$1 billion earmarked for Afghanistan, ADB President tells London Conference

London, January 31, 2006 (ADB) – The ADB plans to provide Afghanistan with US$1 billion in low-interest loans and outright grants over the next five years, ADB President Haruhiko Kuroda will announce today at an international conference. The assistance will promote economic growth and poverty reduction in support of Afghanistan's new five-year development plan, the Interim Afghanistan National Development Strategy (I-ANDS).

Speaking at the London Conference on Afghanistan, opening today, he says ADB would also provide significant amounts of grant-financed technical assistance to promote capacity building and seek ways to mobilize additional private sector financing.

ADB is among the parties at the conference endorsing the Afghanistan Compact, which Mr. Kuroda says is a "new international partnership with Afghanistan that will help ensure a better future for the country and its people." Hailing the Compact as a "bold and ambitious effort," he says, "ADB welcomes this initiative, and pledges that it will do its utmost to subscribe to the Compact's principles, including delivering on our commitment to provide Afghanistan with assistance that effectively contributes to the country's key development priorities, particularly the reduction of poverty."

Mr. Kuroda also encourages Afghanistan's development partners to ensure the effectiveness of their aid, particularly by channeling more assistance directly through the Government's budget. Mr. Kuroda says this will improve the Government's capacity and promote greater accountability. At the same time, he urges the Government to continue its efforts to improve quality of public financial management and raise domestic revenues that are crucial to sustainable development.

"Stringent efforts must also be made to eliminate the scourge of corruption which harms the poor most of all," he says. "All of us must support the effort to eliminate the production of illicit drugs."

Since the resumption of its activities in Afghanistan in 2002, ADB had through end-2005 approved nearly $1 billion in loans, grants, technical assistance, and private-sector investments to support Afghanistan's development. ADB's assistance over the next five years will be subject to the country's progress in implementing both the Compact and I-ANDS, as well as the availability of funding from ADB's concessional lending and grant instrument, the Asian Development Fund.

"Building on the success of the past four years, ADB is confident that together we can help secure a better future for Afghanistan and its people," Mr. Kuroda says.

The London Conference on Afghanistan is hosted by the UK and co-chaired by Afghanistan and the UN.