Cash pipeline to Afghanistan reopens

Loans should help "address social protection issues"

The Asian Development Bank (ADB) has resumed lending to Afghanistan for the first time in 23 years.

A $150m loan was approved after the bank lifted restrictions on new lending to the war-torn country.

The restrictions were lifted after the UK stepped in and cleared $18m (£11.5m) of arrears.

"The UK government's generous support has removed the final barrier for the start of ADB's lending operations in Afghanistan," the bank said.

"Now that arrears have been cleared, ADB can proceed with the provision of loan assistance in key sectors".

Investment

The ADB loan should enhance governance in the country and sort out its transport, energy and financial sectors, ADB said.

"An emergency infrastructure rehabilitation and reconstruction project that focuses on rehabilitation of national roads, irrigation systems, civil aviation, and petroleum storage facilities" should also be set in motion, the bank said.

In addition, there should be "a social sector program loan to address the education and health sectors and social protection issues".

Earlier this year, ADB pledged $500m in concessional loans and grants over a two-and-a-half year period to help the Afghans rebuild their country.

Fresh loans would follow a $14.5m technical assistance grant issued in May to "build capacity and transfer knowledge at various levels of the Afghan public administration".

More is needed

The World Bank has estimated that Afghanistan needs $10.2bn in fresh cash over the next five years for reconstruction.

So far, the international community has pledged $4.5bn, but little has actually arrived in the country.

Afghanistan was a founding member of ADB in 1966.

But by 1979, the bank suspended support for the country.

By then, it had extended nine loans totalling $95m, and technical assistance totalling $2.5m.