Active Portfolio Investment Projects

Governance and State Effectiveness

Project Title:
2020 Incentive Program Development Policy Grant
Grant Amount:
$400 million (ARTF grant: $240 million; IDA grant: $160 million)
Approval Date:
May 7, 2020
Closing Date:
June 30, 2021

Project Objective:

Program Development Objectives are: i) strengthening the policy framework to support state effectiveness, private investment, and social inclusion; and ii) improving the policy and institutional framework for public financial management and fiscal sustainability.

Program Summary

The Incentive Program Development Policy Grant (IP-DPG) supports a range of key reforms to improve business regulation and encourage private investment, expand social inclusion and support civil service reforms, increase resilience to natural disasters, improve tax administration and public financial management, and safeguard fiscal sustainability.

The operation is co-financed with $160 million IDA grant.

Expected Results:

The IP-DPG will lead to:

  1. an increase in the volume of tax and customs duties paid electronically
  2. an increase in the proportion of civil servants included in the HRMIS
  3. an increase in the proportion of customs and procurement staff receiving cadre allowances
  4. an increase in the proportion of tax clearance certificates that are issues digitally
  5. an improvement in doing business scores against obtaining construction permits
  6. a reduction in the electricity utility’s debt-to-equity ratio and reductions in technical losses
  7. expansion of the administrative land system
  8. a reduction in the proportion of the budget allocated to contingency reserves and an increase in the proportion of contingency reserves available in responding to natural disasters
  9. clarification of regulatory responsibilities of the Ministry of Mines and Petroleum and the Afghanistan Oil and Gas Authority
  10. an increase in the proportion of large development projects undergoing full economic analysis prior to approval
  11. increased use of electronic tax filing
  12. allocation of O&M expenditure in accordance with policy guidelines
  13. increased adherence with international standards for audit independence.