Climbing out of poverty, collecting
garbage in Kabul
It seems to me that against all of the odds, there is a growing group of investors who are slowly building a serious financial stake in the future of the country. My view is that with the kind of incentive that ABIF is offering, this process can be accelerated - with all of the wider benefits that flow from private sector investment.
After spending something like 6 years out of the last 10 in the country, I would never underestimate the obstacles to economic development in Afghanistan. However I do genuinely believe that with the right interventions, such as investment incentives, we will be surprised at how much can be achieved in a relatively short space of time.
DFID's investment in ABIF, which was set up as an independent competitive challenge fund with a very clear market development strategy (an essential combination of factors in this kind of environment), will pay back many times over. Those people responsible for making ABIF happen deserve a lot of credit, and DFID should be commended for taking the risk of financing such a project in such a problematic environment.
So here we are today, reaching the end of the first competitive round. We have just completed the evaluation of the detailed business plans we received from the 11 applicants who made it onto our final shortlist. The great news is that we think we could support well over half of these potential investment projects, an excellent interim result (after less than 6 months) for a private sector challenge fund operating in a place like Afghanistan.
This week we have our Investment Panel meeting at which the business plans and our evaluation will be subjected to external scrutiny. The Panel will review the business plans and our opinion, meet the applicants and provide their advice on the projects we are recommending for funding. It will be a long day!
We have evaluated all of the business plans against three sequential criteria:
- Project viability;
- Expected development outcome; and
- Quality of the applicant.
|Spring in Kabul, apple blossom in our garden|
Despite the Financial Times' somewhat negative take on investor sentiment, it is striking that in all of the projects that we are recommending for funding, the applicant is ready to put a significant amount of their own money into the project. There are clearly some people (and our 350 plus applicants were from all over Afghanistan) who believe that now is the time to invest.
I sincerely hope that the projects we are proposing to recommend for funding will survive the Panel's external scrutiny and that we will move very rapidly to negotiating and then signing Grant Implementation Agreements, and finally to disbursing money to some excellent projects. Watch this space!