ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 67848 Afghanistan Reconstruction Trust Fund Quarterly Report: September 21 to December 20, 2011 Prepared by the ARTF Administrator ARTF Management Committee: Asian Development Bank, Islamic ARTF Management Committd BankDevelopment Bank United Nations Development Program, The World Bank ARTF Management Committee: Asian Development Bank, Islamic Development Bank, United Nations Development Program, World Bank ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Afghanistan Reconstruction Trust Fund Cover photo: National Solidarity Program, Kabul Province. ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 CURRENCY EQUIVALENT (Effective March 21, 2011) Currency Unit = Afghani (AFN) US$ 1 = 48.66 AFN GOVERNMENT’S FISCAL YEAR (SY1389) Solar Year Period SY1381 March 21, 2002 – March 20, 2003 SY1382 March 21, 2003 – March 19, 2004 SY1383 March 20, 2004 – March 20, 2005 SY1384 March 21, 2005 – March 20, 2006 SY1385 March 21, 2006 – March 20, 2007 SY1386 March 21, 2007 – March 20, 2008 SY1387 March 20, 2008 – March 20, 2009 SY1388 March 21, 2009 – March 20, 2010 SY1389 March 21, 2010 – March 20, 2011 SY1390 March 21, 2011 – March 20, 2012 SY1391 March 21, 2012 – March 20, 2013 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 Josephine Bassinette – Country Director (Acting) – jbassinette@worldbank.org Ditte Fallesen – ARTF Coordinator – dfallesen@worldbank.org Paul Sisk – Task Team Leader, Recurrent Cost Financing - psisk@worldbank.org Nancy Zhao – Operations Advisor, Investment Financing - nzhao@worldbank.org Anantha Krishna Karur – Financial Management Analyst – akarur@worldbank.org All documents are available on: http://www.worldbank.org/artf i ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ABBREVIATIONS AND ACRONYMS AEP Afghan Expatriate Program MoF Ministry of Finance AFMIS Afghanistan Financial Management MoFA Ministry of Foreign Affairs Information System MoPW Ministry of Public Works AFN Afghanis – Local Currency of Afghanistan MRRD Ministry of Rural Rehabilitation and AISA Afghanistan Investment Support Agency Development AREDP Afghanistan Rural Enterprise Development MUDH Ministry of Urban Development and Housing Project NEEP National Emergency Employment Program ARDS Afghanistan Reconstruction and NEEPRA National Emergency Employment Project for Development Services Rural Access ARTF Afghanistan Reconstruction Trust Fund NGO Non-Governmental Organization CAWSS Central Authority for Water Supply and NPBSE Non-pension-based Salary Expenditure Sewerage NPP National Priority Program CDC Community Development Council NRAP National Rural Access Program CDP Community Development Plan NSP National Solidarity Program DAB Da Afghanistan Bank O&M Operations and Maintenance EQUIP Educational Quality Improvement Program PAM Performance Assessment Matrix FS Fiduciary Standards PBSE Pension-based Salary Expenditure GoA Government of Afghanistan PFEM Public Finance and Expenditure Management IARCSC Independent Administrative Reform and PFM Public Financial Management Civil Service Commission PPU Procurement Policy Unit IDA International Development Association PRR Priority Reform and Restructuring IMF International Monetary Fund SOE Statement of Expenditures KfW Kreditanstalt für Wiederaufbau SWAP Sector wide approach LEP Lateral Entry Program TAFS Technical Assistance and Feasibility Studies MA Monitoring Agent TSA Treasury Single Account MC Management Committee UNAMA United Nations Assistance Mission in MCP Management Capacity Program Afghanistan MDG Millennium Development Goal UNDP United Nations Development Program MEW Ministry of Energy and Water UNOPS United Nations Office for Project Services MFI Microfinance Institution USAID United States Agency for International MISFA Microfinance Investment and Support Development Facility for Afghanistan WB World Bank MoC Ministry of Communication MoE Ministry of Education ii ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 TABLE OF CONTENTS I. SY1390 Q3 – Summary 1 II. ARTF Steering Committee Meeting: November 2011 Quarterly Meeting 5 III. Solar Year 1389 Audit Reports of ARTF-financed Activities 8 IV. Briefing: ARTF-Supported Work on Gender 11 V. ARTF Investment Supervisory Agent 13 STANDARD ANNEXES ANNEX 1: Status of ARTF Investment Portfolio 15 ANNEX 2: ARTF Recurrent Cost Monitoring 56 ANNEX 3: ARTF Financial Tables 64 iii I. Q3 SY1390 - SUMMARY In the first section of this report we provide an update on the ARTF’s financial activities during the third quarter of SY1390 (September 20 to December 20, 2011). This section also includes an update on the latest new commitments made, as well as an update on the draft Financing Strategy for SY1391-1393. 1. Donor Pledges and Contributions for SY1390 Donors have contributed a total of US$4.6 billion to the ARTF since its establishment in March 2002. While the total pledge for SY1390 amounted to US$822 million only US$58 million had been received by the end of SY1390 Q2 The financial situation of the ARTF improved markedly in the course of the third quarter of SY1390, particularly within its last month. As SY1390 Q2 drew to a close National Solidarity Program III (NSP III) was urgently in need of new financing, but due to the lack of new donor contributions, no funds were available in the ARTF at the time. In late September 2011, the US contributed US$100 million with a preference for NSP III to ensure that the program could continue implementation. As the calendar year 2011 drew to a close, many donors were looking to provide new contributions to the ARTF. This trend was further strengthened after the IMF Board approval of the new Extended Credit Facility (ECF) program for Afghanistan on November 14, 2011. By December 21, 2011, US$316 million had been paid in from donors, including Norway, Australia, the Netherlands, Sweden and the EC. During the month of December legal agreements were signed for an additional value of US$563 million from the US, the UK, Germany, Denmark, Poland, Italy, Spain, Canada and Estonia, resulting in a total amount of US$879 million in new contributions to date during SY1390. Figure 1 demonstrates donor contributions through the solar year. SY1390 will set a new record for contributions, expected to reach US$1 billion by end-March 2012. Figure 1: Donor Contributions SY1386-SY1390 $900.00 Funds received after $800.00 closing $700.00 $600.00 1386 $500.00 1387 $400.00 1388 1389 $300.00 1390 $200.00 $100.00 $0.00 Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Ongoing and new ARTF investment programs as well as the Recurrent Cost Window are in urgent need of financing and the new contributions are therefore most timely. ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 2. Cash Balance As of December 21, 2011, the ARTF cash balance was US$802 million, with US$642 million committed. This amount includes US$98 million1 under the Recurrent Cost Window waiting to disburse, US$11 million allocated for the two monitoring agents, and US$484 allocated for ongoing investment programs waiting to disburse. Committed funds are funds that have been allocated to programs approved by the Management Committee. These funds are therefore in effect locked in and are as such unavailable to new commitments. This leaves an unallocated, and available, cash balance of US$159.4 million. Of these, US$15 million was approved as additional financing for the ongoing Horticulture and Livestock Project (HLP) in November 2011. In December 2011 the Management Committee approved the second transfer for SY1390 of US$52 million for the Recurrent Cost Window, as well as US$100 million for the new Capacity Building for Results Facility (CBR) project (please see more on this below) – adding up to a total of US$167 million. These allocations are contingent on the new donor contributions being received throughout December. While the Management Committee does not approve allocations unless funds are readily available, an exception was made, however, as the contributions had already been legally committed. 3. New Commitments – Recurrent Cost Window and Investment Window Recurrent Cost Window: As a result of the off-track IMF program, no new transfers under the Recurrent Cost Window were approved by the Management Committee during the first two quarters of SY1390. US$100 million were, however, held in reserve in the ARTF parent account for rapid disbursement through the recurrent cost window once an IMF program was approved. Funds were thus available for immediate disbursement on November 14, 2011, after the approval of the new IMF ECF program. US$100, the equivalent of the two tranches from the first two quarters, was released. In December a second transfer of US$52 million was approved by the Management Committee, of which US$2 million was expenditures carried over from SY1389, that had not yet been disbursed due to the freeze on recurrent cost financing, while US$50 million was the regular quarterly transfer under the recurrent cost financing ceiling for SY1390 of US$200 million.2 Investment Window: A total of US$150 million was approved in new financing under the Investment Window in Q3 SY1390 for two projects:  In November 2011, the Management Committee approved US$15 million in additional financing for the ongoing Horticulture and Livestock Project (HLP), as well as a one-year extension of the closing date (the new closing date is December 31, 2012). This results in a total project amount of US$49.3 million. The additional funds will finance a consolidation of achievements to date and a scale up of activities. The extended project implementation period will allow the Ministry of Agriculture and Livestock (MAIL) to undertake a stocktaking exercise to inform the development of new models of intervention for the proposed follow-on National Horticulture 1 An additional US$50 million is sitting in the Recurrent Cost Window special account. 2 Since the precondition of an active IMF program was not met by the deadline set by the Incentive Program Working Group, of June 11, 2011, US$70 million in incentive funds were cancelled. The recurrent cost ceiling for SY1390 was therefore reduced from US$270 million to US$200 million. 2 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Program. The new program is expected to be ready for approval by the Management Committee and implementation by early 2013.  At the December 13, 2011, meeting the Administrator presented to the Management Committee the new Capacity Building for Results Facility project. The full value of the 5-year program is US$350 million. The Management Committee approved the program in full, but only a first tranche of US$100 million was approved for immediate transfer. The project team agreed to update the Management Committee on progress and to request further financing as funds disburse and the program progresses. Please see more the box below for more information on the project. NEWS: Capacity Building for Results Facility Afghanistan and the international community have embarked upon a transition strategy for the Government to take greater responsibility for security, reconstruction and development. At the Lisbon Conference in 2010, it was agreed that the Government would assume full responsibility for security from end 2014 when most international forces would leave the country. The Government faces significant challenges in managing these reform processes as transition moves forward. Enhancing capacity of the core civil service, with an emphasis on strengthening budget execution and service delivery, is critical to mitigate the substantial fiscal challenges that will unfold during transition. As donors begin to reduce their funds for technical assistance and project support, the Government will face an increasing responsibility for delivery of services in the context of a shrinking envelope of support. Government must have the skilled staff at the central and sub-national levels to be able to absorb and manage increasing amounts of donor funding provided through the Afghan budget. The task of building more sustainable, strategic and longer term capacity is therefore more urgent than ever. The 5 year CBR project aims to support the Government’s effort to significantly increase the capacity of ministries to delivery essential services and implement national priority programs. CBR and its components are structured as a facility that allows for adaptation based upon experience in the initial years. The Facility is operated on a demand-driven approach with each participating line ministry demonstrating its ownership and commitment through formulation of a prioritized capacity building program to execute its mandates with concrete and monitorable results. All ministries are supported to complete essential reforms, such as the implementation of pay and grading. More extensive support will be contingent upon the ministry fulfilling certain criteria, such as having completed basic public administration reforms, and having an approved strategic plan. This is to set a ministry on a reform path that helps it function more effectively. The project targets improvements in budget execution, business processes and service delivery outcomes. The project finances the costs associated with (i) technical assistance for preparation and implementation of capacity building programs in selected line ministries; (ii) recruitment of managerial, common function and professional staff for key positions in selected line ministries; (iii) a management internship program; (iv) targeted training of civil servants; and (v) project management, monitoring and evaluation. 3 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 4. Looking towards SY1391 With donor contributions again being paid in towards the end of the calendar year, focus was turned towards a new Financing Strategy for SY1391-1393. The first ARTF Financing Strategy was introduced at the London 2010 Conference, with the objective of strengthening the fund’s predictability, transparency and ownership in the Government. Since then the implementation of the Financing Strategy has been reviewed regularly. The new ARTF Financing Strategy will, once approved, set the overarching strategic direction of the fund, for recurrent cost expenditure (including the Incentive Program), investment financing as well as monitoring and results reporting. The framework covers five priority sectors which correspond to the Government’s development clusters: Agriculture, Rural Development, Infrastructure, Human Development and Governance/Public Sector Capacity. The ARTF Investment Window is based around a core set of National Priority Programs delivering services and infrastructure nationally. The new draft Financing Strategy covers a three year period SY1391-1393, or March 2012 through December 2014 (the GoA has agreed to adjust its fiscal year from a solar to a calendar year to improve its budget process). The draft Financing Strategy presents a three-year program for a total of US$3.2 billion, including US$2.4 billion for the Investment Window within five different clusters, and US$825 million for the Recurrent Cost Window for the Recurrent Base financing (US$450 million) and the Incentive Program (US$375 million). This represents a substantial increase from the $1.8bn received from donors during SY1387-1389. Estimates of contributions are based on donor consultations, as well as an assumption of increased funding coming “on-budget� in line with the 50% target agreed at the 2010 Kabul Conference. The draft Financing Strategy was discussed with Ministry of Finance and the Strategy Group and subsequently presented to the Steering Committee at the meeting in late November (see more in section II). Consultations will continue throughout January and February 2012 to finalize the draft strategy and have it approved at the Steering Committee meeting in early March 2012, in time for the beginning of the new solar year 1391 on March 21, 2012. 4 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 II. ARTF STEERING COMMITTEE: NOVEMBER 2011 QUARTERLY MEETING The quarterly meeting of the ARTF Steering Committee was held in Kabul on November 29, 2011. The meeting was attended by the Minister of Finance, Omar Zakhiwahl, as well as representatives from the Ministry of Finance (MoF) and 16 donor countries. Administrator’s Report: Following the approval on November 14, 2011, of the new IMF program, donors have resumed contributions to the ARTF. From March to November 2011 only $158 million was paid in, while $6-700 million is now expected to be paid in before the end of the solar year. The Administrator introduced a new draft Financing Strategy for SY1391-1393. The Financing Strategy had previously been discussed with the Ministry of Finance (MoF) and the Strategy Group. The draft Financing Strategy puts forward a three-year program for a total value of $3.2 billion, including $826 million for the Recurrent Cost Window and $2.4 billion for the Investment Window. This constitutes a significant increase in on-budget funding, which enables government leadership of the long-term planning of the development agenda based on predictable funding levels. Under the Recurrent Cost Window the Financing Strategy proposes a continued phase out ($25 million a year) of the baseline funding (totaling $450 million over three years), while it assumes a substantial increase in the Incentive Program (totaling $375 million over three years), which is conditioned on government performance on predefined reform benchmarks. Both the baseline and IP funds reimburse eligible civilian operating expenses and thus the reduction in baseline funding will not impact on Government’s ability to finance the operating budget. The Investment Window has increased substantially over time, both relative to the Recurrent Cost Window within the ARTF and as a share of the Government’s development budget. The draft Financing Strategy constitutes a considerable further expansion of both new and ongoing development activities during SY1391-1393. It includes several areas identified for potential scale up, including the provincial budgeting pilot and additional investments depending on increased capacity. The ARTF Investment Window is financing core National Priority Programs (NPPs). Some clusters are already perfectly aligned, while going forward more work will be done to ensure that the ARTF as a whole is well aligned with the NPPs. The ARTF provides for a common framework for monitoring and results. During the Financing Strategy period, the focus on monitoring and results tracking will be strengthened both by introducing a new Results Framework for the Investment Window and through the Supervisory Agent that was recently contracted to strengthen project monitoring at the field level. In response to the draft Financing Strategy, the Minister of Finance was very pleased to see donor commitments to increasingly channel funds through the ARTF for on-budget support as this ensured government ownership as well as leadership of the development agenda. While the Minister was happy to see the Recurrent Cost Window fully functioning again, he noted his general support for the phase out of the recurrent base financing, off-set by the increase in the Incentive Program (IP). He furthermore welcomed the reengagement on the IP and expressed his support for the reform agenda, pushed forward by conditionality and benchmarks. The Minister acknowledged the need for further prioritization of funding as aid levels were expected to draw down in the coming years. In this regard, the Minister pointed to NSP as one program that could potentially be downsized to free up funds for other NPPs, particularly within infrastructure and 5 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 agriculture. On NSP, the Administrator explained that a mid-term review is planned for 2012-2013, during which time the appropriate funding levels would be revisited. While the Minister acknowledged that improved capacity in line ministries was a key prerequisite for scaling up programs, particularly within infrastructure and agriculture, he further argued that limited capacity was not in itself a reason to withhold funding from key sectors. Rather, funds should be allocated to strengthen capacity. Donors asked whether an increase in ARTF funding to $3.2 billion was entirely realistic. The Administrator explained that the financing level over three years would be entirely dependent on three factors: (i) Capacity in Government and line ministries; (ii) Capacity in the World Bank; and (iii) donor contributions. The World Bank is increasing its capacity on the ground within key sectors such as infrastructure and urban, but the program will still rely on implementation capacity in critical ministries. Not all ministries are yet capable of preparing projects that can go through the World Bank’s quality assurance process. Infrastructure is one example. This is an area where the Asian Development Bank (ADB) has a comparative advantage and complements ARTF well within the area of infrastructure. ADB can support the infrastructure sector through the Afghanistan Infrastructure Trust Fund (AITF). A pass- through arrangement between the ARTF and ADB is included in the Financing Strategy, though the mechanism has not yet been finalized. The issue of preferencing was tabled as donors inquired if current levels of preferencing are acceptable to the ARTF, while still ensuring that funds are available to fund under-preferenced areas of the Financing Strategy. Preferencing is accepted in accordance with the ARTF legal agreement, but donors have in practice committed to limiting their preferencing levels to a maximum of 50 percent. Preferencing levels are constantly being monitored to allow for sufficient flexibility in implementing the Financing Strategy. The Financing Strategy takes priority in guiding allocations and might over time entirely replace preferencing. In terms of the process going forward, the next couple of months would be focused on reaching an agreement with MoF and donors on financing levels, relative project and cluster allocations as well as expected donor contributions. Both MoF and the Strategy Group would be consulted before a final discussion and final approval would take place at the next Steering Committee meeting in late February/early March 2012 in time for the new solar year, SY1391, beginning March 21, 2012. ARTF-Supported Work on Gender: The Administrator briefed the Minister of Finance and donors on achievements on gender across the ARTF investment portfolio. In December 2010 the Administrator provided a first gender briefing, which included a full review of the ARTF portfolio. One year later, a status update was provided, focusing on progress and suggested provisions for how to further advance this important agenda. The briefing focused on a key set of projects in the portfolio, addressing issues such as project gender objectives/strategies, main achievements as well as challenges. There was generally strong support among donors for furthering work on reporting on gender issues within the ARTF portfolio. The Administrator outlined a number of next steps to further strengthen the focus on gender in the ARTF portfolio: (i) a consistent set of core gender indicators to be developed in cooperation with interested donors and integrated into a new ARTF Results Framework; (ii) the new supervisory agent to apply a gender filter in its monitoring to ensure results on the ground; and (iii) for a subset of key ARTF projects, supervision of gender issues will be intensified and included in reporting. 6 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ARTF Investment Window, Mapping & Supervision: The new ARTF Supervisory Agent, International Relief and Development (IRD), gave a presentation on its work during the first three months of the contract. During the one-year pilot phase of the program (September 2011 to August 2012), the Supervisory Agent will perform 1500 site visits divided on three programs: NSP, NERAP and EQUIP. 30 engineer-trained Afghans are based throughout the country and are carrying out site visits on a daily basis. 152 site visits have been undertaken from September to November, 2011. The Administrator emphasized the importance of the third party supervisory agent as an additional layer to the World Bank’s supervision of ARTF projects. The results coming out of the program are feeding into the World Bank’s supervision, allowing for informed dialogue with ministries on how to solve issues and improve project performance and impact at the field level. It was announced that the online ARTF database had been launched, providing Ministry of Finance and donors with access to maps of ARTF project locations all over Afghanistan. While reports from the Supervisory Agent’s site visits would be shared only with the World Bank and the respective line ministries, the donors will continue to receive updates on the ongoing work at donor meetings and through ARTF donor reporting. Donors were very supportive of the important work carried out by the Supervisory Agent and appreciated the value of the work to ensure quality assurance and results tracking. They expressed a strong interest in a continuation of the program beyond the one-year pilot phase, but asked that the program was scaled up in the second phase to include more programs. Donors asked if the program also includes training of line ministries to ensure transfer of capacity within the area of monitoring and supervision for quality control. The Administrator explained that capacity building is not currently part of the terms of reference of the Supervisory Agent. Capacity building is a key function of the World Bank through the ARTF funded projects. IRD, however, has the capacity to train ministries with a proven track record within this area. Should donors and the Ministry of Finance therefore express an interest in adding this aspect to a second phase of the supervisory program, this could be considered. 7 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 III. SOLAR YEAR 1389 AUDIT REPORTS OF ARTF-FINANCED ACTIVITIES The World Bank has now concluded its review of the audit reports on the financial statements of the ARTF-financed recurrent and investment operations for the Solar Year (SY) 1389 ending March 20, 2011. Audit Process All ARTF projects are audited annually by the Control and Audit Office (CAO) of Afghanistan with technical assistance of the firm PKF (UK). As an integral part of its supervision of the ARTF-financed activities, the World Bank’s Financial Management team and project task team leaders review the audit reports, discuss the auditors’ observations with the government counterparts and follow-up on resolution of key issues. All uses of ARTF funds which are reported as ineligible by the auditors are fully recovered by presentation of justifying documentation or repaid to the ARTF. Discussions with the government counterparts are still underway for SY1389 audit findings but we nevertheless would like to share with you the initial findings from the audit reports. As can be seen in the analysis below, implementing agencies’ compliance with financial and procurement provisions of the ARTF Grant Agreements was excellent for SY 1389 as it was for SY 1388, both in timeliness of submission of audit reports and the unqualified audit opinions rendered by the auditors. Audit Results - Investment Projects Audit reports covering all grants of ARTF investment operations, presented in 21 audited financial statements for SY 1389, were received before the due date, except for the audit report for the National Solidarity Program which was received one month late. These were reviewed and accepted by the World Bank as fulfilling the financial covenant 4.01 (b) of the respective ARTF Grant Agreements. The results of the individual audits are shown in Attachment 1 to this letter. A total of 18 out of 21 audit reports came with unqualified (clean) audit opinions, compared to 16 out of 16 in SY 1388. The timely reporting and good fiduciary compliance reflects the strengthened capacity of implementing agencies in fiduciary management and project reporting; and the continued efforts of the CAO and PKF (UK) in coordinating the audit work program with implementing agencies. For SY 1389 the auditors reported observed transactions in 3 projects totaling US$ 908,000; all of these are being resolved by the implementing entities. 8 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Table 1: ARTF Investment Project Audit Results SY1389 Table 1 ARTF Investment Project Audit Results SY 1389 Solar # of # of Months # of Solar Year Ineligible Supporting Year Audit Reports elapsed Unqualified Total Expenditures documents not Reports received after Audit Expenditures provided Recd on time due Reports in US$ date (millions) In US$ In % In US$ In % (millions) of (millions) of total total 1389 21 20 1 18 402 0. 9 0.2 0.06 0.01 1388 16 16 0 16 245 0 0 0 0 1387 14 0 4 8 276 3.4 1.2 3.2 1.2 1386 10 0 9 7 226 7.3 3.2 8.5 3.8 1385 15 0 3 3 239 27.0 11.3 16.6 6.9 Audit Results - Recurrent Cost Trust Fund In SY 1389, the Government submitted to the World Bank for reimbursement under the ARTF Recurrent Cost Trust Fund a total of US$ 664 million of non-security recurrent expenditures (US$ 453 million for salaries and US$ 211 million for Operations and Maintenance). The contribution approved by the ARTF Management Committee for SY 1389 was US$ 288.8 million (US$ 225 million as the base amount and US$ 63.8 million for meeting the benchmarks under the ARTF Recurrent Cost Incentive Program). In SY 1389 the Bank disbursed US$ 336.7 million comprising US$ 74.5 million relating to SY 1388 expenditures and US$ 262.2 million for SY 1389 expenditures. US$ 26.6 million relating to SY 1389 expenditures was disbursed after the year-end but against the SY 1389 ARTF recurrent cost contribution. Despite the adverse security situation in most provinces the auditors made extraordinary efforts and managed to visit19 of the 34 provinces. The 19 provinces visited by the auditors represent 72 % of total provincial expenditures. Because the visits were determined by the external circumstance and were not the result of a risk-based sample the auditors therefore reserve judgment on the expenditures in the other provinces, which represent 22% of total recurrent expenditures submitted. The ARTF Monitoring Agent, who provides independent verification of the recurrent cost expenditures, was able to obtain documentary support for its testing from provinces which together represent 96% of total provincial expenditure. There was no restriction on the review of recurrent expenditure of spending units located in Kabul. The auditors did find ineligible expenditures of US$ 19.8 million in the total expenditures submitted for reimbursement; of this amount 42% related to salaries for security forces which were included in non security department expenditures and 32 percent related to expenditures without sufficient supporting documentation. These ineligible expenditures found by the auditors have already been recovered by reducing these amounts from subsequent eligible reimbursement claims. 9 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 The auditors also prepared a Management Letter for the SY 1389 audits, which sets out their findings and suggestions on the internal control and other matters over recurrent cost operations. The principal recommendations are for the Government to improve accountability arrangements by enacting a new law on external auditing and expanding internal audit capacity. These activities are considered in the reform plans of the Government. 10 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 IV. BRIEFING: ARTF-SUPPORTED WORK ON GENDER Introduction: The recently released Asia Foundation Survey of the Afghan People reported continued high support for gender equality including equal rights under the law (82%) and equal educational opportunities for women (85%). However, support for women being allowed to work outside the home fell – from 71% in 2006 to 62% in 2011. While the reason for these apparently contradictory views is unclear - security concerns could be a key factor – they nevertheless highlight the complexities and obstacles which this agenda faces. At the request of donors, the Bank – as ARTF Administrator - provided a gender briefing to donors in December 2010, which included a full review of the ARTF portfolio. One year on, we are providing a status update and setting out how to take this important agenda forward. Increasingly, and particularly since the World Development Report 2012, gender mainstreaming is the Bank’s policy globally. In Afghanistan the Bank has applied this approach since the start of its engagement. Gender is therefore an integral part of many ARTF projects. More recently, new ARTF projects have developed explicit gender strategies while older, ongoing ones have retrofitted one into their work. The Bank has also increased pressure on project teams to ensure disaggregated gender data is collected to aid reporting. More broadly, we continue to work on an ARTF results framework in which gender indicators can be locked in as a key and consistent focus of our work. In addition, the new third party supervisory agent for ARTF investments will be applying an additional gender filter in its monitoring, which covers EQUIP, NERAP and NSP in year one. It is expected that these results will be shared with donors in March 2012. The World Development Report 2012: The 2012 WDR: “Gender Equality and Development� highlights the dramatic changes taking place across all regions in terms of progress towards gender equality. Building on cross-country data collection and analysis (including new field work from 19 countries including Afghanistan), the WDR also focuses on the economics of gender equality and development in order to gain insights into how key gender outcomes emerge and evolve as the development process unfolds. It also explores the role of policy in influencing these outcomes. The WDR points to four policy priorities to gender equality: • reducing gender gaps in human capital – specifically those that address female mortality and education • closing gender gaps in access to economic opportunities, earnings and productivity • shrinking gender difference in voice and agency within society; and • limiting the reproduction of gender inequality across generations. The ARTF portfolio contributes to these four areas - a reflection of the continued commitment by GoA to address gender equity as expressed in the ANDS, as well as the high priority which the international community places on gender equity targets. It also reflects the strong commitment of project teams in line ministries in pursuing challenging objectives even within a context of deteriorating security conditions. 11 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Sector Project Results / progress Human BPHS/EPHS 1. Health facilities with female staff increased from 24% (2003) to 72% in 2011 Development 2. Deliveries assisted by professional health workers in project area increased 30% since 2010 3. Gender strategy for health sector recently developed and action plan with indicators drafted 4. Routine reporting and surveys comprise gender disaggregated data EQUIP 5. 2.7 million girls now enrolled in schools (100% increase in the past 4 years) 6. 56,485 students now enrolled in TTCs (50,256 in 2010) of which 38% percent are female 7. 52,000 female teachers now employed (50,000 in 2010) Skills 8. Women account for 20% of the faculty and 25% of students at the National Institute of Administration (NIMA) Development 9. Computer technology Institute: Proportion of female teachers has increased from 27% (2008) to 53% (2011) Project Agriculture & NSP III 10. 35% of CDC members are now female (c. 122,123 members as compared to c. 90 000 in 2009) Rural 11. 4% of CDC office bearers are female (ranges from above 60% in Daikundi to zero in the conflict affected regions) Development 12. NSP has set up a Gender Department and integrated the Gender Strategy into the Operational Manual 13. NSP is collecting gender disaggregated data and has gender indicators in monitoring framework AREDP 14. 44% of Saving Group members are women – 11,661 female members across 4 provinces, compared to 3,173 members in 3 provinces in 2010 15. 37% of Enterprise Groups are female – 32 female Enterprise Groups established during the last year HLP 16. 361 women’s producer groups (421 male producers groups) now receiving horticulture and livestock extension training compared to 158 groups in 2010 17. 50% of women’s producer groups engaged in savings, compared to 46% of men’s groups 18. 25,000 women operated poultry unit as compared to 11,000 units in Dec. 2010 Urban KURP 19. 27 Neighborhood Cooperating Shuras established in 19 gozars of Kabul w. one male and one female Development representative for every 50 households 20. Several cases of female NCS members been instrumental in resolving local disputes, and taking the lead in managing community based solid waste collection system 12 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 V. INVESTMENT WINDOW SUPERVISORY AGENT The Investment Window Supervisory Agent has been contracted to carry out on-site monitoring of physical progress, quality of construction and usage of physical investments for selected projects supported by ARTF, to enhance portfolio monitoring and reporting. Work Method In service of the program’s objectives IRD employs methodologies and tools to accurately capture, verify, catalogue and visualize ARTF-funded infrastructure projects across Afghanistan. The supervisory agent makes use of a set of geospatial applications to collect, verify, catalogue and dynamically publish relevant information to donor agencies and government ministries. Although geospatial data is processed on servers located in Afghanistan, the resulting, vetted data is regularly ‘pushed’ to servers in the US for online access by users. The accurate flow of relevant information through all IRD applications, from data collection at a project site to interactive visualization of project data on a user’s desktop, is explained in the next four sections. Focusing on the infrastructure sector, IRD employs standard data sets for modeling physical entities such as buildings, roads, micro-hydro, etc. and their salient features. Using this standards-based approach, IRD can deliver common data, services and applications for mission critical activities to users as well as provide the foundation for future geospatial-based initiatives. IRD developed forms to easily capture project data on smartphones. Afghan field engineers working in remote areas use these forms to geo-tag infrastructure (for example, buildings) and as well as input structured data, attach photos and other information. Any ARTF project with a geographic location can be captured and transferred to the database servers with an appropriate smartphone form. Infrastructure data is collected daily across Afghanistan by the supervisory agent’s field engineers and the captured data is sent over the cellular network or via WiFi direct to the server. A critical aspect is the accuracy and completeness of all data. As a result, prior to publishing any project data in the online ARTF database, location and content are verified, modified or rejected. For example, IRD employs high-resolution imagery to identify, verify and refine project location information. Subject Matter Experts (SMEs) from each infrastructure sector review all incoming data, including reports, spreadsheets, photos, etc., for completeness and accuracy. Only after an infrastructure project’s location and content, including supporting documents, is confirmed or adjusted, is the project catalogued in the online database. Rejected location or content information requires additional field data collection. Scope of Work During the first year of the contract, the pilot phase, the Supervisory Agent (SA) will carry out a total of 1500 site visits. The SA is focusing on three programs: the National Solidarity Program (NSP III); the Education Quality Improvement Program II (EQUIP II; and the National Emergency Rural Access Program (NERAP). The pilot phase will serve to develop an effective third party monitoring model with tested interface arrangements among the selected firm, the World Bank, and government implementing entities. After the 12-month pilot phase, if successful, the scope of work could be expanded to include additional ARTF-financed investment programs. 13 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Preliminary Results As of December 31, 2011, the SA had performed a total of 375 site visits across the three projects. Please see table 1 for a status update on the deliverables Table 1: Status on deliverables Site visits to: EQUIP NSP NERAP September 24 0 0 October 59 4 23 November 92 6 44 December 85 6 34 Total no. of site visits: 260 14 101 As the program only started up in September results and findings are still preliminary. As more data comes in, results and findings will be strengthened. The preliminary reports highlight the value of on-site monitoring and these early findings have already been used by the World Bank project teams in their engagement with the respective line ministries and have as such informed the dialogue and strengthened the Administrator’s supervision. More results will follow further into the program when the Supervisory Agent has collected more data Monitoring Objectives Next Quarter (December 2011 – March 2012) During the second quarter IRD will expand inspections to include all provinces. A total number of 501 site visits are planned for the next quarter, divided on the three projects as outlined below in table 2. A number of additional inspection items have been identified by World Bank project teams and from experience gained during the first quarter of the monitoring program. These changes include, amongst other things, social and environmental safeguards. The new data requirements have been incorporated into project checklists prepared by the SA. In some cases, additional training of field engineers will be required. This training is underway and should result in more comprehensive information for the second quarter. Table 2: Planned site visits in the coming quarter Planned site visits: EQUIP NSP NERAP January 96 44 27 February 96 44 27 March 96 44 27 Total no. of site visits: 288 132 81 14 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Figure 1: EQUIIP, NERAP and NSP project sites in Parwan Province 15 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ANNEX 1: Status of ARTF Investment Projects 15 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Status and Ratings of Active and Disbursing ARTF Investment Projects (Amounts in US$ million) Approved Grant Amount Disbursed Amount Available Start Date Closing Date Amount Water Resources Development Technical Assistance Project - TF093637 5.50 1.16 4.34 3/23/2009 3/31/2013 Justice Sector Reform Project - TF092160 20.75 14.40 6.35 7/15/2008 12/31/2011 Kabul-Aybak/Mazar-e-Sharif Power Project - TF091120 57.00 38.37 18.63 12/26/2007 06/30/2012 Management Capacity Program - TF090077 15.00 10.33 4.67 10/17/2007 12/31/2011 Horticulture and Livestock Program - TF091885 34.30 29.81 4.49 5/26/2008 12/31/2011 Kabul Urban Reconstruction Project - TF092073 5.60 4.10 1.50 5/13/2008 04/30/2012 Kabul Urban Roads Improvement Project - TF093632 18.00 11.52 6.48 2/25/2009 12/31/2011 Second Education Quality Improvement Program - TF093962 135.00 99.45 35.55 4/14/2009 9/1/2012 Rehabilitation of Naghlu Hydropower Plant - TF054718 20.00 12.43 7.57 2/13/2005 9/30/2012 Strengthening Higher Education Project - TF092544 5.00 2..87 2.13 8/5/2008 12/31/2012 Skills Development Project - TF093854 9.00 8.40 0.60 4/14/2009 2/28/2013 Power System Development Project - TF093513 60.00 8.59 51.41 3/19/2009 7/31/2013 Strengthening Health Activities for the Rural Poor (SHARP) - TF096362 46.00 22.00 24.00 4/11/2010 9/30/2013 National Emergency Rural Access Project - TF095297 80.00 35.16 44.84 10/20/2009 12/31/2013 Afghanistan Rural Enterprise Development Project (AREDP) - TF098045 16.00 2.00 14.00 10/27/2010 1/1/2015 Third Emergency National Solidarity Project - TF098459 350.00 183.83 166.17 1/24/2011 9/30/2015 On Farm Water Management Project (OFWM) - TF099074 41.00 4.50 36.50 03/16/2011 06/30/2014 Second Public Financial Management Reform Project(PFMR II)- TF010024 60.00 7.00 53.00 08/09/2011 12/31/2014 Improving Agricultural Inputs Delivery- TF099595 2.40 0.50 1.90 06/30/2011 03/31/2012 16 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 1. MANAGEMENT CAPACITY PROGRAM (MCP) – (TF090077) Contact: Mr. Satyendra Prasad Approved: 30-June-07 Effective: 17-Oct-07 Closing: 31-Dec-11 sprasad@worldbank.org Allocated: US$15.0 million Disbursed: US$10.33 million Available: US$4.67 million Objective: To achieve sustained improved performance in the management capacity of key departments dealing with financial management, human resource management, policy and regulatory design and administration. Improved management in the core functions should result in improved utilization and cost effectiveness of budgetary resources and faster and better development results on the ground. Approach: The Management Capacity Program (MCP) provides the means for bringing in critical Afghan management to line ministries as a complement to donor-provided technical assistance. MCP hires skilled Afghans through a transparent, merit-based process led by the Independent Administrative Reform and Civil Service Commission (IARCSC). MCP hires are paid at a more competitive salary scale. This is an interim solution to address the challenges of competing demands from UN agencies and bilateral donors who continue to implement projects outside government systems, a small pool of Afghan professionals, and the ongoing distortions in the remuneration levels for skilled manpower. Implementation Progress: The original grant has been fully committed. The MCP aims to finance approximately 200 staff positions. The project currently supports 25 line ministries. 261 positions have been advertised of which 102 have been contracted using an agreed salary scale. 34 positions are currently under recruitment. Demand from ministries far exceeds available funding. The MCP will become part of a new Capacity Building for Results Facility (CBR) which was approved by the ARTF Management Committee on December 13, 2011. In June 2009, the ARTF Management Committee approved an expansion of MCP’s scope to include a new component to support the monitoring and oversight of the implementation of the Afghanistan National Development Strategy (ANDS). As a result, the project cost increased from US$30 million to US$35 million. The additional US$5 million will finance ANDS support positions over a period of 3 years and related program management costs. Initial positions are now filled, with 8 in the Ministry of Economy. In 2009 the Independent Administrative Reform & Civil Service Commission (IARCSC) recruited Adam Smith International to provide project management support. This support ended in 2010. The project has now hired a full time HR Specialist, an M&E specialist and a short-term specialist on Outreach and Communications. Utilization of the technical assistance by the Capacity Development Secretariat has thus far focused on system development, improving standards, responding to gaps in implementation and developing an M&E system. Issues and Actions: The project team and the Government concluded discussions on the transition from the MCP to the Capacity Building for Results program - reflected in the approved EPP for CBR and the draft grant agreement for the CBR being discussed between Government and the WB. Through this, all existing MCP contracts will be transferred to the new project as of 1 January, 2012. (ii) All active MCP contracts were granted an extension until July 31st, 2012 to be financed under the CBR program. This will give to the Government approximately 6 months lead time to advertise and commence recruitment of relevant posts under the CBR program. (iii) The Final ISR for the project was completed and steps and work program for the ICR discussed with the Government. 17 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 $16.00 Achievement of Moderately $14.00 Objectives: Unsatisfactory $12.00 Disbursement Rate: 69% $10.00 Million $8.00 $6.00 $4.00 $2.00 Implementation: Moderately $0.00 Satisfactory 18 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Mr.Ladisy Chengula, 2. NATIONAL SOLIDARITY PROGRAM III (NSP III) – (TF098459) Ms. Zishan Karim lchengula@worldbank.org Approved: 24-Jan-11 Effective: 24-Jan-11 Closing: 30-Sep-15 zkarim@worldbank.org Allocated: US$350.00 million Disbursed: US$183.83 million Available: US$166.17 million Objective: To build, strengthen, and maintain Community Development Councils (CDCs) as effective institutions for local governance and social-economic development. Project Components: Component 1: Capacity Building of CDCs; Component 2: Community Grants for Economic and Social Development; Component 3: Project Implementation Support. Implementation Progress: As of October 2011, the program had mobilized approximately 28,382 communities, of which 28,183 have elected Community Development Councils (CDCs) and 27,726 have prepared Community Development Plans (CDPs). These communities submitted 59,813 subproject proposals of which 59,100 have been financed and 48,141 completed. These include water supply and sanitation (24 percent), rural roads (26 percent), irrigation (19 percent), village electrification (12 percent), education infrastructure (10 percent); and the improvement of livelihoods and income-generation (9 percent), others (21 percent). Over US$905 million has been disbursed directly to communities for completion of these subprojects. An Implementation Support Mission for the project took place from 10-20 December, 2011. Key achievements observed during this mission are as follows:  Closing of NSP II and Reconciliation of Block Grant Float Accounts. Phase 2 of the project officially closed on September 30, 2011 and the reconciliation process for the block grant float accounts has been ongoing. The MRRD/NSP has made good progress in reconciliation of the NSP I and II block grant Float Accounts for IDA and ARTF funds. At closing of NSP II, a total of US$84.7 million (i.e., US$24.7 million from NSP I and US$60 million from NSP II grants), were not fully reconciled and/or documented. The mission reviewed the block grant float account reconciliation; and verified documentation (statement of expenditures) of the respective block grant advances submitted by the MRRD/NSP management. The reconciliation and documentation of US$62.4 million has been completed. The balance will be reconciled by end of NSP II grace period, which is January 31, 2012. This would be after paying all invoices for works, goods and services completed by the closing date of September 30, 2011. The reconciliation will include identification of sources of funds for advances that make up the US$84.7 million. An Implementation Completion and Results Report (ICR) for NSP Phase II is under preparation and will be available in mid 2012.  NSP III Repeater Block Grants: NSP has made significant progress in the procurement of FPs for implementing the repeater block grants. A total of 18 FP contracts for work in 4,928 communities located in 77 districts of 20 provinces is currently under process. These contracts, estimated to cost US$56,383,942 million, are expected to be finalized and signed by January 31, 2012. The procurement of FPs’ contracts for implementing the second phase of repeater block grants in 7,000 remaining communities is expected to be completed by July 31, 2012. 19 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011  NSP Phase III Rollout Progress. FPs have already been contracted for the rollout to 8,104 new communities and contracts for the remaining 7,936 communities that are either being processed or will be starting soon. It is expected that all rollout contracting will be completed by July 31, 2012.  Establishment of the Capacity Development Department (CDD): The project has established the CDD, which is responsible for, among others, developing several standardized mandatory training courses for CDCs, to enhance the implementation of the repeater block grants. The Head of CDD, an International Advisor and eight other key positions have been filled. Additionally, six staff selected as Training Supervisors and Reporting Officers are expected to join the CDD by January 31, 2012. To date, only the position of the Deputy Head of Department remains vacant.  Recruitment of Key Project Staff: The project has recruited two International Technical Assistance position (CDD and Policy &Planning Advisors), one national Gender Advisor, two head of departments (CDD and Engineering), and three senior officers (Donor Relations Manager, Senior Field Coordinator and Social Safeguards Officer). These positions are critical to boosting the program implementation capacity.  Revision of the Operational Manual (OM): The OM Version VI has been completed. Key revisions includes: FPs now responsible for block grants withdrawal authorization; two optional CDC structures, each with equal number of seats reserved for women; limiting the number of sub- projects per block grant entitlement to two and making Human Capital Development (HCD) sub- projects ineligible; CDCs capacity assessment through the Institutional Maturity Index (IMI); FPs’ inputs monitoring mechanism; guidelines on social audits and social inclusion; and Annexes on Gender Mainstreaming, and Environmental and Social Safeguards. The OM VI is key to the implementation of the repeater block grants.  Clustering of the CDCs: Overall, the respective FPs have mobilized 66 Cluster Community Development Councils (CCDCs); 65 Clusters Community Development Plans (CCDPs) have been prepared; and 54 sub-project financed in Balkh, Bamyan and Nangarhar provinces. The process of recruiting a consultant/firm to undertake an impact evaluation of the CCDCs is progressing well. A consultant to review and clean up the baseline survey data has been recruited and will be joining in January 2011.  Transition of CDCs to the Village Councils (VCs): Encouraging progress has been made on this issue at policy making level. A letter sent to the President, signed by four Ministers (Finance; Rural Rehabilitation & Development; Agriculture, Irrigation and Livestock; and Head of Governance Cluster), and the Head of the Independent Directorate of Local Governance (IDLG), proposes that IDLG takes full responsibility for governance aspects of VCs, while MRRD continues to be responsible for community level development interventions.  Gender Mainstreaming: There has been significant progress at both the NSP and FP levels. NSP has recently hired three senior female staff. Moreover, NSP has revised FP contracts which now allocate 9% of the total contract value for the recruitment of female field staff. If FPs fail to hire this minimum number of female social mobilizes, payment will be withheld by NSP. The newly established gender unit is now placing a strong emphasis on collecting gender disaggregated data and reporting on gender related indicators. Issues and Actions: In spite of significant achievements observed during this ISM, there are a number of key issues that need to be addressed: 20 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011  Paktika Hawalla Dealer Issue. The need to resolve this long overdue issue is now more urgent than ever. The mission was briefed on the progress made in the recovery of US$3.2 million that was misappropriated by a Hawalla dealer in Paktika province. If the funds are not refunded to the ARTF Block Grants Float Account before the end of grace period January 31, 2012, then US$2.2 million will be declared as ineligible expenditure to be refunded to the Bank. In addition, other remedial measures, including the suspension of disbursements to all IDA/ARTF-funded programs under the MRRD can be deployed.  Restructuring of Financial Management Department: As noted in previous quarterly reports, there was a need to strengthen the NSP FM dept. NSP has responded by preparing a concept note for the restructuring of the FM department of the NSP, which highlights the following inherent weaknesses: (a) Delays in paying expenses resulting from not having sufficient balance in the relevant bank accounts; (b) Lack of reliable comprehensive financial management information system; (c) Fragmentation of NSP financial management and accounting information among the three FM units i.e., Program Fund Unit, Block Grants Unit and Operations Fund Unit; (d) Execution of the identical set of financial management and accounting functions in above three units, for different purposes, using different methods and technologies; and (e) Need for capacity building in the NSP FM units. The Bank strongly supports the proposed restructuring, which is aimed at re- aligning the organization structure of the FM units with their key functions; and implementing an Integrated Finance Management Information System (IFMIS). It was agreed during this mission that the final restructuring concept note and an action plan for its implementation will be submitted to the Bank by January 15, 2012. The target is to begin the implementation of new NSP FM structure by July 1, 2012.  Budget Execution for SY 1390: The budget approved for SY1390 was US$312 million. The mission was informed that the total expenditures during the first eight months of SY1389 were only US$99.5 million, which represented 31.9 percent of the annual budget. However, it is expected that expenditures will increase by US$107.5 million during the remaining four months of SY1390, if MRRD expedites the signing of FP contracts for implementing the rollout and repeater block grants. Therefore, the total expenditures at the end of the SY1390 are expected to reach US$207 million, which is equivalent to 66.3 percent of the approved annual budget.  Projected Project Financing Requirements: With the ongoing contracting of FPs for repeater block grants and for the new rollout, it is expected that NSP III will have contracted FPs for 12,250 communities with an estimated total contract value of US$140.8 by January 31, 2012. NSP has also initiated the procurement of 31 additional FP contracts for implementing the second rollout to new communities; and 18 FP contracts for the repeater block grants to the 7,000 remaining communities. The estimated total cost of these upcoming contracts is US$179.6 million. Given that a total of US$320 million out of the approved US$391 million (IDA=US$41 million equivalent and ARTF=US$350 million) will be committed to FPs’ contracts alone by July 31, 2012, additional financing will be required to make block grant payments. As the first step, the balance of ARTF Grant of US$150 million approved by its Management Committee on September 13, 2011, will be requested in July 2012, to enable NSP disburse block grants to communities in August 2012. The Bank team will also submit a request for a third tranche of the ARTF Grant in September 2012. 21 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 $250.00 Disbursement Achievement of Satisfactory $200.00 Rate: 53% Objectives: $150.00 $100.00 $50.00 Implementation: Satisfactory $0.00 22 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Mr. Richard Spencer 3. EMERGENCY POWER REHABILITATION PROJECT - (TF054718) Mr. Abdul Hameed Quraishi rspencer@worldbank.org Approved: 13-Feb-05 Effective: 13-Feb-05 Closing: 30-Sep-12 aquraishi@worldbank.org Allocated: US$20.00 million Disbursed: US$12.43 million Available: US$7.57 million Objective: To improve reliability of the power supply in Kabul. Project Components: Component 1: Rehabilitation of 110 kV transmission line from Chimtallah to Northern Kabul; Component 2: Rehabilitation of 110kV Kabul North West and Kabul North Substations; Component 3: Rehabilitation and Expansion of MV Distribution Networks in Kabul; Component 4: Corporatization and Commercialization of DABM; Component 5: Rehabilitation of Naghlu Hydropower Plant. Implementation Progress: Rehabilitation of the 110kV transmission line from Naghlu to Kabul; the new 110 kV double circuit transmission lines from Chimtallah substation to Kabul North West substation, the 110kV single circuit transmission line from Kabul North West to Kabul North substation; supply and installation work of optical fiber ground wire (OPGW) from Pul-e-Khumri to Chimtallah 220 kV transmission line; rehabilitation of 110 kV North-West substation; and rehabilitation and extension of the 110kV North substation have been completed and the facilities have entered service. The 110kV single circuit transmission line from North to East substation is incomplete, with the overground part still requiring some tower placement and conductor stringing, and the underground part requiring splicing and connection into the existing 110kV circuit from East substation. Most of the subprojects have yet to achieve Operational Acceptance and only two - the OPGW retrofit and the Chimtallah to Kabul North West substation - have been handed over to DABS. None of the contracts have yet been closed and they are approximately two years behind schedule. The Naglu hydropower plant rehabilitation work has been further delayed. One Unit - No. 4 - has been rehabilitated and commissioned, although a number of minor tasks remain to be completed. Unit No. 3 has been rehabilitated and is ready for pre-commissioning. Unit No. 2 has been dismantled to allow the use of the rotor shaft in the rehabilitated Unit No.3. The rehabilitation of the remaining two units is unlikely to be completed before the project closing date of September 2012. The rehabilitation of the MV system in central Kabul is now complete and the overhead portions have been handed over to DABS. The underground sections are complete except for about one km of undergrounding and the installation of 20kV switchgear in three Junction Stations. The absence of the switchgear is constraining testing of the underground circuits already in place, and will delay completion of the work. Completion is expected in August 2011, about 27 months behind schedule. Technical assistance work is complete and DABM has now been corporatized and transformed into Da Afghanistan Breshna Sherkat (DABS). The project management firm (PMF) demobilized in July 2011 and selection of a new consultant is under way but the project has suffered significant delays as a result of the absence of the consultant, particularly in certification and handover of physical works, reporting and disbursement. 23 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Issues and Actions: The ARTF grant closing date of September 30, 2012, will not be further extended. Focus is therefore on ensuring all contracted work is completed by that date, or, where it cannot be completed, to bring contracts to a close in an orderly way with minimal impact on the project objectives. $24.00 Achievement of Satisfactory $20.00 Objectives: Disbursement $16.00 Rate: 62% $12.00 Million $8.00 $4.00 Implementation: Unsatisfactory $0.00 24 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Mr. Mohammad 4. KABUL/AYBAK/MAZAR-e-SHARIF POWER PROJECT – (TF091120) Anis, Mr. Abdul Wali Ibrahimi manis@worldbank.org Approved: 26-Dec-07 Effective: 26-Dec-07 Closing: 30-June-12 aibrahimi@worldbank.org Allocated: US$57.0 million Disbursed: US$38.37 million Available: US$18.63 million Objective: To provide improved, more reliable and higher quality power supply to consumers in the cities of Kabul, Aybak and Mazar-e-Sharif. The key project outcome indicator is a 70 percent increase in grid supplied power consumption. Project Components: 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: The project was extended for a second time on September 19, 2011, bringing the cumulative extension period to 30 months, to provide adequate time to complete the remaining project activities and thus allow full completion of the Project Development Objective (PDO). The activities have been delayed for several reasons, some of which have been outside the control of the project implementing entity. The project management firm (PMF) demobilized in July 2011 and selection of a new consultant is under way but the project has suffered significant delays as a result of the absence of the consultant, particularly in certification and handover of physical works, reporting and disbursement. 1. MEW 300/3 Rehabilitation of Kabul LV Distribution Network The physical progress of the Kabul rehabilitation work has improved with more than 85 percent of the work completed. Delays were being experienced as a result of difficulties in accessing right of way to construction sites, especially from Kabul Municipality, institutions and other landlords. Pole procurement has contributed very significantly to the delay, as well as slow progress by contractors due to either materials getting stuck at the port of Karachi or security problems at the border posts, as well as delays in the manufacturing of meter boxes by DABS. Construction of the customer care center (CCC) is completed. 2. MEW S502 - Supply and installation of Mazar-e-Sharif Distribution and Rehabilitation Works Implementation work for Feeder 07 (pilot project) under Mazar distribution works was completed and energized on June 20, 2010, with 20 distribution transformers connected to this new feeder. Approximately 4,500 consumers were connected to the new line, having 24-hour electricity supply from Mazar substation. Since then, the work has been delayed and not much progress was made in increasing the number of connections. The progress is severely restricted due to non-availability of concrete distribution poles, and supply of needed equipment. 25 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 3. MEW S 503 - Supply and Installation of 220/20kV Aybak Substation (New) and Expansion Works at Mazar-e-Sharif (existing) Civil and structural design approvals for both Aybak and Mazar substations are fully completed. Construction works of the boundary wall of Aybak substation has been completed. Also leveling works at Aybak switch yard is nearing completion with 61 percent of the supply items including a 16MVA power transformer having been reached at Aybak site. The switchgear, control, store and office buildings in Aybak substation are 80 percent complete. In Mazar-e-Sharif, all the civil works are completed. Issues and Actions:  The ARTF closing date of June 30, 2012 will not be further extended. Focus is therefore on ensuring all contracted work is completed by that date, or where it cannot be completed to bring contracts to a close in an orderly way while ensuring the PDO is met. $60.00 Achievement of Moderately Objectives: Satisfactory $50.00 Disbursement $40.00 Rate: 67% Million $30.00 $20.00 Implementation: Moderately $10.00 Satisfactory $0.00 26 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 5. HORTICULTURE AND LIVESTOCK PRODUCTIVITY PROJECT – Contact: Mr. Alvaro J. Soler (TF091885) Approved: 26-May-08 Effective: 26-May-08 Closing: 31-Dec-11 asoler@worldbank.org Allocated: US$34.30 million Disbursed: US$ 29.81 million Available: US$4.49 million Objective: To assist producer households in adopting improved practices so as to increase horticulture and livestock productivity and production in focus areas. Project Components: Component 1: Increasing Productivity and Marketable Output of Perennial Horticulture; Component 2: Increasing Output and Productivity of Livestock; Component 3: Capacity Building, and Monitoring and Evaluation Support. Implementation Progress:  The ARTF Management Committee approved in November, 2011, a request from the Government of Afghanistan for an additional financing in the amount of US$15 million, bringing the total ARTF financing for the Project to US$ 49.3 million. In addition, the closing date for the project was extended by one year to December 31, 2012. Overall the project continues to make good progress on implementation, confirming improved performance towards achieving the Project Development Objective (PDO). Below are the key developments in both the horticulture and livestock components during the last quarter. Horticulture:  As of December 2011, a total of 3,187 ha of new orchards had been planted, which represents 106 percent of the end project target of 3000 ha; with the average survival rate of about 70 percent, which is above the target of 60 percent. In addition, inputs were provided for the improvement of existing orchards owned by over 36,000 farmers.  The survey and registration process for 500ha of new orchards for 2012 is completed.  A total of 41ha of grape trellising was established. Of the remaining planned additional 51 ha, 20 ha have already been completed, and the balance will be completed soon as most of it is in the final stages of implementation. Livestock:  A total of 114 government veterinary clinics were equipped and transferred to trained private sector veterinarians for their operation. The second batch of 52 clinics is currently going through the same process of privatization and will be completed by end of 2011.  A total of 25,000 intensive poultry units were established, and have produced over 20 million eggs. This helped poor women increase their farm income and family nutrition.  Installation of the Liquid Nitrogen Plant at the Beni Hisar Farm was completed. It has the capacity of producing about 1,000 litres of liquid nitrogen per week. This would significantly contribute to the use of artificial insemination and the improvement of livestock breeds in Afghanistan, and hence rural incomes and livelihoods. Issues and Actions:  One year extension: the closing date for the project has been extended for one year to December 31, 2012. Thus, it is important for the project to ensure timely extension of contracts, as well as 27 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 signing of new ones as needed for the smooth implementation of the project during the extension period. Also, it is important that during this additional year the project contributes to the preparation of the follow on project.  Liquid nitrogen plant: While the plant is now operational, its long term financial sustainability is still not certain as the Ministry of Agriculture, Irrigation and Livestock is yet to develop and implement a semi-commercial (e.g., public/private partnership-PPP) business plan to run the plant $40.00 Achievement of Satisfactory $35.00 Objectives: $30.00 Disbursement $25.00 Rate: 87% Million $20.00 $15.00 $10.00 Implementation: Moderately $5.00 satisfactory $0.00 28 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Raja Rehan 6. KABUL URBAN RECONSTRUCTION PROJECT (KURP) - (TF092073) Arshad, Approved: 13-May-08 Effective: 13-May-08 Closing: 31-Dec-11 rarshad@worldbank.org Allocated: US$5.6 million Disbursed: US$ 3.59 million Available: US$2.01million Objective: To provide improved delivery of basic urban services in vulnerable communities in Kabul through the upgrading of urban infrastructure and enhancement of the managerial capacity of the Ministry of Urban Development Affairs (MoUDA) and Kabul Municipality (KM). Project Components: Component 1: Area Upgrading in Darwaze Lahori, Deh- Ghaucha e Deh Afghanan, Andarabi, Murad Khana, Joy Sher and part one of Masjed e Itefaq area (US$0.2 million); Component 2: Engineering and Project Management Support (US$2.27 million); Component 3: Support on Cultural Heritage (US$0.1 million). Implementation Progress: The project became effective on May 31, 2008. Implementation initially faced some delays as preparatory studies were necessary to ensure that upgrading activities would not cause damage to the historic fabric and property in these neighborhoods. Despite the logistical and environmental challenges posed by working in densely-populated neighborhoods that contain property of historic significance, upgrading work is now progressing as scheduled. In each neighborhood, community-based Gozar Cooperative Shuras (with participation from both women and men of the area) have played a role in planning and facilitating the implementation of sub-projects. While investments have not been made directly in building conservation, the upgrading measures have contributed to safeguarding the historic fabric, much of which is under threat of ‘development’. Efforts have been made to strengthen the institutional capacity of the Ministry of Urban Development to address urban conservation needs within wider development plans for Kabul and other cities. Issues and Actions:  Liaise with the Project Management Unit to ensure that the appropriate safeguards are adhered to, in order to ensure protection of historic property during upgrading activities.  PMU to work together with staff of the Historic Cities department in the Ministry to ensure that the experience gained through KURP and other initiatives are integrated into official practice. 29 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 $6.00 Achievement of Satisfactory Objectives: $5.00 Disbursement $4.00 Rate: 64% Million $3.00 $2.00 Implementation: Satisfactory $1.00 $0.00 30 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Ms. Lubomira 7. JUDICIAL REFORM PROJECT – (TF092160) Beardsley Approved: 15-Jul-08 Effective: 15-Jul-08 Closing: 31-Dec-11 Lbeardsley@worldbank.org Allocated: US$20.75 million Disbursed: US$12.31 million Available: US$8.44 million Objective: To strengthen the centralized state justice system in Afghanistan and increase access to justice for the Afghan people. Project Components: Component 1: Enhancing Capacity of Justice Institutions ($US23.6 million); Component 2: Empowering the People (US$2.4 million); Component 3: Strengthening Implementation Capacity (US$1.8 million). Implementation Progress: A World Bank mid-term supervision mission took place in October/November, 2009, where after the project closing date was extended to December 2011. Following a good start the project’s implementation slowed down in late 2009 as a result of difficulties in recruiting qualified staff for the Project Support Unit, personnel changes in Justice Institutions (JI), mainly in the AGO and MOJ, difficult political climate before and after the 2009 elections and subsequent changes in the Cabinet. The impact of these factors on the project implementation was exacerbated by the project’s short implementation time-scale; these factors resulted in an overall rating of moderately unsatisfactory for a while. Implementation progress and achievement of Developmental Objectives (DO) have now improved from moderately unsatisfactory to moderately satisfactory as implementation picked up again in late 2010. The project has made most progress in establishing the basic infrastructure for improved access to justice. Thirty legal libraries have been established across the country. The Ministry of Justice (MoJ) has undertaken a major effort to print and disseminate Afghan laws. A network of 6 legal aid offices and 3 legal awareness offices is operational. The MoJ is contracting the biggest Legal Aid NGO (International Legal Foundation (ILF)) for legal service provision in 13 provinces. It is anticipated that MoJ will be able to process up to 2800 more cases within the next 6 months. The project has also made progress in improving the physical infrastructure of the justice sector. Twenty three court houses and offices have been repaired. New designs for 24 court and office buildings were finished by June 2011 along with new court design standards laying the basis for more accessible legal facilities. Work on the AGO headquarters is almost complete and the AGO is expected to move into the new premises by August 2011. More modest improvements have been achieved in the areas of capacity building and human resource management reform for the Justice Institutions. Training has been organized for 90 judges at the Judicial Training Academy in Egypt. A National Conference of Prosecutors has been organized. Reform Implementation and Management Units have been established in the Supreme Court (SC) and Attorney General Office (AGO) to spearhead the process of human resource management reform in those institutions linked to the broader pay and grading reform across the Afghan government. Finally, project management and oversight have improved considerably since the appointment of a Project Director. The Project Oversight Committee, Project Support Unit, and Project Coordinators are fully operational. The Procurement and Financial Management Manuals have been finalized. The implementation of the activities during the extension period will allow translating existing results into a higher volume and better quality of legal services, particularly legal aid. It will also secure smooth transitioning from Phase 1 to Phase 2 of the project. 31 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Issues and Actions: In June 2011 the project was restructured and its closing day extended until December 2011. US$8 million of the grant was cancelled as part of the restructuring. The JI have developed an action plan and schedule for the remaining time of implementation. The Project Development Objectives, the Results/indicators, the Components, Safeguards, Institutional arrangements, financial management or procurement related aspects of the project remain unchanged. $25.00 Achievement of Satisfactory $20.00 Disbursement Objectives: Rate: 59% $15.00 Million $10.00 $5.00 $0.00 Implementation: Satisfactory Apr-09 Apr-11 Apr-10 Sep-09 Feb-10 Sep-11 Sep-08 Feb-09 Sep-10 Feb-11 Jun-10 Jun-11 Jun-09 Jul-08 Jul-10 Jul-09 Jul-11 Mar-09 Mar-10 Mar-11 Dec-08 Dec-10 Dec-09 Dec-11 Oct-08 Oct-09 Oct-11 Oct-10 Aug-09 Aug-10 Aug-08 Aug-11 Jan-10 Jan-11 Jan-09 Nov-08 Nov-10 Nov-11 Nov-09 May-09 May-11 May-10 32 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 8. STRENGTHENING HIGHER EDUCATION PROGRAM (SHEP) – Contact: Mr. Habibullah (TF092544) Wajdi Approved: 05-Aug-08 Effective: 05-Aug-08 Closing: 31-Dec-12 hwajdi@worldbank.org Allocated: US$5.0 million Disbursed: U$2.87 million Available: US$2.13 million Objective: To progressively restore basic operational performance at a group of core universities in Afghanistan, which will provide an institutional base for tertiary education development, capacity building and reform. Project Components: 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: Under Component 1, ARTF resources are supporting infrastructure projects at four universities: Balkh, Kandahar, Kabul Polytechnic and Nangahar. All funds are now committed and the infrastructure design and rehabilitation is underway. The disbursement of ARTF funds has been very slow, out of the $5 million only about $2 million were spent in the past several years and the remaining $3 million were allocated for year 2011. This was mainly for construction of Economics and Literature buildings of Kandahar University. The absence of master plan for the universities, designs, and Bill of Quantities (BoQs) decelerated the process of procurement. Master plan of Kandahar University was completed only in May 2011. Bidding process for the construction of Economics and Literature Faculty buildings of Kandahar University is underway and a part of the funds will be disbursed in the FY 1390. The slow disbursement in ARTF has mainly been caused by delays in contract processing and contract management. Over the past five months, the task team has been working with MoHE and SHEP PCU and major improvements have been put in place. New staff in procurement unit has been recruited. Contract processing and management procedures and steps are identified and defined to all staff. Close coordination among various units (FM, Procurement, and Engineering staff) have been maintained and monitoring of the construction sites are regularly conducted. Positive signs are emerging from the focused interventions in the areas of contract processing and management. Resources are also allocated to faculty development by financing graduate degrees abroad and other academic undertakings. This has included financing of graduate degree programs for the Afghan faculty from Kandahar University, Balkh University, Herat University, Kabul University and Kabul Polytechnic at overseas universities such as the Asian Institute of Technology (Thailand), Central Asia, USA and Europe. Lessons learned from University Partnerships and Block Grants have resulted in curriculum development, BA program designs, materials and teacher graduate trainings for the selected universities. Implementation of SHEP components in the framework of the National Higher Education Strategic Plan (NHESP) aims to maintain oversight on the implementation of SHEP and other development projects. The NHESP SY1389-1994 (2010-2014) provides an important policy and strategic framework for the scale up and implementation of the Governance and Quality Assurance and Accreditation sub- components of SHEP. Close supervision of the detailed programming of these components within the NHESP will be maintained. 33 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Issues and Actions:  Continue supporting the implementation of NHESP;  Alignment of ARTF and IDA resources with the NHESP objectives and priorities;  Sustainable improvement in project management and integration of lessons-learned from partnerships at the university level will continue to be supported. Achievement of Moderately $5.00 Objectives: Satisfactory Disbursement $4.00 Rate: 57% $3.00 Million $2.00 Implementation: Moderately $1.00 Satisfactory $0.00 34 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Mr. Venkatesh 9. SKILLS DEVELOPMENT PROJECT – (TF093854) Sundararaman, Mr. Mostaeen Jouya vsundararaman@worldbank.org Approved: 14-Apr-09 Effective: 14-Apr-09 Closing: 28-Feb-13 mjouya@worldbank.org Allocated: US$9.0 million Disbursed: US$8.40 million Available: US$0.60 million Objective: To increase access to high-quality vocational education and training in the areas of Management, Administration and ICT in a manner that is equitable, efficient and sustainable. Project Components: Component 1: Develop regulatory and quality assurance framework for TVET (Technical & Vocational Education); Component 2: Improve relevance, quality and efficiency of TVET; Component 3: Skill Development Program and market linkage with a rural focus; Component 4: Research, Monitoring and Evaluation. Implementation Progress: The Afghanistan Skills Development Program (ASDP) is supported by both IDA and ARTF. ARTF financing goes towards Component 2 of the broader program, and in particular the development of the National Institute for Management and Administration (NIMA) in Kabul. NIMA falls under the direct administrative purview of the Deputy Ministry for Technical Vocation Education (DMTVET), Ministry of Education. This update focuses on ARTF-financed activities. The objective of Component 2 is to establish and develop NIMA into a model TVET institution in Afghanistan. NIMA was established in 2008. The broad objectives of the Institute are to: a) Offer two year diploma courses in the fields of (i) Administration and Management,(ii) Finance and Accounting, and (iii) ICT; b) Bring students to an advanced level of proficiency in written and spoken English; c) Produce graduates for immediate entry into the labor market and to train lecturers and teachers for other schools and training institutes in Afghanistan; d) Develop competency-based, modular training systems and materials in both general and specialized management for use at the Institute and other public or private training centers; e) Provide students with a safe and supportive living and learning environment that will present multiple opportunities for personal and academic growth. The Institute offers education at 13th and 14th grades and student admission is determined through an entrance examination conducted on an annual basis. The curriculum and course structure follows a modular and competency-based model for each semester. All NIMA program offerings will have to be mapped to the Afghan National Qualifications Framework (ANQF) once it is established. A batch of 1058 students graduated from NIMA with Diplomas accredited by the University of Jyvyskala, Finland. 433 others, who had not successfully performed on all the parameters, were given certificates by NIMA but will however, be granted another chance at completing all requirements. Of the graduating batch, 33% were girls. Student enrollment for the second Cohort that was taken in this year stands at about 500 of which 25 percent is female. The consultancy assignment of M/s Maxwell Stamp Plc, who had been providing support by building up curricula for the three main streams on the one hand, and conducting classes and examinations on the 35 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 other (in addition to providing other academic management inputs, came to an end in July 2011. For the second Cohort, (after the exit of MSP) NIMA has already recruited 20 Junior Faculty and efforts are on to find a direct Institutional Partner for NIMA in the next few months. As per information conveyed, more than 40% of the students have already found employment. The work of renovating and refurbishing the academic buildings and the hostels has been completed. Construction work on the Central computer laboratory is now going on and is expected to be completed soon. Issues and Actions:  Based on the experience with MSP, NIMA management and DMTVET have now decided to invite an established institution (University or similar) which can provide (a) academic management guidance and training for Faculty and (b) accreditation. A detailed program of action is being chalked out.  Work of land development, internal roads and drainage, and refurbishment of the lighting system in the Jangalak campus remains to be done and the MTR conducted in 2011 reviewed the actions being taken and recommended certain mid-stream corrections.  The major issue remains recruitment and retention of Faculty. This matter is being reviewed at the highest levels in the Ministry of Education. $10.50 Achievement of Satisfactory Disbursement Objectives: $9.00 Rate: 93% $7.50 $6.00 Million $4.50 $3.00 Implementation: Satisfactory $1.50 $0.00 36 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 10. SECOND EDUCATION QUALITY IMPROVEMENT PROGRAM (EQUIP II) Contact: Ms. Samantha de – (TF093962) Silva Approved: 14-Apr-09 Effective: 14-Apr-09 Closing: 1-Sep-12 sdesilva@worldbank.org Allocated: US$135.00 million Disbursed: US$99.45 million Available: US$35.55 million Objective: The project development objective is to increase equitable access to quality basic education especially for girls through school grants, teacher training and strengthened institutional capacity with support from communities and private providers. Project Components: Component 1: School Grants (IDA US$8.7 million, ARTF US$92.89 million, others US$55.0 million); Component 2: Teacher and Principal Training and Education (IDA US$16.7 million, ARTF US$55.4 million, USAID US$22 million, others US$24.9 million); Component 3: Project Management, Monitoring and Evaluation (IDA US$4.6 million, ARTF US$9.7 million, others US$4.7 million). Implementation Progress: EQUIP is a national education program under the Ministry of Education and is being implemented in all 34 provinces of Afghanistan. The second phase of EQUIP became effective in March 2008 with added emphasis on alignment, harmonization and capacity building for the implementation of the National Education Strategic Plan (NESP) of Afghanistan. Funds are used directly by communities through School Shuras for the rehabilitation or construction of school buildings and for accessing quality inputs, such as teaching and learning materials. The School Shuras are functioning in all provinces, and 10,893 out of 11,738 schools have Shuras. Shuras are assisted by the Provincial Education Departments, NGOs and District Educational Departments in all 34 provinces. EQUIP II supports the District Teacher Training Program in 23 provinces (the 11 remaining provinces are supported by USAID). It also provides regional allowances for lecturers in 730 Teacher Training Centers (TTC) as well as scholarships for 3,351 girls to attend Teacher Training Colleges for two years, following which they are to join the teaching force in their local communities. It also supports the monitoring and evaluation of National Education Strategic Plan (NESP) programs, including the Education Management Information System at the Ministry of Education. It is envisaged that by the close of the project in 2012, some 1,662 schools will have been built; 10,893 School Shuras will be formed and active (with 1,580 more Shuras to be formed); over 150,000 teachers and around 9000 school administrators trained; 5,000 girls in 25 provinces receiving scholarships to complete their two-year studies at TTCs; and 750 qualified lecturers recruited in 18 provinces. Issues and Actions:  Technical Assistance: EQUIP has financed approximately 400 individual technical assistance contracts in MoE. The MOE has set up a review of technical assistance and has appointed a committee to align the utilization of technical assistance with the capacity building and institutionalization development of key institutions in the MOE for long term sustainability.  Security: The MOE is elaborating strategies to guarantee the safety of students. EQUIP will also need to adjust some of its education service delivery mechanisms. Maintaining community-based management of schools will remain an important strategy. 37 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011  Donor coordination: Improved donor harmonization mechanisms have been put in place, and NESP indicators are being updated to improve alignment, monitoring and evaluation. EQUIP’s own indicators will continue to align with NESP’s goals.  Fiduciary: Improvement of fiduciary (Financial and Procurement) management will continue to be supported in the new institutionalized structures of the MOE (rather than in separate/parallel implementation units). Fund allocating modality to communities remains a critical bottleneck. Alternative modalities have to be explored to make fund delivery efficient.  Monitoring & Evaluation: Focus on strengthening M&E will be an essential component of the additional resources provided through ARTF. A detailed set of indicators have been established and comprehensive education sector data is being populated. In addition, enhanced focus is being relayed to improving quality of construction. $160.00 Achievement of Moderately $140.00 Objectives: satisfactory $120.00 Disbursement Rate:74% $100.00 Million $80.00 $60.00 $40.00 Implementation: Moderately $20.00 satisfactory $0.00 Dec-09 Dec-11 Dec-10 Oct-09 Oct-10 Oct-11 Aug-10 Aug-11 Aug-12 Aug-09 Apr-09 Apr-10 Apr-11 Apr-12 Feb-10 Feb-12 Feb-11 Jun-09 Jun-11 Jun-12 Jun-10 38 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 11. KABUL URBAN ROADS IMPROVEMENT PROJECT - (TF093632) Contact: Mr.Mesfin Wodajo Jijo Approved: 19-Dec-08 Effective: 25-Feb-09 Closing: 31-Dec-11 mjijo@worldbank.org Allocated: US$18.0 million Disbursed: US$11.52 million Available: US$6.48 million Objective: To improve traffic flow on priority corridors of the main urban roads in Kabul. Project Components: Component 1: Improvement of the road network in Kabul. Rehabilitation of about 12 kms of existing roads; construction and rehabilitation of road side drains and walkways; construction of roundabouts at key intersections; and installation of street lights; Component 2: Project Management Support. Support to Kabul Municipality (KM) for the preparation, design, implementation and supervision of the Project; and establishment of a Project Management Unit (PMU) within Kabul Municipality (KM) to strengthen the institutional capacity of KM. Implementation Progress: Design: The Implementation Consultant (IC) has completed both the topographic survey and the technical design of the 75 km of roads under their contract (which goes beyond the ARTF-financed roads). Construction: The four civil works packages under the Project – W1, W2, W3 and W4 – valued at US$12.3 million, have been awarded in 2009 and physical works are substantially completed; the remaining minor works will be completed by end of December, 2011. Preparation for a potential second phase of the project: The World Bank has received a request from the Kabul Municipality through MoF for funding a second phase of KURIP from ARTF resources. Currently, the World Bank team is evaluating the request to inform a decision for a potential second phase. In the meantime, Kabul Municipality is also in the process of hiring a Project Development Specialist to assist them in the preparation of the new project. The selection of the candidate for the position has been finalized and soon will be sent to the Bank for review. Issues and Actions:  The contractor’s and Consultant’s payment has been delayed for last six months. With efforts of the team, Two IPCs of the contractor has been paid and the other invoices are under process. The Bank team is closely working with KM to process the outstanding payments before the grant closing date - December 31, 2011.  The remaining balance of the work needs to be completed by end of December 2011. There are few activities, road marking and installation of the traffic signs, and street lights that still need to be completed. 39 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 $21.00 Achievement of Unsatisfactory $18.00 Objectives: Disbursement $15.00 Rate: 64% $12.00 Million $9.00 $6.00 $3.00 Implementation: Unsatisfactory $0.00 40 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 12. NATIONAL EMERGENCY RURAL ACCESS PROJECT -(TF095297) Contact: Mr.Mesfin Wodajo Jijo Approved: 20-Oct-09 Effective: 20-Oct-09 Closing: 31-Dec-13 mjijo@worldbank.org Allocated: US$80.00 million Disbursed: US$35.16 million Available: US$44.84 million Objective: To provide year-round access to basic services and facilities in the rural areas of Afghanistan covered by the project. This will be achieved through rehabilitation and maintenance of rural access infrastructure by contracting with the private sector and, to a lesser extent, with communities. Project Components: Component 1: Improvement of secondary roads by the Ministry of Public Works (MPW); Component 2: Improvement of tertiary roads by the Ministry of Rural Rehabilitation and Development (MRRD); Component 3: Institutional strengthening, project management, and program development. Implementation Progress: NERAP is a follow-on project supporting the broader government National Rural Access Program (NRAP). ARTF has provided co-financing of US$80 million to the IDA grants (H344 and H636) US$ 112 million and US$40 million respectively, which in turn finances NERAP. The project is implemented by two agencies: Ministry of Public Works (MPW) and Ministry of Rural Rehabilitation and Development (MRRD), with support from an Implementation Consultant (IC) and the United Nation Office for Project Services (UNOPS). With the increase in financing the project closing date was also extended from December 31, 2010 to December 31, 2013. Component 1 is implemented by MPW and supports the improvement of about 1105 km of roads out of which ARTF initially was to finance 176 km of roads packaged into 15 contracts with an allocation of US$39 million in two phases. The ARTF and IDA financing agreements that provided additional funding in November/December 2010, abolished the allocation of ARTF and IDA resources to specific activities; and both resources are now pooled to fund all project activities. Component 2 is implemented by MRRD and supports the improvement of about 1195 km of roads out of which ARTF initially was to finance 190 km of roads packaged into 16 roads and bridges contracts with an allocation of US$11 million in two phases. As in component 1, both resources are now pooled to fund all project activities. Component 3 seeks to build the capacity of the implementing institutions as well as contractors and communities engaged in the project. A capacity building consultancy firm has been hired and is being mobilized, with an initial focus on developing a rural road strategy and staff capacity building. MIS and M&E systems have been developed. MIS is being tested before its official launch. To kick-start implementation of the M&E, NCU hired an M&E officer. When the total cost of NERAP was assessed in the June 2010 midterm review it became apparent that the project faced a funding shortfall. In December 2010, a phase II allocation from the ARTF, approved in September 2009, was released. At the same time the project received additional financing, US$40 million from IDA and US$30 million from the ARTF, to cover the cost overrun. The original IDA and ARTF financing agreements have been amended. The table below provides an overview of the NERAP financing: 41 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 IDA Financing ARTF Financing Original Phase Component Original Additional Phase 1 2 Additional Total Improvement of Secondary Roads 53.1 28 23.5 15.5 20.4 140.5 Improvement of Tertiary Roads 52.1 12 6.5 4.5 7.2 82.3 Institutional Strengthening 6.8 2.4 9.2 Total 112 40 30 20 30 232 The overall progress towards the project end targets is laid out in the following table: Component Roads (km) End Target Progress Percentage Improvement of Secondary Roads 1105 914 76 Improvement of Tertiary Roads 1195 774 70 Total 2300 1688 73 In addition to the progress made on rehabilitation of roads, the piloting of routine maintenance works has been launched in two provinces for the first time. The piloting has now been rolled out to four more provinces covering 770 km of labor based routine maintenance through communities. More provinces will be covered during the current fiscal year. The capacity building consultant has mobilized key staff, and is collecting sample rural road data to verify the existing rural roads database, which will be used to formulate a rural road strategy and developing a long term investment plan. Issues and Actions:  Capacity of delivery: the project implementation capacity has improved significantly over the past years, but there are still gaps that need to be addressed as part of the capacity building consultancy service and beyond.  Scaling-up: as NRAP has been identified as one of the Government’s national priority programs, more resources are likely to be required for scale up. There will be a need for capacity building that adequately responds to the needs of the scaled-up project. In view of this, the implementing ministries, coordinated by NCU, have prepared a draft investment plan that has been submitted to the Agriculture and Rural Development Cluster. At the end of October 2011, the Government sent an official request for funding for a new Afghanistan Rural Access Project. A preparation mission has been launched in November 2011; a concept note developed and agreed by the Bank management to process the proposed project further. A pre-appraisal mission is scheduled for mid-January 2012. A tentative schedule is set for end May 2012 to present the project for approval by the World Bank’s board. The Afghanistan counterparts have to prepare the project for the Bank team’s appraisal at different stages. 42 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 $90.00 Achievement of Moderately $84.00 $78.00 Objectives: Satisfactory $72.00 $66.00 Disbursement $60.00 Rate: 44% $54.00 $48.00 Million $42.00 $36.00 $30.00 $24.00 $18.00 Implementation: Moderately $12.00 $6.00 Satisfactory $0.00 43 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Mr. Anjum Ahmad, 13. POWER SYSTEM DEVELOPMENT PROJECT - (TF093513) Mr. Richard Spencer, Mr. Abdul Hameed Quraishi aahmad2@worldbank.org Approved: 19-Mar-09 Effective: 19-Mar-09 Closing: 31-Jul-13 rspencer@worldbank.org aquraishi@worldbank.org Allocated: US$60.00 million Disbursed: US$8.59 million Available: US$51.41 million Objective: To increase access to grid power and the quantity of available power to the consumers in the target areas of the urban centers at Pul-e-Khumri, Charikar, Gulbahar, and Jabul-Seraj. Project Components: Component 1: Distribution system rehabilitation in Puli-Khumri, Charikar, Gulbahar, and Jabul-Seraj; Component 2: Rehabilitation of transmission switchyards associated with Naghlu and Mahipar hydropower stations; Component 3: Institutional capacity building of executing agencies; project management support; establishment of a unit for promotion of Energy Efficiency and Demand Side Management; implementing some pilots; and collection of baseline energy usage information for the urban centers under the project. Implementation Progress: The Project was originally planned for $60 million, which was divided in two phases due to limited funds available in ARTF at the time of project approval in 2008. Funding of $35 million for Phase I was provided at the outset. Request for the balance $25million was discussed in the ARTF Management Committee meeting on January 18, 2011 along with a request for extension in Project Completion Date (PCD) by one year, i.e., up to July 31, 2013. Both requests (additional funding and PCD extension) were approved. The time extension was approved to cover the delays which had occurred due to issues of pole design/strength, security, customs clearance, budget release at the start of new Solar Year (SY) and issue of contract extensions. Now almost all these issues have been resolved. Design of the distribution system in Charikar, Gulbahar, Jabul Seraj and Pul-e-Khumri is complete and has been signed off by the supervision consultants. The warehouse has been completed and most equipment has been procured. The pole design issue has been resolved and a factory capable of producing in- specification poles has been established and trial production runs were reported to be under way since July. It is estimated that construction in Pul-e-Khumari, provided there are sufficient materials including poles, can be completed within eight months. Work on the Charikar 220/20 KV substation to be funded by Government of India has been delayed. The Government of India recently announced the approval by the Cabinet to fund the turnkey design and construction of the Charikar and Doshi Substations. However, the work on the substations is yet to start. MEW has now requested the Bank to consider funding a mobile substation for the interim period to ensure electricity supply to areas where distribution work will be completed before the Charikar substation. The Bank is working with MEW to realign funds within the project for the mobile sub-station. The project is supporting energy efficiency activities of MEW through the setting up of an Energy Efficiency Cell. The aim is to strengthen Afghanistan’s capabilities to incorporate energy efficiency into its core energy development strategy and mitigate the impacts of high generation costs on consumers. The Cell has been established at MEW led by a Energy Efficiency Advisor (National) and staffed with three engineers. 44 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Recruitment for three more engineers is in process. Bids for three demonstration project have been received / opened on December 17, 2011. Procurement for public outreach component is also in progress. The EE Cell has also undertaken audits of some large building. A household energy survey was completed. Results show that respondents are willing to pay more for more and better quality electricity, and there is awareness about energy saving and alternate energy measures. After some delays, the procurement of a supply and installation contract for the rehabilitation of the Naghlu and Mahipur hydro plant 110kV switch yards has now been completed and a contract was awarded on October 10, 2011. Equipment supply is now under way. The contract completion time is 18 months, giving completion in April 2013, which though close to project closing date is achievable provided there are no major issues in implementation. MEW has requested additional Technical Assistance under this project to cover the cost of project management consultants for all three power projects (APSDP, EPRP and KAMPP) and for consultants for the Central Asia South Asia (CASA) power transmission project. MEW has also requested that staffing and capacity building of MEW Planning Cell may be funded under this project. The Bank awaits a revised Procurement Plan from MEW so that the project restructuring can be processed. Issues and Actions: The Project will need to be restructured to address the technical assistance needs of MEW and to cover the cost of mobile substation. $65.00 Achievement of Satisfactory $60.00 Objectives: $55.00 $50.00 Disbursement $45.00 Rate: 14% $40.00 Million $35.00 $30.00 $25.00 $20.00 $15.00 Implementation: Moderately $10.00 $5.00 satisfactory $0.00 45 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 14. WATER RESOURCES DEVELOPMENT TECHNICAL ASSISTANCE Contact: Mr. Jun Matsumoto PROJECT - (TF093637) Approved: 23-Mar-09 Effective: 23-Mar-09 Closing: 31-Mar-13 jmatsumoto@worldbank.org Allocated: US$5.5 million Disbursed: US$1.16 million Available: US$4.34 million Objective: To build capacity to progressively undertake strategic basin planning and to improve project preparation for water resources development. Project Components: Component 1: Capacity Building for multi-sector River Basin Planning; Component 2: Preparation of Water Resources Development Investments; Component 3: Technical and Implementation Support. Implementation Progress: Although the long-awaited Technical and Implementation Support Consultant (TISC) resumed work based in Kabul from March 1, 2011, TISC has so far failed to mobilize and deploy adequate number of specialist staff required to execute the contract. No significant capacity building has taken place to date except for the support provided by the resident Civil Engineer of TISC to the Project Planning Unit (PPU). This situation has seriously jeopardized the project’s prospect of achieving its development objective. Therefore, for this Quarterly Report, the project ratings have been downgraded from Moderately Satisfactory (MS) to Moderately Unsatisfactory (MU). To rectify the situation and turn around the project performance, it is critical that MEW pursues a resolution of the staffing deficiencies of the consultant team with speed. Issues and Actions: Since the last reporting cycle, project progress has been in the following:  In addition to the 3 resident international staff (Team Leader, civil engineer and procurement/ financial management specialist), TISC has fielded GIS specialist, river basin modeler. To support the project activities WB has also sent a STC on optimization modeling.  Draft performance-based incentives have been reviewed during the recent ISM in October 2011. the Bank team spent considerable time in helping with the development of appropriate work plans for the WRPU and the PPU which were then translated to individual work plans.  MEW’s General Director of Planning has been assigned as the Project Director. While MEW’s project management is improving slowly, the improvement in project management has not happened to the levels required. Genera Director is requested to closely monitor the implementation of this project until arrangements to put the project implementation on the right track are put in place.  Procurement activities such as construction of additional office space by adding a fourth floor in the existing MEW building has been substantially delayed. MEW is requested to proceed with various pending procurement immediately.  The project activities on trans-boundary waters capacity-building is slowly beginning to take shape with the revision of the tashkeel to include the six core positions of experts in hydrology, water resources economics, international water law, negotiations and diplomacy, among others. 46 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 $6.00 Achievement of Satisfactory Objectives: $5.00 Disbursement $4.00 Rate: 21% Million $3.00 $2.00 Implementation: Satisfactory $1.00 $0.00 47 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 15. Strengthening Health Activities for the Rural Poor (SHARP) - Contact: Mr. Inaam Haq (TF096362) Approved: 11-Apr-10 Effective: 11-Apr-10 Closing: 30-Sept-13 ihaq@worldbank.org Allocated: US$46.0 million Disbursed: US$22.00 million Available: US$24.00 million Objective: To support the Government in achieving the Health Nutrition Sector Strategy goal to “contribute to improving the health and nutritional status of the people of Afghanistan, with a greater focus on women and children and under-served areas of the country�. The project provides strategic support to the health sector program for 2009-2013 by (1) financing the delivery of basic services in 11 provinces; (2) providing advice on the development of a hospital policy; (3) maintaining the support to MOPH stewardship functions, particularly to monitoring and evaluation; and (4) leading an innovative results-based financing pilot to further increase utilization of services. Project Components: Component 1: Sustaining and strengthening the Basic Package of Health Services (BPHS); Component 2: Strengthening the delivery of the Essential Package of Hospital Services; Component 3: Strengthening MOPH stewardship functions; Component 4: Piloting Innovations (no ARTF support). Implementation Progress: SHARP finances provision of the Basic Package of Health Services in eight provinces (Helmand, Farah, Badghis, Nimroz, Samagan, Balkh, Wardak, and Saripul) through national and international NGOs contracted out by Ministry of Public Health (MoPH). All contracts with NGOs have been signed in eight provinces while the remaining three provinces are managed by MOPH. SHARP also supports third party annual balance scorecards assessment for primary health care facilities and hospitals. The report has been finalized now. Overall, project performance is satisfactory with most of the outcome indicators show results well on target. Implementation performance is rated moderately satisfactory with recent data indicating service delivery performance of implementing partner NGOs and SM provinces reversing the declining trend in terms of quality of care and coverage of services. However, in at least four provinces performance still remains stagnant, mainly caused by the security situation and the lack of health professional resources which constrain the provision of and access to services. MOPH has revised the basic package of health services, including more nutrition, mental health and disability interventions and plans are being developed to initiate implementation. The provision and access of services has been enhanced by establishing 40 new health facilities, together with sub-centers and being supplemented by 2709 community based Community Health Workers and the community midwifery program has trained 137 midwives. Steps initiated to start reforming and restructuring the procurement management system in the Ministry in line with the national procurement reforms has slowed down and close management attention. The Urban BPHS design has now been finalized and implementation has been initiated in December 2012. The results based financing component is making good progress and has been further expanded to two new provinces and five provincial hospitals. Payments of incentives for performance have started but it is too early to assess the results. At the outcome level the Afghanistan Mortality Survey conducted in 2010 shows an infant mortality rate of 77 per 1,000 live births and an under-five mortality rate of 97 per 1,000 live births, representing significant decline from the 2003 estimates. Despite this progress, the infant and under-five mortality rate in 48 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Afghanistan is still higher than the average for the low income countries. In addition, the Maternal mortality ratio is 327 deaths per 100,000 live births, which is significantly lower than initial estimates. The number of functioning health facilities has increased from 496 in 2002 to more than 2,000 in 2011. The proportion of facilities with skilled female health worker has increased from 25% to 72%. The health management information system indicates more than a five-fold increase in the number of outpatients’ visits from 0.23 visits per capita per year in 2004 to 1.29 in 2011. All other indicators have improved, including child immunization rates, the number of deliveries assisted in facilities by trained health workers, and the number of pregnant women who received at least one prenatal care visit. The amendment to the financing agreement for the approved 2nd installment of ARTF support of US$24 million to the SHARP (and AHAPP) projects has been signed and made effective. With ARTF assistance SHARP’s implementation capacity is being expanded further and provision will include: (a) mental health enhanced nutrition and disability services through the revised BPHS; and (b) improve hospital services critical to reducing maternal and child mortality. Issues and Actions: Overall, SHARP continues to make good progress towards its development objectives. The declining service delivery performance is gradually being reversed. The focus will remain on the following areas: operationalization of the revised BPHS, implementation of EPHS in targeted provinces, and implementation of Urban BPHS in the next quarter. $54.00 Achievement of Satisfactory $48.00 Objectives: Disbursement $42.00 Rate: 48% $36.00 $30.00 Million $24.00 $18.00 $12.00 Implementation: Moderately $6.00 Satisfactory $0.00 49 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 16. Afghanistan Rural Enterprise Development Project (AREDP) - Contact: Mr. Ladisy Chengula (TF098045) Mr. Kamran Akbar Lchengula@worldbank.org Approved: 27-Oct-10 Effective: 27-Oct-10 Closing: 01-Jan-15 Kakbar1@worldbank.org Allocated: US$16.00 million Disbursed: US$2.00million Available: US$14.00 million Objective: To improve employment opportunities and income of rural men and women, and sustainability of targeted local enterprises. Project Components: Component 1: Community-led Enterprise Development; Component 2: Small Medium Enterprise Development; Component 3: Project Implementation Support. Implementation Progress: The Afghanistan Rural Enterprise Development Project (AREDP) became effective on June 14, 2010, at which time IDA financing was made available to the project. The request to the ARTF Management Committee for US$16 million was made in September 2010 and the Grant Agreement was signed on October 26, 2010. Since project effectiveness, the following achievements have been made by the project:  The Project Management Office and five project offices have been set up. Whereas activities have gained momentum in Parwan, Bamyan and Nangarhar; in Herat and Balkh, where implementation was initiated recently, they are well on their way. The Project has already recruited 256 staff out of the planned 387. The provincial offices have been staffed with Provincial Managers, Finance Officers, Administration Officers, M&E Officers, MIS offers and Provincial Enterprise Facilitators to mobilize communities and Village Facilitators to provide necessary handholding support & training to the Savings and Enterprise Groups and Village Savings and Loan Associations (VSLAs).  There has been considerable progress under Component A (Community-led Enterprise Development) of the project. In Parwan, 217 female SGs and 172 male SGs have been mobilized with accumulated savings of Afs 3,924,815 (US$ 78,496). In Bamyan, 279 female SGs and 290 male SGs have been mobilized with accumulative saving of Afs 7,065,196 (US$ 1,41,303 ). In Nangarhar, 320 female SGs and 605 male SGs have been mobilized with accumulative savings of 10,212,616 Afs (US$ 2,04,252). In recently started province Herat, 154 female SGs and 174 male SGs have been mobilized with accumulative savings of 1,366,395 Afs (US$ 27,328) whereas in Balkh, 44 female SGs and 38 male SGs have been mobilized with accumulative savings of 136,440 Afs (US$ 2,729). SGs in Parwan extended 1,924,815 Afs( US$ 38,745) to 274 SG members. SGs in Bamyan disbursed 5,830,706 Afs (US$127,317) to 344 SG members and 2,403,564 Afs (US$ 48,071) loan amount disbursed by SGs in Nangarhar to meet credit need of 396 SG members. The project facilitated saving groups to graduate in to 85 Enterprise groups in Nangrahar, Parwan and Bamyan. The project also supported matured SGs to federate in to 10 VSLAs in Bamyan and Parwan.  Component B (SME Development) is currently working with the SMEs selected in 1st cycle, started in May 2011. The SME component has completed awareness campaigning, coordination with stakeholders, screened application, and carried out technical feasibility (TF) and economical viability (EV) studies of selected SMEs for the 1st cycle. Business development plan of SMEs were screened after TF & EV. A total 229 applications were received in five provinces, including16 women SMEs. Out of 229 applications, 122 SMEs (16FSMEs) were shortlisted for technical feasibility and economical viability studies as well as for developing their business plans. Business 50 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 development plan have been completed for 85 shortlisted SMEs whereas remaining are in process. The project initiated facilitating SMEs for 2nd cycle and started to work on business development support for SMEs whose business plans were ready.  Three teams of AREDP have been to Pakistan and India on exposure visits. The first team visited Khyber-Pakhtoon Khwa province to learn from female and male Farmer Enterprise Groups as well as mobilization for economic development experiences in similar cultural settings. The second team looked at SME financing, M&E systems, management information systems, Islamic financing products and farmer cooperatives. The third team of 12 SMEs (inclusive of 5 SMEs from REDKAN) and 6 AREDP SME staff visited SMEs of cotton seed oil, poultry, rice mills, packaging, fisheries and dairy at Sirsa, Karnal and Jaipur in India. The visit helped related SMEs to understand technicalities of businesses, product enhancement, building linkages, managing finance etc Issues and Actions: The 3rd Implementation Support Mission of the World Bank (November 26-December 05, 2011) was carried out. Key findings from this mission, including actions agreed with the project team, were discussed in a wrap session on Dec 08, 2011 and will be shared shortly in an aide memoire with all the donors. The World Bank Mission found project implementation “Satisfactory�. The project will refine further implementation guidelines of related themes and work out strategy for innovation award to SMEs, seed capital to SGs and VSLA and PRGF facility. The project will also enhance its financial management and financial reporting at regular intervals. $16.00 Achievement of Satisfactory $14.00 Objectives: Disbursement $12.00 Rate: 13% $10.00 $8.00 $6.00 $4.00 Implementation: NA $2.00 $0.00 Oct-10 Oct-11 Oct-13 Oct-14 Oct-12 Apr-11 Apr-12 Apr-14 Apr-13 Jan-11 Jan-12 Jan-14 Jan-15 Jan-13 Jul-11 Jul-12 Jul-13 Jul-14 51 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Contact: Mr. Johannes Georges Pius 17. On Farm Water Management Project - (TF099074) Jansen Approved: 16-Mar-11 Effective: 16-Mar-11 Closing: 30-June-14 jjansen@worldbank.org Allocated: US$41.00 million Disbursed: US$4.50million Available: US$36.50 million Objective: To assist farmers in the project areas in adopting improved farm practices that increase agricultural production and productivity by enhancing the efficacy of water used for raising crops in conjunction with other farm inputs. Project Components: Component 1: On Farm Water Management; Component 2: Institutional Strengthening and Capacity Building; Component 3: Project Management. Implementation Progress: The main grant of this project became effective on March 16 2011. The PIU (including the Kabul-based team and the five Area Teams) has been nearly fully staffed as far as national staff is concerned – all five Area Teams have been hired and started their activities in the field. A total of 42 Irrigation Associations have been established so far. Technical surveys have been completed for 16 irrigation schemes and draft designs have been produced for 9 schemes as well as three Irrigation Demonstration Sites. Draft Environment and Social Management Plans have been completed for 10 schemes. A group of technical staff along with their technical designs visited the Punjab On-Farm Water Management Department in Lahore, Pakistan, for checking of their initial designs by Pakistani experts. The first batch of 23 PIU staff (including two staff from MAIL’s Irrigation Department) has completed a 45 days OFWM training course at the Water Management Training Institute in Lahore. The second batch of trainees started their training on December 8, 2011. Physical works in the field are delayed but expected to start immediately following the 2012 winter season. Procurement of Implementation Consultants Support Team (ICST) will be completed by December 31. The first Supervision and Implementation Support mission was carried out Sept 21-October 4 and recommended a number of corrective actions related to speed up project implementation and improve project management. Issues and Actions:  The project’s operational management capacity has been strengthened by the appointment of an experienced international Sr. Operations Advisor;  Implementation progress thus far is moderately unsatisfactory and the project needs to improve the quality of the designs that go into the bidding packages for contractors;  The project needs to collaborate more closely with the Irrigation Department in MAIL and other relevant ministries to ensure speedy approval of rules and by-laws needed to be able to register Irrigation Associations;  The project needs to stimulate national production capacity of pre-cast concrete lining segments which are an essential component of the field works;  Procurement of ICST, M&E firm, NGOs/IPs, and International fiduciary specialists is making progress but needs to be finalized as soon as possible; 52 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011  Financial Management and Procurement have been rated as moderately satisfactory during the first Supervision and Implementation Support mission;  The project keeps on suffering from loosing good staff – MAIL should put key staff in appropriate salary scales in order to minimize staff turnover. $45.00 Achievement of NA Disbursement $40.00 Rate: 11% Objectives: $35.00 $30.00 $25.00 Million $20.00 $15.00 Implementation: NA $10.00 $5.00 $0.00 Sep-11 Sep-12 Sep-13 Jul-11 Jul-12 Jul-13 Mar-11 Mar-12 Mar-13 Mar-14 Nov-11 Jan-12 Nov-12 Jan-13 Nov-13 Jan-14 May-11 May-12 May-13 May-14 53 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 18. Improving Agricultural Inputs Delivery Systems Project (IAIDS) Contact: Mr. Johannes Georges Pius - (TF099595) Jansen Approved: 30-Jun-11 Effective: 30-Jun-11 Closing: 31-Mar-12 jjansen@worldbank.org Allocated: US$2.40 million Disbursed: US$0.50million Available: US$1.90 million Project Components: Component 1: Improved Seed Production and Certification; Component 2: Quarantine Networks and Quality Control for Agrochemicals; Component 3: Improvement and Expansion of Input Delivery Systems. Implementation Progress: A project preparation grant of US$2.4 million was approved for the Afghanistan Improving Agricultural Inputs Delivery Project (IAIDS). Preparation grants generally support the Government during the project design phase including preparation activities and implementation start-up. The full IADS project is expected to initiate implementation during the second quarter of FY13. Implementation of the preparation grant has suffered from delays. However, with the appointment of a new Project Director preparation activities have taken off. Most PIU staff has now been hired or is in the process of being hired. A Pest Management Plan has been prepared and is under review in the Bank. Procurement of Consultants for the Environmental and Social Management Framework and legal frameworks is in the final stage, and an REOI has been published for the field surveys. The Bank also fielded two of its own consultants to help move forward the seed and agrochemicals parts of the project. Issues and Actions: Even though after a 4 months delay project preparation activities have finally taken off, they are unlikely to have been completed by the current closing date of the grant (March 31, 2012). Therefore it is foreseen that a request for grant extension for a period of 6 months will be made which should enable finalization of project preparation by the first quarter of FY13 after which the main project will be submitted for financing. $3.00 Achievement of NA $2.50 Disbursement Rate: 21% Objectives: $2.00 $1.50 Implementation: NA $1.00 $0.50 $0.00 Nov-11 Nov-12 Nov-13 Jan-12 Jan-13 Jan-14 Sep-11 Sep-12 Sep-13 May-11 May-14 May-12 May-13 Jul-11 Jul-12 Jul-13 Mar-11 Mar-13 Mar-14 Mar-12 54 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 19. Second Public Financial Management Reform Project (PFMR II) Contact: Mr. Paul Edwin Sisk - (TF010024) Mr. Muhammad Wali Ahmadzai psisk@worldbank.org , Approved: 09-Aug-11 Effective: 09-Aug-11 Closing: 31-Dec-14 mahmadzai@worldbank.org Allocated: US$60.00 million Disbursed: US$7.00million Available: US$53.00 million Objective: The Project’s objective is to strengthen public financial management through effective procurement, treasury and audit structures and systems in line with sound financial management standards of monitoring, reporting and control. Project Components: Component 1: Procurement Reform; Component 2: Financial Management Reform; Component 3: Audit Reform and Performance; Component 4: Reform Management. Implementation Progress: This is a follow-on ARTF Project of PFMR which was funded by IDA and will close on 31 December 2011. To date, the implementing agencies of PFMR II have made good progress in sourcing of all major contracts including support to the treasury operations, internal audit functions in the ministry of finance, support to the national audit office (CAO) for independent review of on-budget donor funded operations and support to ARDS in procurement. Out of the allocated amount of US$60 million, US$7 million has been disbursed which represents the initial advance to the designated account managed by the Treasury department of MoF. The disbursement rate will pick-up quickly as the major contracts get signed and advances on these contracts are made over the next six months. $70.00 Achievement of NA $60.00 Objectives: Disbursement $50.00 Rate: 12% $40.00 Million $30.00 Implementation: NA $20.00 $10.00 $0.00 Dec-11 Dec-12 Dec-13 Sep-12 Sep-11 Sep-13 Jun-12 Jun-14 Jun-11 Jun-13 Mar-11 Mar-12 Mar-13 Mar-14 55 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ANNEX 2: ARTF Recurrent Cost Financing 56 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ARTF Fiduciary Framework: 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 25 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 is 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 five 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. 57 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 Figure 25: ARTF Recurrent Cost Monitoring Process Expenditures for non- Monitoring Agent qualified activities (e.g., Government incurs and (MA) performs an military) and identified pays recurrent cost automated Desk ineligible expenditures by expenditures, Review of 100% of MA are deducted and a comprising wages the recurrent cost Statement of Expenditure (~75%) and O&M expenditures (SOE) is prepared for the (~25%) expenditures of the eligible activities Identified ineligible expenditures are deducted from future SOE is submitted to the Special (Working Capital) Monitoring Agent performs a risk- Administrator and the Special Account reimbursements (Working Capital) Account is by the Administrator based review of the SOE expenditures reimbursed 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. 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 January 2009 the government will be able to cover 79 percent of operating expenditures in 2013/14. Therefore, ARTF remains a critical part of the government’s fiscal sustainability, reimbursing a major component of non-security related costs. The annual budget is first approved by the Cabinet and, since SY1385, subsequently by the National Assembly. From SY1388 onwards, the ceiling for ARTF recurrent cost reimbursements is set according to the ARTF Incentive Program. This program envisages an automatic annual decline in guaranteed resources through the recurrent cost window, with an additional incentive top-up, based on the government’s performance against reform benchmarks. 58 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 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 World Bank�) prohibit the World Bank from involvement in the political affairs of its member countries. In addition, the Articles of Agreement spell out the purposes of the World Bank, which purposes have been interpreted by the World Bank’s Board of Executive Directors not to permit involvement in military or security related activities of member countries. The World Bank in its capacity as the trustee of the ARTF is guided by the overall purposes of the World 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 World Bank’s mandate and would violate the political involvement prohibition. What kinds of recurrent costs are financed by the ARTF? Government’s recurrent expenses are reimbursed by the ARTF as long as they adhere to the ARTF grant agreement, government's financial management regulations and the fiduciary standards agreed with the government. To date, approximately 74 percent of recurrent costs have been for payroll expenses and 26 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. How does the World 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 World Bank follows up with the government and the MA on audit findings. The most recent audit covering SY1387 (March 21, 2008 – March 20, 2009), has been received by the Administrator and it has been shared with the donors along with Administrator’s comments. Responses to audit findings will be received from MoF shortly. Audit preparations for SY1388 are 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 World Bank, or with the ARTF grant agreement would be ineligible. When an expenditure is found to be ‘ineligible’ it does not necessarily imply misuse or wrongdoing. 59 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 How does the ARTF finance the government’s operating budget? The ARTF has provided an advance of US$50 million. The government uses this to finance 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? Improvements have been made in the government's compliance with agreed fiduciary standards, as well as with the financial management. The World Bank is providing capacity-building support to all the ministries on compliance with the new Procurement Law. However, the confusion with change in the procurement law in SY 1387 has impacted compliance. 3. Financial Management in the National Government Audit of SY1387 & SY1388: SY 1388 audited financial statements for the recurrent cost and investment trust funds were presented to the Administrator in September 2010 before the due date of September 22, 2010. The Administrator found the reports acceptable and circulated it to the donors along with administrator’s review of audit report. The number of ARTF projects with unqualified (clean) audit opinions increased from 7 of 10 in SY1386, 8 to 14 in SY1387 to 16 out of 16 in SY1388. 60 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ARTF Investment Project Audit Results SY1388 Solar Year # of # of Month # of Total Audit Report s Unqualified Expenditure Supporting Solar Report s elapse Audit s in US$ documents Year s Rec’d receive d after Reports (millions) Ineligible not d on due Expenditures provided time date US$ % of total US$ % of (m) (m) tota l 1388 16 16 0 16 245 0 0 0 0 1387 14 0 4 8 276 3.4 1.2 3.2 1.2 1386 10 0 9 7 226 7.3 3.2 8.5 3.8 1385 15 0 3 3 239 27.0 11.3 16.6 6.9 Public Financial Management: Over the last three years the government has 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 has also developed. Procurement Management: The government established a central facility for procurement that has finalized more than 673 contracts, with a total value above US$1.8 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 2009. This capacity is to work to a recognized standard and it is undertaking to clarify its mandate for carrying out internal audit across government. 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 61 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 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 110,000 in 2009. On “procurement�, the Procurement Policy Unit (PPU) was established in August 2006 and Rules of Procedures for Public Procurement was issued in April 2007 and training in public procurement has been delivered to over 1000 procurement staff from the line ministries, including from 6 provinces.  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 twelve provinces and planned for twelve more provinces. 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 have improved although weaknesses in payments and payroll persist. Progress on the extension of the Verified Payroll Program (VPP) has fallen 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: 62 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011  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. 63 ARTF Quarterly Report SY1390: September 20, 2011, to December 20, 2011 ANNEX 3: ARTF Financial Tables The tables below show the financial situation of ARTF at December 21, 2011. The tables are updated monthly and are available at the ARTF web site: http://www.worldbank.org/artf 64 ARTF Annual Report SY1389: June 20, 2011, to September 21, 2011 Table 1 - Actual and Expected Donor Contributions Paid-In, Committed, Pledged (US$ Million) December 21, 2011 SY 1381- SY 1381- SY 1381- SY 1381- SY 1381 SY 1382 SY 1383 SY 1384 SY 1385 SY 1386 SY 1387 SY 1388 SY 1389 SY 1390 SY 1390 90 90 90 90 Donor Total Total Total Total Total Total Total Total Total Total Total Signed Un-signed Total % of Total Total % of Total Total % of Total Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Pledges Pledges SY 1390 SY 1390 Paid-in Paid-in Australia 0.00 2.63 6.27 7.65 5.84 2.09 31.44 14.99 28.49 36.89 36.89 0.00 0.00 36.89 4.0% 136.29 2.6% 136.29 3.0% Bahrain 0.00 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 0.50 0.0% 0.50 0.0% Belgium 0.00 0.00 0.00 0.00 0.00 0.00 2.61 2.72 0.00 2.71 2.71 0.00 0.00 2.71 0.3% 8.03 0.2% 8.03 0.2% Brazil 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 0.20 0.0% 0.20 0.0% Canada 12.00 50.09 5.49 72.34 58.86 213.46 22.07 34.22 38.35 23.72 23.72 25.35 0.00 49.08 5.4% 555.97 10.8% 530.62 11.6% Denmark 5.00 5.00 3.16 3.92 4.34 8.43 20.86 10.25 2.03 0.00 0.00 10.30 0.00 10.30 1.1% 73.29 1.4% 62.99 1.4% EC/EU 15.87 52.72 47.60 58.77 52.72 73.62 11.31 14.19 25.52 9.44 9.44 0.04 32.72 42.20 4.6% 394.51 7.7% 361.75 7.9% Estonia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.29 0.00 0.29 0.0% 0.29 0.0% 0.00 0.0% Finland 2.79 2.45 5.95 0.00 2.42 5.40 7.91 8.86 7.82 9.90 9.90 0.00 0.00 9.90 1.1% 53.50 1.0% 53.50 1.2% France 0.00 0.00 0.00 0.00 0.00 0.00 5.13 5.72 5.56 0.00 0.00 0.00 0.00 0.00 0.0% 16.41 0.3% 16.41 0.4% Germany 10.07 11.44 15.94 1.23 20.47 55.99 74.00 50.85 64.52 0.00 0.00 78.53 0.00 78.53 8.6% 383.04 7.4% 304.52 6.7% India 0.20 0.20 0.00 0.40 0.20 0.20 0.19 0.20 0.20 0.00 0.00 0.01 0.00 0.01 0.0% 1.80 0.0% 1.79 0.0% Iran, Islamic Republic of 0.00 0.99 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 0.99 0.0% 0.99 0.0% Ireland 1.00 1.70 1.81 0.61 1.28 1.46 1.58 2.78 2.54 1.37 1.37 0.00 0.00 1.37 0.2% 16.12 0.3% 16.12 0.4% Italy 17.00 0.00 6.54 0.00 9.22 8.80 34.07 4.10 3.89 2.92 2.92 7.85 0.00 10.77 1.2% 94.40 1.8% 86.55 1.9% Japan 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.00 20.00 0.00 0.00 20.00 2.2% 25.00 0.5% 25.00 0.5% Korea, Republic of 2.00 2.00 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 6.00 0.1% 6.00 0.1% Kuwait 5.00 5.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 15.00 0.3% 15.00 0.3% Luxembourg 1.00 0.00 0.00 0.61 1.56 1.07 1.14 1.14 1.11 0.00 0.00 0.00 0.92 0.92 0.1% 8.53 0.2% 7.62 0.2% Netherlands 33.67 41.15 46.41 29.66 50.81 39.76 39.46 41.90 32.66 32.57 32.57 0.00 0.00 32.57 3.6% 388.05 7.5% 388.05 8.5% New Zealand 0.00 0.00 0.00 0.00 0.63 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 0.63 0.0% 0.63 0.0% Norway 6.82 29.63 9.91 22.54 23.22 30.98 31.47 38.36 47.80 48.57 48.57 0.00 0.00 48.57 5.3% 289.31 5.6% 289.31 6.4% Poland 0.00 0.00 0.00 0.00 0.29 0.27 1.17 1.20 1.00 0.00 0.00 1.18 0.00 1.18 0.1% 5.11 0.1% 3.93 0.1% Portugal 0.00 0.46 0.73 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 1.18 0.0% 1.18 0.0% Russian Federation 0.00 0.00 0.00 0.00 0.00 0.00 2.00 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 4.00 0.1% 4.00 0.1% Saudi Arabia 10.00 5.00 5.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 25.00 0.5% 25.00 0.5% Spain 0.00 0.00 0.00 0.00 0.00 22.04 0.00 35.22 27.59 0.00 0.00 0.00 6.54 6.54 0.7% 91.40 1.8% 84.85 1.9% Sweden 3.10 5.98 25.90 12.84 14.68 20.18 18.35 25.35 32.64 28.59 28.59 0.00 0.00 28.59 3.1% 187.62 3.6% 187.62 4.1% Switzerland 0.67 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 0.67 0.0% 0.67 0.0% Turkey 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 0.50 0.0% 0.50 0.0% UNDP 0.00 2.41 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0% 2.41 0.0% 2.41 0.1% United Kingdom 15.08 47.10 103.06 131.47 128.49 151.05 162.54 99.05 23.72 0.00 0.00 133.26 0.00 133.26 14.6% 994.82 19.3% 861.56 18.9% United States 38.00 20.00 89.59 62.00 73.90 0.00 159.50 264.00 265.00 100.00 100.00 300.00 0.00 400.00 43.8% 1371.99 26.6% 1071.99 23.5% TOTAL 184.77 286.46 380.37 404.05 453.92 634.80 626.82 657.29 610.44 316.68 316.68 556.81 40.18 913.67 100.0% 5152.59 100.0% 4555.60 100.0% 1. Unsigned pledges are recorded based on a communication from the Donor to the ARTF Administrator 2. Signed pledges are commitments recorded based on countersigned legal documents confirming the pledged amount. 3. Paid amounts reflect receipt of funds and conversion to US dollars. 65 ARTF Annual Report SY1389: June 20, 2011, to September 21, 2011 Table 2 - Expressed Donor Preferences By Projects Paid-In, Committed, Pledged (US$ Million) December 21, 2011 SY 1381 SY 1382 SY 1383 SY 1384 SY 1385 SY 1386 SY 1387 SY 1388 SY 1389 SY 1390 SY 1381-90 Donor Curr Program Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Paid-in Pledged Paid-in Total Expressed Of which US$ US$ US$ US$ US$ US$ US$ US$ US$ Own Curr. US$ Est. Own Curr. US$ SY 1390 Preference Paid-in EC/EU EUR Afghanis tan Rural Enterpris e Developm ent Project (AREDP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.35 0.00 0.00 1.34 1.80 1.80 6.15 6.15 Finland EUR Afghanis tan Rural Enterpris e Developm ent Project (AREDP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.75 2.47 2.47 2.47 2.47 United Kingdom GBP Afghanis tan Rural Enterpris e Developm ent Project (AREDP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.10 0.00 0.00 0.00 0.00 0.00 13.10 13.10 Sweden SEK Afghanis tan Rural Enterpris e Developm ent Project (AREDP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.98 0.00 0.00 20.00 2.86 2.86 5.83 5.83 Total Afghanistan Rural Enterprise Development Project (AREDP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.43 0.00 0.00 23.09 7.14 7.14 27.57 27.57 EC/EU EUR Capacity building for res ults project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15.00 19.63 0.00 0.00 19.63 19.63 0.00 Total Capacity building for results project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15.00 19.63 0.00 0.00 19.63 19.63 0.00 Norway NOK Civil Service Capacity Building 0.00 0.00 2.92 3.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.02 6.02 United States USD Civil Service Capacity Building 0.00 0.00 4.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.30 4.30 Total Civil Service Capacity Building 0.00 0.00 7.22 3.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.32 10.32 Aus tralia AUD Com m unity Recovery 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.94 0.00 0.00 0.00 0.00 0.00 5.94 5.94 Finland EUR Com m unity Recovery 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.75 2.47 2.47 2.47 2.47 United States USD Com m unity Recovery 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00 0.00 0.00 50.00 50.00 Total Community Recovery 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 55.94 0.00 0.00 1.75 2.47 2.47 58.42 58.42 Aus tralia AUD Education - EQUIP 0.00 0.00 0.00 0.00 0.00 0.00 7.62 1.78 2.69 0.00 0.00 0.00 0.00 0.00 12.10 12.10 Canada CAD Education - EQUIP 0.00 0.00 0.00 0.00 0.00 29.80 0.00 9.29 23.15 5.00 4.88 0.00 0.00 4.88 67.11 62.23 Germ any EUR Education - EQUIP 0.00 0.00 0.00 0.00 0.00 0.00 15.72 13.69 24.11 20.00 26.18 0.00 0.00 26.18 79.69 53.51 Spain EUR Education - EQUIP 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.11 0.00 0.00 0.00 0.00 0.00 0.00 2.11 2.11 Norway NOK Education - EQUIP 0.00 0.00 4.61 0.00 0.00 5.13 0.00 8.45 0.00 0.00 0.00 0.00 0.00 0.00 18.19 18.19 Sweden SEK Education - EQUIP 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.03 0.00 0.00 30.00 4.29 4.29 7.32 7.32 Netherlands USD Education - EQUIP 0.00 0.00 0.00 0.00 0.00 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 4.00 United States USD Education - EQUIP 0.00 0.00 0.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 12.00 12.00 Total Education - EQUIP 0.00 0.00 4.61 0.00 0.00 38.93 35.34 35.34 52.97 25.00 31.05 30.00 4.29 35.34 202.52 171.47 Canada CAD Horticulture and Lives tock Program 0.00 0.00 0.00 0.00 0.00 3.53 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.53 3.53 United Kingdom GBP Horticulture and Lives tock Program 0.00 0.00 0.00 0.00 0.00 1.98 4.16 0.00 4.55 0.00 0.00 0.00 0.00 0.00 10.69 10.69 Total Horticulture and Livestock Program 0.00 0.00 0.00 0.00 0.00 5.51 4.16 0.00 4.55 0.00 0.00 0.00 0.00 0.00 14.22 14.22 Canada CAD Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.00 1.28 0.00 0.00 0.00 0.00 0.00 4.28 4.28 EC/EU EUR Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14.19 0.00 10.00 13.09 0.00 0.00 13.09 27.28 14.19 Ireland EUR Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.45 0.62 0.62 0.62 0.62 Italy EUR Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 14.79 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14.79 14.79 United Kingdom GBP Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 4.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.90 4.90 Norway NOK Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 2.10 2.32 0.00 0.00 0.00 0.00 0.00 0.00 4.42 4.42 United States USD Jus tice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.50 0.00 0.00 0.00 0.00 0.00 0.00 1.50 1.50 Total Justice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 21.79 21.01 1.28 10.00 13.09 0.45 0.62 13.70 57.79 44.70 United Kingdom GBP Managem ent Capacity Program 0.00 0.00 0.00 0.00 0.00 0.00 7.39 0.00 1.52 0.00 0.00 0.00 0.00 0.00 8.90 8.90 United States USD Managem ent Capacity Program 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.00 Total Management Capacity Program 0.00 0.00 0.00 0.00 0.00 0.00 8.39 0.00 1.52 0.00 0.00 0.00 0.00 0.00 9.90 9.90 Aus tralia AUD Microfinance for Poverty Reduction 0.00 0.00 0.00 0.00 0.78 1.04 4.76 1.43 0.00 0.00 0.00 0.00 0.00 0.00 8.01 8.01 Canada CAD Microfinance for Poverty Reduction 0.00 4.71 5.49 12.85 24.16 38.83 5.41 4.47 0.00 0.00 0.00 0.00 0.00 0.00 95.93 95.93 Denm ark DKK Microfinance for Poverty Reduction 0.00 0.00 0.00 1.63 2.11 1.47 6.40 3.03 0.00 0.00 0.00 0.00 0.00 0.00 14.63 14.63 Finland EUR Microfinance for Poverty Reduction 0.00 0.00 0.00 0.00 0.00 1.37 2.22 2.22 2.93 0.00 0.00 0.00 0.00 0.00 8.73 8.73 United Kingdom GBP Microfinance for Poverty Reduction 0.00 0.00 3.78 14.54 9.31 9.85 27.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 64.93 64.93 Sweden SEK Microfinance for Poverty Reduction 0.00 0.00 2.22 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.22 2.22 Netherlands USD Microfinance for Poverty Reduction 0.00 0.00 0.00 0.00 0.00 2.50 0.00 5.30 0.00 0.00 0.00 0.00 0.00 0.00 7.80 7.80 United States USD Microfinance for Poverty Reduction 0.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 5.00 Total Microfinance for Poverty Reduction 0.00 4.71 16.49 29.01 36.37 55.05 46.25 16.44 2.93 0.00 0.00 0.00 0.00 0.00 207.26 207.26 Aus tralia AUD National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.78 0.00 4.76 0.71 0.00 0.00 0.00 0.00 0.00 0.00 6.26 6.26 Canada CAD National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 1.28 3.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.64 4.64 EC/EU EUR National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 11.31 0.00 2.79 0.00 0.00 0.00 0.00 0.00 14.11 14.11 Spain EUR National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.45 0.00 0.00 0.00 0.00 0.00 0.00 8.45 8.45 United Kingdom GBP National Em ergency Rural Acces s Project 0.00 0.00 0.00 18.24 13.91 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 32.15 32.15 United States USD National Em ergency Rural Acces s Project 0.00 0.00 0.00 2.00 0.00 0.00 21.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23.00 23.00 Aus tralia AUD National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.72 0.00 0.00 0.00 0.00 0.00 2.72 2.72 EC/EU EUR National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.71 0.00 0.00 2.68 3.61 3.61 12.31 12.31 Germ any EUR National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.74 0.00 0.00 0.00 0.00 0.00 6.74 6.74 Italy EUR National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.46 1.46 1.46 1.46 Spain EUR National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.80 0.00 0.00 0.00 0.00 0.00 4.80 4.80 Japan USD National Em ergency Rural Acces s Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00 10.00 10.00 10.00 10.00 Total National Emergency Rural Access Project 0.00 0.00 0.00 20.24 15.96 3.36 37.08 9.17 25.75 0.00 0.00 13.68 15.07 15.07 126.63 126.63 Aus tralia AUD National Solidarity Program 0.00 0.00 0.00 0.00 0.78 0.00 9.53 1.43 2.69 0.00 0.00 0.00 0.00 0.00 14.42 14.42 Canada CAD National Solidarity Program 0.00 10.98 0.00 14.34 17.83 77.24 9.99 8.05 8.95 0.00 0.00 0.00 0.00 0.00 147.39 147.39 Denm ark DKK National Solidarity Program 0.00 0.00 0.00 0.00 0.00 3.66 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.66 3.66 Belgium EUR National Solidarity Program 0.00 0.00 0.00 0.00 0.00 0.00 1.30 1.36 0.00 0.00 0.00 1.00 1.35 1.35 4.01 4.01 EC/EU EUR National Solidarity Program 0.00 0.00 9.69 21.57 13.18 22.08 0.00 0.00 9.67 0.03 0.04 2.99 4.03 4.06 80.25 80.25 Finland EUR National Solidarity Program 0.00 0.00 0.00 0.00 0.00 1.37 1.74 2.22 2.93 0.00 0.00 1.75 2.47 2.47 10.73 10.73 Germ any EUR National Solidarity Program 0.00 0.00 6.13 0.00 0.00 22.40 23.31 14.86 13.47 0.00 0.00 0.00 0.00 0.00 80.17 80.17 Italy EUR National Solidarity Program 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.46 1.46 1.46 1.46 Spain EUR National Solidarity Program 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.04 2.74 0.00 0.00 0.00 0.00 0.00 9.79 9.79 United Kingdom GBP National Solidarity Program 0.00 5.72 0.00 16.39 9.31 30.25 0.00 0.00 4.55 0.00 0.00 0.00 0.00 0.00 66.24 66.24 Norway NOK National Solidarity Program 0.00 0.00 0.00 3.10 9.02 10.73 4.26 4.74 0.00 0.00 0.00 0.00 0.00 0.00 31.85 31.85 Sweden SEK National Solidarity Program 0.00 0.00 0.00 0.00 3.67 5.24 5.84 6.85 4.39 0.00 0.00 30.00 4.29 4.29 30.28 30.28 United Kingdom USD National Solidarity Program 0.00 0.00 0.00 0.00 0.00 0.00 13.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.44 13.44 United States USD National Solidarity Program 0.00 0.00 10.00 0.00 25.00 0.00 65.00 160.00 180.00 150.00 150.00 100.00 100.00 250.00 690.00 540.00 Total National Solidarity Program 0.00 16.71 25.83 55.40 78.79 172.96 134.43 206.55 229.41 150.03 150.04 136.74 113.60 263.64 1183.70 1033.70 France EUR Power Sys tem Developm ent Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.86 2.78 0.00 0.00 0.00 0.00 0.00 5.64 5.64 Total Power System Development Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.86 2.78 0.00 0.00 0.00 0.00 0.00 5.64 5.64 Germ any EUR Private Sector Developm ent 0.00 0.00 0.00 0.00 3.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.20 3.20 Total Private Sector Development 0.00 0.00 0.00 0.00 3.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.20 3.20 Germ any EUR Public Adm in Reform 0.00 0.00 0.00 0.00 3.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.20 3.20 Total Public Admin Reform 0.00 0.00 0.00 0.00 3.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.20 3.20 Norway NOK Rural Water Supply and Sanitation 0.00 0.00 0.92 2.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.25 3.25 United States USD Rural Water Supply and Sanitation 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.50 Total Rural Water Supply and Sanitation 0.00 0.00 0.92 2.33 0.00 0.00 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.75 3.75 Denm ark DKK Second Public Financial Managem ent Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.00 1.23 0.00 0.00 1.23 1.23 0.00 Total Second Public Financial Management Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.00 1.23 0.00 0.00 1.23 1.23 0.00 Norway NOK Skills Developm ent Program m e (NIMA) 0.00 0.00 0.00 0.00 0.00 0.00 2.80 3.87 0.00 0.00 0.00 0.00 0.00 0.00 6.67 6.67 United States USD Skills Developm ent Program m e (NIMA) 0.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.00 3.00 Total Skills Development Programme (NIMA) 0.00 0.00 0.00 0.00 0.00 0.00 5.80 3.87 0.00 0.00 0.00 0.00 0.00 0.00 9.67 9.67 Aus tralia AUD Strengthening Health Activities for the Rural Poor (SHARP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.78 2.69 0.00 0.00 0.00 0.00 0.00 4.47 4.47 Canada CAD Strengthening Health Activities for the Rural Poor (SHARP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.00 7.80 7.00 7.16 14.97 14.97 7.16 Es tonia EUR Strengthening Health Activities for the Rural Poor (SHARP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.13 0.00 0.00 0.13 0.13 0.00 Total Strengthening Health Activities for the Rural Poor (SHARP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.78 2.69 8.10 7.93 7.00 7.16 15.10 19.57 11.64 USD Rus s ian Federation Strengthening Higher Education Project 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 2.00 2.00 Total Strengthening Higher Education Project 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 2.00 2.00 United States USD Technical As s is tance Feas ibility Studies 0.00 0.00 1.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.50 1.50 Total Technical Assistance Feasibility Studies 0.00 0.00 1.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.50 1.50 Grand Total 0.00 21.42 56.56 110.08 137.52 275.81 294.72 298.02 400.25 215.13 222.98 212.70 150.35 373.33 1967.71 1744.77 66 ARTF Annual Report SY1389: June 20, 2011, to September 21, 2011 Table 7 - ARTF Commitments & Disbursements December 21, 2011 As of: SY1381-90 (US$ million). Comm Disbursed Comm Disbursed Comm Disbursed Comm Disbursed Comm Disbursed Comm Disbursed Comm Disbursed Comm Disbursed Comm DisbursedComm DisbursedSY1381-90 21-Dec-11 Current SY 1381 SY 1381 SY 1382 SY 1382 SY 1383 SY 1383 SY 1384 SY 1384 SY 1385 SY 1385 SY 1386 SY 1386 SY 1387 SY 1387 SY 1388 SY 1388 SY 1389 SY 1389 YTD YTD Total Total Month Available Disb. Year End Year EndYear End Year EndYear End Year EndYear End Year EndYear End Year EndYear End Year EndYear End Year EndYear End Year EndYear End Year EndSY 1390 SY 1390 CommitedDisbursedDisbursed Rate (g) (h) (g) - (h) (h) / (g) TF050577 - Recurrent & Capital Costs Component Wages 40.95 145.77 179.32 174.21 216.20 203.00 276.74 148.31 281.90 1666.40 2.07 - O&M 13.65 51.16 55.28 79.04 84.01 87.55 33.32 73.11 54.78 531.91 0.00 - Debt Service, IMF 0.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.77 0.00 - Debt Service, IDA 2.77 3.87 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.64 0.00 - Debt Service, ADB 0.00 0.56 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.56 0.00 - Bulk Contracts 1.07 12.78 0.56 0.00 0.00 0.00 0.00 0.00 0.00 14.41 0.00 - Disbursements(A) 59.21 214.14 235.16 253.25 300.21 290.55 310.06 221.42 336.68 0.00 2220.68 2.07 Special Account(Opening) Balance (B) 0.00 51.50 50.60 50.00 50.00 50.00 50.00 50.00 50.00 50.00 76.64 Loan Account commitments and disbursements (C) 155.00 110.71 195.00 213.25 258.00 234.55 280.00 253.25 299.00 300.21 286.00 290.55 316.00 310.06 290.00 221.42 216.25 336.68 100.00 26.64 2395.25 2297.32 2.07 97.93 96% Updated Special Account Balance * 51.50 50.60 50.00 50.00 50.00 50.00 50.00 50.00 50.00 76.64 76.64 Monitoring Agent TF050578 - Monitoring Agent 2.00 0.67 0.78 1.41 2.31 2.64 4.64 2.16 7.00 2.53 3.50 4.80 3.14 2.84 3.00 2.39 0.00 3.32 4.17 3.53 30.54 26.29 0.26 4.25 86% TF010186 - Investment Window Monitoring Agent 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.00 1.41 8.00 1.41 0.00 6.59 18% Subtotal Monitoring Agents [2] 2.00 0.67 0.78 1.41 2.31 2.64 4.64 2.16 7.00 2.53 3.50 4.80 3.14 2.84 3.00 2.39 0.00 3.32 12.17 4.93 38.54 27.70 0.26 10.84 72% Closed Investment Projects [3] TF050855 - UNDP Police Pr. 1 & 2 4.84 4.84 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.84 4.84 0.00 0.00 100% TF050970 - Technical Assistance Feasibility Studies 0.00 0.00 8.00 2.52 6.00 3.88 4.50 2.91 0.00 3.28 0.00 3.02 0.00 1.29 0.00 0.09 -1.53 -0.02 0.00 0.00 16.97 16.97 0.00 0.00 100% TF050973 - National Emergency Employment Program 0.00 0.00 16.62 8.31 0.00 8.31 20.20 0.00 16.00 20.20 0.00 15.12 0.00 0.88 0.00 0.00 0.00 0.00 0.00 0.00 52.82 52.82 0.00 0.00 100% TF052081 - Microfinance for Poverty Reduction 0.00 0.00 1.00 0.36 0.00 0.34 0.00 0.31 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.00 0.00 0.00 100% TF052366 - UNDP Police 3 0.00 0.00 16.80 16.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 16.80 16.80 0.00 0.00 100% TF052452 - Microfinance for Poverty Reduction 0.00 0.00 4.00 2.20 12.00 12.64 38.30 21.21 32.00 48.48 33.00 34.22 64.00 24.88 0.00 23.44 -15.36 0.88 0.00 0.00 167.94 167.94 0.00 0.00 100% TF052475 - Telecom & Microwave Link 0.00 0.00 3.00 0.15 3.13 1.03 0.00 3.07 0.00 1.52 -0.12 0.24 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.01 6.01 0.00 0.00 100% TF052482 - Kabul Roads and Drainage System 0.00 0.00 3.00 0.00 0.00 2.91 0.00 0.00 -0.17 -0.11 -0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.80 2.80 0.00 0.00 100% TF052541 - Kabul Power Supply 0.00 0.00 7.44 0.00 0.00 2.90 0.00 1.51 0.00 1.40 0.00 1.03 0.00 0.26 -0.01 0.33 0.00 0.00 0.00 0.00 7.43 7.43 0.00 0.00 100% 0.00 TF052735 - Strengthening Financial Capacity of the Government 0.00 5.10 2.05 0.00 0.26 0.00 1.38 -1.04 0.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.06 4.06 0.00 0.00 100% TF053939 - National Solidarity Program 0.00 0.00 0.00 0.00 27.00 26.62 70.90 47.58 58.50 82.04 12.29 12.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 168.69 168.69 0.00 0.00 100% TF053940 - Civil Service Capacity Building 0.00 0.00 0.00 0.00 0.00 0.00 8.00 2.38 5.00 4.24 0.00 4.98 0.00 1.08 0.00 0.31 -0.05 -0.05 0.00 0.00 12.95 12.95 0.00 0.00 100% TF054729 - Urban Water Supply and Sanitation 0.00 0.00 0.00 0.00 20.00 0.00 21.00 3.63 0.00 3.48 0.00 11.51 0.00 4.48 0.00 4.14 0.00 8.80 0.00 4.96 41.00 41.00 0.00 0.00 100% TF054730 - Education - EQUIP 0.00 0.00 0.00 0.00 0.00 0.00 5.00 0.00 0.00 0.49 27.00 6.51 12.00 29.55 0.00 7.45 0.00 0.00 0.00 0.00 44.00 44.00 0.00 0.00 100% TF055447 - Rural Water Supply and Sanitation 0.00 0.00 0.00 0.00 0.00 0.00 5.00 0.00 0.00 0.59 0.00 0.63 2.65 2.05 0.00 2.25 -1.42 0.70 0.00 0.00 6.23 6.23 0.00 0.00 100% TF090205 - National Solidarity Program 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 171.50 136.32 178.00 162.39 100.00 120.63 0.00 30.15 0.00 0.00 449.50 449.50 0.00 0.00 100% Subtotal Closed Investment Projects [3] 4.84 4.84 64.96 32.39 68.13 58.87 172.90 83.97 110.29 165.98 243.64 226.04 256.65 226.87 99.99 158.64 -18.36 40.47 0.00 4.96 1003.03 1003.03 0.00 0.00 100% Current Investment Projects [4] TF010024 - Second Public Financial Management Reform Project0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 60.00 7.00 60.00 7.00 7.00 53.00 12% TF054718 - Rehabilitation of Naghlu Hydropower Plant 0.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.16 0.00 0.07 0.00 6.05 0.00 2.60 0.00 3.55 0.00 0.00 20.00 12.43 0.00 7.57 62% TF090077 - Management Capacity Program 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00 0.00 0.00 0.55 5.00 2.76 0.00 4.48 0.00 2.53 15.00 10.33 0.00 4.67 69% TF091120 - Kabul-Aybak/Mazar-e-Sharif Power Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 57.00 0.00 0.00 14.70 0.00 9.52 0.00 11.49 0.00 2.67 57.00 38.37 0.00 18.63 67% TF091885 - Horticulture and Livestock Program 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.00 1.57 0.00 2.71 23.30 13.41 0.00 12.12 34.30 29.81 1.14 4.49 87% TF092073 - Kabul Urban Reconstruction Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.60 0.00 0.00 1.14 0.00 1.04 0.00 1.92 5.60 4.10 0.00 1.50 73% TF092160 - Justice Sector Reform Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 27.75 0.40 0.00 3.35 0.00 5.07 -7.00 5.58 20.75 14.40 0.96 6.35 69% TF092544 - Strengthening Higher Education Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 1.00 0.00 0.35 0.00 1.09 0.00 0.44 5.00 2.87 0.00 2.13 57% TF093513 - Power System Development Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 35.00 5.17 25.00 2.72 0.00 0.70 60.00 8.59 0.49 51.41 14% TF093632 - Kabul Urban Roads Improvement Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 18.00 0.00 0.00 5.43 0.00 4.25 0.00 1.83 18.00 11.52 1.32 6.48 64% 0.00 TF093637 - Water Resources Development Technical Assistance Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.50 1.00 0.00 0.09 0.00 0.07 5.50 1.16 0.04 4.34 21% TF093854 - Skills Development Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.00 2.51 0.00 5.04 0.00 0.86 9.00 8.40 0.00 0.60 93% TF093962 - Second Education Quality Improvement Program0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 35.00 35.00 50.00 45.86 50.00 18.59 135.00 99.45 1.93 35.55 74% TF095297 - National Emergency Rural Access Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 30.00 16.00 50.00 19.16 0.00 0.00 80.00 35.16 0.00 44.84 44% 0.00 TF096362 - Strengthening Health Activities for the Rural Poor (SHARP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 22.00 20.89 24.00 1.11 46.00 22.00 0.00 24.00 48% TF096991 - On Farm Water Management Project (OFWM) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.40 0.00 0.59 1.00 0.99 0.00 0.01 99% 0.00 TF098045 - Afghanistan Rural Enterprise Development Project (AREDP) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 16.00 0.40 0.00 1.60 16.00 2.00 0.00 14.00 13% TF098459 - Third Emergency National Solidarity Project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 250.00 40.00 100.00 143.83 350.00 183.83 50.53 166.17 53% TF099074 - ON Farm Water Management project 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 41.00 4.50 41.00 4.50 0.00 36.50 11% TF099595 - Improving Agricultural Inputs Delivery 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.40 0.50 2.40 0.50 0.00 1.90 21% Subtotal Current Investment Projects [4] 0.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.16 67.00 0.07 67.35 24.26 119.50 87.53 437.30 178.95 270.40 206.43 981.55 497.40 63.41 484.15 51% TOTAL COMMIT & DISB. [1+2+3+4] 161.84 116.22 260.73 247.04 348.44 296.07 457.54 339.37 416.29 468.89 600.14 521.46 643.14 564.03 512.49 469.98 635.19 559.42 382.57 242.96 4418.37 3825.45 65.73 592.92 87% Note: * Includes US $50 million Special Account advance plus adjustment for any timing difference. 67 ARTF Annual Report SY1389: June 20, 2011, to September 21, 2011 Table 4 - ARTF Consolidated Sources & Uses of Funds US$ Mil. Report Date : December 21, 2011 SY 1381 SY 1382 SY 1383 SY 1384 SY 1385 SY 1386 SY 1387 SY 1388 SY 1389 SY 1390 Total Total Total Total Total Total Total Total Total Total Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual SOURCES OF FUNDS (A+B) A. Net Donors Contributions (A1-A2) 184.24 284.38 378.77 404.09 460.00 654.25 632.69 653.92 608.48 316.95 A.1. Donors Contributions 184.77 286.46 380.37 404.05 453.92 634.80 626.82 657.29 610.44 316.68 A.2. IDA fees minus Investment Income 0.53 2.08 1.59 -0.04 -6.08 -19.44 -5.88 3.37 2.26 -0.27 A.3. Refund of Ineligible Expenditure 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.29 0.00 B. Cash Carried-Over (=D previous year) 119.52 155.97 238.07 302.79 293.89 426.68 495.34 679.28 728.33 USES OF FUNDS (C+D) C. Disbursements (C1+C2+C3+C4) ¹ 64.72 247.94 296.67 339.37 468.89 521.46 564.03 469.98 559.42 242.96 C.1 Recurrent window - Disbursed by DAB 59.21 214.14 235.16 253.25 300.21 290.55 310.06 221.42 336.68 26.64 Wages 40.95 145.77 179.32 174.21 216.20 203.00 276.74 148.31 281.90 26.64 O&M 13.65 51.16 55.28 79.04 84.01 87.55 33.32 73.11 54.78 0.00 Other 4.60 17.21 0.56 0.00 0.00 0.00 0.00 0.00 0.00 0.00 C.2. Investment window 0.00 15.59 58.87 83.97 166.14 226.11 251.13 246.17 219.42 211.39 C.3. Pass-through to LOTFA (UNDP Police) 4.84 16.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 C.4. Fees to monitoring agent 0.67 1.41 2.64 2.16 2.53 4.80 2.84 2.39 3.32 4.93 D. Cash Balance (end-of-period) (A+B-C=D1+D2) 119.52 155.97 238.07 302.79 293.89 426.68 495.34 679.28 728.33 802.32 D.1. Committed Cash Balance: 97.12 109.91 161.68 279.85 227.24 305.93 385.03 427.54 503.31 642.92 to recurrent window special account 51.50 50.60 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 to recurrent window Trust Fund 44.29 26.04 49.49 76.24 75.03 70.48 76.42 145.00 24.57 97.93 undisbursed investment window balance 0.00 32.57 61.82 150.75 94.90 179.42 252.29 225.61 425.13 484.15 to Monitoring Agent 1.33 0.70 0.37 2.85 7.32 6.02 6.32 6.93 3.61 10.84 D.2. Unallocated Cash Balance 22.40 46.05 76.39 22.94 66.65 120.75 110.31 251.74 225.02 159.41 A.3. Refund of MISFA ineligible expenditure received after project closure. Hence refund booked directly to the Parent TF account and shown separately in this report. D.2. Unallocated cash balance refers to funds in the ARTF parent account that the MC has not formally committed. During the Solar Year they will be committed in line with the ARTF Financing Strategy. 68