Jun 4, 2007

AKDN in Afghanistan

AKDN in Afghanistan

AKDN restored the Kabul Serena Hotel.
AKDN's rural development efforts have  helped Afghans achieve greater food security.
The restoration of Emperor Babur's Garden in Kabul is one part of a wide  ranging programme dedicated to preserving  Afghan's culture and history.

In Afghanistan, programmes of the Aga Khan Development Network (AKDN) include large-scale rural development; health, education and civil society programmes; microfinance services; the rehabilitation of historic neighbourhoods in Kabul and Herat; a rapidly growing mobile phone network; and the renovation of a five-star hotel in Kabul.

First MicroFinanceBank of Afghanistan opens doors in Herat
After receiving banking licence #001 in the autumn of 2003, the First MicroFinanceBank of Afghanistan has rapidly expanded its activities in the country. Currently, First MicroFinanceBank of Afghanistan has two branches in Kabul, one in Pul-e-Khumri, one in Mazar-e-Sharif and as of early 2006, it has opened its fifth branch in Herat. As with other branches of First MicroFinanceBank of Afghanistan, this branch will provide credit and saving products as well as domestic and international payment services. Focusing on micro-enterprises, small businesses and the creation of productive sources of income and employment in Herat, the branch will aim to provide access to the poor and underserved in and around the city.
In addition, the Bank will finance the Small and Medium Enterprises (SME) sector of the economy. Besides granting loans, the bank provides a variety of commercial services, including quality fund management services, and SWIFT transfers, among others.

The Bank’s main goals are sustainability, broad geographical and service outreach and maximal impact. The establishment of First MicroFinanceBank of Afghanistan is an integral part of the AKDN’s commitment to contribute to the reconstruction and rehabilitation of the economic infrastructure and civil society institutions in Afghanistan.


At the conference on the reconstruction of Afghanistan, held in Tokyo in 2002, His Highness the Aga Khan made an initial pledge of US$ 75 million to Afghanistan’s reconstruction. To date, AKDN’s assistance to Afghanistan has exceeded His Highness’ original pledge by 75 percent. With the support of its donors and partners, more than US$ 450 million has been channelled through the AKDN for Afghanistan’s reconstruction. This investment has translated to, among other things, large-scale rural development, health, education and civil society programmes; the provision of a range of microfinance services; the safeguarding of historic landscapes and neighbourhoods in Kabul and Herat; a rapidly growing mobile phone network; and the renovation of a five-star hotel in Kabul.

In his statement at the Tokyo conference, His Highness identified three priorities for national recovery:

  • the creation of a “safety belt” in Central Asia through selective investments in areas within the wider region that remain volatile and fertile grounds for permanent instability;
  • the repatriation of refugees and re-
    integration of former combatants in a manner that fully recognises and respects the rights, cultures and traditions of the country’s ethnic communities; and
  • the establishment of competent, stable, transparent and accountable institutions to emerge from and respond to the needs of the majority of the population and through which the processes of building confidence, strengthening democracy and fostering development can be channelled.

Humanitarian Assistance

In 1995, Focus Humanitarian Assistance, an AKDN affiliate, began emergency and relief activities in northeast Afghanistan. Rugged terrain and the absence of roads meant that humanitarian aid was often transported on small inflatable boats across the Pyanj River from Tajikistan. At its peak in 2001, Focus delivered over 20,000 MT of emergency food and non-food aid to 500,000 beneficiaries in the country.

Food aid was later complemented by agricultural support to farmers, and grants, transportation, reception services, vocational training and shelter provision to returnees. High-energy rations and milk were also distributed to school children and tens of thousands of children were immunised.

Through food-for-work initiatives, communities were involved in the construction of more than 1,600 km of irrigation channels and 700 km of roads as well as the rehabilitation of schools, health clinics, and other community-level infrastructure. These activities paved the way for AKDN’s long-term development programmes in Afghanistan. Today, Focus continues to be involved in emergency response, disaster mitigation, and shelter provision in the country.

Social Development

In 2002, with low levels of food security in Afghanistan, AKDN’s rural development programme focused on the distribution of quality seeds and fertilisers to improve agricultural yields and productivity. Shortly after, AKDN began mobilising and partnering with communities to build community infrastructure projects, including water supply schemes, latrines, irrigation channels, micro-hydroelectric plants, roads, bridges, schools, and health centres. Infrastructure projects are integrated within a comprehensive rural development programme comprising community mobilisation, natural resource management, and enterprise development.

AKDN’s rural development programme is mainly implemented through village-based Community Development Councils organised under the Government’s National Solidarity Programme. AKDN, a facilitating partner of the Programme, has been working with more than 1,000 Community Development Councils since 2007.

Microfinance plays an important role in driving economic development in rural areas. AKDN is disbursing microfinance in nearly 50 rural districts to create licit income-generating opportunities and to encourage entrepreneurship.

In 2004, AKDN launched the First MicroFinanceBank of Afghanistan. The institution was the first of its kind under the country’s new regulatory structure. The Bank provides microfinance to small businesses, helping Afghans to create productive and sustainable sources of income. With an outstanding loan portfolio of more than US$ 36 million, AKDN is disbursing microfinance to nearly 50,000 people in the country. Given the increasing demand for microfinance, the number of borrowers is expected to multiply in the next few years. Preliminary research suggests that two jobs are created for every microfinance loan disbursed.

As part of its alternative livelihood strategy, AKDN has pioneered innovative and flexible microfinance products to discourage people’s involvement in the cultivation and trafficking of opium. Microfinance has eased the burden on over-indebted farmers and, in some cases, has allowed them to re-purchase land sold to drug barons.

AKDN currently manages 24 health facilities including the Bamyan hospital and the French Medical Institute for Children in Kabul. In total, the Network delivers quality health services to more than 360,000 people in the country. In addition, the Government has endorsed AKDN’s revision of Afghanistan’s nursing curriculum.

Today, all of Afghanistan’s pre-service nurses are trained through this curriculum. To enhance the capacity of existing and future health professionals, AKDN also conducts refresher training for doctors, nurses, and midwives, operates two Community Midwifery Training schools, and assists in the management of the Government’s Institute for Health Sciences in Kabul.

AKDN’s interventions in education include the construction and rehabilitation of schools, the construction of facilities for two Government Teacher Training Colleges, adult literacy classes, in-service teacher training, the distribution of learning aids, as well as tutorial assistance and extra-curricular programmes in English and Information Technology. In total, AKDN’s interventions in education are benefiting more than 65,000 students and 2,000 teachers in 132 schools.

Cultural Development

The goal of AKDN’s cultural development activities is to conserve and restore Afghanistan’s cultural heritage while stimulating local economic development and improving the quality of life of people living in surrounding neighbourhoods.

In 2002, AKDN began the rehabilitation of Bagh-e-Babur, a terraced and walled garden containing the tomb of Babur, the founder of the Mughal Empire. AKDN works include the restoration of walls and the Queen’s Palace, the re-laying of water channels, the reconstruction of a caravanserai which will offer space for shcps and offices, and the replanting of trees favoured by the Mughals. AKDN is also upgrading water and sanitation facilities for 10,000 people living adjacent to the garden.

AKDN recently completed the restoration of the mausoleum of Timur Shah, regarded by many historians as the founder of modern Afghanistan. The project also includes the rehabilitation of the surrounding open space and markets around the mausoleum and square.

In 2003, work began on the documentation and conservation of key historic buildings and housing in the war-
damaged neighbourhood of Asheqan wa Arefan in the old city of Kabul. Since then, significant investments have also been made in upgrading basic infrastructure in this and adjacent areas.

Surveys have been undertaken of the surviving historic fabric of the old city of Herat, leading to the conservation of two important historic cisterns as well as several houses. In addition, an Old City Commission has been established to assist the relevant authorities addressing planning and urban management issues in a context that is undergoing rapid transformation.

In all of this work, it has been important to maintain a balance between conservation, which is rooted in a sound understanding of the past, and development that is based on the aspirations and potential of communities.

Economic Development

By making strategic large-scale investments early in Afghanistan’s development, AKDN aims to create replicable models of success and thereby encourage other investors to follow suit. AKDN, because of its institutional background and ethical framework, makes commercial investments along criteria different from those of typical investors. Investment decisions are based more on the prospect of better lives for the people that will be impacted by investments rather than bottom line profitability. The profits generated from these endeavours are then reinvested in development initiatives.

In 2003, AKDN and its partners launched Roshan which has become Afghanistan’s largest mobile GSM provider. To date, Roshan has invested more than US$ 250 million in the country. Roshan’s network coverage includes over 180 major cities and towns. Prior to the launch of Roshan’s commercial operations, there were less than 50,000 working fixed and mobile telephone lines in Afghanistan. In just four years, the number of GSM users has grown to two million. Of these, about half are Roshan subscribers. Roshan directly employs more than 900 people, making it one of the largest private sector employers in the country. Indirectly, nearly 20,000 people are employed through distributors, contractors and suppliers.

Through investments in the Habib Bank, AKDN is making financial services available to Afghanistan’s entrepreneurs and burgeoning private sector. The Habib Bank has been able to draw on its experience in 26 countries to help update Afghanistan’s banking laws and regulations and to build capacity within the industry.

Inaugurated in 2005, the Kabul Serena Hotel, representing a US$ 36.5 million commitment, was the first five-star hotel to open in Afghanistan in over 35 years. It was built at the request of the Government to provide accommodation of an international standard for business travellers and tourists visiting the country. The economic impact of the hotel includes over 900 construction jobs, the sourcing of local materials from numerous craftsmen and artists and the hiring of 400 staff, 90 percent of whom are Afghan.

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