2020 INCENTIVE PROGRAM DEVELOPMENT POLICY GRANT

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The development objectives of  2020 Incentive Program Development Policy Grant Project  for Afghanistan 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 (PFM) and fiscal sustainability. The operation is fully consistent with the priorities and approach established in the World Bank Group’s Country Partnership Framework (CPF) FY17-FY20. Building on a Systematic Country Diagnostic completed in 2016, the CPF is structured around three pillars: i) building strong and accountable institutions; ii) supporting inclusive growth; and iii) social inclusion. Reforms supported under both pillars of the operation directly contribute to all three pillars of the CPF, through an emphasis on institutional, legal, and regulatory reforms that both expand access to economic opportunities to disadvantaged groups and support private sector development. Actions to improve the business environment are also complementary to IFC and MIGA activities intended to mitigate risks faced by private sector investors in fragile contexts through risk sharing and guarantee facilities. The operation is designed to complement World Bank- Afghanistan Reconstruction Trust Fund (ARTF) investment project engagements. Development policy financing and investment project financing are aligned under the World Bank Afghanistan program. All policy actions supported by the Incentive Program Development Policy Grant (IP-DPG) operation will be implemented with technical assistance support provided through World Bank-ARTF investment projects. Policy reforms under the IP-DPG have been selected to maximize the impact of investment projects by addressing key policy and institutional constraints in sectors where the World Bank has investment project engagements.