1. Afghanistan Reconstruction Trust Fund
Administrator’s Report: SY1387
April 5, 2009

2. Strong donor commitment; but recent growth driven by preferences
ARTF Donor Activity: 1387
19 donors contributed US$627m in SY1387
92% of pledge was paid in (rest to roll over)
Preferences grew to 48% of total contribution
Strong donor commitment; but recent growth driven by preferences

3. ARTF Commitments: SY1387 Overall commitments: $640m
Recurrent window: $316m
Investments: $324m
RC commitments represented 21% of operating budget & 17% of development budget.

4. Recurrent Cost Window Ceiling increased in January by $40m
Total RC Window Allocation = $316m
Education sector benchmarks agreed
Fiduciary framework
Afghanistan’s procurement law was changed in July, resulting in cessation of O&M reimbursement
Eligibility on payroll remains strong
ARTF Incentive Window
Benchmarks for SY1388 agreed
Technical review in May 2009
ARTF RC window pays for just over half of the non-security operating budget.

5. ARTF Investment Financing Activities: SY1387
9 government implemented projects received donor financing in SY1387
ANDS Sector
New ARTF Commitment %
Rural development (NSP, HLP)
$191.7
59%
Microfinance
$64.0
20%
Justice
$27.8 9%
Infrastructure (Kabul Roads)
$23.6 7%
Education (EQUIP & SHEP)
$17.0 5%
Total
$324.0
100%
Investment Window expanding rapidly. Financing Strategy will add value.

6. Overall ARTF Investment Portfolio
New programs (EQUIP, justice) looking at more sectoral approaches.
NSP & Microfinance the largest recipients of ARTF resources.
Power sector expanding focus. Strong GoA support.
Diversified portfolio – but focused towards national programs.

7. ARTF Disbursements
Overall Active Portfolio
Rural Development
Institutional Capacity & Education
Economic Infrastructure
Disbursements on investments = 27% of the core development budget in ‘87

8. ARTF Results Framework
ARTF Intervention
Tool
Method
Recurrent Cost Window
Monitoring Agent Reports / PEFA
Tracking trends in fiduciary control framework
Monthly reporting & feedback mechanism
Linked with policy lending & Incentive Program
Performance Assessment Matrix
Tracking trends in PFM, PAR, basic services
Broad proxy for RC Window impact
Platform for policy dialogue
ARTF Incentive Program
Links RC Window to government reforms
Forward looking
Investment Window
Government M&E
Generally output-based
Strengthening government systems (EQUIP)
Third-party evaluation
Baseline & Impact Surveys
Outcome level
MISFA, NRAP & NSP

9. SY1388 – Projected Outlook Overall ARTF pledge has declined
Total resource envelope : $559m
New pledge: $395m ($507m in SY1386)
Pending from SY1387: $55m
Un-allocated cash in parent: $109m
RC Window: $250/290m
Investments: $309/269m
NERAP Phase II, EQUIP II, MCP II, NSP
Skills, Health, Power, Water Management