Contacts: In Kabul: Abdul Raouf Zia (93) 700 280800 In Washington: Erik Nora (202) 458 4735 enora@worldbank.org WASHINGTON, June 11, 2009 ─ The World Bank today approved an additional grant of US$10 million to assist the Government of Afghanistan to effectively and transparently regulate its minerals and hydrocarbon resources and to foster private investment in the sector. In June 2006, the World Bank provided a US$30 million grant for the Sustainable Development of Natural Resources project to strengthen government oversight of the minerals and hydrocarbons sectors, to promote private sector investment, and to build capacity of the government to effectively administer the sector. Since inception, despite a number of constraints - notably a difficult business environment - the project has made steady progress. For example, the project has helped to stimulate private sector investment in Afghanistan through the facilitation of the successful tender of the Aynak copper deposit, one of the largest in the world. To date the government has concluded the main contractual agreements, and once actual work commences it will generate total investment of around US$10 billion over the next 5 to 10 years. Successful conclusion of the main agreement has already resulted in a payment of US$ 80.8 million to the government as the first tranche of a US$808 million premium for the right to develop the deposit. “Strengthening government supervisory institutions and building human capacity is at the heart of the project and is essential to good governance of the mining sector,” said Craig Andrews, World Bank Lead Mining Specialist and task team leader for the project. “With support of the project, the government has initiated training programs for personnel, is putting into place mine title and cadastre management systems, and is developing regulations for environmental management of the sector.” In addition to strengthening the Ministry of Mines’ capacity to supervise the mining sector, the government is moving towards its goal of ensuring transparency and good governance in the sector, as well as recognizing the need for robust environmental and social management of projects. The government recently took the important step of endorsing the principles of the Extractive Industries Transparency Initiative (EITI), which promote transparent and systematic reporting of benefits streams received from the extractive industries. Sustained efforts will now be needed to implement this important agenda. The government is drafting mining and environmental regulations which provide clear guidelines and procedures for issuance of mine titles. The additional grant of US$10 million will specifically finance advisory services to support the government in completion of the ancillary agreements for the Aynak copper deposit and the tender process for the Hajigak iron ore deposit. Hajigak is believed to be the largest iron ore deposit in Asia with reserves of over 1.2 billion tones. For more information on the Bank’s work in Afghanistan, please visit: http://www.worldbank.org.af For more project information, please visit: http://go.worldbank.org/INJJEZJP00 |
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