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ARTF 29 July, 2009

ARTF 29 July, 2009. Quarterly Meeting of ARTF Donors. Administrator’s Report to Donors. March 21 – July 21. Activity: March 21-July 29. 10 donors have paid in $157m during SY1388 SY1388 opened with unallocated cash of $109m Management Committee has met 5 times

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ARTF 29 July, 2009

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  1. ARTF29 July, 2009 Quarterly Meeting of ARTF Donors

  2. Administrator’s Report to Donors March 21 – July 21

  3. Activity: March 21-July 29 • 10 donors have paid in $157m during SY1388 • SY1388 opened with unallocated cash of $109m • Management Committee has met 5 times • approved 7 investment proposals and one recurrent cost transfer • total value of approvals to date $242m • Progress on the Evaluation: • Conclusion of year 1 of the ARTF Incentive Program, • signing of year 2 MoU – today • Initiation of the ARTF Financing & Investment Framework • EC Verification Mission underway • ARTF Portfolio Review underway

  4. MC Approvals SY 1388 ytd • RC transfer reflects the ARTF IP (yr 1) • ARTF invests in tranches • EQUIP, NSP, NEPS, RC – all need further investment later in the year

  5. Outlook for SY 1388 SY1388 Outlook SY1387 Actual • Resources available: • Pledge: $600 • Roll-over: $109 • Total: $709 • Recurrent Cost Ceiling: • ARTF IP: $290 • Investment Window: • Envelope: $400+ • Resources available: • Pledge: $627 • Roll-over: $120 • Total: $747 • Recurrent Cost Ceiling: • Baseline (+40): $316 • Investment Window: • C’ment: $324

  6. ARTF Investment Plan for SY1388 • 1388 sees continued scale-up of NSP • Second phase of support for EQUIP • New activities include two TA programs (MoCI & MEW), BPHS window & MAIL projects • All in line with Afghan budget

  7. Portfolio Review (as of July 21) • Active ARTF investments at $956 million • Disbursements at 73 percent ($702 million) • ARTF portfolio review underway with MoF & line ministries

  8. ARTF Disbursements

  9. Issues & Challenges • Funds shortage for new investments ARTF was hoping to make this year: • Program-based BPHS support through ARTF • New Ag. programs, in support of new sector priorities • Funds to back the Horticulture & Livestock restructuring • Concerns around preferencing • Need for a clearer articulation of ARTF objectives going ahead • ….to ensure financing short-falls do not occur

  10. ARTF & Preferences Background to Discussion

  11. Background for discussion 52% of total in SY1388 Un-preferenced contribution < RC commitment • $1.1bn in preferences for on-budget national programs • Preferences are increasing as a share of ARTF envelope • Ability to finance the RC window out of un-preferenced • Equitable burden sharing for the cost of RC & Incentive Program • 50/50 rule in question • Government ownership of the investment window

  12. Sy1388 Preferences & Discussion SY1388 Preferences Discussion points • Preferencing – not likely to go away in the short run • Need to focus on switching from donor-driven preferencing to government-driven preferencing • Need to avoid over or under-preferencing • Role of ARTF Financing & Investment Framework?

  13. ARTF Financing & Investment Framework Proposal of the Working Group

  14. Process & Objectives • Working Group (GoA/donors) has met three times to discuss • WG needs further impetus/direction from broader donor group • Objectives: • Clearer, more strategic approach to allocation of significant ARTF resources – more agency to donors • Greater predictability around ARTF allocations (aid effectiveness) - more agency to and ownership of government • Multi-lateral decision-making around a portfolio of core sectors with clear development objectives (ANDS prioritisation)

  15. A Strategic Framework for ARTF

  16. Donor transition to program support In line with budget – but led by donors Un-preferenced NSP EQUIP HLP MCP NRAP MISFA etc etc Un-preferenced Flexible for the strategy MCP NRAP MISFA etc etc Un-preferenced Rural D. & Ag Social Sectors Infrastructure Cap. Dev. In line with budget – and multilateral ARTF Framework

  17. Questions to consider & next steps Questions to consider Next Steps • Can donors provide medium term pledges? • Will a Financing & Investment Framework relieve pressure to preference? • Might donors be happy to preference for sectors? • Have we identified the right comparative advantages for ARTF? • Should the WG develop core sectors? • Post elections commitment? • WG to proceed with formulation of the Financing & Investment Framework • Initiate the Annual Consultation Process in line with the budget preparation cycle for SY1389 • Initiate analytical work on SWAps • Other inputs (M&E framework, negotiating the core sectors, etc) • Timeline: post elections Quarterly Meeting (September/October)

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