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Saturday, September 25, 2004
ADB approves fund for Afghanistan (2:30 p.m.)
MANILA -- The Asian Development Bank (ADB) said Saturday it has approved a 15 million-dollar support to a fund to provide political risk guarantees to investors in post-war Afghanistan.
The Philippines-based lender said it approved a five million-dollar soft loan and a 10 million-dollar guarantee to the Afghanistan Investment Guarantee Facility, which would be administered by the World Bank's Multilateral Investment Guarantee Agency.
After a US-led invasion that toppled the radical Islamist Taliban militia, "a vibrant and active private sector is needed to generate jobs and support long-term economic growth for poverty reduction in Afghanistan," said Veronica John, an ADB finance specialist.
"But without insurance against selected political or non-commercial risks for investment projects, many potential investors are reluctant to do business in the country and are taking a wait-and-see attitude."
Limited amounts of political risk insurance are currently available worldwide for Afghanistan.
Under the guarantee facility, investors may choose any combination of four types of risk coverage -- transfer restriction, expropriation, war and civil disturbance, and breach of contract. The guarantees run up to seven years.
At a conference in Berlin earlier this year, ADB president Tadao Chino pledged up to one billion dollars in aid to Afghanistan for 2005-2008. (AFP) |
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