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News from Afghanistan www.adb.org/afrm [email protected] Afghanistan A Quarterly Newsletter of the Afghanistan Resident Mission August 2010 of the Asian Development Bank ADB Allocates More Funds ADB President Meets To Reconstruct and Develop Afghanistan Afghanistan’s President, Inaugurates Major Railway he Asian Development Bank tor General, ADB Central and West Asia (ADB) will provide more grant Department. funds to Afghanistan to support ADB’s assistance in Afghanistan is T essential reconstruction work and centered on three multitranche financ- economic development. ing facilities covering transport, energy, ADB’s Board of Directors on 16 and irrigation. Along with the Ring Road, July agreed to temporarily suspend a ADB is aiming to complete the construc- planned phaseout of exceptional alloca- tion of a railway line connecting Mazar- tion of its Asian Development Fund e-Sharif to the border town of (ADF)—ADB’s concessional financing Hairatan—which handles half the facility—to Afghanistan in 2011 and country’s imports—and to make further 2012, making additional funding avail- improvement in electricity transmission VISIT TO AFGHANISTAN ADB President Haruhiko Kuroda talks to Afghanistan’s able. and distribution over the next 2 years. President Hamid Karzai at Gulkhan Palace, "A significant drop in assistance ADB will now provide $548 million Kabul from ADB has been avoided. We are one in financing for 2011–2012, as compared of the largest development partners in with $386 million under the planned phase- DB President Haruhiko Kuroda Afghanistan. This will cancel out the out. This will help Afghanistan address cost met with Afghanistan’s President potentially disruptive effects on ADB overruns linked to a national ring road, and AHamid Karzai on 25 May, and trav- operations, which are so important for some irrigation and energy projects which eled to Mazar-e-Sharif to inaugurate a the reconstruction and development of were not included when ADB prepared its major ADB railway project in Balkh Prov- the country," said Juan Miranda, Direc- operations program. ince. The new railway line will connect Mazar-e-Sharif to Hairatan, on the north- ern border with Uzbekistan, removing bottlenecks, boosting regional trade, and facilitating the flow of humanitar- ian assistance. In this issue ADB President Inaugurates Rail Line Linking Afghanistan to Central Asia 2 Infrastructure Projects to Improve Afghanistan’s Economy 2 ADB Buys Stake in LPG Firm to Boost Access to Safe, Reliable Energy in Afghanistan 3 ADB Vice-President Joins Conference in Kabul 3 Public-Private Partnerships Can Unlock Central Asia's Vast Potential—ADB 3 South Asia, Neighbors Hold Second RAIL LINE The rail link will connect Afghanistan to Uzbekistan's expansive rail network, and to regional High-Level Forum on Regional markets in Europe and Asia. Future links are planned, which will run across the north and to other parts of Cooperation 4 the country and region, including Pakistan, Tajikistan, and Turkmenistan AFRM Staff News 4 ADB President Inaugurates Rail Line Linking Afghanistan to Central Asia DB President Haruhiko Kuroda on 25 May inaugurated a 75-kilometer stretch of railway line that connects AMazar-e-Sharif to the country's bustling northern border with Uzbekistan. "The new rail link between Mazar-e-Sharif and Hairatan will help reduce trade bottle- necks, boost commerce, and speed the flow of much-needed humanitarian assistance," Mr. Kuroda said at the opening ceremony in Hairatan. "It represents Afghanistan's emer- gence as a regional crossroad for trade and commerce and—most importantly—the as- pirations of Afghanistan's people to rede- fine their country's role in the region and in the world." The rail link is being constructed from a $165 million ADB grant and should be com- pleted by the end of this year. It will con- RAILWAY INAUGURATION (From left to right) Omar Zakhilwal, Afghanistan’s Minister of Finance; Haruhiko nect Afghanistan to Uzbekistan's expansive Kuroda, President, Asian Development Bank; Mohammed Atta Noor, Governor of Balk province; and Karl rail network, and to regional markets in Eu- Eikenberry, US Ambassador to Afghanistan rope and Asia. Future links are planned, which will run across the north and to other Central Asia Regional Economic Coopera- mately $2.1 billion in loans, grants, technical parts of the country and region, including tion Program (CAREC), in which Afghani- assistance, and cofinancing. ADB's focus on Pakistan, Tajikistan, and Turkmenistan. stan joined in 2005. infrastructure and regional cooperation is On 25 May, Mr. Kuroda met with "Afghanistan is at the heart of primarily demonstrated in the transport and Afghanistan’s President Hamid Karzai, Fi- CAREC, and ADB's projects in the energy sectors. Other major ADB projects in nance Minister and ADB Governor Omar country's road, rail, and energy sectors Afghanistan include portions of the North Zakhilwal, ADB Alternate Governor Abdul dovetail perfectly with CAREC's vision of East Power System, which last year began Qadeer Fitrat, and other senior government helping Central Asia reap the benefit of its bringing a regular supply of electricity into officials in the capital, Kabul. In his remarks strategic location," Mr. Kuroda said. Kabul from Uzbekistan, and rehabilitation and at an official luncheon, Mr. Kuroda said the From 2002 to the end of last year, ADB construction of the northern portion of the rail link is a hallmark of the eight-member has provided Afghanistan with approxi- country's Ring Road. Infrastructure Projects to Improve Afghanistan’s Economy DB President Haruhiko Kuroda “We are honored to have Asian De- of roads that link Afghanistan with and Minister of Finance Omar velopment Bank President Kuroda in neighboring countries, and is also in- AZakhilwal met in Kabul on 25 May Afghanistan to highlight ADB’s com- vesting in railways. These transport to discuss ADB support for major in- mitment to Afghanistan. We are par- connections will ultimately improve the frastructure projects in Afghanistan's ticularly grateful to have the livelihoods of Afghans and increase transport, energy, agriculture, and irri- opportunity to thank him for the part- economic growth in many sectors in gation sectors. nership of ADB, one of the largest do- the country,” Mr. Zakhilwal added. "We're committed to working nors to Afghanistan.” Mr. Kuroda and Mr. Zakhilwal dis- with the Government of Afghanistan “ADB’s funding of development cussed the extension of ADB- to facilitate economic growth and to projects in transport, energy, commu- financed electricity projects in Kabul contribute to poverty reduction. We're nications, agriculture, and natural re- and in the north and east of the coun- here for the long haul," Mr. Kuroda sources are fully aligned with the try, and the resumption of works in said. government’s priorities. ADB, a ma- the northern portion of Afghanistan's On the occasion of President jor funder of core infrastructure, has Ring Road, which will commence Kuroda’s visit, Mr. Zakhilwal stated, been instrumental in the construction soon. 2 ADB Buys Stake in LPG Firm to Boost Access To Safe, Reliable Energy in Afghanistan DB is investing up to $8 million for a cially in winter," said Thomas Minnich, In- forecast to rise to 1.4 million tons by 2019. 25% stake in Sungas LLC, a recently vestment Specialist, ADB Private Sector Sungas will import its LPG from neigh- established liquefied petroleum gas Operations Department. "Greater use of liq- boring Turkmenistan and Uzbekistan and A(LPG) distributor in Afghanistan, to uefied petroleum gas will free women to work distribute it by truck to cylinder refilling sta- help it expand a nationwide storage and dis- more productively and children to go to tions, where it can be sold to consumers tribution network. ADB's Board of Directors school, reduce harmful fumes in the air, and through Sungas' distribution and retail sales approved the purchase of the preferred provide a steady fuel supply that will allow channels. The absence of a nationwide pipe- shares in the Delaware, US-registered com- businesses to thrive." line network and the expense of building such pany. Sungas aims to invest $58.2 million to a network mean that LPG distribution by road Around 70% of Afghanistan's energy build LPG distribution centers initially in the is the most cost effective and least demand- needs are met using firewood, animal dung, major cities, Kabul and Herat, followed by ing infrastructure option for Afghanistan. and vegetation brush. Access to safer, another three in Mazar-e-Sharif, Khandahar, The country has very low electricity genera- cleaner, and more reliable forms of energy and Pul-e-Qumri. It will also purchase addi- tion, and potential oil and gas reserves in the such as LPG is essential to allow tional LPG cylinders for distribution to con- north have remained unexplored because of Afghanistan’s economy to flourish and im- sumers. The company expects the network decades of conflict. prove the daily lives of the country’s 28.4 will have the capacity to distribute 190,000 "Modern energy is a prerequisite for de- million people. tons of LPG per year, allowing 230,000 house- velopment. We hope ADB's example will en- "Women and children have to spend holds to switch from using solid fuels to courage other private sector players to invest hours of their day collecting firewood for heat LPG by 2019. National demand for LPG was in Afghanistan's energy sector," said and cooking. Smoke and fumes from that fire- only 250,000 tons in 2008—accounting for Michael
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