Report and Recommendation of the President

to the Board of Directors

Sri Lanka
Project Number: 42091
August 2009

Proposed Multitranche Financing Facility and

Administration of Grant and Cofinancing
Islamic Republic of Afghanistan: Water Resources
Development Investment Program
 CURRENCY EQUIVALENTS
(as of 15 August 2009)

Currency Unit – afghani/s (AF)

AF1.00 = $0.0203
$1.00 = AF49.33

ABBREVIATIONS

ADB – Asian Development Bank

ANDS – Afghanistan National Development Strategy
DMF – design and monitoring framework
EA – executing agency
EARF – environmental assessment and review framework
EIA – environmental impact assessment
EIRR – economic internal rate of return
EIRRP – Emergency Infrastructure Rehabilitation and Reconstruction
Project (traditional irrigation component)
EMP – environmental management plans
FFA – framework financing agreement
IA – implementing agency
ICB – international competitive bidding
IEE – initial environmental examination
IWRM – integrated water resources management
LARF – land acquisition and resettlement framework
MAIL – Ministry of Agriculture, Irrigation, and Livestock
MEW – Ministry of Energy and Water
MFF – multitranche financing facility
MOF – Ministry of Finance
M&E – monitoring and evaluation
NBD – northern basins development
NCB – national competitive bidding
NGO – nongovernment organization
NVDA – Nangahar Valley Development Authority
O&M – operation and maintenance
PDF – program development facility
PFR – periodic financing request
PIO – project implementation office
PMO – project management office
PPMS – project performance management system
PPTA – project preparatory technical assistance
PSC – program steering committee
QBS – quality-based selection
RBA – river basin agency
RBC – river basin council
SLARP – short land acquisition and resettlement plan
TA – technical assistance
USAID – United States Agency for International Development
WUA – water users association
 WEIGHTS AND MEASURES

ha – hectares
km – kilometer
m3 – cubic meter

NOTES

(i) The fiscal year (FY) of the Government and its agencies ends on 20 March. FY
before a calendar year denotes the year in which the fiscal year ends, e.g.,
FY2009 ends on 20 March 2009.

(ii) In this report, "$" refers to US dollars.

Vice-President X. Zhao, Operations 1

Director General J. Miranda, Central and West Asia Department (CWRD)
Director P. Song, Energy and Natural Resources Division, CWRD

Team leader T. Panella, Senior Water Resources Management Specialist, CWRD

Team members L. Aranda, Administrative Assistant, CWRD
M. H. Ayubi, Associate Project Analyst, CWRD
H. Chen, Counsel, Office of the General Counsel
A. Kelly, Principal Economist, CWRD
I. Setyawati, Social Development Specialist, CWRD
R. Takaku, Water Resources Engineer, CWRD
J. Weinstock, Senior Environment Specialist, CWRD

In preparing any country program or strategy, financing any project, or by making any
designation of or reference to a particular territory or geographic area in this document, the
Asian Development Bank does not intend to make any judgments as to the legal or other status
of any territory or area.
 CONTENTS
Page

FACILITY INVESTMENT PROGRAM AND GRANT SUMMARY i

MAP
I. THE PROPOSAL 1
II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES 1
A. Performance Indicators and Analysis 1
B. Analysis of Key Problems and Opportunities 3
III. THE PROPOSED INVESTMENT PROGRAM 8
A. Impact and Outcome 8
B. Outputs 8
C. Special Features 12
D. Water Resources Investment Program 14
E. Implementation Arrangements 17
IV. PROGRAM BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS 24
A. Economic and Financial Benefits 24
B. Household and Poverty Reduction Impacts 25
C. Social Safeguards 26
D. Environmental Impacts 27
E. Risks and Assumption 27
V. ASSURANCES 28
VI. RECOMMENDATION 30
APPENDIXES
1. Design and Monitoring Frameworks 32
2. Problem Tree 41
3. Water Resources Sector Analysis, Development Strategy and Road Map, and 42
Investment Plan
4. External Assistance 52
5. Detailed Cost Estimates 54
6. Selection Criteria and Approval Procedures for Subsequent Projects 58
7. Organization Charts 60
8. Implementation Schedules 62
9. Procurement Plan 66
10. Schedule of Input for Consulting Services 73
11. Flow of Investment Program Funds 76
12. Summary Economic and Financial Analysis 77
13. Summary Poverty Reduction and Social Strategy 84
14. Summary Resettlement Framework 88

SUPPLEMENTARY APPENDIXES (available on request)

A. Detailed Economic and Financial Analysis
B. Financial Management Assessment
C. Resettlement Due Diligence
D. Environment Due Diligence
E. Detailed Terms of Reference
F Helmand Basin Water Resources Master Plan
G. Facility Administration Memorandum
 FACILITY INVESTMENT PROGRAM AND GRANT SUMMARY

Borrower Islamic Republic of Afghanistan

Classification Targeting classification: Targeted intervention (geographic)

Sector (subsectors): Agriculture and natural resources (irrigation,
drainage, and flood protection; water-based natural resources
management)
Themes (subthemes): Economic growth (widening access to
markets and economic opportunities), environmental sustainability
(natural resources conservation, environmental policy and
legislation), gender equity (human capabilities), and capacity
development (institutional development)
Climate change: The investment program will provide limited
support for climate change adaptation.
Location impact: Rural (high)
Partnership: Government of the United Kingdom

Environment The Water Resources Development Investment Program (the

Assessment Investment Program) is to be financed by the Asian Development
Bank (ADB), through a multitranche financing facility (MFF). The
Investment Program has an environmental assessment and
review framework and cumulative environmental impact
assessment. Each project under the MFF will have individual
safeguard documents as required by ADB. The first tranche had
an initial environmental examination and is classified as
environmental category B according to ADB guidelines.

Program Description The Investment Program is consistent with the Afghanistan National
Development Strategy (ANDS), which was approved in April 2009
and constitutes the country’s strategic platform for development for
2008–2020. Its aim is to promote growth, generate wealth, and
reduce poverty and vulnerability. ANDS covers all key sectors and
subsectors, and embraces several themes. Water resources is a
major sector under ANDS, which provides a programmatic
approach to developing the water sector that includes (i) physical
investments in rehabilitation of existing and development of new
water resources and irrigation infrastructure; and (ii) nonphysical
investment in capacity building, strengthened institutions, and policy
frameworks. The proposed MFF finances the medium-term portion
of a broader investment program. The Investment Program is
consistent with ADB’s Afghanistan country partnership strategy
(CPS) 2009–2013, long-term strategic framework 2008–2020
(Strategy 2020), and water policy Water for All.
The Investment Program will finance (i) the rehabilitation and
upgrading of existing and development of new irrigation and water
resources infrastructure, (ii) flood management infrastructure, (iii)
institutional strengthening, and (iv) capacity building for key staff
throughout the sector. The first tranche project has four
components: (i) northern basins development (NBD) that includes
ii

rehabilitation and upgrading of irrigation infrastructure, and

development of a river basin agency (RBA) and water users
associations (WUAs) for water management; (ii) Nangahar Valley
Development Authority (NVDA) improvement that includes
irrigation rehabilitation and upgrading, development of WUAs, and
a management reform plan for the NVDA; (iii) flood management
that includes development of flood protection infrastructure along
the Amu Darya River and development of a national flood
management program; and (iv) project management and program
development that includes a program development facility to
prepare the subsequent two tranches of the MFF.

MFF Modality The MFF is proposed as the modality to extend ADB financing to
the Investment Program for the following reasons:
(i) It provides flexibility to the authorities and ADB. Within the
proposed maximum financing of $303.3 million equivalent,
ADB and the Government can modify the amount and
timing of contributions under each tranche.
(ii) Financing is aligned with project readiness.
(iii) The MFF allows ADB to enter into a long-term partnership,
thereby creating a stable financing plan and platform for
sector development. It provides physical and nonphysical
investments.
(iv) A program loan would help improve policies but not capital
investments. An MFF allows ADB and the Government to
shift time and resources away from repetitive processing
tasks into implementation work.
ADB will provide grants to finance projects under the MFF when
the projects are ready for financing, and upon submission of a
satisfactory periodic financing request (PFR). Each grant will
constitute a tranche and may carry financing terms different from
the terms of previous or later tranches. The choice of financing
terms will depend on the project and ADB’s financing policies at
the time the grant is made. Tranches may be provided in
sequence or simultaneously, and may overlap.
The projects corresponding to individual tranches may comprise
projects, subprojects, their subcomponents, and/or other physical
and nonphysical components of the Investment Program.
All the necessary conditions for the use of an MFF are in place: a
strategic framework, a policy framework, an investment program,
and a tentative financing plan.

Rationale Water resources in Afghanistan. Sound management and

development of Afghanistan’s water resources are essential for
sustained economic growth. Afghanistan is arid, and precipitation
varies substantially both geographically and over the course of the
year, with most precipitation falling between November and April.
The seasonal precipitation pattern leads to annual flooding; this
 iii

causes significant economic losses in some areas, but also

provides potential opportunities. Harnessing available water
resources where and when they occur—and exploiting these
resources most efficiently for irrigated agriculture and other
uses—are key challenges.
Agricultural economy. Agriculture employs about two thirds of
the population and comprises up to half of Afghanistan’s gross
domestic product. However, agricultural production fluctuates
yearly because of climatic conditions, and irrigation is necessary
in most areas for reliable agriculture. Irrigated agriculture accounts
for about 80% of crop production. Almost 85% of Afghanistan’s
inhabitants live in rural areas, and are either directly or indirectly
dependent on agriculture. Improved access to irrigation is
necessary for rural economic growth and improved livelihoods.
Irrigation sector. Afghanistan has approximately 6.5 million
hectares (ha) of arable land. By the mid-1970s, over 3 million ha
received irrigation, and irrigation uses 95% of Afghanistan’s
developed water supplies. Today, 1.8 million ha have regular
irrigation. About 80% of irrigated lands have been developed and
managed by local communities in river valleys, and these systems
are old and degraded. Improving the performance of these
existing traditional irrigation systems is necessary to boost
agricultural production.
Modern irrigation systems under state control were developed
with foreign aid over the last 50 years. The NVDA near Jalalabad
was established by the former Soviet Union under a collective
farm model. It is currently operated by the Ministry of Agriculture,
Irrigation, and Livestock (MAIL). The systems support perennial
irrigation on 20,000 ha of prime agricultural land, of which 12,000
ha are privately owned, with most of the remainder on short-term
leases to small farmers. All physical aspects of the irrigation
system need rehabilitation. The Government also needs support
to develop a business plan to restructure NVDA (currently an
inefficient state enterprise) and increase its corporate orientation.
Seasonal flooding. In many areas, annual flooding and bank
erosion results in damage to irrigation systems and the loss of
prime agricultural land, rural infrastructure, and other assets. This
problem is particularly acute in the upper Amu Darya River that
borders Afghanistan and Tajikistan. ADB is implementing the
Pyanj River Basin Flood Management Project to address flood
issues, but infrastructure investment is needed to remedy
problems, and Afghanistan currently has little flood management
capacity.

Program Investment Plan ANDS proposed an investment program for $3,761 million for the
entire water sector. The Ministry of Energy and Water (MEW) has
revised the ANDS investment plan to $2,468 million over the
medium-term under the national programs for irrigation and water
iv

resources management that include: (i) Institutional Set-Up and

Capacity Building Program, (ii) Water Resource Infrastructure
Management Program, (iii) Bank Protection Program, and (iv)
National Water Resources Development Program. The
Government has asked ADB to finance a portion of the water
sector investment program and to support it over 10 years through
an MFF (Table 1). The amount proposed is up to $303.3 million
equivalent. A set of investments has been and will be prepared
under the ADB Investment Program. The investments will be
financed in three tranches, with the first tranche totaling $92.8
million inclusive of in-kind support for operations and maintenance
from project beneficiaries. Table 2 provides estimates for each of
the first-tranche components. Table 3 provides estimates for
ADB's Investment Program over the three tranches based on the
Government's programs under the ANDS.
Table 1: Medium-Term Water Resources Sector Investment Program
($ million)

Item Medium Term

Institutional Set-Up and Capacity Building Program 46.0
Water Resource Infrastructure Management Program
(includes National River Basin Management and
Irrigation Rehabilitation) 133.0
Bank Protection and Flood Control Program 161.0
National Water Resources Development Program 2,128.0
Total 2,468.0
Sources: Ministry of Energy and Water, and Asian Development Bank
estimates.

Table 2: Cost Estimates for Tranche 1 Program Components

($ million)

Tranche 1 Component Amount

Northern Basins Development 34.3
Nangahar Valley Development Authority Improvement 25.0
Flood Management 12.1
Program Development 9.3
Helmand Basin Water Resources Master Plan 3.3
Tranche 1 Contingency 8.8
Total 92.8
Notes:
1. The table includes estimated amounts for import duties and taxes.
2. Program management costs are included in each component.
3. Program development includes preparation of tranches 2 and 3.
4. The grant contribution by the Government of the United Kingdom is £2
million for the Helmand Basin Water Resources Master Plan.
Source: Asian Development Bank estimates.
 v

Table 3: Cost Estimates for the Investment Program

Item Tranche 1 Tranche 2 Tranche 3 Total

Institutional Set-Up and Capacity
Building Program 3 2 2 7
Water Resource Infrastructure
Management Program (includes
National River Basin
Management and Irrigation
Rehabilitation) 61.3 10 71.3
Bank Protection and Flood Control
Program 15 20 35
National Water Resources
Development Program 11 97 82 190
Total 90 129 84 303.3
Notes:
1. The Nangahar Valley Development Authority (NVDA) component is
included under the heading of the Water Resources Infrastructure
Management program due to the nature of the activities, but NVDA falls
outside the Ministry of Energy and Water (MEW) investment program.
2. The Helmand Basin Water Resources Master Plan is included under
Water Resources Infrastructure Management Program.
3. Program totals and Asian Development bank tranche investments are
based on indicative projects in the MEW investment plan, which is
updated regularly in light of better information, but the Afghanistan
National Development Strategy programs should remain.
Source: Asian Development Bank estimates.

Impact and Outcome The Investment Program will increase the productivity of irrigated
agriculture due to improved water resources management and
development.

Financing Plan The Government has asked ADB to provide up to the equivalent
of $303.3 million to help finance the Investment Program. Tranche
1 will involve cofinancing of $3.3 million equivalent from the
Government of the United Kingdom (to be administered by ADB).
ADB financing will be provided as grants from ADB’s Special
Funds resources in accordance with relevant ADB policies,
subject to modifications that may be included under individual
financing agreements. The implementation period will be 10
years. The Investment Program will consist of individual tranches,
the terms of which may vary. The MFF will finance civil works,
equipment and goods, consulting services, and recurrent costs.
The Government will submit a PFR for each tranche, which will be
reviewed by ADB in accordance with the Framework Financing
Agreement (FFA) and ADB's then-prevailing policies. If approved,
financing will be provided from the MFF. The Government has
submitted the first PFR, requesting $89.9 million to help finance the
tranche 1 project. The terms and conditions for subsequent tranches
will be subject to (i) the availability of ADB Special Funds resources;
(ii) Afghanistan’s access to such resources pursuant to ADB’s
Graduation Policy and Asian Development Fund donor
requirements; and (iii) the availability of ADB Special Funds
resources to Afghanistan pursuant to then-applicable policies
concerning allocation of, and eligibility for, such funds. Adherence to
vi

undertakings made in the FFA and individual tranche financing

agreement covenants will be conditions for financing approval.
The last date for any disbursements under any tranche will be by
22 September 2019. Afghanistan is expected to submit the last
PFR no later than 31 December 2016.
In addition, as a part of the proposed MFF amount, the Government
of the United Kingdom will provide a grant in the amount of $3.3
million equivalent in financing for a Helmand Basin Water
Resources Master Plan under the Investment Program. The
financing plan for tranche 1 is in Table 4. The project participants will
also contribute $1.9 million equivalent of in-kind operation and
maintenance (O&M) support for the first tranche.
Table 4: Financing Plan for Tranche 1
Amount
Tranche 1 ($ million) %
Asian Development Bank 86.6 93.2
Government of the United Kingdoma 3.3 3.6
Government 1.0 1.1
Project participants: in-kind irrigation
O&M from farmers 1.9 2.1
Tranche 1 Total 92.8 100.0
O&M = operation and maintenance.
Note: The table includes estimated amounts for import duties and taxes.
Government will pay resettlement compensation costs and
counterpart staff salaries.
a
The grant contribution by the Government of the United Kingdom is £2
million. This amount also includes ADB's administration fee, audit
cost, bank charges and provision for foreign exchange fluctuations (if
any), to the extent that these items are not covered by the interest
and investment income earned on this grant, or any additional grant
contribution by the Government of the United Kingdom.
Source: Asian Development Bank estimates.

Besides the Government of the United Kingdom, other

development partners may determine to complement ADB's
financing after the Board's approval of the proposed MFF through
cofinancing to be administered by ADB. The amounts of
cofinancing to be provided by all development partners and
administered by ADB (including the grant provided by the
Government of the United Kingdom) under the Investment
Program will be deducted from the total MFF amount approved.
Such cofinancing may be provided as grants or loans, and may
take the form of joint cofinancing. ADB's administration of such
cofinancing from time to time will be reported to the Board for
information annually.

Period of Utilization Until 22 September 2019

Estimated Project 22 March 2019

Completion Date
 vii

Investment Program The Ministry of Finance (MOF) will be the Executing Agency for
Executing Agency the Investment Program.

Implementation The implementing agencies for the first tranche will be MEW and
Arrangements MAIL (the latter for activities involving the NVDA). A program
steering committee (PSC) chaired by the MEW minister will
provide oversight and policy guidance for the program. Two
dedicated project management offices (PMOs) will be established.
The first PMO will be located in Kabul to support the flood
management and northern basins development components with
centralized services for safeguards, financial management and
administration. Two project implementation offices (PIOs) will be
established, one in Taloqan and one in Mazar-i-Sharif, to support
the technical field implementation. A program development facility
(PDF) to prepare new tranches of the MFF will be housed in the
MEW PMO in Kabul. The second PMO for the NVDA component
under MAIL will be located in Jalalabad with a liaison office in
Kabul. The PMOs will include specialist teams providing support
on technical, legal, finance and administration, safeguards and
gender, monitoring and evaluation (M&E), and capacity and
institutional development issues. The parallel PMO structure for
MAIL and MEW mitigates the risk of poor cooperation and
simplifies financial flows that could lead to implementation delays.
Due to weak capacity, the PMOs will include international and
national consultants along with counterpart staff to provide
technical and administrative support and capacity development.

Procurement Procurement of works and goods to be financed under the MFF

will be implemented in accordance with ADB’s Procurement
Guidelines (2007, as amended from time to time). International
competitive bidding will be used for supply contracts estimated to
cost more than $500,000 and for works of more than $2 million.
National competitive bidding will be used for goods and works
valued at more than $100,000 and below the thresholds for
international competitive bidding. Shopping will be used for goods
and works equal to or below $100,000.
For each project financed under the Investment Program,
advance contracting for the procurement of goods and services
will be permitted, subject to these being eligible according to
agreed upon procedures, and ADB’s Procurement Guidelines and
Guidelines on the Use of Consultants (2007, as amended from
time to time).
Retroactive financing is proposed under individual tranches for
expenditures incurred 12 months before the signing of the
corresponding financing agreement, with a ceiling of up to 20% of
the tranche amount. The MOF, MEW, and MAIL have been
informed that approval of advance contracting and retroactive
financing does not commit ADB to finance any of the proposed
projects.
viii

Consulting Services The PMOs, PIOs, and PDF will require consulting services for
effective project implementation and to develop the capacity of
counterpart staff. Firms and individuals (national and international)
will be engaged to provide services in the following areas, among
others: (i) project management, (ii) engineering, (iii) procurement
and financial management, (iv) safeguards and gender, (v) M&E,
(vi) auditing and reporting, (vii) training and institutional
development, and (viii) due diligence for subsequent tranches.
Consultants will be selected and engaged in accordance with
ADB’s Guidelines on the Use of Consultants.
The least-cost selection method will be used to recruit external
auditors. Recruitment of nongovernment organizations (NGOs)
and/or other service providers to help prepare and/or monitor
implementation of safeguards, training of WUAs, or service
delivery of other activities will be recruited on a competitive basis
acceptable to ADB. Individual consultants may be recruited in
accordance with the procedures acceptable to ADB for
recruitment of individual consultants.

Project Benefits and For the first tranche, the NBD and NVDA improvement
Beneficiaries components will provide rehabilitation and upgrading of an
irrigation system that supplies about 100,000 ha in the north and
the east of the country. This will result in improved agricultural
productivity from increased yields, expanded irrigated area, and
increased cropping intensities. The estimated economic internal
rates of return (EIRRs) for these components are 16.9% and
18.4%, respectively. The financial benefits will be greatest to
farmers in the tail-end of the irrigation systems, and those in the
Northern Basins may experience an increase in their incomes of
about 27%.The third investment component, flood management,
will provide flood protection for the Yetim Tapa irrigation system
and Yangi Qala town, and has an EIRR of 20.4%. The first
tranche as a whole has an EIRR of 18.0%.

Risks and Assumptions The following risks have been identified with the Investment
Program and first tranche.
Security. Security has been declining in Afghanistan over the last
3 years and this could delay or in some cases prevent successful
implementation of interventions under the program. However,
lessons drawn from previous activities undertaken in Afghanistan
can mitigate security risks. Project implementation will be
supported with adequate resources for security, including
communications, transport, and reinforcement of facilities.
Security plans will be developed for each activity with the support
of the Afghanistan Resident Mission security team, and private as
well as government security personnel will be engaged as
required.
 ix

Capacity. The technical capacity, project management capacity

and financial management capacity of both MEW and MAIL
require development. Experience has shown that counterpart
capacity is generally inadequate to support project
implementation, so adequate consultant input is required to
ensure project effectiveness and timely implementation. Formal
and on-the-job capacity development activities will take place in
parallel with project implementation, with counterpart staff
assuming more responsibility as capacity is developed.
Operations and maintenance sustainability. The sustainability
of improved infrastructure and associated project benefits will
depend on adequate O&M capacity and financing. To mitigate the
risk of inadequate O&M, the project includes (i) MEW and MAIL
staff training and planning for O&M; (ii) interim project O&M funds,
with the assurance that the Government will allocate an adequate
recurrent budget for O&M; and (iii) WUA training for O&M and
development of modalities for their financial sustainability.
 64o00'E 72o00'E

Project Implementation Office

for Flood Management
AFGHANISTAN Project Implementation Office
(Ministry of Energy and Water)
for Northern Basin Development
WATER RESOURCES DEVELOPMENT (Ministry of Energy and Water)
INVESTMENT PROGRAM TAJIKISTAN
UZBEKISTAN PEOPLE'S
REPUBLIC
TURKMENISTAN OF
Keleft
Faizabad CHINA
JOWZJAN Hairatan TAKHAR
Balkh KUNDUZ
Andkhoi Kholm BADAKHSHAN
Mazar-e-Sharif Kunduz
Sheberghan Taloqan Eshkashem
BALKH
36o00'N Sar-e-Pul Baghlan 36o00'N
Samangan Pul-e-Khumri
SAMANGAN BAGHLAN
Maimana
FARYAB PANJSHIR NURISTAN
SAR-E-PUL Doshi Bazarak
BADGHIS Charikar Mahmood-e-Raqi Kamdish
BAMYAN KAPISA KONAR
Islam Qala Qala-i-Naw
PARWAN LAGHMAN Asadabad
Bamyan Mehtar Lam
Chaghcharan KABUL
WARDAK KABUL Jalalabad Project Management Office
Herat
Maidanshahr (Ministry of Agriculture, Irrigation, and
NANGARHAR
HERAT Khadir Pul-e-Alam Torkham Livestock / Nangahar Valley
GHOR LOGAR PAKTIA Development Authority)
DAIKONDI Gardez
Shindand Ghazni KHOST
GHAZNI Project Management Office
Khost (Ministry of Energy and Water)
IRAN Sharan
ORUZGAN
Tarin Kot
Farah FARAH Mukur
PAKTIKA
ZABOL Project Area
32o00'N Delaram 32o00'N
Northern Basins Development
Qalat (Lower Balkh River Basin)
Lashkar Gah
Nangahar Valley Development Authority
Kandahar Finalization (Irrigation Service Area)
Flood Management (Protected Area from
Flood Risk of Amu Darya River)
Zaranj
HELMAND KANDAHAR Northern River Basins
NIMRUZ Geographical Area
Landay PAKISTAN National Capital

Kudbar Provincial Capital

N City/Town
River
Provincial Boundary

0 50 100 150 200 International Boundary

Boundaries are not necessarily authoritative.
09-2410 HR

Kilometers

64o00'E 72o00'E
 I. THE PROPOSAL

1. I submit for your approval the following report and recommendation on (i) a proposed
multitranche financing facility (MFF); (ii) proposed administration of a grant to be provided by the
Government of the United Kingdom; and (iii) proposed administration of cofinancing that may be
provided by development partners under the MFF, all to the Islamic Republic of Afghanistan for
the Water Resources Development Investment Program (the Investment Program). The design
and monitoring frameworks are in Appendix 1.

II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES

A. Performance Indicators and Analysis

2. Sound management and development of water resources are vital for Afghanistan's
sustained economic growth, particularly in the agricultural sector. However, 30 years of civil
unrest have severely degraded the country’s water resources infrastructure, and the capacity
and institutions to manage and develop that infrastructure. This has devastated both the
productivity of the agricultural sector, and the rural livelihoods and communities that depend
upon it (the Problem Tree Analysis is in Appendix 2).

3. The Government of Afghanistan is addressing this situation through the Afghanistan

National Development Strategy (ANDS).1 The ANDS lays out the Government's development
agenda under three pillars: (i) security; (ii) governance, rule of law and human rights; and (iii)
economic and social development. The ANDS notes that water plays a key role in economic
development, but there has been underinvestment in the sector to date. The ANDS gives the
highest priority to water, and its water sector development program includes a mix of
investments in infrastructure, policy, institutions, and capacity to achieve sustainable sector
growth. The ANDS provides a solid framework to develop the water resources sector, but
realizing this will take substantial commitment and investment (the sector analysis, strategy,
road map, and investment plan are in Appendix 3).

4. Water resources in Afghanistan. Much of Afghanistan is arid, and effective water

resources management has always been a significant national concern. However, Afghanistan’s
overall water resources endowment is respectable—precipitation is about 165,000 million cubic
meters (m3) per year, with yearly runoff of 57,000 million m3, equal to about 2,280 m3 per capita.
However, precipitation varies geographically—averaging about 250 millimeters across most of
the country, with as little as 75 millimeters falling in the southwest, and reaching 1,170 mm in
the northeast—as well as seasonally, with most falling between November and May. Thus
although much of Afghanistan does not receive adequate precipitation for effective rainfed
agriculture, some parts of Afghanistan are prone to seasonal flooding due to runoff.2

5. Agricultural economy. Agriculture employs about two thirds of the population and
comprises up to half of Afghanistan’s gross domestic product, but the contribution varies
considerably with yearly climatic conditions (it equaled 53% in 2007, but was only 36% in 2004–
2005). The seasonal variability and overall arid climate makes irrigation necessary in most
1
Islamic Republic of Afghanistan. 2008. Afghanistan National Development Strategy. Kabul.
2
In addition, 80% of Afghanistan's water resources are comprised of snow and ice at elevations above 2,000
meters, and are sensitive to cycles of drought. This poses water resource management challenges with regard to
climate change. Improving water management for increased efficiency and development of infrastructure will help
mitigate the threats posed by climate change. In addition, ADB's Central and West Asia Department is addressing
climate change for its clients through ADB. 2007. Technical Assistance for Enabling Climate Change Interventions
in Central and West Asia. Manila (TA 7274-REG).
2

areas for reliable agriculture, and irrigated agriculture accounts for about 80% of all agricultural
production. Almost 85% of Afghanistan’s inhabitants live in rural areas and are either directly or
indirectly dependent on agriculture for their livelihoods.3 To achieve the Government’s poverty-
reduction goals, economic growth has to be supported by a sustained increase of 5% to 8% per
year in the agricultural sector. Development of the agricultural sector, which will require
improved access to irrigation, is essential for economic growth, enhanced livelihoods, and
poverty reduction.

6. Irrigation. Irrigation uses 95% of Afghanistan's developed water supplies, and there is
approximately 6.5 million hectares (ha) of arable land in Afghanistan. By the mid-1970s, an area
of about 3 million ha received some form of irrigation. Today, about 1.8 million ha receives
irrigation due to the serious deterioration of irrigation systems from (i) civil unrest and war, (ii)
floods, (iii) prolonged droughts, (iv) the breakdown of institutions responsible for their operation
and maintenance (O&M) and management, and (v) a lack of resources for O&M and
rehabilitation. The vast majority (about 80%) of irrigation systems are traditional, and have been
developed and managed by local communities over the last several centuries.4 These systems
rely on technically simple distribution structures, and the river intakes in particular are prone to
destruction from annual floods, and require regular rebuilding. In spite of their technical
simplicity, a robust traditional management institution exists under the oversight of mirabs5, with
active community participation developed over the years to manage the systems. Strengthening
and transforming the traditional mirab management system that has eroded in recent years into
legal water users associations (WUAs), while in parallel providing rehabilitation and upgrading
for irrigation infrastructure, is a key challenge to improving the productivity of irrigated
agriculture.

7. Modern irrigation systems under state control (i) were developed with foreign aid over
the last 50 years, (ii) comprise up to 15% of all irrigated area, (iii) support rural livelihoods, and
(iv) and are in need of rehabilitation and upgrading and management reform. The Nangahar
Valley Development Authority (NVDA) near Jalalabad was built with assistance from the former
Soviet Union under a collective farm model. It is currently operated by the Ministry of
Agriculture, Irrigation, and Livestock (MAIL). The system—which has about 20,000 ha of
irrigated land with a perennial supply of water, fertile farmland, and an excellent agricultural
climate—is close to markets. About 12,000 ha is privately held and the rest is mainly leased by
NVDA to small farmers on an annual basis for a single crop of wheat, which represents a
significant underutilization of these assets. All physical aspects of the irrigation system need
rehabilitation and upgrading. MAIL also needs assistance to develop a business plan to
restructure NVDA on a corporate basis, with the goals of using MAIL’s existing assets more
productively, and providing sustainable O&M and management of the irrigation system.6

8. Flooding. In many areas, seasonal flooding and bank erosion cause annual damage to
irrigation systems and the loss of agricultural land, rural infrastructure, and other assets. The
problems are particularly acute in the upper Amu Darya river, which form the border between
Afghanistan and Tajikistan. The Afghan side of the border features many low-lying, populated
areas as the river flows into the flood plain from the mountains. The soil is soft and productive

3
Afghan farmers also need substantial support relating to agricultural support services and marketing in order to
optimize returns.
4
Although developed using basic technology, some of these individual system irrigate more than 10,000 ha.
5
Mirabs are responsible for management and organization of community O&M of the systems and serve at the
request of the community.
6
Assets associated with the NVDA include the irrigation system and land, a machine shop and motorpool, an olive oil
processing plant, buildings, marketing facilities, nurseries and research plots, and residences.
 3

along the Afghan bank, but few flood protection works have been built. Banks erode regularly,
especially during the spring and summer flood season, and numerous villages and up to 10,000
ha of land has been lost over the last 20 years. ADB is implementing the Pyanj River Basin
Flood Management Project regional technical assistance (TA)7 project to improve the ability of
both countries to address flood issues. However, infrastructure investment is also needed for
flood management throughout the country. Currently, Afghanistan has little capacity or formal
organization to address flood management.

9. Policy and institutional framework. Afghanistan's policy framework related to water

resources is well designed, but support is needed to build capacity and effective institutions for
the framework’s implementation. The new Water Law8 is based on best practice for integrated
water resources management (IWRM) and establishes the overarching sector framework. 9
Under the law, river basin agencies (RBAs) and river basin councils (RBCs) have been
established as a decentralized management structure under the Ministry of Energy and Water
(MEW), which is responsible for development of infrastructure and overall management of water
resources. 10 MEW's capacity has improved with regard to basic engineering and project
management, but MEW still requires significant support to fulfill its mandate, especially at the
regional level. The transition to RBAs and RBCs will require the development of new skills.

10. MEW is the lead ministry for water resources and irrigation in Afghanistan, but MAIL has
responsibility for small-scale irrigation and on-farm water management. MAIL has very limited
capacity for irrigation but has drafted an irrigation sector strategy for its own programs.11 Its
emphasis is on water harvesting and on-farm water management, with the latter vital to achieve
the maximum productivity from the rehabilitation and upgrading of the irrigation system. Donors
are working with MAIL to develop its capacity, and MAIL will play an increasingly important role
in irrigated agriculture.

B. Analysis of Key Problems and Opportunities

1. Challenges

11. The water sector faces tremendous physical and nonphysical challenges that need to be
addressed in an integrated and sustained way to develop the sector.

a. Physical Challenges

12. Water resources availability. On an average per capita basis, the precipitation that
Afghanistan receives should be sufficient to prevent water scarcity. However, surface water runoff
is highly seasonal and very unevenly distributed. Over half of Afghanistan's water runoff flows into
Amu Darya River, much of it in the form of floods; this water is challenging and expensive to
capture, and located far from population and economic growth centers.

13. Transboundary considerations. Over 95% of Afghanistan's water resources are in rivers
that flow into neighboring countries. This makes development of water resources more challenging,
because coordination and agreements with riparian neighbors are often needed for development.

7
ADB. 2008. Technical Assistance to the Islamic Republic of Afghanistan and the Republic of Tajikistan for the
Pyanj River Basin Flood Management Project. Manila (TA 6452-REG).
8
Signed by the President on 30 April 2009.
9
The implementing rules and regulations for the water law are currently being drafted.
10
The river basin agencies will replace the current provincial setup for MEW regional operations.
11
NVDA is an exception to MAIL's normal operations.
4

14. Degraded infrastructure. Existing water resources and irrigation infrastructure in

Afghanistan has received inadequate O&M over the last 30 years and is extremely degraded.
Significant rehabilitation and upgrading investment is required to restore existing infrastructure to its
productive potential.

15. Lack of new infrastructure. Although Afghanistan has water that it can harness for
productive purposes, it has not invested in new water resources and irrigation infrastructure over
the last few decades. Substantial investment is needed to help Afghanistan bridge the gap
resulting from 30 years of stagnated economic development.

16. Inefficient water resources management. Most irrigation in Afghanistan uses traditional
systems that are not engineered, are constructed from rudimentary materials, and have degraded
over the last few decades, resulting in low irrigation efficiency. The lack of investment in new
infrastructure has also hampered water user efficiency. On-farm irrigation and water management
need to be improved, and would benefit significantly from training and the introduction of more
efficient irrigation technologies and management practices.

b. Nonphysical Challenges

17. Lack of qualified staff. The decades of conflict and inactivity have seriously affected
MEW, which has few staff that can contribute to water sector development. Capacity building
efforts by ADB, the World Bank, and other donors have resulted in improvements, but additional
effort is required to enable MEW to manage and develop the water sector without external
assistance. In addition to solidifying basic technical and project management capacity, new
skills will be required for the RBAs and RBCs to become functional. The current salaries of MEW
engineers are far below market rates, inhibiting retention of staff. The situation is unlikely to change
in the short- to medium-term, and the amount and duration of support needed during project
implementation exceeds the norm.

18. Feasibility studies and investment plan. Significant work is being undertaken by ADB,
the European Commission, and the World Bank to rehabilitate and upgrade irrigation systems
throughout Afghanistan, but little investment is taking place to develop new water resources
infrastructure. Although potential new projects exist, investment is constrained by a lack of
quality feasibility studies to support the realization of new projects and serve as a basis for
prioritizing investments. MEW contracted the preparation of new feasibility studies to regional
firms, but many of the studies need additional work on technical options, economics,
safeguards, and other issues to bring them to an international standard that would support ADB
investments. ADB initiated support to MEW to remedy this situation under technical assistance
(TA) for Capacity Development for Irrigation and Water Resources,12 but additional support is
needed.

19. MEW has a list of priority investments, but it is not fully supported by objective selection
criteria or adequate project information. However, even with good feasibility studies, analysis is
required to prioritize and sequence projects, especially in a river basin context, where upstream
developments can impact downstream projects. The World Bank has initiated modeling efforts
in the Kabul River Basin to evaluate different development options and scenarios in optimizing a
development plan. Additional work is required and is ongoing to (i) develop better feasibility
studies to support investment, and (ii) prioritize and sequence investments as the basis of a
comprehensive sector investment plan.
12
ADB. 2005. Technical Assistance to the Islamic Republic of Afghanistan for Capacity Development for Irrigation
and Water Resources. Manila (TA 4716-AFG).
 5

20. Lack of water resources knowledge base. Good quality data are required for effective
water management and rehabilitation, upgrading and development of water resources and
irrigation infrastructure. A severe lack of most data (e.g., surface and groundwater data,
meteorological data, geotechnical information, agricultural data, and water quality data)
constrains effective planning and management. Monitoring capability is limited by a lack of
technical resources, as well as human capacity to manage data collection and analysis. An
intensive effort is needed to ensure that sector development is not supported by project
development in isolation, and that measurement and monitoring systems and the institutions
and capacity to use them effectively are also put in place.

21. Operation and maintenance of infrastructure. The Government has limited funds and
capacity for O&M of large irrigation and water resources infrastructure. Donor funds and
Government general revenues can be used in the short term for recurrent costs, but a longer-
term solution is required. Under the Water Law, fees can be charged for water delivery, and the
Government is committed to developing tariff strategies for O&M funds that stay within the
sector to reduce subsidies and achieve sustainability. Over 80% of irrigation uses traditional
systems, and communities have been responsible for O&M for hundreds of years, although
traditional management has declined in recent years. Support is required to build on the
community management and to establish WUAs under the Water Law. O&M is a challenge, but
opportunities exist to address it on multiple levels.

22. On-farm water management and agricultural production. While timely delivery of
irrigation water is a primary constraint for agricultural production, other issues—including on-
farm water management, inputs, access to markets, and post-harvest handling—are binding
constraints to agricultural production. These production factors are underdeveloped in
Afghanistan, and should be addressed with irrigation to maximize productive impact.

23. Poppy cultivation. Afghanistan currently produces over 90% of the world's opium and
poppy production poses a huge social, political, and security challenge. Opportunities for
alternative livelihoods are required in rural areas to ease the reliance on the opium economy.
Improved access to irrigation, especially for higher-value second-season cropping, provides
enhanced incomes and blunts the strong economic incentives to grow poppy. At the same time,
assurances are required from communities receiving assistance that they will abstain from
poppy production, and government interdiction efforts must pose a credible threat.

2. Water Resources Sector Strategy and Investment Program

24. The ANDS and the Government's water sector policy framework provide a clear sector
strategy and investment program. The ANDS's water sector vision is "to manage and develop
the country's water resources so as to reduce poverty, increase sustainable economic and
social development, improve the quality of life for all Afghans and ensure an adequate supply of
water for future generations." 13 Underpinning the ANDS is the national Water Sector Strategy,
which addresses all water subsectors including water supply, environment, and hydropower.
Based on a sector analysis, the ANDS Water Sector Strategy develops programs with
associated investments, which include the following for water resources and irrigation: (i)
Institutional Set-Up and Capacity Building Program, (ii) National Water Resources Development
Program, (iii) National River Basin Management Program, (iv) Irrigation Rehabilitation Program,
and (v) River Bank Protection Program. The most recent MEW investment plan based on the
ANDS programs is about $2.5 billion over the medium term. In addition to the investments, the
13
Islamic Republic of Afghanistan. 2008. Afghanistan National Development Strategy: 1387–1391 (2008–2013).
Kabul (page 84).
6

ANDS has a Water Sector Strategic Action Plan that outlines policy, institutional, and capacity
development activities needed to achieve desired sector outcomes. The programmatic
approach of the ANDS, plus the existing legal and policy framework, including the new Water
Law, provide the strategic framework to support sector investment. The ANDS programs, their
objectives and the initial investment program provide a well-defined road map to guide sector
investment. Refinements are required and are ongoing, and the ADB Investment Program will
be updated as better information becomes available and new projects are prepared.

3. ADB Operations and Sector Strategy

25. ADB's new country partnership strategy (CPS) for Afghanistan (2009–2013) 14 is fully
aligned with the ANDS. The CPS highlights four sectors for ADB investments: (i) energy, (ii)
transportation and communication, (iii) agriculture and natural resources (including irrigation and
water resources), and (iv) governance. The new strategy for the water sector represents a
continuation of the previous objectives from the country strategy and program update (2006–
2008).15 However, investments and institutions are supported in a more programmatic fashion
through the combination of physical and nonphysical investments under the MFF modality. The
new strategy attaches special importance to themes, particularly gender and development,
capacity, and private sector development. In addition to the CPS, the Investment Program is
fully aligned with ADB’s long-term strategic framework 2008–2020 (Strategy 2020), 16 which
includes investment in water resources infrastructure as a core ADB business activity. The
Government's commitment to a policy framework based on IWRM principles contained in the
Water Law and ANDS is consistent with the ADB water policy, Water for All.

4. External Assistance

26. Water resources and irrigation in Afghanistan have received significant attention over the
last 6 years from multiple donors, but infrastructure investment has been lower than in other
sectors (e.g., roads and power). ADB, the European Commission, and the World Bank have
been the three largest, most consistent donors to the sector with ongoing programs that began
in 2002. The European Commission has supported a long-term integrated program in the Amu
Darya and Kundoz basins featuring infrastructure rehabilitation and upgrading and institutional
development of the RBAs, RBCs, and WUAs. The World Bank has had an ongoing emergency
rehabilitation and upgrading program that is working throughout the country. The Untied States
Agency for International Development has had several rural development and agricultural
programs with irrigation and water resources activities, but no dedicated water resources
program. Other bilateral donors have supported the sector, including the Government of India
(through the construction of Salma Dam) and the Canadian International Development Agency,
which is rehabilitating Dahla Dam. To date, ADB has combined an integrated approach—which
integrates physical and nonphysical investments—with a geographic focus on the northern and
western portions of the country. A more complete list of sector assistance is in Appendix 4.

5. Lessons Learned

27. ADB has significant experience in implementing water resources projects in Afghanistan,
and important lessons can be drawn from these and other ADB projects in Afghanistan, as well as

14
ADB. 2007. Country Partnership Strategy: Afghanistan, 2007–2011. Manila.
15
ADB.2005. Country Strategy and Program Update (2006–2008): Afghanistan. Manila.
16
ADB 2008. Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank 2008–2020.
Manila.
 7

ADB's overall experience in the water resources sector.17

28. Security risks are present in Afghanistan, but can be mitigated with proper planning,
coordination with local authorities and communities, and adequate resources. Security planning
and associated costs can be significant, and need to be factored into projects from the outset.

29. Many projects in Afghanistan are behind schedule and prone to related cost overruns. This
is a function of security concerns and rising investment costs, in part because initial project costing
and actual contracting may be separated by years due to delays in consultant recruitment,
preparation of feasibility studies and detailed designs, and tendering. The MFF modality will help
mitigate this problem, because projects should be ready to proceed with contracting at the time a
periodic financing request (PFR) is submitted. More effective project management offices (PMOs)
under a long-term programmatic MFF approach will also improve planning.

30. Many delays stem from project startup activities (e.g., establishment of the PMO and
training of PMO staff, recruitment of implementation consultants, establishment of financial and
project management systems, and awarding of initial civil works contracts). Projects should have
better and more detailed implementation plans, and project implementation manuals at the
outset. Effective use of TA funds to advance project readiness beyond normal processing
standards, assiduous support from the resident mission, and additional support from ADB
headquarters is required, especially in weakly performing countries such as Afghanistan. This will
be facilitated by the joint venture approach taken by the Afghanistan Resident Mission and ADB
headquarters.

31. Capacity is weak across all aspects of project preparation and management. Adequate
consulting input is required to ensure that project implementation will proceed irrespective of
government counterparts and support. Capacity development can be undertaken as a parallel
activity through a mix of on-the-job experience and more formal in-country and foreign training. As
capacity is developed, greater responsibility can be shifted to government counterparts.

32. It is very difficult to recruit and retain good consulting services in Afghanistan, so the
quality-based selection (QBS) procedures should be used to secure qualified staff. QBS also
provides greater flexibility in replacement of consultant staff from existing contracts.
Procurement is difficult and contractor capacity is weak, so contracting is more manageable
using larger international competitive bidding (ICB) contracts rather than multiple national
competitive bidding (NCB) contracts. Much of the ICB work is also subcontracted, meaning
national contractor capacity is still developed in the sector under the ICB modality, with
management by the internationally qualified firms.

33. Water resources and irrigation projects are most effective when the development of
infrastructure can provide a tangible, catalytic factor to develop management and O&M capacity for
WUAs and government agencies. However, careful planning and adequate implementation
resources are needed to ensure that interlinked physical and nonphysical components are
phased accordingly. Activities to establish WUAs and RBAs should be undertaken early in a
project so that they can then actively engage in and have ownership over the planning,
execution, management and O&M of civil works.

17
Previous ADB projects include the ADB. 2003. Report and Recommendation of the President to the Board of
Directors on a Proposed Loan to the Islamic Republic of Afghanistan for the Emergency Infrastructure and
Rehabilitation and Reconstruction Program. Manila. (Loan 1997-AFG); and ADB. 2005. Report and
Recommendation of the President to the Board of Directors on a Proposed Loan to the Islamic Republic of
Afghanistan for the Western Basins Water Resources Management Project. Manila (Loan 2227-AFG).
8

34. Project sustainability relies on either the Government or user groups providing adequate
O&M procedures and resources for infrastructure. O&M and recurrent costs must be an explicit
consideration of project design, and capacity building and institutional development related to
O&M should be provided for government staff and water users.

35. Regionally implemented projects in Afghanistan need strong technical field

implementation capacity, but also require a strong presence in Kabul (i) to manage
procurement, financial management, and other administrative activities; (ii) to follow-up on
approvals from the central authority; and (iii) to ensure close cooperation and support with the
implementing agency(s) to (a) manage expectations, (b) quickly resolve implementation
problems, and (c) make program adjustments as required.

36. ADB’s experience with WUAs indicates that (i) WUA development is a long-term
process, (ii) WUAs need to be involved in all aspects of irrigation development and
management, and (iii) WUAs will fail if they lack adequate resources to fulfill their mandate.
Lessons from ADB’s Bali Irrigation Project18 demonstrate the importance of explicitly working
within and strengthening existing traditional irrigation management when introducing any project
intervention. Not doing so jeopardizes project success, and may also weaken the traditional
systems themselves, thereby lowering overall sector performance.

III. THE PROPOSED INVESTMENT PROGRAM

A. Impact and Outcome

37. The Investment Program will increase the productivity of irrigated agriculture as a result
of improved water resources management through infrastructure development, capacity
building, and institutional strengthening.

B. Outputs

1. General Investment Program Outputs

38. The Investment Program's outputs will include (i) physical rehabilitation and upgrading of
existing irrigation and water resources infrastructure; (ii) the development of new infrastructure for
irrigation, flood management, and water resources; (iii) support to develop and implement
improved institutional frameworks and policies for irrigation, flood management, and water
resources management; (iv) programs to strengthen line agencies, O&M, and management
practices; and (v) capacity development programs to ensure sustainable outcomes. Outputs will
also include PMOs and project implementation offices (PIOs) to ensure efficient development of
infrastructure and delivery of services and to provide training for government staff for improved
project management. A program development facility (PDF) will be established to prepare new
tranches of the MFF.

39. The underlying approach to executing the Investment Program is to develop projects
that integrate physical and nonphysical components to comprehensively and holistically address
sector needs to achieve desired outcomes. This approach, combined with long-term ADB
engagement through the MFF, will provide the support needed to sustainably improve the
performance and accelerate development of the water resources sector in Afghanistan.

18
ADB. 1981. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
Republic of Indonesia for the Bali Irrigation Sector Project. Manila. (Loan 0522-INO).
 9

2. Tranche 1 Outputs

40. Tranche 1. The first tranche (the Project) under the Investment Program will have four
components: (i) northern basins development (NBD), (ii) NVDA improvement, (iii) flood
management, and (iv) project management and program development. Each of these components
will have an integrated package of physical and nonphysical outputs.

a. Component 1 – Northern Basins Development Physical Outputs

41. Large infrastructure. The Northern Basins19 is one of the five national RBAs defined
under the Water Law. The NBD activities build from previous ADB projects—the Emergency
Infrastructure Rehabilitation and Reconstruction Project (EIRRP) 20 and the Balkh River Basin
Integrated Water Resources Management Project.21 Tranche 1 will finance infrastructure for water
resources management and irrigation in the Lower Balkh River Basin (about 80,000–100,000 ha of
intensive irrigation). This includes construction of the Bangala weir, rehabilitation and upgrading for
the Samarkandian weir, and improved operational control for the Samarkandian and Narhi Shahi
weirs. This improved infrastructure will nearly complete modernization of the former traditional
intakes in the Lower Balkh Basin and provide significantly improved basin-level water management
and distribution capacity, thereby enabling optimized water allocation and agricultural production.

42. Smaller irrigation infrastructure. The Project will provide rehabilitation and upgrading of
about 250 main canal structures, and nearly complete this work in the Lower Balkh Basin. 22
Secondary and tertiary canal structures will be constructed and upgraded on a pilot basis in a WUA
development program. Investment in these smaller structures will be scaled-up under the second
tranche of the Investment Program once WUAs and robust implementation procedures have been
established.

43. Improved canal access points for women. The Project will support development of
improved canal access points for women to do washing and collect water for household use. The
Project's gender specialist will work through the WUAs and community development councils to
engage women to identify the best design and locations for access points in the canal network.23
This will be pilot tested in the first tranche to establish a robust implementation modality, and then
scaled up in later tranches. The gender specialist will also develop options and a program to
increase investment in gender-related activities in subsequent tranches of the Investment Program.

b. Component 1 – Northern Basins Development Nonphysical Outputs

44. River basin management and operation and maintenance. The Project will support
development of the Northern Basin RBA, including training and resources to monitor, measure,
and analyze water flow and other data. Rules to manage and operate the modernized intakes and
19
The Northern Basins include the Balkh Ab, Khulm, Sari Pul, and Samigan rivers.
20
ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
Islamic Republic of Afghanistan for the Emergency Infrastructure Rehabilitation and Reconstruction Project.
Manila. (Loan 1997-AFG).
21
ADB. 2004. Proposed Grant Assistance to the Islamic Republic of Afghanistan for the Balkh River Basin Integrated
Water Resources Management. Manila. (JFPR 9060-AFG).
22
Under the EIRRP, a participatory process of working with the communities to identify and confirm the irrigation
system improvements was established. This approach will be continued under the NBD component. As a part of
the process, the communities receiving assistance had to commit that they (i) would abstain from growing poppy,
and (ii) provide requisite O&M to maintain the improvements.
23
Community development councils were developed as a part of the National Solidarity Program implemented by the
Ministry for Rural Rehabilitation and Development. They still serve as viable local government units in most
villages.
10

weirs on the Balkh River will be developed with water users to take full advantage of the improved
infrastructure. Procedures will be developed and RBA staff trained for effective O&M of the
infrastructure under RBA management. The Project will support the RBA and Government in the
development of mechanisms for sustainable O&M financing, including creation of policies and
procedures to assess and collect user fees to supply irrigation water; the work done in this regard
for the Northern Basins should also help in the development of related national policies. While
these procedures are being developed, tranche 1 will provide interim O&M funds for infrastructure
under the RBA.

45. The Project will support the RBA to prepare a Northern Basin water resources master
plan to further develop the Northern Basins. The master plan will include feasibility studies,
detailed designs, and preparation of tender documents for the (i) Imam Sahib intake and main
canal structures; (ii) secondary and tertiary structures in the Lower Balkh Basin; and (iii) canal
off-takes, irrigation structures, and flood management infrastructure throughout the Northern
Basins, in preparation for financing in the second tranche of the Investment Program.

46. Water user associations and river basin councils. The component will mobilize and
legally establish WUAs in the Lower Balkh Basin based on the mirab system. A core technical
training program for WUAs will be developed that includes (i) O&M and minor repairs, (ii) water
distribution management, (iii) basic irrigation design and improved structures, (iv) irrigation and
crop scheduling, and (v) monitoring and evaluation (M&E). Under the first tranche, a WUA
development plan will be prepared for the adjacent basins to be executed in the second tranche
of the Investment Program. The WUA training will also include (i) a pilot program for WUAs to
participate in the rehabilitation and upgrading of secondary and tertiary structures, and (ii)
demonstration activities for improved on-farm water management. Under the Water Law, RBCs,
which are made up of water users, are tasked with determining water allocations, permitting,
settling legal disputes, and helping to set policy for their associated RBA. Tranche 1 will help
establish the RBCs; during the second tranche, more intensive capacity development efforts will
be undertaken to improve the RBCs’ effectiveness.

c. Component 2 – Nangahar Valley Development Authority Improvement

Project Physical Outputs

47. System rehabilitation. This component comprises comprehensive rehabilitation and

upgrading of the irrigation system that includes repairs to the main canal headgate; desilting;
improved protection walls; new headgates on secondary canals; and works on siphons, spillways,
and passages for drainage washes. All secondary and larger tertiary canals will be rehabilitated
and fitted with new improved control structures. These works will be executed on and benefit both
the 12,000 ha of privately held land and the 8,000 ha of NVDA land.24

48. Improved canal access points for women. The NVDA improvement component will also
support work with the WUAs and community development councils to develop water access points
within the canal network for women to wash and collect water for household use.

24
Currently, most NVDA land is leased to small farmers for 1 year, and for a single wheat crop only; no second crop
is permitted, although water supplies are adequate. This renders these areas far less productive than they could
be, and reduces livelihoods below than the private holdings. An important objective of the proposed NVDA
business plan is to identify options to improve the productivity of the leased land.
 11

d. Component 2 – Nangahar Valley Development Authority Improvement

Project Nonphysical Outputs

49. NVDA reform. Institutional reform of NVDA under a corporatized management structure is
a key priority of MAIL. This component will support preparation of an institutional reform and
business plan with associated adjustment costs for the restructuring of NVDA on a corporate basis.
An important part of the institutional reform is creation of a sustainable irrigation service delivery
agency to manage the main canal and an O&M financing mechanism for the irrigation system. The
project will provide interim O&M financing on a declining basis until the new system is put in place.

50. Water user associations. The Project will mobilize and legally establish WUAs on the
privately managed lands and on lands with leaseholders. A training program for WUAs and
farmers will be developed, similar to that under the NBD component. The NVDA WUAs training
will include demonstration activities for (i) improved irrigation and agricultural techniques for
greater productivity and efficiency, and (ii) on-farm water management. These activities will also
be made available to NVDA staff or other leaseholders farming the NVDA land.

e. Component 3 – Flood Management Physical Outputs

51. The Project will construct flood protection works for Yangi Qala town and the Yetim Tapa
irrigation system in Takhar province along the south bank of the Amu Darya. This will include an
earthen embankment 5 kilometer long to protect the town and irrigation system from major
flooding. The embankment may be elongated under the second tranche to expand the protected
area, depending on its performance, and whether there are associated negative impacts. The
works will include a permanent gated intake for the Yetim Tapa irrigation canal intake on the Amu
Darya River to protect 5,000 ha of irrigated area within the system. The Project will include funds
for gabions and other quick gestation, low-cost interventions to protect areas along the Amu Darya
River from bank erosion. A limited number of these structures will be developed under tranche 1
and their performance will be reviewed for possible expansion during subsequent tranches.

f. Component 3 – Flood Management Nonphysical Outputs

52. The flood management component will (i) help establish a National Flood Management
Program within MEW in Kabul, and (ii) prepare additional flood management works for financing
under the second tranche. The National Flood Management Program will develop a 5-year plan to
initiate the development and build the capacity of the new unit in MEW. Training will be offered to
the new MEW flood management unit on flood risk assessment, flood mapping, the design of
various flood management structures, and other flood-related topics. This component will support
preparation of two to four additional flood management structures along the Amu Darya River for
financing under subsequent tranches.

g. Component 4 – Project Management and Program Development

53. Under the first tranche, project management arrangements will be put in place to ensure
effective implementation and timely preparation of subsequent tranches. A PMO will be
established in Kabul under MEW to provide coordination and support for the NBD and the flood
management components. Two PIOs will be established—in Mazar-i-Sharif and Taloqan—to
direct field activities for these components. A PDF will be established within the Kabul PMO to
manage preparation of subsequent MFF tranches. A dedicated PMO will be established in
Jalalabad under MAIL for the NVDA improvement component, and will direct all implementation.
12

h. The Second and Third Tranches

54. The NBD program will continue in tranche 2 with subsequent subprojects prepared
during tranche 1. Flood Management will be an ongoing program throughout all tranches with a
primary focus on the Amu Darya, possibly spreading to other regions in tranche 3. This will
continue ADB's commitment to the north of Afghanistan. An important objective of the second
and third tranches is to support development of new infrastructure projects for water resources
and irrigation. The projects developed will in part depend on the attractiveness of the
investment(s), however, the Investment Program will target the Amu Darya, Kabul, and the
Northern River Basins to maintain the geographic focus of the first tranche investments.

C. Special Features

55. Integrated approach to sector development. The Investment Program has an

integrated approach to water resources sector development under a long-term program. It
includes substantial investment in infrastructure, including rehabilitation of existing assets and
development of new infrastructure. The infrastructure supports enhanced water management
capacity at all levels—including on-farm, tertiary and secondary irrigation canals, and large
works that promote improved water management on a basin level. The nonphysical investments
support improved (i) water management capacity and institutions at the (a) national level
through development of the Flood Management Program, and (b) at the basin level through
development of the RBAs and RBCs; and (ii) water management at the irrigation system and
farm level through development and strengthening of WUAs. The 10-year length of the
Investment Program provides an appropriate time frame to enable the physical and nonphysical
outputs to impact water resources management and development in a synergistic and
transformative manner.

56. Cofinancing partnerships. The Investment Program thus sets out a framework for
effective partnerships in assisting Afghanistan with developing its water sector over the medium-
term. Besides the Government of the United Kingdom (para. 66), other development partners
may determine to complement ADB's financing after the Board's approval of the proposed MFF
through cofinancing to be administered by ADB. The amounts of cofinancing to be provided by
all development partners and administered by ADB (including the grant provided by the
Government of the United Kingdom) under the Investment Program will be deducted from the
total MFF amount approved by the Board. Such cofinancing may be provided as grants or
loans, and may take the form of joint or parallel cofinancing. ADB's administration of such
cofinancing from time to time will be reported to the Board for information annually.25

57. Multitranche financing facility modality. Use of the MFF to extend ADB financing to
the Investment Program is proposed for the following reasons:

(i) The MFF approach provides flexibility to ADB and the Government. ADB and the
Government can modify the amount and timing of ADB contributions under each
tranche, assuming the proposed financing ceiling of $303.3 million equivalent is
not exceeded. Such flexibility is important if the Government can raise financing
from other sources, or if the Government needs more time to finalize specific
project packages. In addition, the financing to be provided by ADB can be closely
linked to the availability of resources within ADB, and to full compliance with
warranties and representations made under the framework financing agreement
(FFA).
25
ADB, 2008, Mainstreaming the Multitranche Financing Facility, Manila.(para. 79)
 13

(ii) Financing under the MFF can be aligned to specific technical, safeguard, legal,
and other project selection criteria. The authorities can make grant conversions
under the MFF as and when projects are ready for execution. This approach
facilitates advance actions and the expedient establishment of administrative and
implementation arrangements. The MFF allows ADB and the Government to
more closely link financing to possible changes in project costs bundled under
each tranche, which avoids cost overruns.

(iii) A program loan would help improve policies but not capital investments, which
are crucially needed. By channeling funding through an MFF, ADB, and the
Government can shift time and resources away from repetitive processing tasks
into implementation work.

(iv) All required conditions for the use of an MFF are in place: a strategy and road
map, policy framework, investment program, and financing plan. The modality
also moves the analytical work up front, leaving resources and multiple entry
points for ADB and the Government to focus on execution, capacity, and reforms.
ADB and its partners have agreed on decision-making criteria for the provision of
financing, including specific warranties and representations, and covenants
leading to suspension and cancellation of financing.

58. The status of the MFF preconditions is as follows:

(i) Strategy. The strategic framework and road map are sound. The main components
are provided with desired sector outcomes.

(ii) Policy framework. The policy framework is well developed, but capacity needs to
be developed and institutions strengthened to ensure its effective implementation.

(iii) Investment Program. Under the ANDS, the Government prepared a medium-term
investment plan for the water sector. The current investment plan for water
resources and irrigation calls for investments of $2,468 million.

(iv) Financing plan. The Government's investment plan has a significant gap between
financing and sector needs. ADB is one of the financiers, together with the
Canadian International Development Agency, Department for International
Development of the United Kingdom, the European Union, the Government of
India, United States Agency for International Development, and the World Bank
among others. If financing for the shortfall is not secured, the Investment Program
will still continue but at a slower pace. The national budget is not a reliable financing
option.

59. Weakly performing country status. ADB's approach to engaging with weakly performing
countries (WPCs) recognizes that WPCs face various development challenges in different
degrees, and that existing ADB business processes sometimes constrain effective operations in
WPCs. 26 Afghanistan is considered a WPC because of its conflict status. While the Government is
committed to implementing the Investment Program, there are certain constraints facing
Afghanistan, including (i) the need to deliver development projects expediently in multiple and risk
prone areas that may yield varying economic and financial returns; (ii) difficulty in timely recruitment
of quality consultants, contractors, and procurement of goods; (iii) limited availability and qualified
26
ADB. 2007. Achieving Development Effectiveness in Weakly Performing Countries (The Asian Development Bank's
Approach to Engaging with Weakly Performing Countries). Manila.
14

counterpart staff for project preparation, implementation, and management.

60. To strengthen the effectiveness of ADB's operations in WPCs, ADB's current approach
allows that some of existing ADB business processes could be relaxed (footnote 26). Accordingly,
the following are areas in which selective relaxation of ADB's requirements can be considered
under the proposed MFF:

(i) Rates of return on program or project feasibility assessments. Given the

conflict status of Afghanistan, it should be recognized that the financial and
economic risks of investment projects under the Investment Program are higher
and that lower returns are possible.

(ii) Involvement of counterparts. Given the limited availability of qualified counterpart

staff in Afghanistan as well as security concern, ADB can consider alternative
arrangements, including requesting the Government to outsource the counterpart
requirement.

(iii) Eligibility and modes of procurement. ADB may consider relaxing its eligibility
rules and modes for the procurement of works and goods, as well as engagement
of consultants in situations where coordination with other development partners is
required, or ADB considers necessary and appropriate to ease project
implementation.

61. While the first tranche of the Investment Program has been prepared and will be
delivered using standard ADB business processes, future tranches under the Investment
Program could benefit from expedited project processing and approval, as well as relaxation of
the ADB business processes requirements in the areas mentioned in para. 60. The exact
business processes and associated specific guidelines to be relaxed and expedited, and their
application to a specific project will be detailed in the related PFR report for a particular tranche.
Relevant internal approval and consultation will be sought as appropriate in accordance with the
then-prevailing ADB policies, rules, and procedures.

D. Water Resources Investment Program

62. The ANDS proposed a sector investment plan for $3,761 million for the entire water sector.
For irrigation and water resources management, MEW has defined a revised investment plan of
$2,468 million over the medium-term under the ANDS national programs that include: (i)
Institutional Set-Up and Capacity Building Program, (ii) Water Resource Infrastructure
Management Program (includes both the National River Basin Management and Irrigation
Rehabilitation programs), (iii) Bank Protection and Flood Control Program, and (iv) National
Water Resources Development Program (Table 1). 27 The Government has asked ADB to
finance a portion of this investment plan and to support it over 10 years through an MFF. The
amount proposed is up to $303.3 million equivalent. A set of initial investments has been
prepared under the ADB Investment Program. The investments will be financed in three
tranches, with the first totaling $92.8 million. Table 2 provides estimates for the first tranche
components (see Appendix 5 for detailed cost estimates). Table 3 provides the estimates for
ADB's Investment Program over the three tranches based on the Government's investment
programs under the ANDS.
27
The Government's investment plan provides ambitious targets for the medium-term and in particular for the
National Water Resources Development Program. However, over the long-term, substantially more resources will
be required to develop the sector. The Government investment plan will be updated with support from the PDF as
additional and more reliable project information becomes available.
 15

Table 1: Medium-Term Water Resources Sector Investment Program

($ million)
Item Medium Term
Institutional Set-Up and Capacity Building Program 46.0
Water Resource Infrastructure Management Program
(Includes National River Basin Management and
Irrigation Rehabilitation) 133.0
Bank Protection and Flood Control Program 161.0
National Water Resources Development Program 2,128.0
Total 2,468.0
Sources: Ministry of Energy and Water, Asian Development Bank estimates.

Table 2: Cost Estimates for Tranche 1 Program Components

($ million)
Tranche 1 Component Amount
Northern Basins Development 34.3
Nangahar Valley Development Authority Improvement 25.0
Flood Management 12.1
Program Development 9.3
Helmand Basin Waster Resources Master Plan 3.3
Tranche 1 Contingency 8.8
Total 92.8
Notes:
1. The table includes estimated amounts for import duties and taxes.
2. Program management costs are included in each component.
3. Program development includes preparation of tranches 2 and 3.
4. The grant contribution of the Government of the United Kingdom for the Helmand
Basin Water Resources Master Plan is £2 million.
Source: Asian Development Bank estimates.

Table 3: Cost Estimates for the Investment Program

($ million)
Item Tranche 1 Tranche 2 Tranche 3 Total
Institutional Set-Up and Capacity Building Program 3 2 2 7
Water Resource Infrastructure Management Program
(Includes National River Basin Management and
Irrigation Rehabilitation) 61.3 10 71.3
Bank Protection and Flood Control Program 15 20 35
National Water Resources Development Program 11 97 82 190
Total 90 129 84 303.3
Notes:
1. The Nangahar Valley Development Authority (NVDA) component is included under the heading of the Water
Resources Infrastructure Management Program due to the nature of the activities. However, NVDA falls
outside the MEW investment program.
2. The Helmand Basin Water Resources Master Plan is included under the Water Resources Infrastructure
Management Program.
3. Program totals and Asian Development Bank tranche investments are based on indicative projects in the
Ministry of Energy and Water investment plan, which will be updated regularly with better information, but the
Afghanistan National Development Strategy programs should remain.
Source: Asian Development Bank estimates.
16

1. Financing Plan and Conditions

63. The Government has asked ADB to provide up to the equivalent of $303.3 million to help
finance the Investment Program. Tranche 1 will involve cofinancing of $3.3 million equivalent from
the Government of the United Kingdom. ADB financing will be provided from ADB’s Special
Funds resources in accordance with relevant ADB policies,28 subject to modification that may be
included under individual financing agreements. The implementation period will be 10 years.
The Investment Program will consist of individual tranches, the term of which may vary. The
MFF will finance civil works, equipment and goods, consulting services, and recurrent costs.

64. The Government will submit a PFR for each tranche, which will be reviewed by ADB in
accordance with the FFA and ADB's then-prevailing policies. If approved, financing will be
provided from the MFF. The Government has submitted the first PFR, requesting $89.9 million to
help finance the tranche 1 project. The terms and conditions for subsequent tranches will be
subject to (i) the availability of ADB's Special Funds resources; (ii) Afghanistan’s access to such
resources pursuant to ADB’s Graduation Policy 29 and Asian Development Fund donor
requirements; and (iii) the availability of ADB Special Funds resources to Afghanistan pursuant to
then-applicable policies concerning allocation of, and eligibility for, such funds. Adherence to
undertakings made in the FFA and individual tranche financing agreement covenants will be
conditions for financing approval.

65. The last date for any disbursements under any tranche will be by 22 September 2019.
Afghanistan is expected to submit the last PFR no later than 31 December 2016.

66. As a part of the proposed MFF amount, the Government of the United Kingdom will provide
a grant in the amount of $3.3 million equivalent to finance a Helmand Basin Water Resources
Master Plan under the Investment Program. 30 The financing plan for tranche 1 is in Table 4. Such
grant will be provided on a parallel basis to be administered by ADB subject to terms and
conditions for ADB administration of grant cofinancing.

Table 4: Financing Plan for Tranche 1

Amount
Tranche 1 ($ million) %
Asian Development Bank 86.6 93.2
Government of the United Kingdoma 3.3 3.4
Government 1.0 1.1
Project participants: in-kind irrigation O&M from farmers 1.9 2.1
Tranche 1 Total 92.8 100.0
O&M = operation and maintenance.
Note: The table includes estimated amounts for import duties and taxes. The Government will pay
resettlement compensation costs and counterpart staff salaries.
a
The grant contribution of the Government of the United Kingdom is £2 million. This amount
also includes Asian Development Bank's administration fee, audit cost, bank charge and
provision for foreign exchange fluctuations (if any), to the extent that these items are not
covered by the interest and investment income earned on this grant contribution by the
Government of the United Kingdom.
Source: Asian Development Bank estimates.

28
ADB. 2005. Pilot Financing Instruments and Modalities. Manila; and ADB. 2008. Mainstreaming the Multitranche
Financing Facility. Manila.
29
ADB. 1998. A Graduation Policy for the Bank’s Developing Member Countries. Manila.
30
The Helmand Basin Water Resources Master Plan will (i) include an assessment of water resources and
associated infrastructure in the Helmand River Basin, (ii) prepare a short-term action plan, and (iii) prepare a long-
term master plan for development of the basin. The $3.3 million is a tentative cost estimate.
 17

2. Asian Development Fund Grant

67. The Board approved the policy paper on the revised framework for Asian Development
Funds grants on 26 September 2007.31 This policy provides that for countries eligible for grant
assistance, the percentage of financing on a grant basis in a country will be based on its debt-
distress classification. Afghanistan is classified as a country with a high risk of debt distress, and
is eligible to receive 100% grant financing in tranche 1.

3. Financing Subsequent Tranches

68. Financing may be made available from ADB, provided the Investment Program
continues to be implemented in accordance with the general understandings and expectations
on which the MFF is based, as contained in the FFA. Progress towards achieving the expected
outcome and outputs set out in the DMF for the Investment Program will be guided by the
project selection criteria (Appendix 6). Furthermore, compliance with the policy framework,
safeguard requirements, social development policies, and all other undertakings contained in
the FFA will also influence ADB’s decision whether to continue financing individual tranches.

69. If a decision has to be made during the early stages of implementation of tranche 1,
when results would most likely not yet have been achieved, ADB’s decision to process
additional financing tranches would be made based on the Government’s level of commitment
regarding and efforts to achieve the outcome set forth in the DMF. Nonphysical tasks agreed
upon that have a direct effect on the outputs expected from the Investment Program (e.g.,
assumptions and mitigation of risks in the DMF pertaining to the Government, such as
counterpart staff, commitments to institutional change, and O&M issues) will be primary factors
in ADB decisions.

E. Implementation Arrangements

1. Program and Project Management

70. Executing agency. The Ministry of Finance (MOF) will be executing agency (EA) for the
Investment Program. MEW will be the implementing agency (IA) for the NBD and flood
management components, and manage the PDF. MAIL will be the IA for the NVDA component.

71. Project management offices. PMOs will be established within both MEW and MAIL
within 3 months of grant effectiveness. The MEW PMO will be located in Kabul and oversee
management of the Investment Program, including monitoring and evaluating the progress of
the overall investment program, and consolidating accounting and reporting on NBD and flood
management components. The MAIL PMO will be located in Jalalabad and be responsible only
for the implementation of the NVDA component in the first tranche and will report to MOF and
ADB.32 Both PMOs (under MEW and MAIL) will be headed by full-time program directors that
will be appointed by their respective agencies within 3 months of grant effectiveness. The PMOs
will be supported by teams of full-time specialists with technical and engineering, legal, finance
and administration, safeguards and gender, M&E and reporting, and capacity and institutional
development expertise, along with administrative staff. The teams will include counterpart staff

31
ADB. 2007. Revising the Framework for Asian Development Funds Grants. Manila.
32
MAIL will also maintain a small project liaison office in Kabul to facilitate communication and coordination between
MAIL and NVDA and between MAIL and MOF. This will be staffed by one liaison officer and one financial
management officer (both appointed within 3 months of grant effectiveness).
18

as well as international and national consultants to provide support and ensure effective
implementation (see Appendix 7 for organizational charts).

72. Program development facility. Within 3 months of grant effectiveness, and concurrent
with establishment of its PMO, MEW will establish a PDF. Prior to and in preparation for the
formal establishment of the PDF, MEW will first appoint a full-time project director for the PDF
within 2 months of grant effectiveness, and then appoint consultants and counterpart staff to
support the project director when the PDF is established. The PDF will be responsible for the
identification, screening, feasibility preparation, and detailed design of the subsequent
investment packages under the Investment Program.33 The MEW PMO will establish a PIO at
Mazar-i-Sharif to implement the NBD component, and a PIO at Taloqan to implement the flood
management component, both within 3 months of grant effectiveness. 34 Each PIO will be
headed by a full-time project director (appointed within 3 months of grant effectiveness),
supported by implementation consultants and counterpart staff (appointed within 4 months of
grant effectiveness). All program and project directors and counterpart staff will serve on a full-
time basis and be competitively selected and remunerated, free and clear of any restrictions
applicable to Afghanistan’s public servants, and acceptable to ADB.

73. The two PMOs and associated PIOs will be responsible for management, execution, and
coordination of all activities under tranche 1. Their responsibilities include (i) recruitment of
consultants; (ii) supervision of the implementation consultants; (iii) collection of baseline data
and M&E of all activities; (iv) safeguards; (v) coordinating with MEW, MAIL, and concerned
RBAs, RBCs, and WUAs to ensure progress is on schedule with respect to institutional
development and capacity building; and (vi) financial management.

74. A program steering committee (PSC) will be formed to oversee the Investment Program
and tranche 1 activities. This will be the same committee that was formed in June 2007 to
oversee all other ADB-supported water sector activities in Afghanistan. The PSC is chaired by
the MEW minister; members include representatives from MOF, MEW, MAIL, the Ministry of
Mines, and the Ministry of Rural Reconstruction and Development. The MEW and MAIL PMOs
will serve as the PSC secretariat. The PSC will meet as required for program guidance, but a
minimum of every 6 months to provide policy guidance and review tranche 1 and Investment
Program performance.

75. Project coordination office. MOF will establish a project coordination office (PCO) to
facilitate coordination among MOF, MEW, and MAIL and to support the PSC as required. The PCO
will support the two PMOs and subsequent investment program implementation with regard to (i)
progress reporting, (ii) M&E, and (iii) facilitating financial processing requirements within MOF on
behalf of PMOs. MOF will appoint a PCO coordination officer and an M&E officer within 4 months
of grant effectiveness. If consultant support is required, this will be recruited on an individual basis.

33
Two options will be used to screen and prepare new projects. In the case of small- to medium-scale potential
projects located in the NBD and flood management areas, the PIOs have been tasked to identify and prepare
additional projects, including detailed designs. For all other (or for large-scale) investments, the PDF will contract
the services of consulting firms or individuals using procedures in accordance with ADB’s Guidelines on the Use of
Consultants (2007, as amended from time to time).
34
For the PIO in Mazar-i-Sharif, the existing PIO from the former ADB EIRRP will be retained to carry on the work if
possible. If this eventuates, appointment of a new PIO will not be necessary. The flood management PIO will be
located in Taloqan where communications infrastructure and commercial banking facilities are available, with a
base established in Yangi Qala to manage construction.
 19

2. Specific Project Implementation Processes by Component

76. Rehabilitation and upgrading of the main, secondary, and tertiary canals of the NVDA
irrigation system and the associated works will be the responsibility of the MAIL PMO, assisted
by the consulting services for detailed design and construction supervision. The MEW PMO and
PIOs (Taloqan and Mazar-i-Sharif) will be responsible for the (i) construction of the (a) flood
embankment and associated irrigation intake at Yangi Qala, (b) Bangala weir, (c) 250 main
canal structures in the Lower Balkh River Basin, and (d) improved canal access points; and (ii)
rehabilitation and upgrading of the secondary and tertiary canals They will be assisted by
consulting services covering both detailed design and construction supervision. For the civil
works outlined above (except for those implemented using community participation), the design
and supervision consultants will be assigned the role of the engineer and will provide (i) design
services, (ii) contract document preparation, (iii) support with evaluation of bids, and (iv)
construction supervision. Payment to civil works contractors will be approved by the relevant
PMO and/or PIO based on certification by the “engineer”.

3. Implementation Period

77. The Investment Program is scheduled for execution over a 10-year period commencing
in 2009 and ending in 2019. Management approval of tranches 2 and 3 is targeted for 2013 and
2015, respectively.35 All physical works and institutional support financed under the MFF will be
completed by 22 March 2019 at the latest, and the final date for any disbursement under the
MFF is 22 September 2019.

78. The NBD and the flood management activities under the initial tranche will be
implemented over a 5-year period commencing in early 2010. Formation and training of WUAs,
design of various works, and the construction of Bangala weir are all scheduled to commence in
the first year. The NVDA irrigation system rehabilitation component will be implemented over a
4-year period also commencing in early 2010. Formation and training of WUAs, survey work,
and detailed design work are necessary prior to award of civil works, and construction will
commence midway in the second year and be completed during the fourth year. The physical
implementation of tranche 1 will be completed by 31 December 2014. Indicative implementation
schedules for tranche 1 and the Investment Program are in Appendix 8.

79. Project readiness. Preliminary designs or feasibility-level drawings have been prepared
for all tranche 1 works to be awarded by ICB. The 204 structures prepared by the EIRRP have
existing designs and tender documents under preparation.36 A design exists for the Bangala
weir, but it needs to be updated. Individual consultants for hydrology, hydraulic engineering, and
procurement will be hired to advance preparation of the detailed design, tender documents, and
procurement for the Bangala weir and rehabilitation and upgrading of the Samarkandian weir.
The ICB tendering for these activities will be underway prior to the arrival of the MEW PMO and
PIO implementation consultants, who will evaluate the bids and supervise the construction. For
all other tranche 1 projects, due diligence has been performed to assess their technical,
economic, and financial viability. The concurrence of the Government and IAs were obtained for
all tranche 1 projects. All tranche 1 projects requiring physical investment have been classified
as category B in terms of resettlement and environmental impact, and category C for indigenous
peoples. An initial environmental examination (IEE), environmental assessment and review
framework (EARF), and cumulative impact assessment have been prepared. The land
acquisition and resettlement framework (LARF) and short land acquisition and resettlement plan
35
The PDF has adequate resources to prepare both tranche 2 and tranche 3 investments for subsequent PFRs.
36
The designs and tender document will be reviewed and confirmed by the implementation consultants.
20

(SLARP) for NBD have been prepared. A number of potential projects have been identified for
preparation in tranche 2. Final due diligence on all subsequent projects will be conducted under
tranche 1, and tranches 2 and 3 will be fully prepared during the tranche 1.

4. Procurement

80. Procurement of works and goods to be financed under the Investment Program will be
undertaken in accordance with ADB’s Procurement Guidelines (2007, as amended from time to
time). ICB will be used for supply contracts estimated to cost more than $500,000 and for civil
works that cost more than $2 million. NCB will be used for goods and works above $100,000 and
below the aforementioned ICB thresholds.37 Shopping will be used for goods and works equal to or
below $100,000. With respect to construction activities under tranche 1, civil works packages for (i)
Bangala weir and rehabilitation and upgrading of Samarkandian and Narhi Shahi weirs, (ii) the
Yangi Qala flood embankment and associated irrigation headworks, (iii) the majority of the main
canal structures in the Lower Balkh Basin, and (iv) the rehabilitation and upgrading of the NVDA
irrigation system will be awarded under ICB procedures. Civil works contracts costing less than $2
million—including pilot secondary and tertiary canal rehabilitation in the Lower Balkh Basin,
development of improved canal access points for women, and emergency floodworks along the
Amu Darya—will be awarded using NCB procedures or shopping.38 These smaller works will not
be suitable for or of interest to international contractors and adequate national contracting capacity
exists to complete these works.39 Before commencement of any procurement activity under NCB,
ADB and PMO will review the Government’s recently enacted public procurement provisions to
ensure consistency with ADB’s Procurement Guidelines.

81. The pilot secondary and tertiary canal rehabilitation in the Lower Balkh Basin and the
improved canal access points for women may be undertaken using community participation
procedures with WUAs, providing the cost of the works is $10,000 or less for the initial contract and
up to $30,000 if the WUA has relevant experience. Selection criteria for these works have been
developed that ensure (i) they involve no safeguard issues, (ii) the community is capable of and
committed to ongoing O&M, and (iii) the scope of work is within their capacity to manage. The
procurement plan is in Appendix 9 and the procurement plan with all annexes including community
contracting and national competitive bidding details is in Supplementary Appendix G. In addition,
procurement plans will be prepared for future tranches of the MFF indicating the particular
contracts for goods, works and consulting services required, proposed methods of procurement,
and related ADB procedures.

5. Advance Contracting and Retroactive Financing

82. Advance contracting and retroactive financing are proposed for procurement of goods
and services for projects financed through the Investment Program. The Government was
informed that expenditures incurred before tranche effectiveness will be eligible for retroactive
financing only if procurement, consultant recruitment procedures, and other expenses fully comply
with ADB’s Procurement Guidelines and Guidelines on the Use of Consultants. When the tranche
becomes effective, up to a maximum of 20% of the proceeds may be used to retroactively finance
eligible expenditures incurred during the 12-month period prior to signing of the relevant financing
agreement. The Government may opt for advance contracting without retroactive financing. In that

37
Any necessary modifications or clarification to NCB procedures will be set forth in the procurement plan.
38
In order to accelerate contract awards, a limited number of the main canal structures in the lower Balkh Basin may
be contracted using NCB procedures if the designs and tender documents are prepared.
39
All civil works contracts awarded under international competitive bidding, the first five national competitive bidding
contracts, and the first seven community contracting contracts will be subject to ADB’s prior approval procedures.
 21

case, the procurement procedures completed under advance contracting are concluded and the
award of contract made after the tranche becomes effective. The Government and the EAs have
been informed that approval of advance contracting and retroactive financing does not commit
ADB to finance any of the proposed projects.

6. Consulting Services

83. Robust levels of consulting support will be required to ensure implementation of the
works under tranche 1 due to (i) the limited project management capacity available in MEW and
MAIL, and (ii) the expanding workloads in both ministries. Support will also be required to
prepare investments under ensuing tranches of the Investment Program. The PMOs and PIOs
will be supported by consulting services to provide detailed design and construction supervision
for tranche 1 works. Additionally, the PDF and PIOs in Mazar-i-Sharif and Taloqan will be
provided necessary consultant support to (i) identify, establish the feasibility of, and prepare
detailed designs for projects in ensuing tranches of the Investment Program; (ii) prepare a
master plan for water resources development in the Northern Basins; and (iii) establish a
National Flood Management Program within MEW in Kabul. Consultant support will be provided
to establish and train effective WUAs. Consultant support for the PMOs will be contracted in two
separate packages; one for MEW and one for MAIL. The MAIL package will provide 72 person-
months of international and 302 person-months of national consultant services, while the MEW
package will provide 219 person-months of international and 795 person-months of national
consultant input. Eight person-months of international and 8 person-months of national
individual consultant input will be recruited to accelerate project readiness for construction of the
Bangala weir and for rehabilitation and upgrading of the Samarkandian weir. Details regarding
and the schedule of inputs for consultant services is Appendix 10. Detailed terms of reference
for consulting services will be provided in Supplementary Appendix E. All consultants to be
financed under the Investment Program, including those under tranche 1, will be recruited in
accordance with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to
time). The selection and engagement of the two main packages outlined above will be through
firms selected on quality-based selection (QBS) procedures.40 The same applies for firms to be
recruited by the PMO to carry out preparation of subsequent tranches under the PDF. The two
PMOs may select individual consultants for inputs as the situation requires. 41 The PMO
implementation consultants will recruit the services of nongovernment organizations (NGOs) for
(i) WUA training and on-farm water management demonstration activities, (ii) assistance as
needed with the updating and implementation of the SLARP, and (iii) external monitoring of
resettlement activities. The NGOs will be contracted on a competitive basis acceptable to
ADB.42

40
The QBS method is to be used to attract interest from qualified firms, which tend to avoid cost competition in a
volatile environment such as Afghanistan. ADB has had numerous experiences in Afghanistan with substandard
consultants being recruited through the quality- and cost-based selection method resulting in work of substandard
quality, implementation delays, and cost overruns. Effective project preparation and implementation in Afghanistan
is difficult and demands consultants of the highest quality. The two primary implementation consulting contracts
will be recruited using full technical proposals. The use of full versus simplified technical proposals for subsequent
recruitment of firms will depend upon the size of the contract, complexity of the work to be undertaken and other
relevant concerns in accordance with ADB guidelines.
41
Recruitment of individual consultant input requires a no-objection from ADB.
42
Funds for the recruitment of NGOs will be included as provisional sums in the contracts for the implementation
consultants for the MEW and MAIL PMOs.
22

7. Anticorruption Policy

84. ADB’s Anticorruption Policy (1998, as amended to date) was explained to and discussed
with the Government, the EA, and the IAs. Consistent with its commitment to good governance,
accountability, and transparency, ADB reserves the right to investigate, directly or through its
agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to projects under
the Investment Program. To support these efforts, relevant provisions of ADB’s Anticorruption
Policy are included in the grant regulations and the bidding documents for the Investment
Program. In particular, all contracts financed by ADB in connection with the Investment Program
shall include provisions specifying the right of ADB to audit and examine the records and
accounts of MOF, MEW, and MAIL, as well as all contractors, suppliers, consultants, and other
service providers as they relate to the Investment Program. If corrupt, fraudulent, collusive, or
coercive practices are found, ADB will automatically cancel the MFF and the tranches
concerned. This position has been made clear to the Government.

8. Disbursement Arrangements

85. Two first-generation imprest accounts will be established in commercial banks

acceptable to ADB. One account will be established in Kabul for the use of the MEW PMO, and
one in Jalalabad for the use of the MAIL PMO. Two second-generation imprest accounts will be
established by MEW for use by its PIOs and will be located in Mazar-i-Sharif for the NBD
component and Taloqan for the flood management component. All imprest accounts will be
established, managed, replenished, and liquidated in accordance with ADB’s Loan
Disbursement Handbook (2007, as amended from time to time) and detailed arrangements
agreed to by the Government of Afghanistan and ADB. The initial amount to be deposited in the
two first-generation imprest accounts will not exceed 6 months of estimated expenditures under
the grant, or 10% of the total grant amount, whichever is less. The initial amount to be deposited
in the two second-generation imprest accounts will not exceed 6 months of the projected
expenditure of the PIOs of MEW to be funded from such accounts, or $500,000, which ever is
less.43 The currency for all accounts will be US dollars. Statements of expenditure procedures
will be used to reimburse eligible expenditures, or to liquidate and replenish the imprest
accounts for individual payments under $100,000. Grant disbursements for goods and services
under major civil works and consultant’s contracts will be made using the direct payment
procedure, as outlined in ADB’s Loan Disbursement Handbook.

86. Subsequent PFRs will be mutually exclusive, in that the funds under each PFR will be
governed by a separate grant agreement. The respective grant agreements will describe the
detailed disbursement arrangements for a specific PFR. Grant disbursements under subsequent
tranches of the MFF will be in accordance with ADB’s Loan Disbursement Handbook.

9. Accounting, Auditing, and Reporting

87. The MEW and MAIL PMOs will prepare and maintain separate accounts for project- and
program-related expenditures adequate to identify goods and services financed from grant
proceeds, financing resources received, expenditures incurred for the project, and use of
counterpart funds for project- or program-related expenditures. The two PMOs will consolidate
and review accounts, and after auditing submit them to MEW or MAIL, and to MOF and ADB.
Project accounts will be audited annually by independent auditors acceptable to ADB using
international accounting standards. The audited accounts and audit reports will be submitted to

43
Bank charges associated with the imprest accounts will be financed by ADB.
 23

MOF and ADB no later than 6 months after the close of the fiscal year to which they relate. The
audit reports will include statements verifying that funds disbursed by ADB against statements
of expenditure have been used for the purpose for which they were provided. The imprest
accounts and statements of expenditures will be audited as a part of the regular audit of project
accounts, and should have separate opinions. Financial management assessments for MAIL,
MEW, MOF, and NVDA were carried out and found that while adequate systems were in place,
capacity and execution need strengthening. The PMOs and PIOs include financial management
consulting support to (i) ensure sound financial management procedures are established and
executed under the Project, and (ii) develop the capacity of counterpart staff (please see
Appendix 11 for the Flow of Investment Program Funds).

88. Both PMOs will be responsible for preparing quarterly financial, physical, and
institutional and capacity development progress reports on their respective program activities,44
and submitting these to MOF, MEW, MAIL, and ADB. The PCO (MOF) will support and
coordinate this task with the PMOs. The quarterly reports are to be submitted within 1 month
following the end of the quarter to which they relate.45

89. Within 3 months of completion of the Project, the PMOs will submit to ADB a project
completion report relating to the components for which each was responsible.46 In addition to
quantifying physical progress and monitoring the utilization of grant funds, all reports will include
a progress statement regarding the status and effectiveness of the recently established RBCs
and RBAs, and the WUAs established and/or strengthened under tranche 1.47

10. Project Performance Monitoring and Evaluation

90. Within 6 months of grant effectiveness, a project performance management system

(PPMS) for tranche 1 activities will be established in each PMO; in the case of the MEW PMO it
will have direct links to the PIOs and PDF.48 The M&E program will be prepared in consultation
with MOF, MEW, and MAIL as well as concerned RBCs, RBAs, and WUAs. Participatory M&E
techniques will be introduced to support the PPMS as a part of the WUA and RBA activities
under tranche 1, and appropriate capacity will be developed. A database of key benchmark
indicators (among those currently highlighted in the DMF) will be established by the respective
PMOs and become a part of the PPMS. The key indicators selected will be monitored at least
twice per year.

11. Project Review

91. During the initial 2 years of tranche 1 implementation, ADB will conduct review missions
at least twice annually to (i) assess the effectiveness of the implementation arrangements and
propose needed adjustments; (ii) monitor implementation progress relative to the agreed
implementation schedule, identify constraints to progress, and define an action plan to improve
implementation; (iii) ensure that ADB safeguards and other conditions set out in the grant
agreement and financial framework agreement are complied with; and (iv) assess preparatory

44
Reports prepared by the MEW PMO will incorporate reports from the PIOs (Mazar-i-Sharif and Taloqan) and the
PDF relating to the progress of forward planning and implementation of the overall Investment Program.
45
In addition, the PMOs will prepare other such information and reports relating to both tranche 1 activities and the
Investment Program in total as ADB may reasonably request.
46
It is envisaged that the MAIL PMO’s completion report will be prepared in the fourth year of the implementation
period for tranche 1 activities, and the MEW PMO’s report in the fifth year.
47
The MAIL PMO’s completion report should also provide full detail regarding the status of restructuring of NVDA and
the effectiveness of the newly established entities to manage and provide O&M for the main canal.
48
This will be revised and updated upon arrival of the implementation consultants.
24

work for subsequent investment packages to avoid delays in submission of subsequent PFRs.
ADB will field a comprehensive midterm review mission for the tranche 1 investment package 2
years following grant effectiveness, which will assess performance, identify problems affecting
project implementation, and reach formal agreement with the Government of Afghanistan on
any changes in the scope of work or to implementation arrangements required to address the
identified shortfalls. The full terms of reference of the mid-term review mission will be developed
jointly by MOF, MEW, MAIL, and ADB during the second year of implementation. Prior to
fielding the mission, MEW and MAIL will each submit detailed progress reports relative to their
respective components. Project review arrangements for subsequent tranches of the Investment
Program will be similar to those for tranche 1 activities.

IV. PROGRAM BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS

A. Economic and Financial Benefits

92. Economic benefits. For the NBD and NVDA components, the principal benefits will be
increased agricultural production. More dependable water supply and improved water
management made possible by infrastructure rehabilitation and upgrading and development of
WUAs and RBAs will support expanded irrigated areas, increased cropping intensities, and
improved crop yields. For the NBD component, the Project will directly benefit about 84,000 ha
in the lower Balkh River Basin irrigation systems, and in particular the 39,200 ha within canals
controlled by the Bangala weir. About 20,000 ha will benefit from the NVDA improvement
component.

93. Impacts will depend on the location of a farm within the irrigation system. The tail areas
are expected to benefit relatively more than the head and middle reaches, because the
improved water supply availability and reliability will be relatively greater in the tails. For the
NBD component, an increase of 12.5% in cropped area is expected in the tail reaches and 5%
to 9% in the head and middle reaches of the Aqcha, Charboloc, and Faizabad canals below the
Bangala weir. Yield increases are expected to average 7% in the tail reaches of these canals
but only 3% in the head and 5% in the middle reaches. The impacts arising from the
rehabilitation and upgrading of main canal structures will range from 2% to 5% for increases in
cropped area, with yield increases of 1% to 2%. These benefits will be realized throughout the
irrigation system.

94. For private farms in the NVDA areas, increases in cultivated area will vary from only 4%
in canal head reaches to 10% at the tail end of canals, while average crop yields are expected
to increase by between 2% and 5%. The overall increase in cropped area will be 7.3%. In the
state farm areas, the cropping intensity, which is relatively low, is expected to increase by
around 25%, with a greater diversity of crops than at present, and crop yields will increase by an
average of 10%. These changes will be facilitated by improved incentives for farmers that lease
land on the state farms.

95. The flood management component will provide protection from floods and erosion for
about 5,000 ha of cultivated land along the south bank of the Amu Darya River at Yangi Qala,
as well as for the town of Yangi Qala. The embankment along the river and the head regulator
at Yetim Tapa will prevent flood damage to crops, livestock, villages and other rural
infrastructure. In the areas along the Amu Darya River, the Project will protect households from
losses, but will not have a direct impact on the household incomes.
 25

96. The economic internal rate of return (EIRR) is estimated to be (i) 16.9% for NBD, (ii)
18.4% for NVDA improvement, and (iii) 20.4% for flood management. The overall project EIRR
is 18.0%. These results are robust to changes in key variables. For the Project, the switching
value for a decrease in benefits is -23% and for an increase in investment costs is +32%.

B. Household and Poverty Reduction Impacts

97. The Project will have a positive impact on household incomes, food security and poverty
reduction in project areas. The overall demand for farm labor will increase due to the expanded
irrigated area and increases in cropping intensity. This is expected to amount to about 600,000
labor days per year (5.9 days per ha) for NBD and NVDA combined. The financial impact of the
project on farm households will vary by location. For households in the tail reaches of canals
below the Bangala weir, where the Project will have the greatest impact, the increase in
household income for a 1 ha farm will be $93 per year, or 27% of present estimated income. In
the head reaches of these canals (where current water supplies are more assured and current
incomes higher), the expected increase is $172 per year, or 8.2% of present income. The
impact of the rehabilitation and upgrading of main canal structures on household incomes is
expected to vary from 2.3% ($49) in the head reaches to 6.2% ($21) in the tail reaches. In the
NVDA subproject area, where current incomes are higher than in the Northern Basins because
of the greater production of fruit and vegetables, increases in farm household incomes for a 1
ha farm will be between $406 per year (an increase of 8.6%) in the head reaches and $461 per
year (an increase of 21%) in the tail reaches. Many households have small holdings of less than
1 ha, and when these are located on head and middle reaches, the project will enable some
(and possibly many) households to move above the poverty line. While the impact on poverty in
the tail reaches may be less in absolute terms, it will be larger in relative terms.

98. Program benefits. The economic and financial benefits of interventions under
subsequent tranches of the Investment Program should be similar in scope and magnitude to
those identified under the first tranche. Benefits from development of new infrastructure will
have the added impact of expanding the production base and providing irrigation to farmers who
have never enjoyed this opportunity. An important benefit from the Investment Program is that
more reliable irrigation, especially for second-season cropping, will encourage production of
diversified and higher-value crops that provide alternatives to poppy production. Other benefits
that are not quantified stem from institutional strengthening and capacity development for RBAs,
RBCs, and WUAs, which will result in greater water use efficiency and higher productivity. The
improved water management and possible development of water storage through the
Investment Program will help support climate change adaptation.

C. Social Safeguards

99. Involuntary resettlement. A land acquisition and resettlement framework (LARF) was
prepared based on the laws of Afghanistan and in accordance with ADB’s Involuntary
Resettlement Policy (1995) and Operations Manual 49 and endorsed by the Government. The
LARF has established a process for (i) resettlement categorization of project activities as A, B,
or C based on ADB guidelines; (ii) assessment of required resettlement activities; (iii)
preparation of any required resettlement plans or other safeguards documents; (iv)
compensation to affected persons prior to commence of civil works; and (v) grievance redress
among other resettlement activities. The safeguards teams in the PMOs will be responsible for
all resettlement activities and prepare any required resettlement plan(s). The categorization

49
ADB. 2008. Involuntary Resettlement. Operations Manual. OM F2/BP. Manila.
26

form and draft resettlement documents for subsequent tranches will be submitted for ADB
approval with each PFR. The PMO and implementation consultants and/or contractors will
update resettlement plans during detailed design. Resettlement plans will be implemented only
after they have been formally approved by the IA and cleared by ADB. No notice to proceed will
be given for civil works until the resettlement plan is fully implemented in the construction area.
The PMO will monitor the resettlement plan implementation and report to ADB. In addition, an
external monitoring agency will be engaged by the PMO and will have responsibility for (i)
confirming that any required land acquisition and resettlement activities have been completed
prior to commencement of civil works, (ii) assessing implementation, (iii) progress reporting, and
(iv) assessing the impact of the land acquisition and resettlement activities. The external
monitoring agency findings and quarterly reports will be filed independently with the EA, IA(s),
and ADB, and relevant information may be included in PMO reporting. A nongovernment
organization may be engaged as required to support the PMO with the preparation and
implementation of resettlement activities. The LARF will ensure that women receive due
compensation for losses, and that women who are de facto household heads are clearly listed
as beneficiaries for compensation. The Government of Afghanistan has agreed to pay
resettlement compensation costs.

100. Tranche 1 has been categorized as category B for resettlement. The NBD component
will require some land acquisition that may impact up to five families, but no relocation is
required. The flood management component requires compensation for 19 families that are
currently farming in the area of the proposed protective embankment. Short land acquisition and
resettlement plans (SLARPs) have been prepared for the affected persons. A summary of the
LARF is found in Appendix 14 and the full LARF and SLARP are in Supplementary Appendix C.

101. Indigenous peoples. The tranche 1 project has been classified as category C. The
tranche 1 project areas are inhabited by different ethnic groups. The socioeconomic features
and level of vulnerability of these people do not fit with the characteristics defined by ADB's
Policy on Indigenous Peoples (1998). The impact of subsequent tranche projects on indigenous
peoples will be categorized through the initial poverty and social assessment (IPSA) screening
and indigenous peoples categorization followed by appropriate actions as indicated in the
approved LARF. Specific actions favorable to indigenous peoples will be included in the land
acquisition and resettlement plan or in the specific PFR document for projects categorized as B
in terms of indigenous peoples impact. Projects undertaken as part of future tranches will avoid
negative impacts on indigenous peoples. If a project under a future tranche is classified as
category A with respect to indigenous peoples impacts, an indigenous peoples development
plan will be prepared in accordance with ADB's Policy on Indigenous Peoples. Any required
documents relating to indigenous peoples will be attached to the PFR.

102. Gender. The project's gender analysis indicated that the first tranche interventions will
not create significant adverse or beneficial gender impacts that differ from the status quo. The
analysis also indicated that the Investment Program would have limited entry points for gender-
related activities, because the role of women in water resources management and irrigation is
not significant. Other concerns that do affect women—such as the creation of income
generation activities (poultry, animal husbandry, carpet making, handicrafts, etc.)—are not part
of this project, and no impacts related to these issues are anticipated. However, in an effort to
address gender-related concerns associated with the Investment Program, the project will
improve access sites at irrigation canals where women traditionally gather to wash clothes and
collect water. Under the project, the gender specialist will work with the WUAs and community
development councils to solicit views from women on the design and location of the access
points. This intervention will be scaled up in subsequent tranches that also have irrigation-
 27

related activities. The gender specialist for the NBD component will prepare options to introduce
additional gender interventions for tranches 2 and 3.

D. Environmental Impacts

103. An EARF and cumulative impact assessment were prepared for the Investment Program
following the Government’s existing environmental laws and regulations and ADB’s
Environmental Policy (2002). The EARF lays out the procedures and provides guidance for
environmental due diligence under the Investment Program. Environmental capacity
development for the Investment Program will be supported through the implementation
consultants’ environmental specialist, who will be part of the safeguard team in the PMOs. The
PMOs, with support from the consultants, will be responsible for environmental monitoring and
implementation of the environmental management plans (EMPs). For future tranches, initial
environmental examinations (IEEs), or environmental impact assessments, if required, will be
prepared following the EARF and included in the appraisal report, with due public consultation
and information disclosure. The finalized IEEs will be submitted with the PFR for ADB approval.

104. The IEE, including an EMP and summary IEE, was prepared for the first tranche, which
is classified as category B in terms of environmental impacts. The Project should have positive
impacts on the environment including improved water-use efficiency, protection of assets from
river bank erosion and flooding, and better land-use management. Potential negative impacts
include (i) erosion of flood protection infrastructure; (ii) dust, noise, and waste during
construction; (iii) flood flow displacement due to headworks operation; and (iv) possible
degraded surface and groundwater quality and public health due to increased use of agricultural
inputs. These will be mitigated by (i) development of a contractors’ environmental management
plan based on the EMP, with monitoring benchmarks; (ii) operation of infrastructure to minimize
flood damage; (iii) WUA training for improved water management; and (iv) RBA capacity
building related specifically to developing and implementing technically, socially, and
environmentally sound operational policies and procedures. All of the environmental due
diligence documents for the first tranche and Investment Program are found in Supplementary
Appendix D.

E. Risks and Assumptions

105. Security. Security has been declining in Afghanistan over the last 3 years and this could
delay or in some cases prevent successful implementation of interventions under the program.
However, experience operating in Afghanistan has provided lessons to mitigate security risks.
Project implementation will be supported by adequate security resources, including for
communications, transport and physical reinforcement of facilities. Security plans will be
developed for each activity with support from the Afghanistan Resident Mission security team;
private and government security personnel will be engaged as required.

106. Capacity. MEW and MAIL both require technical, project management and financial
management capacity development. Previous experience has shown that counterpart capacity
is generally inadequate to support project implementation, meaning adequate consultant input is
required to ensure effective and timely project implementation. Formal and on-the-job capacity
development activities will take place in parallel with project implementation and counterpart
staff will assume more responsibility as capacity is developed. The long-term partnership under
the MFF modality helps support this approach.
28

107. Operations and maintenance sustainability. The sustainability of improved

infrastructure and associated project benefits will depend on adequate O&M capacity and
financing. To mitigate the risk of inadequate O&M, the project includes (i) O&M training and
planning for MEW and MAIL staff; (ii) interim project O&M funds, with the assurance that the
Government will allocate adequate recurrent budget resources for O&M; and (iii) WUA training
in O&M and development of approaches to ensure their financial sustainability.

V. ASSURANCES

108. In addition to the standard assurances, the Government has agreed to the following
assurances, which have been largely incorporated into the FFA presented to the Board and will
be incorporated, as appropriate, into the legal documents for projects financed under the
Investment Program.

109. Policy dialogue. The Government will keep ADB informed about its policies and
projects related to the water resources sector that are expected to materially affect the financial
viability of each project under the Investment Program, and in particular issues that will affect
the implementation, management and O&M of existing assets and planned sector development.

110. Nangahar Valley Development Authority restructuring. Prior to the commencement

of civil works for the rehabilitation of the main canal of NVDA, MAIL will have endorsed a plan
for the corporatization of NVDA that includes a business plan for operation of core activities.
The plan will also define a structure that supports an irrigation service agency for the
sustainable O&M of the main canal, and secondary and tertiary areas of command still under
NVDA-managed irrigation, with requisite funding to support recurrent costs.

111. Project selection criteria and implementation arrangements. MEW will ensure that all
projects to be financed under the MFF meet, to the satisfaction of ADB, the agreed selection
criteria and that all projects are properly monitored to the satisfaction of ADB. The agreed
selection criteria are presented in Appendix 6.

112. Program and project directors and related offices, facilities and counterpart staff.
Within 3 months of grant effectiveness, (i) MEW and MAIL will appoint program and project
directors acceptable to ADB; (ii) MEW will establish a PMO in Kabul and MAIL a PMO in
Jalalabad, together with all requisite counterpart staff; and (iii) MEW will establish the PDF with
all requisite counterpart staff. MEW will also establish PIOs in Mazar-i-Sharif and Taloqan within
3 months of grant effectiveness and with all requisite counterpart staff within 4 months of grant
effectiveness. The Government will ensure that counterpart staff for the PMOs and PIOs are
supplied according to the agreed implementation arrangements and serve on a full-time basis.
The Government will ensure that staff for all positions on projects financed under the MFF are
competitively selected and remunerated, free and clear of any restrictions applicable to
Afghanistan’s public servants.

113. Counterpart staff. MEW and MAIL will ensure that counterpart staff will be provided as
required (within reasonable levels identified during preparation of the Project) to support
effective and timely implementation of all activities under the Project.

114. Investment program facilities. MEW and MAIL will ensure that office space with utilities
and other resources will be provided as required (within reasonable levels identified during
preparation of the Project) to support effective and timely implementation of all activities under
the Project. This includes office space for implementation consultants and support staff.
 29

115. Operation and maintenance. MEW and MAIL commit to ensuring the O&M of
infrastructure built under the Investment Program. To ensure RBAs have the resources to
undertake O&M activities, the Government will commit to providing O&M budgets to RBAs for a
specified timeframe. In the longer term, the Government commits to developing policies and
procedures for the collection of fees for water service delivery as provided for under the Water
Law to support O&M of irrigation and water resources infrastructure. For structures maintained
by WUAs (normally secondary and tertiary canal structures), the Government will ensure
adequate ongoing support to the WUAs to sustainably manage the O&M.

116. Auditing and accounting. MEW and MAIL will ensure that separate project accounts and
records are maintained in a timely manner to adequately identify the use of tranche proceeds in a
manner (and in accordance with details) that may be specified in each financing agreement for
relevant tranches. Audited financial reports of MFF-financed activities will be submitted to ADB
within 6 months of the end of each fiscal year.

117. Financial governance. MEW and MAIL will ensure that their respective internal controls
are in accordance with the National Accounting Standards.

118. Environment. MEW and MAIL shall ensure that (i) the Project is designed and
implemented, and the Project facilities constructed and operated, in accordance with all
applicable laws and regulations of the Recipient and ADB's Environment Policy (2002); (ii) the
design and implementation of the Project strictly follows the mitigation measures set forth in the
IEE for the Project, including the EMP and the EARF; (iii) mitigation measures identified in the
EMP, if any, are incorporated in bidding documents and related contracts under the Project; (iv)
bidding documents include a reference to the EMP to ensure that environmental issues are
covered comprehensively; and (v) an environmental performance report is submitted to ADB on
a semiannual basis during the project implementation period in the format and containing such
details as required by ADB. If there is any discrepancy between the Recipient’s relevant laws
and regulations, and the requirements of ADB's Environment Policy, ADB's policy shall apply.

119. Land acquisition and resettlement. MEW and MAIL shall ensure that (i) the Project
is designed and implemented in accordance with the Recipient's relevant laws and regulations,
the requirements of ADB's Policy on Involuntary Resettlement (1995), and the LARF as agreed
with ADB; (ii) all land and rights-of-way required for project implementation are made
available in a timely manner; (iii) where land acquisition and resettlement are necessary, the
related works will commence and contractors will be mobilized only after the related land
acquisition and resettlement plan (as approved by ADB) has been disclosed to the affected
people and properly carried out; and (iv) the activities of all relevant contractors are in
compliance with the requirements of the related land acquisition and resettlement plan. If
there is any discrepancy between the Recipient's relevant laws and regulations, and the
requirements of ADB’s Policy on Involuntary Resettlement, ADB's policy shall apply. The
Recipient shall engage an external agency or a nongovernment organization acceptable to ADB
to conduct the external monitoring of the resettlement process and the evaluation of relevant
impacts, with reports from the independent monitoring agency to be submitted to ADB on a
semiannual basis.

120. Indigenous peoples. MEW and MAIL shall ensure that the Project and its
implementation do not negatively affect indigenous peoples in the territory of the Recipient. In
the event that any such indigenous people are negatively affected or otherwise involved in any
of the project activities, the Recipient shall take all necessary actions that are required by, or will
otherwise comply with, ADB's Policy on Indigenous Peoples (1998).
30

121. Execution of civil works contracts. MEW and MAIL will ensure that, subsequent to
award of civil works contract under any project, no section or part thereof under the civil works
contract will be handed over to the contractor unless compliance can be demonstrated with (i)
applicable provisions of the land acquisition and resettlement framework and plans, including the
timely delivery of compensation to affected people; (ii) indigenous peoples development framework
and indigenous peoples development plans; and (iii) the EARF and EMPs. Any changes to the
location, route, alignment, or environment impacts resulting from changes introduced during
detailed design of related projects will be subject to prior approval by ADB and MEW or MAIL, in
accordance with the project selection criteria and procedures specified in the FFA. MEW and MAIL
will ensure that the infrastructure rehabilitated or newly developed under the Investment
Program will comply with technical specifications of the design.

122. Gender. MEW and MAIL will follow the principles of ADB’s Policy on Gender and
Development (1998) during the implementation of each project, including taking all necessary
actions to encourage women living in the project area to participate in planning and implementing
project activities. The EA and IAs will monitor the Project’s effects on women through, where
relevant, gender-disaggregated data collected pursuant to the M&E system referred to in the
PPMS.

123. Labor and health standards. The Government shall ensure that all contractors under
the Investment Program: (i) comply with applicable labor laws of Afghanistan; and (ii) use their
best efforts to employ women and local people negatively affected by, or living in the vicinity of,
the project area. Afghanistan shall also ensure that: (i) each civil works contract contains
provisions prohibiting (a) the use of child labor and (b) differentiation in wages between male
and female workers for work of equal value; (ii) such contract also includes mandatory
provisions on health, sanitation, and appropriate working conditions; and (iii) the relevant
contractors and their workers observe local protocols concerning acceptable behavior toward
the local population. Afghanistan shall further ensure that each implementing agency, with the
assistance of relevant local authorities, causes the contractors under the relevant project,
subproject, or component to distribute to their workers information on the risks of sexually
transmitted diseases, including HIV/AIDS.

124. Security. Afghanistan shall (i) provide overall security and protection in the relevant
areas where projects, subprojects, and components will be implemented to ensure the smooth
and uninterrupted implementation of the Investment Program; (ii) be responsible for the removal
of mines and unexploded ordnance in such areas; and (iii) cause and ensure that each of the
contractors under the projects, subprojects, or components prepares, and includes as part of
the contract, a security plan together the required budget that will ensure the smooth and
uninterrupted implementation of the relevant activities contemplated under the contract.

VI. RECOMMENDATION

125. I am satisfied that the proposed multitranche financing facility would comply with the
Articles of Agreement of the Asian Development Bank (ADB) and recommend that the Board
approve:

(i) the provision of grants under the multitranche financing facility in an aggregate
amount not exceeding $303,300,000 equivalent from ADB’s Special Funds
resources on such terms and conditions to be determined in accordance with then
applicable policies relating to allocation of and eligibility for such resources;
 31

(ii) the administration by ADB of a grant not exceeding $3,300,000 equivalent to be

provided by the Government of the United Kingdom; and

(iii) the administration by ADB of the cofinancing to be provided by development

partners in the form of loans and grants as described in para. 56 of this Report;

and such other terms and conditions as are substantially in accordance with those set forth in
the Framework Financing Agreement presented to the Board, all to the Islamic Republic of
Afghanistan for the Water Resources Development Investment Program.

Haruhiko Kuroda
President

31 August 2009
32 Appendix 1
DESIGN AND MONITORING FRAMEWORKS
Table A1.1: Multitranche Financing Facility
Design Performance
Summary Targets/Indicators
Impact
Increase agricultural A 5% or greater increase in
productivity the productivity of
rehabilitated irrigation areas
in target areas by 2019.
Outcome
Improved water Rehabilitation and
resources upgrading of irrigation
management systems serving at least
150,000 ha by 2019.a
At least 30,000 ha along
Amu Darya River with
significantly reduced flood
risk by 2019.a
At least 15,000 hectares of
new irrigated area
developed.
WUAs and RBA(s) in
Investment Program project
areas managing irrigation
and water resources
according to the National
Water Law, and (with
minimal external
assistance) providing O&M
through sustainable
financial arrangements,
ongoing through 2019.
Women's time for collecting
water reduced by 20%.
Data Sources/Reporting Assumptions and
Mechanisms Risks
Assumption
PPMS quarterly report Development of water
resources and irrigation
Review missions from remains a government
ADB headquarters and priority
AFRM
MEW reporting
Project completion report
Assumptions
PPMS quarterly report O&M strategies and
financing options
Review missions from developed by the
ADB headquarters and project are
AFRM implemented by
Government and users.
MEW reporting
Government provides
WUA reporting adequate and timely
resources to sustain
operations of RBAs and
flood management unit.
Farmers are receptive
to participation in
system improvements
and WUAs.
Risk
Unstable security
environment.
 Appendix 1 33

Design Performance Data Sources/Reporting Assumptions and

Summary Targets/Indicators Mechanisms Risks
Outputs
(Physical) Assumptions

Rehabilitation and Rehabilitation and
upgrading of upgrading of irrigation
traditional and modern systems (e.g. weirs, intake
irrigation infrastructure and main canal) and
improvement of the
associated secondary and
tertiary irrigation structures,
including Imam Sahib canal
in Northern Basins; and
comprehensive
rehabilitation and upgrading
in lower Balkh irrigation
system completed. Ongoing
through 2019.a
PPMS quarterly report Quality consultants are
available and recruited
Review missions from and mobilized in a
ADB headquarters and timely manner.
AFRM
PMO and PIO staff can
MEW reporting provide adequate
support.
WUA reporting
Projects with adequate
feasibility studies to
support new
investments can be
prepared.

At least 300 improved Risks

access points for women to
collect canal water, ongoing Unstable security
through 2019. environment.

Development of new Construction of new water Contracting

water resources and resources and irrigation responsiveness and
irrigation infrastructure projects (e.g., dams or capacity is inadequate
diversion weirs, intakes, for successful
main canals, secondary completion of civil
and tertiary structures and, works.
possible associated power
facilities) completed by
2019.a

Development of flood Construction of flood

and bank protection protection, including at least
civil works two embankments, groins
or other flood infrastructure
along the Amu Darya River
by 2019.

Gabions and other bank

stabilization works
constructed protecting at
least 10 km of riparian land.
(Nonphysical)

Institutional Sustainable and effective

strengthening management and O&M,
including O&M financing for
Policy development water resources and
irrigation infrastructure
34 Appendix 1

Design Performance Data Sources/Reporting Assumptions and

Summary Targets/Indicators Mechanisms Risks
Capacity developed under the
development, and Northern Basins RBAs by
training 2019.

Northern Basins River

Basin Council constituted,
with a training program and
adequate support to fulfill
its mandate according to
the national Water Law by
2019.

WUA program delivered

that (i) legally registers
WUAs, (ii) provides training
for management and O&M
of the irrigation system, and
(iii) develops plans and
procedures for financial
sustainability of the WUAs
throughout the Northern
Basins and Investment
Program areas by 2019.

Management and O&M

plans with sustainable
financing mechanism
developed and
implemented for new and
rehabilitated irrigation and
water resources
infrastructure developed
under the Investment
Program.

A flood management unit in

MEW with a flood policy,
analytical and planning
capacity and investment
plan being implemented by
MEW staff with limited
external support, ongoing
through 2019.

Project management Project management

capacity and arrangements
established under project
management offices to
effectively manage
subsequent tranche
activities.
 Appendix 1 35

Design Performance Data Sources/Reporting Assumptions and

Summary Targets/Indicators Mechanisms Risks
Tranches 2 and 3 managed
according to their
implementation schedules.

A PPMS established within

6 months of grant
effectiveness.

Audit reports submitted

within 6 months for each
fiscal year.

PMOs operational with

minimal support from the
consultants by 2017.
Activities with Milestones Inputs

Tranche 1 ADB: $300,000,000;

1.1 Establish PMOs and PIOs for tranche 1 by February 2010. review missions and
1.2 Recruit implementation consultants for all four components—advance action guidance from
will be used and consultants should be mobilized by July 2010. headquarters and
1.3 Start the feasibility study for subsequent trances and Helmand Basin Studies resident mission staff
(by the PDF) by second quarter of 2011, and complete by 2012.
1.4 Start the detailed design and preparation of bidding documents for Government:
subsequent tranches by the first quarter of 2013, and complete by the second counterpart support for
quarter of 2014. project implementation
and facilities
2.1 Contract the works and complete the construction of Bangala Weir and
associated works, and Samarkandian and Nahre Shahi Weir. Start within 7 Cofinancing: $3.3
months of grant effectiveness and complete by year 3 of the program. million in cofinancing
2.2 Complete the rehabilitation and upgrading of all main canal structures in from the Government of
Lower Balkh River Basin by year 3 of the project. the United Kingdom
2.3 Capacity building program developed and executed for the Northern Basins
River Basin Agency. Start in July 2010 and continue through year 4 of the Beneficiaries: in-kind
program. O&M; input into project
and infrastructure
3.1 Prepare detailed designs for and supervise construction of flood protection design
works in Yangi Qala and for Yatim Tapa irrigation systems. Start in July 2010 and
complete by year 4 of the program.
3.2 Prepare designs for and supervise implementation of bank protection works in
Kundoz and Talocan provinces where feasible. Start in May 2010 and complete
by year 4 of the program.
3.3 Develop and execute a flood management capacity development program for
MEW staff in Kabul. Start by the second quarter of 2012 and complete by year 4
of the program.

4.1 Prepare detailed designs for and supervise construction of rehabilitation and
upgrading of the NVDA main, secondary, and selected tertiary canals. Start in
July 2010 and complete by year 4 of the program.
4.2 Prepare a draft institutional reform and management plan for NVDA. Start in
October 2010, complete within 1 year, and secure endorsement by MAIL prior to
commencement of NVDA rehabilitation civil works.
36 Appendix 1

Activities with Milestones

Tranche 2 (Expected commencement date is January 2014).

b
1.1 Recruit implementation consultants for all components by July 2014.
b
1.2 Award civil works contracts for all components by September 2014.
b
2.1 Civil works for all components completed by second quarter of 2017.
b
2.2 Capacity building program for all components completed by 2017.

Tranche 3 (Expected commencement date is July 2015)

1.2 Recruit implementation consultants for all components by December 2015.
1.2 Award civil works contracts by 2015.

2.1 Civil works for all components completed by March 2019.

2.2 Capacity building program for all components completed by March 2019.
ADB = Asian Development Bank; AFRM = Afghanistan Resident Mission; ha = hectares; km = kilometers; MAIL =
Ministry of Agriculture, Irrigation, and Livestock; MEW = Ministry of Energy and Water; NVDA = Nangahar Valley
Development Authority; O&M = operation and maintenance; PDF = program development facility; PIO = project
implementation office; PMO = project management office; PPMS = project performance management system; RBA =
river basin agency; RBC = river basin council; WUA = water users association.
a The exact outputs of the multitranche financing facility Investment Program are not known in advance. The quantities
in this design and monitoring framework (DMF) are indicative. The impact and outcome indicators are cumulative for
the Investment Program. The output indicators for this DMF are for tranches 2 and 3 only while the outputs for
tranche 1 are reflected in the dedicated tranche 1 DMF.
b Tranches 2 and 3 comprise the following indicative investments: (i) extension of flood embankment in Yangi Qala and
Darqad, (ii) construction of Imam Sahib headworks and canal rehabilitation, (iii) flood protection works for the
Sherawan Irrigation intake, and (iv) irrigation and water resources infrastructure throughout the Northern Basins area.
Central and West Asia Department

Table A1.2: Tranche 1
Design Performance Targets /
Summary Indicators
Impact
Increase agricultural At least a 5% average
productivity in Balkh, increase in the agricultural
Jazawan, Nanghar, productivity of irrigation
Kunduz, and Takhar areas rehabilitated under
provinces the project by 2015.
Outcome
Improved water Rehabilitation and
resources upgrading of irrigation
management systems serving at least
100,000 ha by 2015.
At least 5,000 ha and Yangi
Qala town have significantly
reduced flood risk by 2014.
WUAs and Northern Basin
RBA sustainably managing
irrigation and water
resources according to the
National Water Law, with
declining external
assistance and providing
O&M with sustainable
financial arrangements by
2014.
Women's time spent
collecting water reduced by
20%.
Outputs
(Physical)
Rehabilitation and Construction of Bangala
upgrading of Weir and rehabilitation of
traditional and Samarkandian and Nari
modern irrigation Shahi Weirs by 2014.
infrastructure
Rehabilitation and
upgrading completed for
85% of main canal
structures (70,000 ha) by
2014.
Appendix 1 37
Data Sources/Reporting Assumptions
Mechanisms and Risks
Assumption
PPMS quarterly reporting Development of water
resources and irrigation
Review missions from remains a government
ADB headquarters and priority
AFRM
MEW, RBA, and NVDA
annual reporting
Project completion report
Assumptions
PPMS quarterly reporting O&M strategies and
financing options
Review missions from developed by the
ADB headquarters and project are
AFRM implemented by the
Government and water
MEW RBA and NVDA users.
annual reporting.
Government provides
adequate and timely
resources to sustain
operations of RBAs and
flood management unit.
Farmers are receptive
to participation in
system improvements
and WUAs.
Risk
Unstable security
environment.
Assumptions
PPMS quarterly reporting Quality consultants are
available and recruited
Review missions from and mobilized in a
ADB headquarters and timely manner.
AFRM
PMO and PIO staff can
MEW RBA and NVDA provide adequate
annual reporting support.
WUA reporting
38 Appendix 1

Design Performance Targets / Data Sources/Reporting Assumptions

Summary Indicators Mechanisms and Risks
Improvement completed for Risks
15% of secondary and
tertiary structures (12,000 Unstable security
ha) by 2014. environment

The NVDA irrigation system Contracting

is providing water with responsiveness and
design discharge in 100% capacity is inadequate
of the command areas for successful
(20,000 ha) in Nangahar completion of civil
province by 2013. works.

At least 150 improved water

access points in the lower
Balkh Basin and NVDA
irrigation system by 2014.

Development of Completed flood

flood protection and embankment in Yangi Qala
bank erosion civil and head regulator for
works Yetim Tapa irrigation
system in Takhar Province
by 2013.

Gabions and other quick

gestation works constructed
to protect 3 km of banks
from erosion where
interventions are in place in
Kundoz and Takhar
provinces by 2013.

(Nonphysical)

Institutional A capacity development

strengthening program based on the
mandate of the Water Law
Policy development for the Northern Basin RBA
completed by 2014.

Capacity A sustainable management

development, and and financial plan for RBA
training O&M drafted by 2014.
Operational rules for the
Balkh river weirs adopted
by 2014.

A water resources
management strategy and
a master plan for the
Northern Basins RBA
prepared by 2013.

WUA program delivered

that (i) legally registers
WUAs, (ii) provides training
 Appendix 1 39

Design Performance Targets / Data Sources/Reporting Assumptions

Summary Indicators Mechanisms and Risks
for management and O&M
of the irrigation system, and
(iii) develops plans and
procedures for financial
sustainability of the WUAs
in the Lower Balkh River
Basin and NVDA irrigation
by 2014.

A National Flood
Management Program in
MEW initiated with a 5-year
plan for its development, by
2013.

Plan adopted for an

irrigation service delivery
agency that sustainably
manages and provides
O&M for the NVDA
irrigation system, by 2013.

NVDA institutional reform

and business plan prepared
by 2011.

Project Management Establishment of PMOs for

and Development MEW and MAIL, and PIOs
for MEW to support project
activities. PMOs and PIOs
operational with minimal
support from the
consultants prior to 2013.
Tranche 1 executed
following the proposed
implementation schedule.

A PPMS established within

6 months of grant
effectiveness.

Audit reports submitted

within 6 months for each
fiscal year.

PDF in MEW to prepare

new projects and MFF
tranches. Feasibility
studies, safeguards and
detailed design prepared by
the PDF to support tranche
2 (by year 3 of the
Program), and to support
tranche 3 (by year 5 of the
Program).
40 Appendix 1

Activities with Milestones Inputs

1.1 Establish PMOs and PIOs for tranche 1 by February 2010. ADB: $86.6 million;
1.2 Recruit implementation consultants for all four components—advance review missions and
action will be used and consultants should be mobilized by July 2010. support from
1.3 Start Helmand Basin Master Plan in the first quarter of 2010 and complete headquarters and
by the third quarter of 2011. resident mission staff
1.4 PDF to start the feasibility study for subsequent tranches by the second
quarter of 2011 and complete by 2012. Government:
1.4 Start the detailed design and preparation of bidding documents for counterpart support for
subsequent tranches by the first quarter of 2013, and complete by the second project implementation,
quarter of 2014. RBAs and flood
management unit and
2.1 Civil works and construction of Bangala Weir and associated works, and facilities
Samarkandian and Nahre Shahi Weir—start in September 2010 and complete
by year 4 of the program. Cofinancing: $3.3
2.2 Complete the rehabilitation and upgrading of all main canal structures in million from the
Lower Balkh River Basin by year 3 of the project. Government of the
2.3 Develop and execute the capacity building program for the Northern Basins United Kingdom
River Basin Agency—initiate in July 2010 and continue through year 4 of the
program. Beneficiaries: $1.9
million for O&M in-kind
3.1 Prepare detailed designs for and supervise construction of flood protection support; input into
works in Yangi Qala and for Yatim Tapa irrigation systems. Start in July 2010 project and
and complete by year 4 of the program. infrastructure design
3.2 Prepare designs for and supervise implementation of bank protection works
in Kundoz and Takhar provinces where feasible. Start in May 2010 and
complete by year 4 of the program.
3.3 Establish a flood management unit at MEW and develop and execute a
flood management capacity development program. Start by the second quarter
of 2011; ongoing through year 4 of the program.

4.1 Prepare detailed designs for and supervise construction of the rehabilitation
and upgrading of the NVDA main, secondary, and selected tertiary canals. Start
in July 2010 and complete by year 4 of the program.
4.2 Draft an institutional reform and management plan for NVDA. Start in
October 2010 and complete within 1 year; secure endorsement by MAIL prior to
commencement of NVDA rehabilitation civil works.
ADB = Asian Development Bank; AFRM = Afghanistan Resident Mission; ha = hectare; MAIL = Ministry of Agriculture,
Irrigation, and Livestock; MEW = Ministry of Energy and Water; MFF = multitranche financing facility; NVDA = Nangahar
Valley Development Authority; O&M = operation and maintenance; PDF = program development facility; PIO = project
implementation office; PMO = project management office; PPMS = project performance management system; RBA =
river basin agency; RBC = river basin council; WUA = water users association.
 Appendix 2 41

PROBLEM TREE ANALYSIS

Effects Constrained economic growth, rural

unemployment, and poverty

Limited agricultural production and

Lack of storage and bulk
productivity due to low yields, limited Flood damage and water supply for municipal,
irrigated area, and underdevelopment of lost productivity industrial, and hydropower
high value crops

Core Arid climate with spatial and seasonal variation in precipitation and water resources resulting in
limited and unreliable irrigation and limited bulk water supply and uncontrolled flooding. This may
Problem be exacerbated by climate change.

Existing water resources, Water resources, Ineffective water

Causes irrigation, and flood irrigation, and flood resources, irrigation, and
infrastructure deteriorated infrastructure flood management at all
and in need of upgrading underdeveloped levels

Lack of asset management Lack of data and

planning and lack of quality project
operation and maintenance Weak knowledge base and
feasibility information lack of data
resources and capacity

Unclear international
Lack of watershed riparian rights / Lack of capacity, weak
management agreements institutions, and
inadequate resources for
integrated water resources
Lack of investment management at the
national and basin levels
Weak sector strategy with
limited prioritized
investment planning Lack of capacity, weak
institutions, and
inadequate resources for
MEW capacity weak for all irrigation system
aspects of sector planning management – both for
and project development, traditional and state-
implementation and managed systems
management, including
safeguards

Lack of capacity and

Weak local contracting resources for effective on-
capacity farm water management
and improved irrigation
technology and practices
Inefficient government
bureaucracy, e.g.
procurement procedures

Poor security

Source: Asian Development Bank.

42 Appendix 3

WATER RESOURCES SECTOR ANALYSIS, DEVELOPMENT STRATEGY AND ROAD MAP,

AND INVESTMENT PLAN

A. Road Map

1. Background

1. Sound management and development of water resources are vital for Afghanistan's
sustained economic growth, particularly in the agricultural sector. Agriculture employs about two
thirds of the population and comprises up to half of Afghanistan’s gross domestic product,
however, the contribution varies considerably with yearly climatic conditions. Irrigation is
necessary in most areas for reliable agriculture, and irrigated agriculture accounts for about
80% of all agricultural production. About 85% of Afghanistan’s population lives in rural areas
and are either directly or indirectly dependent on agriculture for their livelihoods. Development of
the agricultural sector, which requires improved access to irrigation, is essential for economic
growth, enhanced livelihoods, and poverty reduction.

2. However, irrigation and water resources infrastructure and the capacity and institutions
to manage and develop it have been severely degraded over the last 30 years. By the mid-
1970s, an area of almost 3 million hectares (ha) received some form of irrigation. Today, only
about 1.8 million ha receives irrigation due to the deterioration of irrigation systems from (i) civil
unrest and war, (ii) floods and droughts, (iii) breakdown of institutions responsible for managing
the systems and their operation and maintenance (O&M), and (iv) a lack of resources for O&M
and periodic rehabilitation.

2. Sector Vision

3. Afghanistan National Development Strategy. The Government of Afghanistan (the

Government) is addressing this situation through the Afghanistan National Development
Strategy (ANDS - approved in April 2009), which provides the framework and specific sector
strategies for the development of Afghanistan. 50 The ANDS established three pillars for
sustained growth: (i) security, (ii) governance, rule of law and human rights, and (iii) economic
social development. Development of water resources is given the highest priority under the
ANDS and its vision for the sector is "to manage and develop the country's water resources so
as to reduce poverty, increase sustainable economic and social development, improve the
quality of life for all Afghans and ensure and adequate supply of water for future generations."

4. The Asian Development Bank (ADB) Water Resources Development Investment

Program (the Investment Program) will increase the productivity of irrigated agriculture due to
improved water resources management through infrastructure development, capacity building,
and institutional strengthening. The Investment Program's outputs will include (i) physical
rehabilitation and upgrading of existing irrigation and water resources infrastructure; (ii) the
development of new infrastructure for irrigation, flood management, and water resources; (iii)
support to develop and implement improved institutional frameworks and policies for irrigation,
flood management, and water resources management; (iv) programs to strengthen line agencies,
O&M, and management practices; and (v) capacity development programs to ensure sustainable
outcomes.

5. The approach to the Investment Program is to develop projects that integrate physical
and nonphysical elements to address sector needs comprehensively and holistically, and

50
Islamic Republic of Afghanistan. 2008. Afghanistan National Development Strategy. Kabul (page 46).
 Appendix 3 43

achieve desired outcomes. This approach, combined with long-term ADB engagement through
the multitranche financing facility (MFF) modality, will provide the necessary support to
sustainably improve the performance and accelerate development of water resources in
Afghanistan.

3. Sector Challenges

a. Physical Challenges

6. Water Resources Availability. On an average per capita basis, Afghanistan receives

adequate precipitation, so that it should not be a water-scarce country. However, surface water
runoff is highly seasonal and very unevenly distributed. Over half of Afghanistan's water runoff
(much of it flood) flows into the Amu Darya River, which is expensive to develop, and it is far from
population and economic growth centers. Harnessing water resources when and where they occur
for productive use is a key challenge to develop the sector.

7. Degraded Infrastructure. Existing water resources and irrigation infrastructure in

Afghanistan has received inadequate O&M over the last 30 years and is extremely degraded.
Significant investment in rehabilitation and upgrade is required to restore existing infrastructure to
its full productive potential.

8. Lack of New Infrastructure. While Afghanistan has water resources that it can harness for
productive purposes, it has not invested in new water resources and irrigation infrastructure over
the last several decades. Substantial investment is needed to help Afghanistan bridge the gap from
years of stagnated economic development.

9. Floods and Bank Erosion. One impact of the unevenly distributed perception and runoff is
pervasive annual flooding and bank erosion, which cause damage to irrigation systems and leads
to the permanent loss of agricultural land, livestock, and rural infrastructure. In years of high
flows, the impacts are particularly acute with substantial damage and losses. The Ministry of
Energy and Water (MEW), which has primary responsibility for water resources, is currently
working to develop a flood management policy, yet need assistance and capacity development
to complete this as well as to put together a long-term plan and investment program for flood
management throughout all Afghanistan.

10. Transboundary Considerations. Over 95% of Afghanistan's water resources are in rivers
that flow into neighboring countries. This makes development of water resources more challenging
since coordination and agreements with riparian neighbors may be needed for their development.

11. Inefficient Water Resources Management. Since most of the irrigation in Afghanistan
(about 80%) is from traditional systems that are not engineered and constructed from rudimentary
materials, irrigation efficiency is low. The problem is exacerbated by their degradation over the last
decades. The lack of investment in new infrastructure has also hampered water use efficiency. Not
only are there technical constraints, but irrigation and water management practices need to be
improved at the system as well as the on-farm level. The sector would benefit significantly from
training and the introduction of more efficient irrigation technologies and management practices.
Tremendous scope exists to increase water use efficiency at all levels to ensure the most
productive use of all water resources.
44 Appendix 3

b. Nonphysical Challenges

12. Lack of Water Resources Knowledge Base. Effective water management,

rehabilitation and upgrading, and development of water resources and irrigation infrastructure
require quality data. A severe lack of surface and groundwater data, meteorological data, and
agricultural data among others exists constraining effective planning and management.
Monitoring capability is limited both from a lack of technical resources and human capacity to
manage data collection and analysis. A concerted effort is needed to ensure that that
measurement and monitoring systems and the institutions and capacity to use them effectively
are put in place to support sector development.

13. Capacity and Weak Institutions. Capacity is still weak across many aspects of project
preparation and management for water resources and irrigation in Afghanistan. The MEW has a
solid policy framework under the new Water Law and various sector strategies, however, it requires
substantial assistance to carry out its mandate and execute the sector strategies. After having
supported implementation of previous donor projects as well as receiving technical assistance
for capacity development, MEW's staff capacity to develop and manage water resources is
improving with regard to basic engineering and project management although external
assistance is still needed. However, strengthening MEW and its staff to carry out the new
challenges of creating and effectively managing River Basin Agencies (RBAs) as called for under
the new National Water Law will require a new approach and skills that do not exist in MEW.

14. Feasibility Studies and Investment Plan. Substantial work is being undertaken for
rehabilitation and upgrading of irrigation systems throughout Afghanistan, but little investment is
taking place to develop new infrastructure. Although potential projects exist, part of the
investment constraint is a lack of quality feasibility studies. MEW has contracted preparation of
feasibility studies to regional firms, however, many of the completed studies need additional
work on technical options, economics, safeguards, and other issues to bring them to a standard
that would support ADB investments.

15. MEW has a list of priority investments, yet it is not fully supported by objective selection
criteria or complete data and project information. However, even with good feasibility studies,
analysis is required to prioritize and sequence projects, especially in a river basin context,
where upstream developments can impact downstream projects. Additional work is required and
is ongoing to (i) develop better feasibility studies to support investment, and (ii) prioritize and
sequence investments as the basis of a comprehensive sector investment plan.

16. Operation and Maintenance (O&M) of Infrastructure. The Government has limited
funds and capacity for O&M of large water resources infrastructure. Donor funds and
Government general revenues can be used in the short term for recurrent costs however, a
longer term solution is required. Under the new Water Law, fees can be collected for water
delivery costs, and the Government is committed to developing tariff strategies for O&M funds to
reduce subsidies and achieve O&M sustainability. Developing and implementing these policies
will become more critical as new infrastructure is developed in the coming years. Since over
80% of irrigated area is from traditional systems, communities have been responsible for O&M
for hundreds of years. Yet, the strength of the traditional management has declined in recent
years. Support is required to build upon the traditional community management structures and
to establish water user associations (WUAs) under the Water Law. While O&M still remains a
challenge, opportunities and strategies are in place to address it on multiple levels.

17. Poppy Cultivation. Afghanistan currently produces over 90% of the world's opium and
poppy production and poses a huge social, political, and security challenge. Opportunities for
 Appendix 3 45

alternative livelihoods are required in rural areas to ease the reliance on the opium economy.
Improved access to irrigation, especially for higher value second season cropping, provides
enhanced incomes that blunt the strong economic incentives to grow poppy. At the same time,
assurances are required from communities receiving assistance that they will abstain from
poppy production.
4. Road Map
18. The road map is based on the ANDS strategy, which includes desired sector outcomes
and physical and nonphysical targets, as well as ADB sector analysis to guide the Investment
Program. Table A3.1 highlights the critical milestones for sector development along with
timelines. The ANDS strategy and the road map below includes long-term milestones and
although many of the activities may be planned to take place well into the future, this is likely the
most realistic scenario for Afghanistan.
Table A3.1: Road Map with Milestones for Water Resources and Irrigation
Objective Milestone Timeline Responsibility –
Implementation Support
Improved Water Resources Management
Improved institutional Approval of new National Water 2009– MEW
framework for irrigation Law completed
and water resources
Rules and regulations for the 2012 MEW with technical assistance
National Water Law drafted support from development
partners.
Environmental regulatory 2012 MEW, National Environmental
frameworks and management Protection Agency
services for water quality and
water resources management
Policy for flood management 2015 MEW with ADB support
drafted and approved
Climate change policy for water 2015 MEW with technical assistance
resources drafted support from development
partners.
Effective RBAs and RBCs Northern Basins, Amu Darya, 2014 MEW with support from ADB
and Sub-basin Agencies and Western Basins RBAs and and European Commission
and Sub-basin Councils RBCs established and all sub-
basins delineated
Staff recruited and trained for 2014 MEW with support from ADB
Northern, Amu Darya, and and European Commission
Western Basins RBAs and RBC
Revitalize the Helmand 2013 MEW with support from ADB
Arghandab Valley Association and other development
with the intent for it to become partners
the Southern Basins RBA
RBAs and RBCs for all of 2016 MEW with support from ADB,
Afghanistan established. European Commission, and
World Bank
All sub-basins delineated 2018 MEW with support from ADB,
European Commission, and
World Bank
Staff recruited and trained for all 2018 MEW with support from ADB,
RBAs European Commission, and
World Bank
46 Appendix 3

Objective Milestone Timeline Responsibility –

Implementation Support
River Basin Management Plans 2014 MEW with support from ADB
drafted for Northern, Amu Darya and European Commission
and Western Basins RBAs
River Basin Management Plans 2018 MEW with support from ADB,
drafted for all RBAs European Commission, and
World Bank
Financing mechanisms in place 2015 MEW with support from ADB
for Northern Basins, Amu Darya, and European Commission
and Western Basins RBAs and
RBCs to be self-sustaining
Financing policies/mechanisms 2020 MEW with support from ADB
in place for Northern Basins for and European Commission
all RBAs and RBCs to be self-
sustaining
Hydrometeorological The hydrometric network 2010 MEW with support from the
network and data installed and operating World Bank
collection and analysis
Regular hydrologic monitoring in 2014 MEW with support from the
place and run-off, drought, and World Bank and other
flood forecasting capacity in development partners.
place within MEW
Data collection and monitoring 2018 MEW and MAIL with support
systems such as groundwater, from development partners.
agriculture and other needs in
place providing quality
information for sector planning
and management in place
Effective Water Users WUAs based on mirab system 2014 MEW with support from ADB
Associations established throughout Northern and European Commission
Basins, Amu Darya and Western
Basins
WUAs based on mirab system 2018 MEW with support from
established throughout development partners.
Afghanistan
WUAs fully trained and 2015 MEW with support from ADB
managing irrigation systems and European Commission
Northern Basins, Amu Darya,
and Western Basins
WUAs fully trained and 2020 MEW with support from
managing irrigation systems development partners.
throughout Afghanistan
WUAs effectively participating in 2016 MEW with support from ADB
RBAs and RBCs in the Northern and European Commission
Basins, Amu Darya, and Western
Basins
WUAs effectively participating in 2022 MEW with support from
RBAs and RBCs throughout development partners.
Afghanistan
WUAs financially self-sustaining 2015 MEW with support from ADB
in Northern Basins, Amu Darya, and European Commission
and Western Basins
WUAs financially self-sustaining 2022 MEW with support from
throughout Afghanistan development partners.
 Appendix 3 47

Objective Milestone Timeline Responsibility –

Implementation Support
Capacity Development
MEW Staff Training At least 70% of staff in MEW 2014 MEW with support from
offices properly trained to carry development partners.
out tasks with improve gender
balance
Flood Management Flood management unit 2011 MEW with ADB support
established in MEW Kabul
Flood management planning and 2014 MEW with ADB
implementation capacity MEW
Kabul
Flood management planning and 2018 MEW with ADB and European
implementation capacity in place Commission. World Bank and
in all RBAs other development partner
support.
Project Management MEW staff able to develop terms 2014 MEW with ADB and World
of reference and to recruit and Bank and other development
manage consultants to prepare partner support.
feasibility studies to international
standards.
MEW staff able to recruit and 2015 MEW with ADB and World
manage consultants for the Bank and other development
design and supervision of civil partner support.
works
Education Curriculum for all aspects of 2023 Government of Afghanistan
water resources management with support from development
and irrigation at technical partners.
colleges.
Infrastructure Development
Investment and Planning National Water Resources 2013 MEW and MAIL with support
Development Plan indicating from ADB, World Bank, and
options for dams, multipurpose other development partners.
storage reservoirs, water supply,
expanded irrigation, and
improved water management.
Ongoing process and MEW 2016 MEW and MAIL with support
capacity in place for regular from ADB, World Bank, and
periodic updating of the National other development partners.
Water Resources Development
Plan at least every 3 years
Sustainable stream of public and 2023
private funds for infrastructure
investment in water resources
and irrigation
Irrigation and Water 2.5 million hectares under 2016
Resources Management irrigation
30% of 2.5 million hectares 2016
receiving water from large head
works
50% of villages benefit from 2015 MEW and MAIL with
small-scale irrigation development partner support.
25% of irrigation in large 2023 MEW, development partners
schemes supplied by public and the Government of
private partnership Afghanistan
48 Appendix 3

Objective Milestone Timeline Responsibility –

Implementation Support
O&M of large irrigation systems 2023 MEW
full self-sustaining from user fees
with large involvement of private
sector
Development of at least three 2018 MEW with support from ADB
new multipurpose water and other development
resources projects partners.
Widespread adoption of drip 2018 MEW with support from
irrigation and other alternative development partners.
technologies
An additional 2,000 megawatts of 2025 Government of Afghanistan
hydropower with support from development
partners.
ADB = Asian Development Bank; O&M = operation and maintenance; MAIL = Ministry of Agriculture, Irrigation, and
Livestock; MEW = Ministry of Energy and Water; RBA = river basin agency; RBC = river basin council; WUA = water
users associations.
Source: Asian Development Bank.

B. Strategic Context

19. Afghanistan National Development Strategy. As noted, the ANDS provides the
overall development framework and specific sector strategies for irrigation and water resources
in Afghanistan. To flesh out the sector strategy, road map and investment plan the ANDS is
supported by a national Water Sector Strategy that addresses all subsectors including water
supply, environment, and hydropower among others. 51 The ANDS and supporting strategy
highlights the importance to water resources with regard to economic development, and notes
that both the Government and donors have under-invested in better water resources
management with negative consequences for the productive lives of the people.

20. The ANDS and supporting sector strategy include a set of investment programs for
infrastructure as well as institutional and capacity strengthening to develop the sector. In
addition to the investments, the ANDS has a Water Sector Strategic Action Plan that outlines
policy, institutional, and capacity development activities needed to achieve desired sector
outcomes, which are reflected in the road map above. The ANDS programmatic approach plus
the existing legal and policy framework including the new Water Law (see para. 22), provide the
strategic framework to support sector investment. The ANDS programs and their objectives and
initial investment program provide a well-defined road map to guide sector investment.
Refinements are required and are ongoing, and the ADB Investment Program will be updated
as better information becomes available and new projects are prepared.

21. ADB Strategy. ADB's new Country Partnership Strategy (CPS) for Afghanistan (2009–
2013) is fully aligned with the ANDS. The CPS highlights four sectors for ADB investments: (i)
energy, (ii) transportation and communication, (iii) agriculture and natural resources (including
irrigation and water resources), and (iv) governance. The new strategy for the water sector
represents a continuation of the previous objectives from the CPS Update (2005–2008).

51
The ANDS strategy is based on the first national water strategy that was drafted and adopted in 2004. The Water
Law specifically tasks MEW with formulation and implementation of a national water strategy. It also requires the
RBAs to develop basin strategies and development plans, which can form the basis of a consolidated national plan.
Strategic planning for water sector development has already received substantial attention and the process is now
institutionalized under the Water Law. The main issue is to develop capacity and secure resources to implement
and improve the strategic work.
 Appendix 3 49

However, investments and institutions are supported in a more programmatic fashion through
the combination of physical and nonphysical investments under the MFF modality. The new
strategy attaches special importance to themes, particularly gender and development, capacity,
and private sector development. In addition to the CPS, the Investment Program is fully aligned
with Strategy 2020–the Long Term Strategic Framework, which includes investment in water
resources infrastructure as a core ADB business activity. The Government's commitment to a
policy framework based on integrated water resources management (IWRM) principles
contained in the Water Law and ANDS are consistent with the ADB Water Policy, Water for All.

C. Policy and Institutional Framework

22. National Water Law. The policy framework for water resources is well structured to
address the challenges of the water sector in Afghanistan, however, developing the capacity
and strengthening the institutions to implement the framework will require significant resources
and a long-term commitment. The corner stone of the policy framework is the new Water Law
(signed by the President on 30 April 2009) that is based on Integrated Water Resources
Management principles. The Water Law establishes the overarching sector framework and
ministerial responsibilities, not only for irrigation and water resources management, but all other
subsectors including water supply and sanitation, hydropower, and the environment, among
others.

23. Ministry of Energy and Water. MEW is the lead agency for water resources whose
responsibility includes (i) making policies to guide and strategies planning, development and
protection of water resources; and (ii) regulating use of water resources. Under the new Water
Law, RBAs have been established under MEW to replace the previous provincial field structure.
RBCs made up of line agencies, local government, and water users have been established
under the Water Law to provide policy guidance and oversee permitting and disputes resolution
for their associated RBA. The Water Law supports water end-user participation in decision
making for (i) water resources planning, implementation, and management; (ii) operations and
maintenance; and (iii) determination of water allocations. Although five RBAs have been created
across the country, they are not yet functional, and lacking staff and resources adequate to
carry out their mandate. The work to establish the RBCs is also in its nascent stages. Under the
five main RBAs and RBCs that cover the country, sub-basin agencies and councils are to be
established as required for more localized management.

24. Ministry of Agriculture, Irrigation, and Livestock. MEW is the lead ministry for water
resources and irrigation, however, MAIL has responsibility for on-farm water management
(OFWM) as well as development of smaller irrigation concerns, although in practice MAIL is
currently not implementing any irrigation projects.52 MAIL has very limited capacity for irrigation
but has its own irrigation sector strategy with the emphasis on small water harvesting and
OFWM interventions, the latter of which is vital to help achieve the maximum productivity from
irrigation system rehabilitation and upgrading. Donors are working with MAIL to develop this
capacity, and MAIL will play an increasingly important and effective role for irrigated agriculture.

D. Investment Program

25. To achieve sector objectives, the ANDS structured 10 programs with associated
investments for the water sector, 5 of which address irrigation and water resources. The initial
investment plans for each of the programs were developed for the medium term, however,

52
NVDA is an exception to MAIL's normal operations.
50 Appendix 3

these will evolve as more projects and sector needs are identified. The ANDS programs and
their objectives are well structured to achieve sector goals, and these should remain in place to
support sector development. The Program Development Facility to be established under the first
tranche of the Investment Program will work with MEW, development partners, and other
stakeholders to refine and update the Government's sector investment plan and ANDS programs.
The relevant ANDS programs for water resources and irrigation are listed below.

(i) The Institutional Set-up and Capacity Building Program supports capacity
development for water resources management institutions at all levels from WUAs to
RBAs, and MEW at the national level. In addition to technical competence, financial
capacity for infrastructure and recurrent costs as well as the development of financial
management capacity are also stressed. This program will support the development
and implementation of sector laws, policies, and rules and regulations.
(ii) The National Water Resources Development Program is the largest program
financially and focuses on development of new infrastructure. It addresses both the
need for improved planning and project development capacity as well as resources
for new infrastructure development. The estimated cost of this program is over $2
billion dollars, which in medium term is likely unrealistic, however, in the longer term
is far short of what will be required to develop infrastructure for the sector.
(iii) The National River Basin Management Program targets implementation of the new
institutional structure for water management under the Water Law and capacity to
manage water based on IWRM principles. Development of capacity for stakeholder
participation for water management is stressed.
(iv) The Irrigation Rehabilitation Program supports rehabilitation of mainly traditional
systems, which are the majority in Afghanistan. This includes rehabilitation and
upgrading of existing infrastructure along with improved O&M and management.
(v) The Riverbank Protection Program addresses bank erosion and flood control. It
looks at shorter- (including emergency) and longer-term structural and nonstructural
management options and development of a national program.

E. Financing Plan

26. The ADB Investment Program and first tranche investments are fully aligned with and
support the objectives and national programs outlined under the ANDS investment plan (para.
25). The ANDS proposed a comprehensive water sector investment program for $3,761 million for
the entire water sector. MEW has revised this to $2,468 million over the medium term based on the
ANDS national programs for irrigation and water resources management. Table A3.2 provides the
current medium term investment plan based on the ANDS programs.

Table A3.2: Medium-Term Water Sector Investment Plan

($ million)

Item Medium Term

Institutional Set-up and Capacity Building Program 46.0
Water Resource Infrastructure Management
Program (includes National River Basin
Management and Irrigation Rehabilitation) 133.0
Bank Protection and Flood Control Program 161.0
National Water Resources Development Program 2,128.0
Total 2,468.0
Source: Ministry of Energy and Water and Asian Development Bank estimates.
 Appendix 3 51

27. Currently, the resources available to support this investment plan are just over $800 million
or a third of the needs identified by MEW. It is anticipated that the sector investment plan and
financing will increase as additional projects and needs are identified with better information and
improved capacity for planning. As noted, the MEW investment plan has optimistic targets, yet will
be updated. While the investment plan may be refined, the objectives of the ANDS Water Sector
Strategy and the ANDS programmatic approach develop the sector along with the legal and policy
framework including the new water law and provide a sound strategic framework to support the
sector investment. Table A3.3 provides the current level of ongoing and committed sector
investment.

Table A3.3: Ongoing and Committed Sector Financing

($ million)

Financier to Water Resources and Irrigation Amount

Asian Development Banka 385.0
Government of Canada 45.0
Government of the United Kingdomb 3.0
European Commission 90.0
Government of Afghanistan 45.0
Government of India 110.0
Government of the United Statesc 30.0
World Bank 100.0
Total Ongoing and Committed Sector Investment 808.0
Medium Term Sector Needs 2,468.0
Additional Funding to be Identified for Sector Investment Plan 1,660.0
Note: Figures includes estimated amounts for ongoing, committed or planned projects. This includes the
proposed Asian Development Bank Investment Program.
a
Includes cofinancing from the Government of Canada ($12.9 million) and the Islamic Development Bank
($10 million).
b
The grant financing from the Government of United Kingdom is £2 million and rounded to $3 million.
c
This only includes contribution from the United States Agency for International Development. .
Source: Asian Development Bank estimates.
52 Appendix 4

EXTERNAL ASSISTANCE

Approximate
Implementing Development Amount
Project Title Duration Agency Partners ($ million)
Capacity Building for 2003–2004 MIWREa ADB 0.7
Reconstruction and
Development: TA for Water
Resources Management
and Planning
Rural Recovery Through 2003–2009 NGO ADBb 5.0
Community-Based
Irrigation Rehabilitation
Project
Emergency Infrastructure 2003–2009 MIWREa ADB 15.0
Rehabilitation and
Reconstruction Project
(Traditional Irrigation
Component
Balkh River Basin Water 2004–2008 MIWREa ADBb 10.0
Integrated Resources
Management
Western Basins Water 2004–2007 MIWREa ADB 1.8
Resources Management
and Irrigated Agriculture
Development Project
Western Basins Water 2005–2013 MEW ADBc 87.6
Resources Development
Project
Capacity Building for 2005–2008 MIWREa ADB 0.8
Irrigation and Water
Resources Management
Pyanj River Basin Flood 2008–2010 MEW (and ADB 1.7
Management Project MWRLR)
Water Resources 2008–2010 MEW and MAIL ADB 1.8
Development Project
Various small scale 2004–2009 MEW ARTF 15.0
emergency flood and
irrigation works
Various feasibility studies 2005–2009 MEW ARTF 30.0
for water resources
infrastructure
Dahla Dam and Irrigation 2008–2011 MEW CIDA 45.0
System – Phase 1
 Appendix 4 53

Approximate
Implementing Development Amount
Project Title Duration Agency Partners ($ million)
Kunduz River Basin 2004–2009 MIWREa and EC 39.4
Programme MAIL
Amu Darya River Basin 2006–2011 MEW and MAIL EC 18.2
Programme
Panj-Amu River Basin 2009–2014 MEW and MAIL EC 35.7
Program
Water Sector Reform 2003–2008 MIWREa GTZ 3.1
Project
Salma Dam Power Project 2006–2009 MEW Government 116.0
of India
Assisting Afghanistan to 2002–2004 USAID 10.0
Revitalize Irrigated
Agriculture
Rebuilding Agricultural 2003–2006 USAID 20.0
Markets Program
Accelerating Sustainable 2007–2010 USAID 10.0
Agriculture Program
Alternative Livelihoods 2004–2010 USAID 20.0
Programs (North, East, and
South)
Emergency Irrigation 2004–2011 MIWREa World Bank 93.0
Rehabilitation Project
Technical Assistance for 2009–2011 MEW World Bank 12.0
Water Sector Capacity
Building
ADB = Asian Development Bank; ARTF = Afghanistan Reconstruction Trust Fund; CIDA = Canadian International
Development Agency; GTZ = Deutsche Gesellschaft für Technische Zusammenarbeit (German Technical
Cooperation); EC = European Commission; IDB = Islamic Development Bank; MAIL = Ministry of Agriculture,
Irrigation, and Livestock; MEW = Ministry of Energy and Water; MIWRE = Ministry for Irrigation, Water Resources,
and Environment; MWRLR = Ministry of Water Resources and Land Reclamation, Government of Tajikistan; USAID
= United States Agency for International Development.
a
In 2005, MIWRE changed its name to the Ministry of Energy and Water.
b
Financed through the Japan Fund for Poverty Reduction.
c
Includes Islamic Development Bank and Canadian International Development Agency cofinancing.
Source: Asian Development Bank estimates.
54 Appendix 5

DETAILED COST ESTIMATES

Table A5.1: Detailed Cost Estimates by Expenditure Categorya

($ million)

Base Costs
Item Total
(%)
A. Investment Costs
1. Civil Works
a. Northern Basins Water Resources Development 20.6 24.5
b. NVDA Improvement 19.0 22.6
c. Bank Erosion and Flood Management 8.6 10.2
Subtotal (A1) 48.2 57.3
2. Machinery and Equipment
a. Northern Basins Water Resources Development 0.5 0.6
b. NVDA Improvement 0.2 0.2
c. Bank Erosion and Flood Management 0.1 0.1
d. PMO 0.1 0.1
Subtotal (A2) 0.9 1.1
3. Vehicles
a. Northern Basins Water Resources Development 0.1 0.12
b. NVDA Improvement 0.1 0.12
c. Bank Erosion and Flood Management 0.1 0.12
d. PMO 0.1 0.12
Subtotal (A3) 0.4 0.48
4. Survey, Design, and Monitoring
a. Northern Basins Water Resources Development 0.9 1.1
Subtotal (A4) 0.9 1.1
5. Land Acquisition and Resettlement
a. Northern Basins Water Resources Development 0.3 0.4
b. Bank Erosion and Flood Management 0.1 0.1
Subtotal (A5) 0.4 0.6
6. Training and Workshops
a. Northern Basins Water Resources Development 1.7 2.0
b. NVDA Improvement 1.0 1.2
c. PMO 0.2 0.2
Subtotal (A6) 2.9 3.4
7. Monitoring and Evaluation
a. NVDA Improvement 0.1 0.1
b. PMO 0.3 0.4
Subtotal (A7) 0.4 0.5
8. Consulting Services
a. International 7.1 8.4
b. National 2.5 3.0
Subtotal (A8) 9.6 11.4
 Appendix 5 55

Base Costs
Item Total
(%)
9. Project Preparation and Special Studies
a. Program Development Facility 9.3 11.1
b. Helmand Basin Master Planb 3.3 3.9
Subtotal (A9) 12.6 15.0
c
10. Project Management Operating Costs
a. PIO – Northern Basins Water Resources Development 1.1 1.3
b. PMO – NVDA Improvement 1.1 1.3
c. PIO – Bank Erosion and Flood Management 0.6 0.7
d. PMO Kabul 1.1 1.3
e. Counterpart Staff Government Salaries 0.1 0.1
Subtotal (A10) 4.0 4.7
d
11. Security Costs
a. PIO – Northern Basins Water Resources Development 0.3 0.36
b. PMO – NVDA Improvement 0.3 0.36
c. PIO – Bank Erosion and Flood Management 0.3 0.36
d. PMO Kabul 0.3 0.36
Subtotal (A11) 1.2 1.4
Total Investment Costs 81.5 97.0
B. Recurrent Costs 2.5 3.0
Total Recurrent Costs (O&M) 2.5 3.0
Total Base Costs 84.0 100.0
Physical contingencies 5.9 7.0
Price contingencies 2.9 3.5
Total Project Costs 92.8 110.5
NVDA = Nangahar Valley Development Authority, O&M = operations and maintenance, PIO = project implementation
office, PMO = project management office.
a
Amounts include taxes and duties.
b
The grant contribution of the Government of the United Kingdom is £2 million.
c
Includes costs of project coordination office under the Ministry of Finance.
d
Includes armored vehicles, radio and other security-related equipment and operating costs.
Source: Asian Development Bank estimates.
 Table A5.2: Detailed Cost Estimates by Financier

56
($ million)

Appendix 5
Asian Development Government of Government of the Project Participants
Bank (ADF Grant) Afghanistan United Kingdom
Item
Cost Amount % of Amount % of Amount % of Amount % of
Category Category Category Category

A. Investment Costsa
1. Civil Works
a. Northern Basins WRD 20.6 20.6 100.0 0.0 0.0 0.0 0.0 0.0 0.0
b. NVDA Improvement 19.0 19.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
c. Bank Erosion and Flood Management 8.6 8.6 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Subtotal (A1) 48.2 48.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0
2. Machinery and Equipmentb
a. Northern Basins WRD 0.5 0.4 82.9 0.1 17.1 0.0 0.0 0.0 0.0
b. NVDA Improvement 0.2 0.2 92.0 0.0 8.0 0.0 0.0 0.0 0.0
c. Bank Erosion and Flood Management 0.1 0.1 83.3 0.0 16.7 0.0 0.0 0.0 0.0
d. PMO 0.1 0.1 92.0 0.0 8.0 0.0 0.0 0.0 0.0
Subtotal (A2) 0.9 0.8 85.5 0.1 14.5 0.0 0.0 0.0 0.0
3. Vehicles
a. Northern Basins WRD 0.1 0.08 80.0 0.02 20.0 0.0 0.0 0.0 0.0
b. NVDA Improvement 0.1 0.08 80.0 0.02 20.0 0.0 0.0 0.0 0.0
c. Bank Erosion and Flood Management 0.1 0.08 80.0 0.02 20.0 0.0 0.0 0.0 0.0
d. PMO 0.1 0.08 80.0 0.02 20.0 0.0 0.0 0.0 0.0
Subtotal (A3) 0.4 0.32 80.0 0.08 20.0 0.0 0.0 0.0 0.0
4. Survey, Design and Monitoring
a. Northern Basins WRD 0.9 0.9 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Subtotal (A4) 0.9 0.9 100.0 0.0 0.0 0.0 0.0 0.0 0.0
5. Land Acquisition and Resettlement
a. Northern Basins WRD 0.3 0.0 0.0 0.3 100.0 0.0 0.0 0.0 0.0
b. Bank Erosion and Flood Management 0.1 0.0 0.0 0.1 100.0 0.0 0.0 0.0 0.0
Subtotal (A5) 0.4 0.0 0.0 0.5 100.0 0.0 0.0 0.0 0.0
6. Training and Workshops
a. Northern Basins WRD 1.7 1.7 100.0 0.0 0.0 0.0 0.0 0.0 0.0
b. NVDA Improvement 1.0 1.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
c. PMO 0.2 0.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Subtotal (A6) 2.9 2.9 100.0 0.0 0.0 0.0 0.0 0.0 0.0
7. Monitoring and Evaluation
a. NVDA Improvement 0.1 0.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0
b. PMO 0.3 0.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Subtotal (A7) 0.4 0.4 100.0 0.0 0.0 0.0 0.0 0.0 0.0
 Asian Development Government of Government of the Project Participants
Bank (ADF Grant) Afghanistan United Kingdom
Item
Cost Amount % of Amount % of Amount % of Amount % of Category
Category Category Category
8. Consulting Services
a. International 7.1 7.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0
b. National 2.5 2.5 100.0 0.0 0.0 0.0 0.0 0.0 0.0
c. Program Development Facility 9.3 9.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0
d. Helmand Basin Master Planc 3.3 0.0 0.0 0.0 0.0 3.3 100.0 0.0 0.0
Subtotal (A8) 22.2 18.9 85.1 0.0 0.0 3.3 14.9 0.0 0.0
d
9. Project Management Operating Costs
a. PIO – Northern Basins WRD 1.1 1.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0
b. PMO – NVDA Improvement 1.1 1.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0
c. PIO – Bank Erosion and Flood 0.6 0.6 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Management
d. PMO Kabul 1.1 1.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0
e
e. Counterpart Staff Government Salaries 0.1 0.0 0.0 0.1 100.0 0.0 0.0 0.0 0.0
Subtotal (A9) 4.0 3.9 97.5 0.1 2.5 0.0 0.0 0.0 0.0
10. Security Costsf
a. PIO – Northern Basins WRD 0.3 0.3 86.2 0.0 13.8 0.0 0.0 0.0 0.0
b. PMO – NVDA Improvement 0.3 0.3 86.2 0.0 13.8 0.0 0.0 0.0 0.0
c. PIO – Bank Erosion and Flood 0.3 0.3 86.2 0.0 13.8 0.0 0.0 0.0 0.0
Management
d. PMO Kabul 0.3 0.3 86.2 0.0 13.8 0.0 0.0 0.0 0.0
Subtotal (A10) 1.2 1.2 86.2 0.0 13.8 0.0 0.0 0.0 0.0
Total Investment Costs 81.5 77.4 94.9 0.8 1.0 3.3 4.0 0.0 0.0
B. Recurrent Costs
1. Operations and Maintenance 2.5 0.6 24.0 0.0 0.0 0.0 0.0 1.9 76.0
a. O&M Support for Larger Infrastructure 0.6 0.6 100.0 0.0 0.0 0.0 0.0 0.0 0.0
b. O&M In Kind Contribution 1.9 0.0 0.0 0.0 0.0 0.0 0.0 1.9 100.0
Total Recurrent Costs 2.5 0.6 24.0 0.0 0.0 0.0 0.0 1.9 76.0
C. Contingencies
a. Physical Contingencies 5.9 5.8 97.8 0.1 1.7 0.0 0.0 0.0 0.0
b. Price Contingencies 2.9 2.89 98.9 0.01 1.1 0.0 0.0 0.0 0.0
Total Contingency 8.8 8.7 98.5 0.11 1.1 0.0 0.0 0.0 0.0
Total Project Costs 92.8 86.6 93.2 1.0 1.1 3.3 3.6 1.9 2.1
NVDA = Nangahar Valley Development Authority, O&M = operations and maintenance, PIO = project implementation office, PMO = project management office, WRD =
Water Resources Development.

Appendix 5
a
Amounts include taxes and duties.
b
Government contribution includes taxes and import duties.
c
The grant contribution of the Government of the United Kingdom is £2 million.
d
Includes bank charges and other office operating costs.
e
Includes costs of project coordination office under the Ministry of Finance.
f
Includes armored vehicles, radio and other security-related equipment and operating costs.
Source: Asian Development Bank estimates.

57
58 Appendix 6

SELECTION CRITERIA AND APPROVAL PROCEDURES

FOR SUBSEQUENT PROJECTS

A. Introduction

1. Selection criteria are required to identify projects and subprojects to be financed under
the Water Resources Development Investment Program (the Investment Program). Selected
projects agreed to by the Government of Afghanistan (the Government) and the Asian
Development Bank (ADB) utilizing the approval process detailed below will be prepared to a
standard acceptable to ADB by the Program Development Facility (PDF) under the Ministry of
Energy and Water (MEW) during the first 5 years of the Investment Program. The selection
criteria include: (i) general criteria for all interventions pursued under the Investment Program,
(ii) specific criteria for interventions involving flood management and river bank erosion, and (iii)
specific criteria for interventions involving irrigation (Table A6).

B. Selection and Approval Procedures

2. The appraisal process has already been undertaken for the first tranche periodic
financing request (PFR) under the Investment Program. Investments for interventions to be
proposed for inclusion in subsequent PFRs will be processed in accordance with the following
procedures.

3. The PDF, acting on behalf of MEW, will undertake a preliminary assessment—including

preliminary site visits as required—of the proposed interventions to ensure compliance with the
Investment Program's selection criteria. During this preliminary assessment, the PDF will
prepare an initial poverty and social assessment and complete the requisite ADB safeguard
checklists to determine the initial project categorization with respect to the environment,
indigenous peoples, and involuntary resettlement.

4. Based on the preliminary assessment, the PDF will recommend those investment
packages deemed suitable for a full feasibility study. The PDF's recommendations will be
reviewed by the Ministry of Finance (MOF), MEW, and ADB, and their concurrence to proceed
will be obtained before the PDF contracts the feasibility study and/or detailed design to prepare
the investment. If a proposed intervention is not likely to satisfy the selection criteria and/or the
agreed approval procedures, ADB will inform MOF and MEW, who will advise the PDF to either
(i) modify the intervention proposal in such a way that it will be eligible, or (ii) reject the proposed
intervention. In the latter case, the PDF may propose a replacement subproject that will be
subjected to same selection process. Feasibility-level assessment and/or detailed design of
approved investment packages will be contracted to a consulting firm or individual(s) by the
PDF, with the results reported to the program steering committee (PSC).

5. Based on the feasibility studies and/or detailed design for the interventions that are
technically feasible, economically viable, socially and environmentally acceptable, and in
compliance with the selection criteria, the PDF will prepare draft appraisal reports and requisite
ADB safeguard due diligence documents along with recommendations that the proposal be
included in the next PFR prepared for ADB consideration. Projects that are recommended will
be subject to the approval of the PSC. Upon obtaining the PSC’s concurrence with the PDF’s
recommendations concerning subprojects to be included under the Investment Program, MOF
will submit the PFR to ADB for approval. MOF will ensure that the necessary internal approvals
have been obtained prior to submission of the PFR. ADB will then review the PFR for approval
in accordance with ADB guidelines.
 Appendix 6 59

Table A6: Investment Program Selection Criteria

General Selection Criteria

The intervention should be consistent with accepted integrated water resources management planning principles and
the Investment Program's road map that supports the Government's water resources sector investment plan.
The economic return on the investment packages considered should be at least 12%.
The intervention should not have a negative impact—in terms of water quality or quantity—on other water users who
have a recognized entitlement and are reliant on water supplied by the same water system (basin).
Each subsequent investment under the proposed MFF must address all ADB safeguards, including environment,
resettlement, and indigenous peoples as detailed in the Financing Framework Agreement. MEW and PDF staff must
ensure that this criterion can be met or that cost-effective mitigation measures will satisfy requirements during the
preliminary assessment of potential projects approved for further feasibility study.
The intervention should not present unacceptable technical risks in terms of its development or operation that would
undermine its efficacy, economic return, or safety.
Potential investments must have provisions and assurances and/or commitments for adequate O&M of the completed
works. This could be in the form of temporary, declining levels of funding from ADB or other development funds
complemented by increasing levels of government support, water-user funding, and/or in kind contributions adequate
to meet all recurrent expenditures and/or O&M.
The intervention should be of a size and scale such that the beneficiaries are capable of independently operating and
maintaining the systems when construction activities are complete, unless there is a government entity charged with
management and O&M of a project or subproject that cannot be managed by the community. The intended
beneficiaries must have indicated enthusiasm for the intervention and a willingness to operate and manage it in a
cohesive fashion as demonstrated through willingness to contribute cash or in-kind labor to the subproject
development and through willingness to develop and commit to execution of a management and O&M plan.
The community(s) must have an adequate decision making structure for identifying needs, accessing resources, and
distributing benefits in an equitable manner to all members of the community.
The intervention will have a positive impact on a significant portion of the local community.
Transboundary water issues must be adequately addressed as part of the project selection and preparation process.
Interventions must have water resources requirements that would be in compliance with existing international
agreements, or it must be possible to achieve a new agreement or concurrence among the concerned riparians.
Selection Criteria for Flood Management and River Bank Erosion
Interventions should be selected based on their ability to mitigate flood or erosion risk while providing a satisfactory
economic rate of return without creating negative impacts.
Interventions that could have the potential to result in morphological changes in the river regime and generate major
unforeseen negative impacts should be avoided, provided alternative protection measures can be identified.
Interventions that could inadvertently result in adverse impacts on water users currently taking water from the river
should be avoided.
Flood management or bank protection works are not to be considered without the inclusion of mitigating measures as
part of the intervention if they would result in (i) the reduction of a river or wash cross section, or (ii) increased water
surface elevations to pass a flood of given magnitude, or (iii) pose any risk of main channel deposition or blockage.
Interventions that have the potential to negate people's rights to riverbank access are not to be included unless
alternative access routes are identified and confirmed with the affected communities
Selection Criteria Specifically for Irrigation
Communities receiving assistance must pledge to abstain from poppy cultivation.
The soils and topography must be suitable for constructing irrigation works and supporting irrigated agriculture,
including adequate natural drainage, and not subject to the risk of excessive settlement, poor stability, or severe
erosion.
The sustainable financial returns to all farmers from the intervention must be adequate to offset any associated cost
increases.
Priority will be accorded to those investments having significant positive impact on the food production base to help
ensure food security for Afghanistan.
ADB = Asian Development Bank, IWRM = integrated water resources management, MEW = Ministry of Energy and
Water, MFF = multitranche financing facility, O&M = operation and maintenance, PDF = program development
facility.
Source: Asian Development Bank.
 ORGANIZATION CHARTS

60
Figure A7.1: Project Management Organization

Appendix 7
Project Steering Committee Chaired by ADB
Minister of Energy and Water (MOF, MEW, NVDA/MAIL)

PMO MEW (Kabul) Coordination Office PMO NVDA/MAIL (Jalalabad)

Specialist Teams: Technical, Legal, Finance and MOF Specialist Teams: Technical, Legal, Finance and
Administration, Gender and Safeguards, M&E and • Project Coordination Administration, Gender and Safeguards, M&E and
Reporting • M&E Reporting, Capacity Building/Institutional
PMO Staff Consultant (Int./Nat.) PMO Staff Consultant (Int./Nat.)
• Program Director • TL (WR Planner) • Project Director • TL (Irrigation Engineer)
• WR/ Flood Engineers • Irrigation/Flood • WR/Irrigation Engineer • Engineer/Design 2
• Finance • Finance/Accounting • Finance • Finance/Accounting
• Procurement • Procurement • Procurement • Procurement
• M&E • Economist/ M&E • M&E • M&E
• Safeguards • Safeguards/ • Safeguards • Safeguards/
• Environment Resettlement • Environment Resettlement
• Environment • OFWM • Environment
• Gender • WUAs • Gender
• Business Development • WM/OFWM
PDF Staff PDF Consultants (Int./Nat.) • Field Engineers 4 • WUA
• Business Management
• PDF/Engineer • TL (WR Planner) Liaison Office (Kabul)
• Project Coordination • Construction
• Economist • Economist Supervision 4
• Engineer • Irrigation Engineer • Finance

PIO Northern Basins Development (Mazar-i-Sharif) PIO Flood Management (Taloqan)

Specialist Teams: Technical, Legal, Finance and Specialist Teams: Technical, Legal, Finance and
Administration, Capacity Building / Institutional Administration, Gender and Safeguards, M&E

PIO Staff Consultant (Int./Nat.) PIO Staff Consultants (Int./Nat.)

• Project Director • TL (Irrigation Engineer) • Project Director • TL (Bank Construction)
• Finance • Office Manager • Finance • Office Manager /
• Procurement • Accountant • River Engineer Accountant
• • • Geotechnical/Design

• WR/Irrigation/Hydraulic
• WUAs/OFWM
• Field Engineers 6
Appendix 7
Irrigation/Design 2 Field Engineers 2
• RBM/OFWM/WUAs • Construction Supervision 2
• Construction
Supervision 6
• Agronomist/O&M

ADB = Asian Development Bank, Int. = international, M&E = monitoring and evaluation, MAIL = Ministry of Agriculture, Irrigation, and Livestock, MEW = Ministry of
Energy and Water, MIS = monitoring information system; MOF = Ministry of Finance, Nat. = national, NVDA = Nangahar Valley Development Authority, O&M =

59
operation and maintenance, OFWM = on-farm water management, PDF = program development facility, PIO = project implementation office, PMO = project
management office, RBM = river basin management, TL = team leader, WM = water management, WR = water resources, WUA = water users association.
Source: Asian Development Bank.
 Appendix 7

60
Figure A7.2: Specialist Teams and Expertise
Project Director

Appendix 7
Expertise Technical Legal Finance and Safeguards and M&E Reporting Capacity Building /
Administration Gender Institutional

Common for • Irrigation/Hydraulic • Procurement • Financial • Safeguards • M&E • Project Management

MEW and
• Designa • Contracting • Accounting • Resettlement • Financial Assessment
NVDA
• Supervisiona • Audit Preparation • Gender • WUAsa
• Environment • WM/OFWMa

for MEW • WR Planner (TL)

• Irrigation/Hydraulica • RBMa
•
a
Agronomist/O&M
• Flood Management
• Bank Constructiona
• Geotechnicala

PDF • WR Planner (TL) • M&E • Feasibility Studies

• Economist • Project Management
• Irrigation

for NVDA • Irrigation/Hydraulic • Business Development/

(TL) Institution Reform

Appendix 7
M&E = monitoring and evaluation, MEW = Ministry of Energy and Water, MIS = management information system, NVDA = Nangahar Valley Development Authority, O&M =
operation and maintenance, OFWM = on-farm water management, PDF = program development facility, RBM = river basin management, TL = team leader, WR = water
resources, WM = water management, WUA = water users association.
a For components under MEW, assigned in relevant PIO.

Source: Asian Development Bank.

61
Appendix 7

62
56
IMPLEMENTATION SCHEDULES
Table A8.1: Tranche 1

Appendix 8
Appendix 6
2010 2011 2012 2013 2014
Task / Activity
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Component 1: Northern Basins Development
1.1 Subcomponent 1 Irrigation R&U
1.1.1 Construction of Bangala weir and bridge, Samarkandian emergency
repairs and gate operation equipment for Nahre Shahi Weir (ICB)
Preparation of DD and BD
Advertisement of bid, bid opening, evaluation of bid
Contract award
Mobilization of contractor and preparatory work
Construction works
Construction of Bangala Weir
Construction of new river channel, feeder channel, and division structure
Installation of gates and ancillary for wier, feeder channel, and division
Construction of flood passage for Samarkandian Weir
Commissioning
1.1.2 Main Canal Infrastructure Rehabilitation (ICB)
Preparation of DD and BD
Advertisement of bid, bid opening, evaluation of bid
Contract award
Mobilization of contractor and preparatory work
Construction and commissioning
1.1.3 Pilot Rehabilitation of Secondary and Tertiary Canal including Canal
Water Access Point (NCB and Community Contracting)
Determination of pilot rehabilitation structures and water access points agreed
among WUAs, communities, and PIO
DD and construction priorities and arrangements agreed among WUAs,
communities, and PIO
1.1.3.1 Pilot Rehabilitation of Secondary Canal (NCB)
Preparation of BD
Advertisement of bid, bid opening, evaluation of bid
Contract award
Construction of prioritized structures in secondary canal and commissioning
1.1.3.2 Pilot Rehabilitation of Tertiary Canal (Community Contracting/NCB)
Rehabilitation works in tertiary canal
1.1.3.3 Construction of Water Access Points
Construction of water access points
1.2 Subcomponent 2: Northern River Basin Management
1.2.1 Development of RBA and RBC
Provision of equipment and materials
Development of operation plan for basin infrastructure
Training RBA and formation of RBC
1.2.2 Development of River Basin O&M Funds
Review O&M fund flow and development of sustainable O&M fund plan
Implementation of O&M fund plan
1.2.3 Development of Master Plan for River Basin Water Management Rehab.
River basin survey and investigation
Prioritize development needs
Development of master plan
1.3 Subcomponent 3: WUAs Development and Training
Bidding contracting to NGOs, evaluation and contracting
Development of training program and mobilization of WUAs

Appendix 8
Registration of WUAs
Selection of demonstration farm areas
Implementation of training program and strengthening WUAs using demo farms
1.4 Subcomponent 4: Project Management
Appointing PIO Director
Establishment of PIO
Staff recruitment and procurement of office furniture and equipment
Consultant fielding
Identify investment projects for subsequent tranches Note: Development of FS will start only if Projects are identified by PIO
Development of feasibility study for subsequent tranches

61
Support to subcomponent
 Appendix 7

62
2010 2011 2012 2013 2014
Task / Activity
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Component 2: NVDA Improvement

Appendix 8
2.1 Subcomponent 1: Irrigation rehabilitation and upgrade
2.1.1 Main, Secondary, and Tertiary Canal Rehabilitation Including Canal
Water Access Points (ICB)
Preparation of DD and BD
Advertisement of bid, bid opening, evaluation of bid
Contract award
Mobilization of contractor and preparatory work
Construction of canal and water access points
Commissioning
2.2 Subcomponent 2: Development of NVDA Bussiness Plan
Technical support for market study, and business plans
Support to establish the irrigation service delivery agency
2.3 Subcomponent 3: WUAs Development and Training
Bidding contracting to NGOs, evaluation and contracting
Development of training program and mobilization of WUAs
Registration of WUAs
Selection of demonstration farm areas
Implementation of training program and strengthening WUAs using demo farms
2.4 Subcomponent 4: Project Management in NVDA
Appointing PMO Director
Establishment of PMO
Staff Recruitment and Procurement of Office Furniture and Equipment
Recruiting Implementing Consultant (QBS)
(TOR Preparation, Advertising, Long List, RFP Preparation)
(Issue RFP, shortlisting, TP evaluation, public opening, FP and ranking)
(Contract and publication of award of contract)
Consultant fieldings
Development of a Project Performance Management System
Project management, monitoring and evaluation
Submission of audit report to the Government and ADB
Review and update key benchmark indicators
Component 3: Flood Management
3.1 Subcomponent 1 - Bank Erosion and Flood Protection
Yangi Qala/Darqad Flood Embankment, Yetim Tapa Headworks (ICB)
Preparation of DD and BD
Advertisement of bid, bid opening, evaluation of bid
Contract award
Mobilization of contractor and preparatory work
3.1.1 Construction of Yangi Qala/Darqad Flood Embankment
Construction of embankment
3.1.2 Construction of Yetim Tapa Headwork
Construction of headwork
Commissioning
3.2 Subcomponent 2 - Bank Protection (Shopping/NCB)
Selection procedure for contractors (indicative schedule)
Bank protection works (indicative schedule)
3.3 Subcomponent 3 - National Flood Management Program

Appendix 8 Appendix
3.3.1 Establish Flood Management Unit and Develop Five Year Plan for

2.
Capacity Building
Review current flood management practices
Establish flood management unit in MEW
Development of five-year plan for capacity building
3.3.2 Training for New MEW Flood Management Unit

57
Flood risk assessment
Preparation of flood risk map
Designing flood management structures
3.3.3 Develop a Portfolio of Priority Flood Management Projects

6 63
Appendix 7

64
2010 2011 2012 2013 2014
Task / Activity

Appendix 8
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Component 3: Flood Management
3.4 Subcomponent 4- Project Management
Appointing PIO Director
Establishment of PIO
Staff recruitment and procurement of office furniture and equipment
Consultant fielding
Identify investment projects for subsequent tranches Note: Development of FS will start only if Projects are identified by PIO
Development of feasibility study for subsequent tranches
Support to component
Component 4: Project Management Office and PDF
4.1 Subcomponent 1: Project Management in MEW
Appointing PMO Director
Establishment of PMO
Staff recruitment and procurement of office furniture and equipment
Recruiting implementing consultant (QBS)
(TOR preparation, advertising, long list, RFP preparation)
(Issue RFP, shortlisting, TP evaluation, public opening, FP and ranking)
(Contract and publication of award of contract)
Fielding of consultants
Development of a Project Performance Management System
Project management, monitoring and evaluation
Submission of audit report to the Government and ADB
Review and update key benchmark indicators
4.2 Subcomponent 2: PDF
Recruiting feasibility study consultant (QBS) Note:The Consultants will be required only if the loan consultants can not identify suitable pottential projects in their assigned areas within 6 months.
(TOR preparation, advertising, long list, RFP preparation)
(Issue RFP, shortlisting, TP evaluation, public opening, FP and ranking)
(Contract and publication of award of contract)
Consultant Fielding
4.2.1 Feasibility Study for Tranches 2 and 3 (QBS)
DD for identified project and preparation of BD and BOQs
4.2.2 Helmand Basin Master Plan (QBS) Note: Recruitement of Consulting firm will be finalized in 2009.

Key: Milestone Grand Summary Summary

Intensive Activity Civil Works

ADB = Asian Development Bank; BD = bidding document; BOQ = Bill of Quantities; DD = detailed design; FP = financial proposal; ICB = international competitive
bidding; IEE = initial environmental examination; LAR = land acquisition and resettlement; MAIL = Ministry of Agriculture, Irrigation, and Livestock; MEW = Ministry
of Energy and Finance; NCB = national competitive bidding; NVDA = Nangahar Valley Development Authority; O&M = operation and maintenance; OFWM = on-
farm water management; PDF = project development facility; PTD = participatory technology development; PMO = project management office; PIO = project
implementation office; QBS = quality-based selection; R&U = rehabilitation and upgrading; RBA = river basin agency; RBC = river basin council; RFP = request for
proposal; SBA = sub-basin agency; TBD = to be determined; TP = technical proposal; WUA = water users association.
Source: Asian Development Bank estimates.

Appendix 8
63
 64
Table A8.2: Multitranche Financing Facility

Appendix 8
Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Tranche 1
Component 1: Northern Basins Development
1.1 Subcomponent 1: Irrigation R&U
1.1.1 Construction of Bangala Weir & Bridge, Samarkandian Emergency Repairs and Gate
Operation Equipment for Nahre Shahi Weir (ICB)
Construction of Bangala Weir and Bridge and Gate Operation Equipment for Nahre Shahi Weir
Rehabilitation Works of Samarkandian Wier : Design/Preparation
1.1.2 Main Canal Infrastructure Rehabilitation (ICB)
Construction : Procurement/Recruitment
1.2.3 Pilot Rehabilitation of Secondary and Tertiary Canal (NCB & Community Contracting)
Pilot Rehabilitation of Secondary and Tertiary Canal : Civil Work
1.2 Subcomponent 2: Northern River Basin Management
1.2.1 Development and Training of RBA and RBC : Services
1.2.2 Development of River Basin O&M Funds
1.2.3 Development of Master Plan for River Basin Water Management Rehabilitation
1.3 Subcomponent 3: WUAs Development and Training
Contracting WUAs Training, Development of Training Program and Registration of WUAs
Selection of Demonstration Areas, WUAs and Womens' Participation of Canal Design
Implementation Training Program and Strengthening WUAs and Dissemination of Practices

Component 2: Flood Management

2.1 Subcomponent 1 - Bank Erosion and Flood Protection (ICB)
Construction of Yangi Qala Channel and Yetim Tapa Headworks
2.2 Subcomponent 2- Emergency Works (Shopping/NCB)
Emergency Works
2.3 Subcomponent 3 - National Flood Management Program (Kabul)
2.3.1 Establish Flood Management Unit and Develop Five Year Plan for Capacity Development
2.3.2 Training New MEW Flood Management Unit
2.3.3 Develop a Portfolio of Priority Flood Management Projects

Component 3: NVDA Improvement

3.1 Subcomponent 1: Irrigation Rehabilitation and Upgrade
Main, Secondary, and Tertiary Canal Rehabilitation (ICB)
3.2 Subcomponent 2: Development of NVDA Business Plan
Technical Support for Market Study and Business Plan
Support to Establish Irrigation Service Delivery Agency
3.3 Subcomponent 3: WUAs Development and Training
Contracting WUAs Training, Development of Training Program and Registration of WUAs
Selection of Demonstration Areas, WUAs and Womens' Participation of Canal Design
Implementation Training Program and Strengthening WUAs and Dissemination of Practices

Component 4: PMOs and PDF

4.1 Subcomponent 1: PMOs in MEW/NVDA
PMOs Set Up and Consultant Support to PMOs and PIOs
4.2 Subcomponent 2: PDF in PMO under MEW
FS for Tranches 2 and 3
DD, Preparation of BD and BOQs for Tranche 2 and 3
Helmand Basin Master Plan
Tranche 2 (Indicative)
Extension of Flood Embankment in Yangi Qala/Darqad
Yatim Tapa Intake Structure and Channel Rehabilitation
Construction of Imam Sahib Headworks and Canal R&U
Flood Protection works for the Sherawan Irrigation Intake

Appendix 8
OFWM and Agriculture Production
Tranche 3 (Indicative)
Construction of Irrigation and Flood Management Infrastructure in the Sholgara Valley
Investments in Sherin Tagab, Sari Pul and Khulm River Basins
On-farm water Management and Agriculture Production
BD = bidding document, BOQ = Bill of Quantity, DD = detailed design, FS = feasibility study, ICB = international competitive bidding, NCB = national competitive bidding, O&M =
operation and maintenance, PDF = project development facility, PIO = project implementation office, PMO = project management office, R&U = rehabilitation and upgrading,
RBA = river basin agency, RBC = river basin council.

65
Source: Asian Development Bank estimates.
66 Appendix 9

PROCUREMENT PLAN

Table A9.1: Project Information

Project Name: Water Resources Development Investment Program
Country: Islamic Republic of Afghanistan Executing Agency: Ministry of Finance
Grant Amount: $303.3 million Of which committed: $89.9 million (tranche 1)
(including $3.3 million cofinanced by the Government of
United Kingdom)
Loan (Grant) Number: 42091
Date of First Procurement Plan: 18 August 2009 Date of this Procurement Plan: 18 August 2009

A. Process Thresholds, Review and 18-Month Procurement Plan

1. Project Procurement Thresholds

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following
process thresholds shall apply to procurement of goods and works.

Table A9.2: Procurement Thresholds—Goods and Works

Procurement of Goods and Works
Method Threshold
ICB for Works Above $2,000,000
ICB for Goods Above $500,000
NCB for Works Beneath that stated for ICB, Works
NCB for Goods Beneath that stated for ICB, Goods
Shopping for Works Below $100,000
Shopping for Goods Below $100,000
Community Contractinga Below $ 10,000 for initial contract of a community; up to
$30,000 once the community has experience.
ICB = international competitive bidding, NCB = national competitive bidding.
a
Implementation procedures are detailed in Supplementary Appendix G.

2. ADB Prior or Post Review

2. Except as ADB may otherwise agree, the following prior or post review requirements
apply to the various procurement and consultant recruitment methods used for the project.

Table A9.3: Prior and Post Review Requirements and Consultant Recruitment Methods
Procurement Method Prior or Post Comments
Procurement of Goods and Works
ICB Works Prior
ICB Goods Prior
NCB Works Post First 3 prior
NCB Goods Post First 3 prior
Shopping for Works Post First 3 prior
Shopping for Goods Post First 3 prior
Community Participation Post First 5 prior
Direct Contracting Prior

Recruitment of Consulting Firms

Quality- and Cost-Based Selection Prior
QBS Prior
Other selection methods: Consultants Qualifications, Least- Prior
Cost Selection, Fixed Budget, and Single Source Selection

Recruitment of Individual Consultants

Individual Consultants Prior
ICB = international competitive bidding, NCB = national competitive bidding, QBS = quality-based selection.
 Appendix 9 67

3. Goods and Works Contracts Estimated to Cost More Than $1 Million

3. The following table lists goods and works contracts for which procurement activity is
expected to commence within 18 months. These amounts are indicative.

Table A9.4: Goods and Works Contracts Expected to Commence Within 18 Months
Prequalification Advertisement
Contract Procurement of Bidders Date
No. General Description Value Method (Yes/No) (quarter/year) Comments
Component 1: Northern Basin Development
1. Construction of Bangala 12.8 ICB No Q1/10
Weir, Gate Operation ($ mil.)
Equipment for
Samarkandian and Nahre
Shahi Weir, and
Rehabilitation of
Samarkandian Weir
ICB = international competitive bidding, Q = quarter.

4. Consulting Services Contracts Estimated to Cost More Than $100,000

4. The following table lists consulting services contracts for which procurement activity is
either ongoing or expected to commence within 18 months. These amounts are indicative.

Table A9.5: Consulting Services Contracts Expected to Commence Within 18 Months

Recruitment
Method Advertisement International
Contract Quality: Date or National
No. General Description Value Cost Ratio (quarter/year) Assignment Comments
1. Tranche 1 Implementation 11.4 QBS Q3/09 International
Consultant in PMO/MEW ($ million)
2. Tranche 1 Implementation 4.6 QBS Q3/09 International
Consultant in PMO/NVDA ($ million)
3. Helmand Basin Master 3.3 QBS Q3/09 International Cofinanced by
Plan ($ million) the
Government of
United
Kingdom
MEW = Ministry of Energy and Water, NVDA = Nangahar valley Development Authority, PMO = project management
office, Q = quarter, QBS = quality-based selection.

5. Goods and Works Contracts Estimated to Cost Less than $1 Million and
Consulting Services Contracts Less than $100,000
5. The following table groups smaller-value goods, works and consulting services contracts
for which procurement activity is expected to commence within 18 months. These amounts are
indicative.

Table A9.6: Smaller Value Goods and Works Contracts Expected to Commence Within 18 Months
Value of Number Procurement /
Contracts of Recruitment
No. General Description (cumulative) Contracts Method Comments
1. Vehicles for PMO/PIOs in MEW $180,000 2 Shopping
2. Vehicles for PMO in NVDA $70,000 1 Shopping
3. Office Equipment for PMO and PIOs in MEW $90,000 1 Shopping
4. Office Equipment for PMO in NVDA $50,000 1 Shopping
MEW = Ministry of Energy and Water, NVDA = Nangahar Valley Development Authority, PIO = project
implementation office, PMO = project management office.
68 Appendix 9

B. Indicative Tranche 1 Packages to be Procured After 18 Months

1. Goods and Works Contracts Estimated to Cost More Than $1 Million
6. The following table lists goods and works contracts for which procurement activity is
expected to commence after 18 months. These amounts are indicative.
Table A9.7: Goods and Works Contracts Expected to Commence After 18 Months
Prequalification Advertisement
Contract Procurement of Bidders Date
No. General Description Value Method (Yes/No) (quarter/year) Comments
Component 1: Northern Basin Development
1. Main Canal 5.4 ICB No Q2/11 The number of
Infrastructure ($ million) contracts will
Rehabilitation be finalized
(1–3 NCB contracts are during
possible) implementation
2. Pilot Rehabilitation for 1.5 NCB/ No Q3/12 The number of
Secondary and Tertiary ($ million) Community contracts will
Canal and Improved Contracting be finalized
Canal Access Points for during
Women implementation.
Community
contracting
procedures are
detailed in
Supplementary
Appendix G of
the RRP.
Component 2: Nangahar Valley Development Authority Improvement
3. Rehabilitation of NVDA 20.6 ICB No Q2/11
Main, Secondary and ($ million)
Tertiary Canals
Component 3: Flood Management
4. Yanqi Qala Flood 8.9 ICB No Q2/11
Embankment, Yatim ($ mil.)
Tapa Headworks, and
Pilot Porcupines and
Forestation
5. Bank Erosion Protection 1.5 NCB/ No TBD The number of
Works ($ million) Shopping contracts will
be finalized
during
implementation
ICB = international competitive bidding, NCB = national competitive bidding, NVDA = Nangahar Valley Development
Authority, Q = quarter, TBD = to be determined.

2. Consulting Services Contracts Estimated to Cost More Than $100,000

7. The following table lists the consulting services contract for which procurement activity is
expected to commence after the next 18 months. These amounts are indicative.
Table A9.8: Consulting Services Contracts Expected to Commence After 18 Months
Recruitment
Method Advertisement International
Contract Quality: Date or National
No. General Description Value Cost Ratio (quarter/year) Assignment Comments
1. Feasibility Studies for 8.0 QBS and Q4/10 International Number of
Subsequent Tranches ($ mil.) Individual contracts will
Preparation Consultant(s) be finalized
during
implementation
Q = quarter, QBS = quality-based selection.
 Appendix 9 69

C. Indicative List of Packages Required Under the Tranches 2 and 3

8. The following table provides an indicative list of all procurement (goods, works and
consulting services) over the life of the project. The indicative projects are all contingent and
require confirmation based on the Water Resources Development Investment Program
selection criteria. Contracts financed by the recipient and others should also be indicated, with
an appropriate notation in the comments section. Other project components will be identified,
confirmed and prepared during execution of the first tranche.
Table A9.9: Procurement Activities
Domestic
Estimated Preference
Estimated Number Procurement/ Applicable/
Value of Recruitment Type of
No. General Description (cumulative) Contracts Method Proposal Comments
Civil Works
1. Flood Management Component
2. Extension of Flood TBD 1 ICB No
Embankment in Yangi Qala and
a
Darqad
3. Channel Stabilization in Imam TBD 1–3 ICB No
Sahib1
4. Flood protection works for the TBD 1 ICB No
a
Sherawan Irrigation Intake
5. NBD Component
6. Construction of Imam Sahib TBD 1 ICB No Contracts
Headworks and Canal for NCB
rehabilitation may be
clustered
7. Construction of irrigation and TBD 1 ICB No
flood management
infrastructure in the Sholgara
Valley
8. Investments in Sherin Tagab, TBD TBD ICB No
Sari Pul and Khulm River
Basins
Consulting Services
9. Tranche 2 Implementation TBD 1-3 QBS TBD
Consulting Services (international)
10. Tranche 3 Implementation TBD 1-3 QBS TBD
Consulting Services (international)
ICB = international competitive bidding, NCB = national competitive bidding, QBS = quality-based selection, TBD = to
be determined.
a
To the degree possible, the flood management subprojects will be grouped to reduce the number of contracts.

D. National Competitive Bidding for Afghanistan

1. General

9. National competitive bidding for the procurement of goods and related services shall
conform to the provisions for open tender without prequalification as prescribed in the
Procurement Law of October 2005 and elaborated in the Rules of Procedure for Public
Procurement issued by the Ministry of Finance in April 2007, with the clarifications and
modifications described in the following paragraphs required for compliance with the provisions
of ADB’s Procurement Guidelines (2007, as amended from time to time).
70 Appendix 9

2. Registration and Other Pre-Bid Requirements

(i) Bidding shall not be restricted to shortlists or standing lists.

(ii) No bid shall be declared ineligible on the grounds of debarment without ADB’s
prior concurrence.

(iii) No bid shall be declared ineligible on the grounds of government regulations that
restrict sources without ADB’s prior concurrence.

(iv) Foreign suppliers and contractors from ADB member countries shall be allowed to
bid, without registration, licensing, and other government authorizations. However,
in case these foreign suppliers and contractors are declared winning bidders, the
requirements may be completed after the award and before the signing of the
contract, without unreasonable costs or additional requirements.

3. Prequalification

10. Post qualification shall be used unless prequalification is explicitly provided for in the
loan agreement and procurement plan. Irrespective of the procedure applied (whether
prequalification or post qualification), no domestic or foreign contractor shall be precluded from
participation.

11. If prequalification is undertaken, the prequalification criteria should include "Eligibility

Requirements", "Financial Situation", "Pending Litigation", and "Experience". Technical
Capacity (personnel and equipment) should not be part of the prequalification criteria.

12. Interested bidders shall be given a minimum period of 28 days for the preparation and
submission of prequalification applications.

4. Advertising

13. Bidding of national competitive bid (NCB) contracts estimated at $500,000 or more for
goods and related services and NCB contracts estimated at $1,000,000 or more for works shall
be advertised on ADB’s website via the posting of the Procurement Plan.

5. Bidding Documents

14. Procuring entities shall use standard bidding documents acceptable to ADB, based
ideally on the standard bidding documents issued by ADB.

6. Bidding Period

15. Procuring entities shall allow for a minimum of 4 weeks for submission of bids.

7. Bid Security

16. Where required, bid security shall be in the form of a bank guarantee or check from a
reputable bank and should not be more than 2% of the estimated value of contract to be
procured.
 Appendix 9 71

8. Preferences

17. No preference of any kind shall be given to domestic bidders or for domestically
manufactured goods.

9. Evaluation

18. No bid shall be rejected on the grounds of price, or for any other reason(s) not related
to the evaluation and qualification criteria, without ADB’s prior concurrence.

19. Prompt payment discounts offered by bidders shall not be considered in bid evaluation.

10. Price Negotiations

20. Price negotiation shall be allowed only after receiving ADB’s prior concurrence.

11. Advance Payments

21. No advance payment shall be made without an advance payment security in the form of
a bank guarantee or check from a reputable bank.

12. Government-Owned Enterprises

22. Government-owned enterprises in Afghanistan shall be eligible to participate only if they

can establish that they are legally and financially autonomous, operate under commercial law,
and are not a dependent agency of the procuring entity, or the project executing agency, or the
implementing agency.

13. Right to Inspect/Audit

23. A provision shall be included in all NCB works and goods contracts financed by ADB
requiring suppliers and contractors to permit ADB to inspect their accounts and records and
other documents relating to the bid submission and the performance of the contract, and to
have them audited by auditors appointed by ADB.

14. Anticorruption Policy

24. The Borrower shall reject a proposal for award if it determines that the bidder
recommended for award has, directly or through an agent, engaged in corrupt, fraudulent,
collusive, or coercive practices in competing for the contract in question.

25. ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to
be awarded a contract financed by ADB, if it at any time determines that the firm or individual
has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices
in competing for, or in executing, an ADB-financed contract, as indicated in paragraph 1.14 (a)
of ADB's Procurement Guidelines.

15. Disclosure of Decision on Contract Awards

26. At the same time that notification of award of Contract is given to the successful bidder,
the results of the bid evaluation shall be published in a local newspaper, or well-known, freely
accessible website identifying the bid and lot numbers and providing information on (i) name of
each bidder who submitted a bid; (ii) bid prices as read out at bid opening; (iii) name of bidders
whose bids were rejected and the reasons for their rejection; and (iv) name of the winning
bidder, and the price it offered, as well as duration and summary scope of the contract awarded.
72 Appendix 9

The executing agency or implementing agency or contracting authority shall respond in writing
to unsuccessful bidders who seek explanations on the grounds on which their bids are not
selected.

16. Member Country Restriction

27. Bidders must be nationals of member countries of ADB, and offered goods, works, and
related services must be produced in and supplied from member countries of ADB.
 Appendix 10 73

SCHEDULE OF INPUT FOR CONSULTING SERVICES

1. Project management offices (PMOs) will be established by the Ministry of Energy and
Water (MEW) and Ministry of Agriculture, Irrigation, and Livestock (MAIL). The PMOs will engage
consulting services to assist in implementation of the first tranche. Recruitment and selection of
consultant proposals requires position-based terms of reference for each specialist. The summary
and detailed position-based terms of reference are found in Supplementary Appendix E.

2. The PMO consultants for both MEW and MAIL will have technical and engineering, legal
and procurement, finance and administration, safeguards and gender, monitoring and
evaluation and reporting, and capacity and institutional development expertise, and provide
support in these areas. In addition, the MEW PMO consulting package will also provide support
for (i) two project implementation offices (PIOs) that will implement the northern basins
development (NDB) and flood management components, and (ii) a program development facility
(PDF) to prepare investments for subsequent tranches of the Investment Program. The MAIL
PMO will support implementation of the Nangahar Valley Development Authority (NVDA)
improvement component. The consultant positions and schedule of inputs are listed in Tables
A10.1 and A10.2.1 In addition to these two packages, 8 person-months of international and 8
person-months of national individual consulting input will be recruited to accelerate project
readiness for the NBD component.

Table A10.1: Schedule of Consulting Input for the Ministry of Energy and Water
Package
Person Month Input per Year
Item Year 1 Year 2 Year 3 Year 4 Year 5 Total
A. Project Implementation in PMO MEW
1. International
a. PMO TL / Water Resources Planner 5 11 7 5 4 32
b. Irrigation / Hydraulics Engineer 4 4 2 10
c. Finance Specialist 2 2 4
d. Procurement Specialist 2 4 2 8
e. Economist / M&E 2 2 4
f. Flood Management Specialist 6 6 12
g. Environment Specialist 2 2
h. Resettlement / Social Safeguards Specialist 2 2
i. Gender 2 2
j. Unallocated 3 4 4 2 2 15
Subtotal (A1) 18 35 21 7 8 91
2. National
a. Deputy PMO TL / Hydraulics Engineer 6 11 11 8 6 42
b. Economist / M&E 6 11 6 6 6 35
c. Financial Specialist 4 11 11 11 6 43
d. Accountant 6 11 11 11 6 45
e. Procurement Specialist 6 11 6 3 3 29
f. Flood Management Specialist 6 11 11 28
g. Social Analyst / Resettlement Specialist 6 3 3 3 15
h. Environment Specialist 4 3 3 10
i. Gender Specialist 3 5 5 3 16

1
A separate consulting package will be recruited for the Helmand Basin Water Resources Master Plan once the
position based, detailed terms of reference are finalized.
74 Appendix 10

Person Month Input per Year

Item Year 1 Year 2 Year 3 Year 4 Year 5 Total
j. Unallocated 2 7 7 7 1 24
Subtotal (A2) 39 88 72 52 31 287
B. Program Development Facility in PMO MEW
1. International
a. PDF TL / Water Resources Planner 2 8 8 4 22
b. Economist 2 4 6
c. Unallocated 2 5 3 10
Subtotal (B1) 6 17 11 4 38
2. National
a. Deputy PDF TL / Civil / Hydraulics Engineer 4 8 8 4 24
b. Economist / M&E / MIS Specialist 3 6 6 6 21
c. Irrigation Engineer 4 11 11 10 36
d. Unallocated 3 8 8 8 27
Subtotal (B2) 14 33 33 28 108
C. PIO for Northern Basins Development
1. International
a. PIO TL – Irrigation / Hydraulic Engineer 4 4 4 4 16
b. Irrigation Engineer 6 6 2 2 16
c. Water Management /WUAs/OFWM Specialist 2 6 4 2 14
d. Irrigation Agronomist 2 2 4
e. River Basin Management Specialist 4 5 4 4 17
f. O&M Engineer 2 2 4
Subtotal (C1) 18 25 16 8 4 71
2. National
a. Deputy PIO TL – Civil / Hydraulic Engineer 6 11 11 11 11 50
b. Design Engineer (2) 6 12 12 30
c. Accountant 6 11 11 11 6 45
d. Field Supervisors (6) 12 30 12 6 60
e. WUA / OFWM Specialist 6 11 11 11 6 45
f. River Basin Management Specialist 4 11 11 8 34
Subtotal (C2) 40 86 68 47 23 264
D. PIO for Flood Management
1. International
a. PIO TL / Hydraulic/Flood Management 3 6 6 15
Engineer
b. Geotechnical Specialist 2 2 4
Subtotal (D1) 5 8 6 19
2. National
a. Deputy PIO TL / River Training Engineer 6 11 11 11 39
b. Design Engineer 6 4 2 12
c. Accountant 6 11 11 11 39
d. Field Supervisors (2) 6 22 18 46
Subtotal (D2) 18 32 46 40 136
Total International Input 47 79 49 19 12 219
Total National Input 107 228 208 159 54 795
M&E = monitoring and evaluation, MEW = Ministry of Energy and Water, MIS = management information system,
NVDA = Nangahar Valley Development Authority, O&M = operation and maintenance, OFWM = on-farm water
management, PDF = program development facility, PIO = project implementation office, PMO = project management
office, TL = team leader, WUA = water users association.
Source: Asian Development Bank estimates.
 Appendix 10 75

Table A10.2: Schedule Consulting Inputs for the Ministry of Agriculture, Irrigation
and Livestock Package
Person Month Input per Year
Item Year 1 Year 2 Year 3 Year 4 Year 5 Total
A. Project Implementation in PMO MAIL/NVDA
1. International
a. PIO TL - Irrigation /Hydraulic Engineer 4 8 8 4 24
b. Irrigation Engineer 3 3 3 2 11
c. Institutional Reform/Business Management 3 4 7
d. Finance Specialist 3 3
e. Procurement Specialist 2 5 7
f. Resettlement/Social Safeguards Specialist 2 2
g. Water Management / WUA / OFWM Specialist 3 5 3 11
h. Environment Specialist 2 2
i. Unallocated 3 3 6
Subtotal (A1) 18 30 16 8 72

2. National
a. Deputy TL Civil/Hydraulic Engineer 6 11 11 11 39
b. Financial Specialist 4 4 4 4 - 16
c. Accountant 6 11 11 11 39
d. Procurement Specialist 6 11 17
e. Social Safeguards Specialist 6 3 3 12
f. Environment Specialist 4 3 3 10
g. Gender Specialist 3 5 5 13
h. M&E Specialist 3 6 6 6 21
i. Field Supervisors (4) 20 24 16 60
j. Design Engineer (2) 6 22 4 4 36
k. WUA / OFWM Specialist 6 11 11 11 39
Subtotal (A2) 41 109 80 69 302
M&E = monitoring and evaluation; MAIL = Ministry of Agriculture, Irrigation, and Livestock; NVDA = Nangahar Valley
Development Authority; OFWM = on-farm water management; PIO = project implementation office; PMO = project
management office; TL = team leader; WUA = water users association.
Source: Asian Development Bank estimates.
76 Appendix 11

FLOW OF INVESTMENT PROGRAM FUNDS

ADB
Imprest Fund (Financier) Imprest Fund
Procedure Procedure
(Statement of (Statement of
Expenditure) Grant Expenditure)
Agreement

Afghanistan
MOF
Grant (Recipient) Grant
Agreement Agreement

MEW PMO/PDF in Kabul Imprest Account MAIL PMO in Jalalabad

• Intl.and Ntl. Financial Experts Imprest Account
• Accountant • Intl. and Ntl. Financial Experts
• Financial Officer • Accountant
• Financial Officer
MEW PMO/PIU Consulting Firm
MAIL PMO Consulting Firm

PIO in Mazar PIO in Taloqan Feasibility Studies and

2nd Generation 2nd Generation Detailed Design for later
Imprest Account Imprest Account tranches
• Accountant • Accountant
Helmand Basin Water
• Financial Officer • Financial Officer Resource Master Plan

Direct Direct
Payments Payments

Contractors for Contractors for Contractor for

Northern Basins Flood Management NVDA

Grant Fund Flow Fund Flow

Agreement (Direct Payment) (Imprest Account)

ADB = Asian Development Bank; Intl. = international; MAIL = Ministry of Agriculture, Irrigation, and Livestock; MEW =
Ministry of Energy and Water; MOF = Ministry of Finance; Ntl. = national; PDF = program development facility; PIO = project
implementation office; PMO = project management office.
Source: Asian Development Bank.
 Appendix 12 77

SUMMARY ECONOMIC AND FINANCIAL ANALYSIS

A. Background

1. The Water Resources Development Investment Program (the Investment Program) for
Afghanistan will be financed by the Asian Development Bank (ADB) through a multitranche
financing facility (MFF) for $303.3 million over a 10-year period. The funds will be disbursed in
three tranches, and the Investment Program will implement a program of activities to develop
water resources in Afghanistan through the rehabilitation and upgrading of existing
infrastructure, development of new infrastructure, and capacity and institutional strengthening
for improved management of water resources.

2. The first tranche has three investment components. The first component, northern
basins development (NBD), will take place in the Lower Balkh River Basin and supports (i)
construction of the Bangala weir, (ii) rehabilitation and upgrading of the Samarkandian and
Nahre Shahi weirs, (iii) rehabilitation and upgrading of approximately 250 irrigation structures on
main canals, (iv) pilot improvements to secondary and tertiary structures, (v) improved access
points for women to collect canal water, (vi) formation of water users associations (WUAs) with
training and demonstrations, and (vii) strengthening the Northern Basins River Basin Agency
and Council. The second component, Nangahar Valley Development Authority (NVDA)
improvement, will support (i) rehabilitation and upgrading of the main, secondary, and tertiary
canals of the NVDA irrigation system, totalling about 20,000 hectares (ha); (ii) establishment of
WUAs and on-farm water management, and improved agricultural practices training and
demonstrations; and (iii) development of a corporate business plan to reform NVDA
management. Component 3, flood management, will construct (i) a 6 kilometer flood
embankment with trial forest plantation and bank protection works along the Amu Darya River at
Yangi Qala, (ii) new headworks to control the flow of water into the Yatim Tapa irrigation canal,
and (iii) river bank protection works to mitigate erosion.

B. Approach and Main Assumptions

3. Project interventions will provide rehabilitation and upgrading of irrigation systems with
improved distribution structures, and in particular permanent headworks for river off-takes in the
NBD. Since traditional systems require significant levels of annual maintenance, one benefit of
the project will be the reduction of annual operation and maintenance (O&M) costs. The
infrastructure rehabilitation and upgrading will be supported by on-farm demonstrations for
farmers regarding methods for optimizing water management for improved performance and
production. The flood management activities will protect rural assets. The principal benefits of
the Project will accrue from improvements in agricultural production, and avoided losses through
the protection of land, buildings, and other infrastructure from floods and bank erosion. The
benefits of the interventions have been estimated by comparing the with-project and without-
project scenarios.

4. The economic and financial analysis was undertaken using first quarter 2009 constant
prices and the exchange rate used was $1 = AF50. The following key parameters and
assumptions were used in the analysis:

(i) use of the world price numeraire;

(ii) agricultural input and output prices are based on current prices reported by
farmers during surveys carried out for project preparation, supplemented by
78 Appendix 12

available market data from the project areas and available data from secondary
sources;

(iii) a standard conversion factor (SCF) of 0.981 has been used for most agricultural
inputs and outputs, except that specific conversion factors have been estimated
for wheat (0.83), rice (0.71), maize (0.77), urea (0.92), and diammonium
phosphate (0.66) based on June 2009 international prices with appropriate
adjustments for transport, handling, marketing and processing. 2 For unskilled
labor, a shadow wage rate factor of 0.8 was used to take account of surplus labor
in rural areas; and

(iv) the project implementation period for the first tranche of the Project will be 5
years and the economic life is 25 years.

C. Project Costs and Benefits

5. Project costs were estimated using prices prevailing in the first half of 2009 and include
investment costs for new construction, rehabilitation and upgrading of existing infrastructure,
support for improved water management through the establishment of WUAs and other
measures, project management, and O&M. The total cost of project interventions under the first
tranche is $92.9 million (including contingencies). The first tranche of the project also includes
funding of $9.3 million for a program development facility (PDF) that will identify potential
investments and carry out feasibility assessments for subsequent tranches of the Investment
Program. Also included is funding of $3.3 million for the Helmand Basin Master Plan, to be
cofinanced by the Government of the United Kingdom.

6. Benefits: Northern basins development. The quantified benefits of the Project’s NBD
component derive from the two main interventions: (i) the construction of the Bangala weir; and
(ii) the rehabilitation and upgrading of about 250 main canal structures in the lower Balkh
irrigation system, which builds on work begun under the Emergency Infrastructure Rehabilitation
and Reconstruction Project (EIRRP).3 The Project will undertake measures to improve water
management, both on-farm and in the canal systems, including through the development of
WUA on-farm water management demonstrations.

7. Annual crop production in the Balkh river basin depends on winter snowfalls in the
mountains, spring rains, and the resulting river flows. In a normal year, the lower Balkh system
intensively irrigates about 84,000 ha, although system improvements under EIRRP are reported
to have increased the area irrigated in a normal year by 10%. The actual area receiving
adequate irrigation varies according to the annual precipitation in a given year.

8. Construction of the Bangala weir will provide better control of diverted flows to the
command areas of the Aqcha, Charboloc, and Faizabad canals (totalling 39,200 ha), which will
reduce operational losses in the head reaches and throughout the command areas. Overall
operational irrigation efficiency is expected to increase from 45% to 55%. The benefits of this
project arise from increases in cropped area and crop yields that come about as a result of a
more assured water supply. The level of benefits will depend upon the farm location within the
canal system. The greatest impact will be in the tail reaches of canals, because improved water

1
The SCF was estimated based on import and export data from the years 2007 to 2009.
2
Details of the estimates are given in Supplementary Appendix A.
3
ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
Islamic Republic of Afghanistan for the Emergency Infrastructure Rehabilitation and Reconstruction Project.
Manila.
 Appendix 12 79

control and efficiency will make proportionally more water available for the tail areas than for the
head and middle reaches of canals, which are already relatively well supplied. In general, no
significant changes in cropping patterns have been assumed. Rehabilitation and upgrading of
the main canal structures will have similar, smaller impacts spread throughout the entire 84,000
ha command area of the irrigation system.

9. The head, middle and tail reaches of each command area are assumed to be equal in
area and for the northern basins have present cropping intensities of 156% (head), 135%
(middle), and 66% (tail). The wheat crop provides about one third of project benefits and at
present has yields of between 2.7 tons/ha in the head reaches and 1.4 tons/ha in the tail
reaches. Other important crops are winter vegetables such as cauliflower, with yields of 15.0–
17.5 tons/ha and summer melons with yields up to 25 tons/ha in the head reaches, but
achieving as little as 6–7 tons in the tail reaches where the water supply is currently unreliable.

10. The production assumptions used in the analysis and the changes in cropping intensities
are given in Table A12.1.

Table A12.1: Northern Basins - With Project Increases in Agricultural Productivity

(%)
Bangala Weir R&U of Main Canal Structures
Area Cropping Area Cropping
Item Crop Yield Crop Yield
Cultivated Intensity Cultivated Intensity
Head reaches 5.0 3 6.5 2 1 2.0
Middle reaches 9.0 5 12.1 3 1 4.0
Tail reaches 12.5 7 8.3 5 2 3.1
R&U = rehabilitation and upgrade.
Source: Asian Development Bank estimates.

11. With the Project, benefits accrue from an estimated additional 3,450 ha due to
construction of the Bangala weir and 2,772 ha due to rehabilitation and upgrading of the main
canal structures. The total increase in grain production is expected to be about 9,640 tons,
including wheat and maize, but principally wheat from the increased cultivated area made
possible by the Bangala weir. There will be significant increases in the production of second-
season fruit and vegetables. Due to increased on-farm production activity, the increase in
demand for labor is expected to be about 400,000 person days/year, or some 5.2 days/ha/year
due to the Bangala weir and 2.4 days/ha/year due to the rehabilitation and upgrading of the
main canal structures.

12. No benefits have been quantified for other activities under the NBD component,
including the (i) rehabilitation of the Nahre Shahi and Samarkandian weirs, (ii) the upgrading of
structures on selected secondary and tertiary canals, and (iii) development of improved
women's access points to collect canal water. Benefits, potentially substantial, will also accrue
from strengthening of the Northern Basins RBA that will operate the physically improved weirs
for more effective water management throughout the Lower Balkh Basin. The Project will also
lead to greater production of fodder crops and straw. Both will benefit livestock production, but
these benefits have not been quantified. The economic returns for the component are therefore
lower than they would be if it were possible to quantify all benefits.

13. Benefits: NVDA improvement. Current production in the NVDA area is constrained by
degradation of the irrigation system. Rehabilitation and upgrading of the main canal and
associated secondary and tertiary canals will restore the system to full capacity. The command
80 Appendix 12

area of the NVDA system includes four state farms covering a total of about 10,000 ha, of which
not more than about 7,600 ha is estimated to be cultivable, and 14,000 ha of private farms, of
which about 11,900 ha is cultivated. The current cropping intensity on the state farm land is
estimated to be 56%, but on private farms is generally between 162% and 173%, and may be
higher in some cases. The Project will increase water availability and reliability at the farm level.
The benefits accrue from increases in the area cultivated and increased project yields. In
addition, a modest increase of tree crops on private farms (about 1.5% of total area), is
assumed at the expense of grain production. Tree crops are well established in the area and
farmers are likely to take advantage of better water supplies to increase investment in this more
profitable crop.

14. Present yields are generally higher in the NVDA area than in the Balkh River Basin. In
the NVDA area, wheat—with yields between 1.85 tons/ha in the tail reaches and 3.5 tons/ha in
the head reaches—provides about a quarter of the benefits. Because of the proximity of both
local and Pakistani markets, a wide range of winter and summer vegetables are grown, as well
as both citrus and stone fruit. With-project changes are summarized in Table A12.2. Because of
the relatively low current yields on the state farm areas, a higher average increase is anticipated
for these areas, because improved water and on-farm management will be starting from a low
base.

Table A12.2: Nangahar Valley Development Authority — With-Project Increases in

Agricultural Productivity
(%)
Private Farms State Farms
Area Cropping Area Cropping
Item Crop Yield Crop Yield
Cultivated Intensity Cultivated Intensity
Head reaches 4 2.0 6.3
Middle reaches 8 3.5 7.7 10a 10 25.6b
Tail reaches 10 5.0 16.2
a
For existing crops.
b
Includes addition of new crops to cropping pattern.
Source: Asian Development Bank estimates.

15. With the Project, an estimated additional 870 ha will be cropped in the private farm areas
and 760 ha on the state farms. Benefits will include an increase in grain production of 4,398
tons, including wheat (2,723 tons), rice (1,111 tons) and maize (564 tons). Significant increases
in fruit and vegetable production will accrue from private farmers. The increase in demand for
labor arising from increased on-farm production activities will be about 220,000 person
days/year (11.5 days/ha).

16. Apart from the quantified benefits, benefits for the NVDA component will come from
improvements in water management through the establishment of and training for WUAs and
farmers to operate, maintain, and manage their irrigation systems. Crop diversification impacts
toward higher value outputs resulting from on-farm demonstrations may also be
underestimated. Increases in livestock production that arise because of increased fodder
production with the Project have also not been quantified in the analysis.

17. Benefits: Bank erosion and flood management. The flood embankment at Yangi Qala
and headworks at Yetim Tapa on the Amu Darya river will protect agricultural land and rural
infrastructure from flood damage and destruction by river bank erosion. The annual flooding can
cause significant damage in this area, especially in high flow years.
 Appendix 12 81

18. The area to be protected by the 6 km embankment at Yangi Qala and the headworks on
the Yetim Tapa canal includes 5,000 ha of cultivated land, several villages, and Yangi Qala
town. Benefits accrue from the prevention of the damage that regularly occurs at present. Based
on data from the area, the analysis assumes that a 50-year flood (occurring once every 50
years) destroys the entire summer crop, and a 5-year flood will severely damage 20% of the rice
crop. Other floods may occur, with varying degrees of damage caused, but they are not
quantified for this analysis. Furthermore, bank erosion leads to the loss of an estimated 60
ha/year of crop land and 10 ha/year of grazing land, as well as to the annual loss of houses and
related buildings with an average value of $25,000. The annual value of crop losses is
estimated at $0.56 million and the annual value of production lost from eroded land at a further
$0.21 million.4 Large floods have caused significant damage to buildings and infrastructure in
Yangi Qala town. The annual value of this loss is estimated at $0.2 million. An estimate is also
included for the cost of relocating households that are losing land and houses as a result of river
erosion.

D. Economic Analysis of the Project

19. Overall, the first tranche project has an economic internal rate of return (EIRR) of 18.0%.
A 20% in increase in project costs would reduce this EIRR to 14.0% and a 20% decrease in
benefits decrease it to 12.9%. A simultaneous increase in costs of 10% and reduction in
benefits of 10% would lead to an EIRR of 13.5%. The switching value at 12% for costs is
+31.6% and for benefits is –23.2%. A delay of 2 years in achieving benefits would result in an
EIRR of 13.9%.

20. The NBD component has an EIRR of 16.9%. A 20% increase in costs for this component
reduces the EIRR to 12.7%, while a 20% decrease in benefits would result in an EIRR of only
11.4%. A simultaneous increase in costs of 10% and reduction in benefits of 10% would lead to
an EIRR of 12.1%. Switching values are +23.9% for costs and –17.9% for benefits. Crop yield
increases achieved have a greater impact on these results than the increase in irrigated area.

21. The EIRR for the NVDA improvement component is 18.4%. A 20% increase in costs
would produce an EIRR of 13.9%, and a 20% decrease in benefits an EIRR of 12.6%. The
combination of a 10% increase in costs and 10% decrease in benefits gives an EIRR of 13.3%.
Switching values at 12% are +29.5% for costs and –21.9% for benefits. The economic
indicators for this component are robust for variations in key variables.

22. The EIRR for the flood management component is 20.4%. The combination of a 10%
increase in costs and a 10% decrease in benefits would give an EIRR of 17.6%, while a 20%
increase in costs alone produces an EIRR of 17.6%, and a 20% decrease in benefits an EIRR
of 17.5%. Switching values are +85.9% for costs and –52.1% for benefits, making this
component extremely robust.

E. Assessment of Financial Impacts

23. The Project will have a positive impact on household incomes and food security and will
contribute to the reduction of poverty. In the Northern Basins, the demand for farm labor will
increase due to the larger cropped area and the expected increases in cropping intensity, but
increases per ha are not large and likely to be met within households themselves.

4
The value of production from eroded land is cumulative and increases by $0.21 million per year.
82 Appendix 12

24. The financial impact of the project on farm households will vary by location within the
irrigation system, with impacts directly related to the relative increase in water availability. The
greatest impact on households under the NBD component will be for those along the Aqcha,
Charboloc, and Faizabad canals below Bangala weir. On average, it is expected that the farm
income of the households in the head reaches of these canals will increase by AF8,600/ha/year
($172), or 8.2% of present average income. In the middle reaches of the canals, household
incomes will increase by an average AF12,200/ha/year ($244), or 17.3% of present income. The
greatest impact will occur in the tail reaches of the canals; although average household farm
income is estimated to increase by only AF4,600/ha/year ($92), this represents an increase of
27.5% over the present situation.

25. Rehabilitation and upgrading of main canal structures generates small increases in
household farm income throughout the Lower Balkh irrigation system. These include an average
of (i) AF2,450/ha/year ($49) for households in the head reaches, or 2.3% of present farm
income; (ii) AF2,450/ha/year ($49) for households along middle reaches, or a 3.5% increase;
and (iii) AF1,050/ha/year ($21) along tail reaches, representing an increase of 6.2% from
present levels.

26. For NVDA Improvement, increases in private farm household incomes from the
expected changes in cropped area, crop yields and cropping patterns are estimated to be
AF20,300/ha/year ($406 or 8.6%) in the head reaches of canals, AF23,400/ha/year ($468, or
12.9%) in the middle reaches, and AF23,000/ha/year ($460, or 21.1%) in the tail reaches. Farm
incomes are higher in this area than in the Northern Basins and the benefits are larger because
the cropping pattern is more diversified and there is greater emphasis on the production of
higher-value crops.

27. The bank erosion and flood management component, while protecting households from
potential losses of income and assets, will have no direct impact on household incomes for
those living in the area affected by the proposed embankment and headworks.

F. Poverty Impacts of the Project

28. The increases in farm household income anticipated with the Project will reduce overall
poverty levels in the project areas. However, specific impacts on households are difficult to
assess. Average household size is assumed to be seven persons, 5 for which the average
annual household income (at the poverty line income of $14/person/month) would be $1,176
(AF58,800). In the NBD component, an average family on the head reach of a canal would
require 0.56 ha to achieve this income at present, compared with 0.83 ha on a middle reach and
3.5 ha on a tail reach. With implementation of the Bangala weir, average households on the
Aqcha, Charboloc, and Faizabad canals would be able to achieve the poverty level income with
0.52 ha on the head, 0.71 ha on the middle, and 2.75 ha on the tail reaches. Rehabilitation and
upgrading of main canal structures will have similar but smaller impacts. Many households have
small holdings of less than 1 ha; where these are located on the head and middle reaches of
canals, the Project will enable some—and possibly a significant number—of households to
move above the poverty line. While the absolute poverty reduction impact in the tail reaches
may be smaller, the relative impact will be larger.

5
Information on household size for the Northern Basins and the NVDA area is sparse and probably not reliable. The
average of seven people per household that was used is an indicative figure, based on: World Food Programme
and Ministry of Rural Rehabilitation and Development. 2004. National Risk and Vulnerability Assessment. Kabul.
 Appendix 12 83

29. In the NVDA area, an average household requires between 0.54 ha and 0.25 ha in the
tail and head reaches for household farm income to be above the poverty level at present, and
about between about 0.44 ha and 0.23 ha with the Project. While average farm sizes are small,
the relative productivity of private farms in the NVDA area suggests that poverty levels for those
with landholdings are relatively low. However, households that depend only on the farming of
leased state land would have household incomes below the poverty line both without and with
the Project.6

30. Poverty impact ratios were calculated for each component and are 56% for the northern
basins, 58% for the NVDA, and 49% for the flood management components.

Table A12.3: Summary of Economic and Financial Analysis

Bank
Northern Erosion and Project
Item NVDA
Basins Flood (first tranche)
Management
Command Area (ha)
Geographic area 84,000 25,000 5,000 114,000
Incremental cropped area 5,598 1,627 7,225
Benefits at full development
($ million/year) 9.51 7.21 3.29a 20.24
Investment cost ($ million) (base costs) b
a. Civil works 20.6 19.0 8.6 48.2
b. WUAs, OFWM, and training 1.8 1.1 2.9
c. Project management and other support 14.1 4.5 4.2 22.7
Economic NPV ($ million) 12.9 11.5 7.9 32.3
EIRR and sensitivity 16.9% 18.4% 20.1% 18.0%
Capital costs increase by 10% 14.7% 16.1% 19.0% 15.9%
Benefits reduced by 10% 14.3% 15.7% 18.9% 15.6%
Costs +10% and benefits -10% 12.1% 13.3% 17.6% 13.5%
Benefits delayed by 2 years 13.2% 14.0% 15.4% 13.9%
Wheat price reduced by 20% 15.8% 18.0% 19.5% 17.2%
Increase in crop yields reduced by 20% 15.2% 16.7% - 16.6%
Increase in cropped area reduced by 20% 15.0% 17.6% - 16.8%
Irrigated area reduced by 10% 15.4% 17.8% - 17.0%
Switching values at 12% EIRR
Increase in capital costs +23.9% +29.5% +85.9% +31.6%
Reduction in incremental benefits -17.9% -21.9% -52.1% -23.2%
Incremental grain production (tons) 9,640 4,398 n/a 14,038
Incremental demand for labor (days/year) 402.000 224,000 n/a 626,000
Poverty impact ratio (%) 56 58 49 -
EIRR = economic internal rate of return, NPV = net present value, NVDA = Nangahar Valley Development Authority,
OFWM = on-farm water management, WUA = water users association.
a
In 10th year after completion of works.
b
Excludes the Project Development Facility (for subsequent tranches) and the Helmand Valley Master Plan study.
Source: Asian Development Bank estimates.

6
Leasing land on state farms for a single annual crop of wheat is probably a supplement to private farm production
for many farm households, rather than the sole farming activity.
 84 Appendix 13

SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY

Country/Project Title: Afghanistan: Water Resources Development Investment Program

Lending/Financing Department/ Central and West Asia Department/

Multitranche Financing Facility
Modality: Division: Energy and Natural Resources Division

I. POVERTY ANALYSIS AND STRATEGY

A. Link to the National Poverty Reduction Strategy and Country Partnership Strategy

The Afghanistan National Development Strategy (ANDS) recognizes the need to sustain high growth rates in the medium
term to generate employment and reduce poverty.a Agriculture generates about 50% of gross domestic product and employs
about two thirds of all Afghans; 19 million people (or nearly 80% of the population) live in rural areas, which have the highest
incidence of poverty. Agricultural and rural economic growth are essential for sustained improvement in national livelihoods.
Reliable irrigation water is critical to achieving this growth, because irrigated agriculture produces 80% all agricultural output.
To achieve the Government’s poverty-reduction goals, economic growth has to be accelerated and supported by a sustained
increase of 5%–8% per year in the agriculture sector. Growth of the agricultural sector will in large part determine the rate of
economic growth and poverty reduction, and reliable irrigation water is essential to agricultural growth in Afghanistan.

According to data from the 2005 National Risk and Vulnerability Assessment data, about 45% of the rural population is poor,
as opposed to 27% of those who live in urban areas.b Rural populations have the highest rates of food insecurity, with 45%
not meeting minimum food requirements. In addition to facing high food insecurity, rural households have less access to
infrastructure and basic public services. Their level of education is low and rates of illiteracy high.

The country partnership strategy (CPS) of the Asian Development Bank (ADB) is fully aligned with ANDS priorities and
outcomes, and the CPS highlights four sectors for ADB investments: (i) energy; (ii) transportation and communication; and (iii)
agriculture and natural resources, including irrigation and water resources management; and (iv) governance.c

B. Poverty Analysis Targeting Classification: Targeted intervention (geographic)

1. Key Issues

Afghanistan’s human development indicators are among the lowest in the world.d Some 12 million Afghans, or 42% of the
population, live below the poverty line, with monthly incomes of about $14 per capita. About 45% of the population is
estimated to be unable to purchase sufficient food to guarantee the world standard minimum food intake of 2,100 calories per
day.e The national literacy rate was only 28% in 2008, and the literacy rate among women only 16%. Only 31% of the
population has access to safe drinking water, and 12% is believed to have access to sanitation. In addition, life expectancy in
Afghanistan is under 45 years, at least 10 years below that of any other Asian country. Over 20% of all Afghan children die
before the age of 5, half of Afghanistan’s school-age children are not in school, and 57% of the population is under 18 years
of age. Gender inequality is rife across all sectors, resulting in particularly difficult circumstances for women.f

A number of factors have contributed to the country’s overall high poverty incidence, but it has primarily been a result of 30
years of civil conflict, and the associated political instability and lack of security, which stifled economic growth and social
development. The coincident arrivals of returning refugees and internally displaced people (IDP) and the resultant growth in
landlessness have in some areas increased pressure on the resource base beyond sustainable levels. The information below
was collected under the social assessment carried out in the project areas during the preparation of the Water Resources
Development Investment Program.

(i) In Imam Sahib District, 65% to 90% of families in the area close to the flooding and bank erosion along the Amu Darya
River are below the poverty line. These high poverty rates are due to the ongoing river bank erosion and the
displacement of a large number of families and villages.
(ii) The lower Balkh River Basin has an average poverty rate among all villages of about 70%; 83% of families interviewed
were below the poverty line in Khulm district, and 65% in Balkh district.
(iii) In the Nangahar Valley Development Authority (NVDA) area, the poverty incidence ranges from 44% to 88% in Beshood
district, where there are large numbers of IDP and returnees.
 Appendix 13 85

II. SOCIAL ANALYSIS AND STRATEGY

A. Findings of Social Analysis

The main livelihood activities in the project areas include irrigated agriculture, livestock, and hired labor. The proportion of
families that are landless range from about 28% in Amu Darya basin to 95% in the Jalalabad area due to the influx of
returning refugees and IDP. Limited farm production arising from poor water availability and the lack of employment
opportunities are key social issues. Crop losses are reported in all areas, mainly due to the unreliable water supply, which is
chronic at the tail end of many irrigation canals. In addition, bank erosion and flooding have negatively affected farm output in
the villages along the Amu Darya River. At the time of the field assessment, few households had surplus grain to sell: the
assessment recorded zero in Nangahar, and 17% in the Yangi Qala area. The rural labor pool is increasing with many unable
to find work opportunities.

The Project's northern basins development component will improve water reliability in the irrigated areas of the Lower Balkh
River Basin resulting in increased yields, expanded irrigated area, and increased cropping intensities, This will translate into
higher incomes for farm families. The impact will be more pronounced in the tail reaches of the command areas. The size of
the population that benefits will depend on the amount of irrigation water available, but in many years, up to 500,000 persons
could directly benefit from the improvements (assuming an average family size of seven people). Similar benefits will be
generated by the project in the NVDA area, but given the smaller size of the irrigated area, about 150,000 persons will directly
benefit from the irrigated agricultural productivity. The increased agricultural productivity will also support substantial
additional labor opportunities, much of which may be captured by family members, and stimulate value chains associated with
agricultural production. While many families in the area may not directly benefit through higher incomes from bank erosion
and flood protection, many in the area will have a much lower risk of losing productive assets. There are approximately
240,000 persons in the Yangi Qala area and Iman Sahib, although not all of them are at risk of floods. However, the flood risk
protection for the Yetim Tapa irrigation system will directly benefit close to 40,000 persons.g

B. Consultation and Participation

1. Provide a summary of the consultation and participation process during the project preparation.

Consultations were undertaken by the project preparation consultants with farmer irrigators, the landless, sharecroppers,
herders, community elders, officials from nongovernmental organizations (NGOs), and government authorities. In addition,
small workshops and meetings were held in each of the project component areas, and a large final tripartite workshop was
held in Kabul at the end of the project preparation. The views of the communities and proposed project beneficiaries were
incorporated into the project design. Consultation is integral to the project design with regard to the development of water
users associations (WUAs), which will be empowered to assume formal responsibility for the management and operation and
maintenance of large portions of the irrigation system, and will share decision-making responsibility for infrastructure
improvements.

2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring?
Information sharing Consultation Collaborative decision making Empowerment

3. Was a C&P plan prepared? Yes No

During project implementation, there will be significant interaction with the local farmers as a part of the WUA development
and training program. Local NGOs will support implementation of this effort, which by its very nature will be participatory and
involve ongoing consultation with farmers and community members.

C. Gender and Development

1. Key Issues

Field assessments indicated that gender roles in the project areas are determined by tradition, with women engaged in
selected activities, of which homemaking is the most important. The percentage of families headed by women ranges from 3%
to 10%. Women are concerned about the lack of food, income, work opportunities, and health facilities, and by drinking water
shortages. They are concerned about not enjoying the freedom to work on income generation projects (which stems mainly
from cultural reasons).

The Investment Program is not expected to explicitly address existing gender concerns and has few activities to address
ongoing gender differences or to create a high gender impact. Because gender roles are unlikely to change and the
Investment Program's main activities do not address gender concerns, there are unlikely to be any gender impacts resulting
86 Appendix 13

from implementation of the project. However, to address gender-related concerns associated with irrigation, the project will
improve access sites at irrigation canals where women traditionally gather to wash clothes and collect water. Under the
project, the gender specialist will work with the WUAs and community development councils to solicit women's view on the
design and location of the access points. This intervention along with possible other interventions will be scaled up in
subsequent tranches with irrigation activities.
2. Key Actions. Measures included in the design to promote gender equality and women’s empowerment—access to and
use of relevant services, resources, assets, or opportunities and participation in decision-making process:

Gender plan Other actions/measures No action/measure

Although a gender action plan was not prepared, the project will support improved access sites for woman to wash and collect
water for household use on the secondary and tertiary canal systems.

III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS

Issue Significant/Limited/ Strategy to Address Plan or Other Measures

No Impact
Involuntary Limited impact, with farm
Resettlement land compensation for five
families under the northern
basins development (NBD)
component and 19 families
under the flood management
component. No relocation of
households is required.
Issue Included in Design
A land acquisition and Full Plan
resettlement framework Short Plan
was prepared for the Resettlement Framework
Investment Program and No Action
short resettlement plans
were prepared for the NBD
and flood management
components.

Others have no impact.

Indigenous Peoples No impact Plan
Other Action
Indigenous Peoples
Framework
No Action
Labor

Employment Significant Project interventions will Plan

opportunities generate increased Other Action
Labor retrenchment employment opportunities. No Action
Core labor standards
Affordability No Impact Action
No Action
Other Risks and/or
Vulnerabilities

HIV/AIDS Limited significance Security will be provided by Plan

Human trafficking the Government to project Other Action
Others (conflict, consultants and No Action
political instability, etc), contractors in areas of risk.
please specify The geographic focus of
activities can respond if
necessary to significant
changes in the security
environment. Security
plans will be developed as
required. Construction
sites will not have large
work crews, however,
information on HIV/AIDS
will be distributed to
workers.
 Appendix 12 87

IV. MONITORING AND EVALUATION

Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities
and/or social impacts during project implementation? Yes No

A monitoring and evaluation team will be established in the project management office to monitor project performance,
including environmental, poverty, gender, and social impacts, as specified in the summary initial environmental examination
and the poverty, social, and gender assessment.
a
Islamic Republic of Afghanistan. 2008. Afghanistan National Development Strategy. Kabul (p. 40).
b
Islamic Republic of Afghanistan. 2008. Afghanistan National Development Strategy. Kabul (p. 30).
c
ADB. 2007. Country Partnership Strategy: Afghanistan, 2007–2011. Manila.
d
Because of unreliable or outdated statistical data, Afghanistan is not included in the United Nations Development Programme
(UNDP) 2007 human development index. Various statistical indicators provided for Afghanistan, however, place it among the
lowest-ranked countries, and it is certainly the lowest ranked in the entire Asia and Pacific region (UNDP. 2007. Human
Development Report 2007/2008. Fighting Climate Change: Human Solidarity in a Divided World. New York, p. 233). The 2007
Afghanistan human development report ranks Afghanistan as 174th of 178 countries, ahead of only Burkina Faso, Mali, Sierra
Leone, and Niger (Center for Policy and Human Development. 2007. Afghanistan Human Development Report 2007 Bridging
Modernity and Tradition: Rule of Law and the Search for Justice. Kabul). Afghanistan’s key Millennium Development Goals
and the country’s economic, social, and poverty indicators are summarized in Appendix 2, Tables A2.1, A2.2, and A2.3.
e
Islamic Republic of Afghanistan. 2008. Afghanistan National Development Strategy. Kabul (p. 27).
f
Islamic Republic of Afghanistan. 2005. Millennium Development Goals Islamic Republic of Afghanistan Country Report 2005
Vision 2020. Kabul, pp. xviii–xix.
g
Ministry for Rural Rehabilitation and Development. 2006. National Area-Based Development Programme, Provincial Profiles.
Available: http://www.mrrd.gov.af.
88 Appendix 14

SUMMARY RESETTLEMENT FRAMEWORK

1. Scope and impacts. The Afghanistan Water Resource Development Investment

Program (the Investment Program) will increase the productivity of irrigated agriculture due to
improved water resources management through infrastructure development, capacity building,
and institutional strengthening. The first tranche includes three investment components: (i) the
northern basins development (NBD) component will take place in the Lower Balkh River Basin
and support rehabilitation and upgrading and development of irrigation infrastructure, and
capacity and institutional development for the river basin agency and water user associations; (ii)
the Nangahar Valley Development Authority (NVDA) improvement component will support
rehabilitation and upgrading of the NVDA irrigation systems, and the development of WUAs and
a corporate business plan for NVDA; and (iii) the flood management component will construct a
flood embankment and bank protection works.

2. A land acquisition and resettlement framework (LARF) was prepared that outlines the
policy, procedures and institutional requirements for preparing and implementing land
acquisition and resettlement plans (LARPs) for interventions under the Investment Program.
The first tranche of the Investment Program has currently been classified as resettlement
category B. Both the NBD and flood management components have limited associated
resettlement activities, and short LARPs have been prepared. Farm land compensation is
required for (i) five families on the proposed Bangala weir site under the NBD component, and
(ii) 19 families on the proposed embankment site under the flood management component. In
both cases, no household relocation is required and the impacts are minimal. The LARF and
short LARPs can be found in Supplementary Appendix C.

3. Resettlement policy. Resettlement will be implemented in accordance with

Afghanistan’s land expropriation act (2000) and its amendment (2005) and relevant Asian
Development Bank (ADB) policies, in particular, ADB’s Involuntary Resettlement Policy (1995)
and Operations Manual.1

4. Resettlement principles, entitlements, and procedures. The LARF applies to all

involuntary resettlement impacts arising from land acquisition and/or conversion, or any other
impacts that arise from the Investment Program, including to people with no formal title to land.
The LARF principles include the following: (i) potential impacts on affected peoples should be
avoided or minimized; (ii) if impacts are unavoidable, affected persons will be identified and
assisted in maintaining their standards of living at pre-project level; (iii) attention will be paid to
identify the presence of and involve vulnerable groups, including women and indigenous
people;2 (iv) information on the preparation and implementation of the LARF will be disclosed to
all affected persons and their involvement throughout the process will be ensured; (v) land
acquisition and compensation will be paid in accordance with ADB’s involuntary resettlement
policy and the country’s relevant laws; (vi) affected persons will be paid compensation for their
lands, properties, and assets prior to taking the acquired land and assets; (vii) an entitlement
matrix will include details of entitlements for all affected persons, including compensation at
replacement costs, allowances, income restoration and livelihood improvement; and (viii)
vulnerable households and persons will receive a further cash allowance of 20% of the
resettlement costs.

1
ADB. 2008. Involuntary Resettlement. Operations Manual. OM F2/BP. Manila.
2
No impacts to indigenous peoples are anticipated under the Investment Program.
 Appendix 14 89

5. The types of loss and entitlements will cover: (i) loss of titleholders, including agricultural
and homestead lands, assets, commercial land and structures, residential tenancy, and
commercial tenancy; (ii) loss of non-title holders, including (a) agricultural lands held by tenants
and sharecroppers (whether registered or not), squatters and encroachers; (b) homestead land;
and (c) commercial structures held by informal tenants, squatters and encroachers; (iii) loss of
livelihoods, including loss of (a) wage earnings, (b) income and/or food, and (c) rangeland
income; (iv) additional support to vulnerable groups, including women and widows; (v) loss of
community infrastructure and resources such as grazing areas; and (vi) any other impacts (i.e.,
temporary impacts during infrastructure construction or any other unforeseen impacts).

6. The compensation and rehabilitation entitlements for each affected item established for
the Investment Program is detailed below.

Table A14.1: Entitlement Matrix

Loss type Specification Affected People Compensation Entitlements
Permanent All land losses Farmer who is Land and land compensation with plots of equal value and/or
Loss of independent of Titleholder productivity to plots lost; or cash compensation at
Arable Land impact severity replacement cost based on market rate free of taxes,
registration, and transfer charges. Unaffected portions of a
plot will also be compensated if they become unusable after
impacts occur.
Leaseholder Transfer of lease to other plots of equal value and/or
(registered or not) productivity of plots lost, or cash equivalent to the net income
from the land calculated on the basis of the market value of
the annual production of the affected land for the remaining
years of the lease (maximum of 10 years).
Sharecroppers Cash compensation equal to the market value of the lost
(registered or not) harvest share, paid once for temporary impacts, or twice for
permanent impacts.
Agricultural workers Cash indemnity corresponding to their salary in cash and kind
losing their contract for the remaining part of the agricultural year.
Non-titled cultivators A one-time rehabilitation allowance equal to 1 year of net
income from the affected land (in addition to crop
compensation) for land-use loss.
Additional Farmer who is A one-time severe impact allowance equal to the net income
provisions for Titleholder from annual crop production (inclusive of winter and summer
severe impacts Leaseholder crops and in addition to standing crop compensation) and the
(> 10% loss of waiving of taxes and fees.
land, property or Sharecroppers A one-time severe impact allowance equal to the net income
assets) (registered or not) from their annual share of harvest lost (in addition to standard
crop compensation).
Non-titled land A one-time severe impact allowance equal to the net annual
owners income from the affected land (in addition to standard crop
compensation).
Temporary All affected persons Affected land and/or communal infrastructure will be restored
Land (including non-titled or reconstructed to pre-project conditions.
Acquisition land owners) Rent shall be agreed between landowner and contractor
equal to the revenue lost at market value (e.g. compensation
for harvests lost at average yield per hectare).
Residential or Titleholder Land for land compensation through provision of a plot
Commercial comparable in value and/or location to the plot lost, or cash
Land compensation for affected land at full replacement cost, free
of taxes, registration and transfer costs.
Non-titled land Provision of a free or leased plot in a government
owners resettlement area, or a self-relocation allowance equal to 1
year of minimum salary.
Houses Full/partial loss Owners Cash compensation at replacement rate for affected
Buildings and of structures (with or without structures and/or fixed assets free of salvageable materials,
90 Appendix 14

Loss type Specification Affected People Compensation Entitlements

Structures house or building depreciation and transaction costs. For partial impacts, full
registration) cash assistance to restore remaining structure. Cost of lost
water and electricity connections will be included in the
compensation.
Renter or An allowance equal to 3 months rent.
Leaseholder
Standing Crops affected All affected persons Cash compensation equivalent to the gross income from the
Crops (including non-titled crop computed as the market value of the total annual
land owners produce from the affected land. To be paid both to
landowners and tenants based on their specific
sharecropping agreements.
Trees Trees affected All affected persons Cash compensation shall reflect income replacement. Fruit
(including non-titled trees will be valued at the market value of 1 year of produce
land owners) times the number of years needed to grow a tree of the same
productivity.
Business or Temporary or All affected persons Business owner: (i) cash compensation equal to 1 year of
Employment permanent loss (including non-titled income, if the loss is permanent; and (ii) cash compensation
of business or land owners) for the period of business interruption, if the loss is temporary.
employment Compensations to be based on tax declaration or official
minimum salary.
Worker/employees: Indemnity for lost wages for the period of
business interruption, up to a maximum of 3 months.
Livelihood Vulnerable affected An additional allowance equal to 3 months at minimum
person: affected salary. Priority for employment in project-related jobs, training
person below opportunities, self-employment and wage-employment
poverty line assistance.
Relocation Transport All affected persons Provision of cash compensation to cover transport expenses
and/or affected by and livelihood expenses for 1 month.
transitional relocation
livelihood costs House renters Provision of a cash grant for 3 months of rent at prevailing
area rates.
Community Loss or damage Rehabilitation and/or replacement of affected structures or
assets to public utilities (e.g., mosques, footbridges, roads, schools, and
infrastructure or health centers) to pre-program level.
utilities
Source: Asian Development Bank.

7. The methodology for assessing minimum compensation rates of different items is as

follows:
(i) Land will be valued at replacement cost based on market rates derived from a
survey of land sales in the year before the impact survey. No deductions for
taxes or transaction costs will be applied.
(ii) Houses and buildings will be valued at replacement value based on cost of
materials, type of construction, labor, transport, and other construction costs. No
deductions will be applied for depreciation, salvaged materials, and transaction
costs
(iii) Annual crops will be valued at full market rate at the farm gate.
(iv) Fruit trees will be valued based on age category and productivity. Productive
trees will be valued at the market value of 1 year of produce multiplied by the
number of years needed to grow a new tree with the same productive potential
as the lost tree.
(v) Timber trees will be valued at the market value of timber. Affected persons will be
provided with free planting materials, or paid the cost of the materials.

8. Initial asset valuation will be the responsibility of the project management office (PMO),
executed with support of the implementation consultants, which will be verified and certified by
 Appendix 14 91

the regional property valuation team headed by the senior property supervisor, and then
approved by the implementing agency (IA). If the land or property is being acquired with the
owners' consent, this valuation will be used as the basis of negotiation between the owners and
the local authorities.

9. Institutional responsibilities, arrangements, and procedures. Two PMOs will be

established within the IAs: one within the Ministry of Energy and Water (MEW) for the NBD and
flood management components, and the second within the Ministry of Agriculture, Irrigation, and
Livestock (MAIL) for the NVDA improvement component. The PMOs have overall planning,
supervising, monitoring, and coordination responsibilities for preparing and executing LARPs
under the Investment Program. 3 The actual work will be undertaken by the specialists and
consultants that will be attached to the PMO as well as officials attached to relevant line
agencies. The PMOs will be responsible for undertaking such activities as surveys, censuses,
public consultations and information disclosures, grievance redress, monitoring, the preparation
of LARPs and their dissemination in local languages; line agencies will be responsible for
activities such as land surveying, title registration, land acquisition, compensation payment, and
relocation, as the agencies have the authority to undertake such activities under prevailing law.
The PMO will be assisted as needed by a nongovernment organization (NGO) to work with local
communities for the preparation and implementation of the LARPs. LARP final drafts will be
submitted for approval of both the IA and ADB.4

10. Disclosure, consultation, and grievances. The consultation with all affected persons
will be an ongoing process throughout LARP planning and implementation. Affected persons will
be fully informed of all steps in the planning and implementation of the process. All information
including the entitlement matrix will be disclosed to affected persons in the local language. Local
channels for information disclosure (such as announcements at market days) will be planned
and implemented as part of the information disclosure process. A grievance redress process will
be implemented in respect of all activities under the Investment Program where resettlement
actions are required. The grievance redress will be facilitated by the community and supported
by an NGO as required. The procedures for the grievance resolution process are based on the
project implementation arrangements involving the PMO and IA; if the process is unsuccessful,
the affected persons will have the option of addressing their grievances through formal court
procedures, with the support of an NGO.

Table A14.2: Grievance Resolution Process

Land and Crops Compensation Issues
1. Grievance resolution will be attempted through a district committee comprised of the district governor, senior
district property supervisor, and implementation NGO.
2. In absence of a settlement, affected persons may appeal to the PMO director. The director will decide the case within 15
days and inform the affected person.
3. If the PMO decision is unacceptable to the affected persons, they can register their complaint directly with the IA within
1 month of receiving a response from the PMO, with documents to support their claim. The IA will respond within 15 days
of registering the complaint. The IA’s decision must be in compliance with the LARF provisions.
4. Should all three levels of this grievance redress system fail to satisfy the affected person, he or she may
approach the appropriate court of law for resolution of the grievance. The affected person will be facilitated in this
process by an implementing NGO.
IA = implementing agency, LARF = land acquisition and resettlement framework, NGO = nongovernment organization,
PMO = project management office.
Source: Asian Development Bank.

3
It is not anticipated that any resettlement activities will be required under the NVDA component.
4
If the final designs have to be changed, the resettlement plans will be modified, including the completion of a new
social assessment, and the revised resettlement plans will be submitted to the IA and ADB for their approval.
92 Appendix 14

11. Monitoring and evaluation. The PMO will establish a monitoring and evaluation system
for each project involving land acquisition. The monitoring and evaluation system includes an
internal monitoring program to be planned and implemented by the PMO. In addition, an
external monitoring program will be implemented by an external monitoring agency to be
recruited and appointed by the PMO after ADB approval. Monitoring indicators will be
established as appropriate. The external monitoring agency will file independent monitoring
reports.

12. Resettlement cost. Each LARP will have its own costs, which will be part of the overall
budget for the investment tranche. The resettlement cost will include compensation, allowances,
and implementation support costs. The Government of Afghanistan has agreed to pay
resettlement compensation costs. For the first tranche, all costs have been calculated and
included for updating and implementing the short LARP and associated compensation.