

s to

mon

itorin

g ag

ent

0.66

81.

407

2.64

12.

158

2.53

44.

798

2.39

24.

060

D.

Cas

h B

alan

ce (

end-

of-p

erio

d) (

A+B

-C=D

1+D

2)11

9.52

415

5.96

623

8.07

030

2.78

929

3.89

342

6.67

955

5.29

255

6.72

2

D

.1.

Com

mitt

ed C

ash

Bala

nce:

97.1

2010

9.91

316

1.68

428

0.84

922

8.24

430

6.92

632

1.27

244

4.73

7

to re

curr

ent w

indo

w s

peci

al a

ccou

nt51

.500

50.6

0350

.000

50.0

0050

.000

50.0

0050

.000

50.0

00

to re

curr

ent w

indo

w T

rust

Fun

d44

.288

26.0

4249

.489

76.2

4275

.029

70.4

7925

.528

70.0

00

undi

sbur

sed

inve

stm

ent w

indo

w b

alan

c0.

000

32.5

6661

.822

151.

753

95.8

9518

0.42

423

8.97

532

2.77

4

to M

onito

ring

Agen

t1.

332

0.70

20.

372

2.85

47.

321

6.02

36.

769

1.96

3

D

.2.

Una

lloca

ted

Cas

h Ba

lanc

e22

.404

46.0

5376

.386

21.9

4065

.649

119.

753

234.

020

111.

985

(1) A

dvan

ce d

isbu

rsem

ents

repo

rted

follo

win

g st

anda

rd W

orld

Ban

k pr

actic

e.(2

) Ass

umes

all

pled

ges

colle

cted

, and

est

imat

es o

f fut

ure

allo

catio

ns a

nd d

isbu

rsem

ents

are

met

.(3

) SY1

387

fore

cast

ed b

alan

ce (p

revi

ous

bala

nce

+ ne

w c

omm

itmen

ts -

disb

urse

men

ts) i

s ba

sed

on p

roje

cted

con

tribu

tions

, com

mitm

ents

and

dis

burs

emen

ts.

(4) U

nallo

cate

d ca

sh b

alan

ce re

fers

to fu

nds

in th

e A

RTF

par

ent a

ccou

nt th

at th

e M

C h

as n

ot fo

rmal

ly c

omm

itted

. Dur

ing

the

Sol

ar Y

ear t

hey

will

be

com

mitt

ed in

line

w

ith p

riorit

ies

for A

RTF

fund

s as

set

out

in th

e A

fgha

n N

atio

nal d

evel

opm

ent b

udge

t.

Tabl

e 4

- AR

TF C

onso

lidat

ed S

ourc

es &

Use

s of

Fun

ds

Dec

embe

r 20,

200

8


65

Documents

Afghanistan Reconstruction Trust Fund Report to Donors - World … · 2016. 7. 8. · Report to Donors Third Quarter of the Afghan Fiscal Year 1387 September 22, 2008 to December