Afghanistan Debt Sustainability Analysis: Working paper ; Working Paper

In: http://hdl.handle.net/11540/6191

Open Access

Abstract

ADB's experience with other postconflict countries suggests that total investment requirements for reconstruction and development are higher than initial estimates and that expectation of large amount of assistance of grants is usually not materialized.2 Since November 2001, funding agencies have provided substantial humanitarian relief support through UN agencies and nongovernment organizations (NGOs) to Afghanistan on pure grant basis. Only limited grant financing has been available for reconstruction and development. The Government is very keen to start major reconstruction work. This has been difficult with bilateral development aid, which tends to be fragmented, tied, and small scale. While the Government continues to mobilize grant financing,3 resumption of concessional lending by international financial institutions (IFIs) to Afghanistan will be an essential part of global support for reconstruction and development. IFIs can provide only a small share of their assistance in the form of grants.