World Bank Supports Water and Agriculture Sectors in Afghanistan

WASHINGTON, May 25, 2006 ? The World Bank today approved a US$60 million package of assistance to Afghanistan, of which a US$40 million grant will support urban water supply services, and a US$20 million grant will further develop the agriculture sector.
As a result of conflict, drought, rapid urban growth, and lack of investment, the water supply service in Afghan cities is of very poor quality. Current access to piped water infrastructure is among the lowest in the world at around 18 percent. While concerted efforts by the Government and several donors have resulted in improvements since 2002, the task ahead remains daunting. The US$40 million grant for the Urban Water Sector Project is designed to increase access to and reliability of the water supply service in Kabul. It will assist the Government in increasing the performance of all urban water providers in Afghanistan, thus laying the foundation for future expansion of reliable, sustainable and affordable water and sanitation services.

The project will help transform the Central Authority for Water Supply and Sewerage (CAWSS) into a technically viable operation; establish the financial sustainability of the Afghan Urban Water Supply and Sanitation Company (CAWSS?s successor); and prepare a follow-up project under which water supply and sanitation coverage will be further expanded in Kabul and provincial towns.

A vast majority of urban dwellers draw small quantities of water from generally unsafe boreholes and open wells, springs, or streams,? said Christophe Bösch, World Bank Senior Water and Sanitation Economist and task team leader for the project. ?This project will improve sustainable access to safe drinking water, which in turn will have positive impact on health and poverty outcomes.?

Agriculture is central to the Afghan economy, contributing more than half of GDP and employing around two-thirds of the labor force. However, Afghanistan?s agriculture has suffered from prolonged conflict, unrest, and frequent droughts. Between 1979 and 2004, agricultural production grew at only 0.85 percent per year.

The US$20 million grant for the Emergency Horticulture and Livestock Project is designed to enhance productivity and stimulate increased and more efficient production of horticulture and livestock products. It will improve incentives for private investments and strengthen institutional capacity in agriculture. The project is the first stage in a program that will unfold over the coming decade to support the horticulture and livestock sub-sectors nationwide.

To enable faster overall economic growth and reduce rural poverty, agriculture needs to grow at a minimum rate of 5 percent a year over the next decade,? said Norman Piccioni, World Bank Lead Rural Development Specialist and task team leader for the project. ?The horticulture and livestock sectors offer great potential both for growth in the agriculture sector and for enhancing rural incomes.?

By focusing on high-value horticulture and livestock products and emphasizing small-scale farmers, the project will also make a positive contribution to the Government?s counter-narcotics policy. It is widely recognized that increased productivity and growth in the non-opium agricultural sector will be an important component of reducing the opium economy.

In conjunction with the two project approvals, the World Bank?s Board also discussed a new Interim Strategy Note (ISN) for Afghanistan. The strategy covers the period 2007 - 2008 and envisages a grant program of up to US$540 million, which is in line with the Bank?s five-year pledge of US$1.2 billion made at the January London Conference on Afghanistan.

The grants are from the International Development Association, the World Bank?s concessionary lending arm.

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