Programmatic Support for Institution Building

The proposed Post-Conflict Fiscal Rehabilitation Credit (Post-Conflict FRC) aims to advance the TSS goal of rebuilding essential governance institutions and capacity, particularly in areas important for facilitating the overall reconstruction, economic recovery and aid process. The proposed Credit would provide quick-disbursing funds that are needed to help the ATA fill an immediate financing gap. Specifically, it provides support for policies and structural reforms that promote fiscal soundness, accountability and transparency. The proposed Credit would encompass a sub-set of policy actions contained in a policy matrix that draws from a Letter of Development Policy (LDP) by the ATA. The Credit emphasizes policies, while capacity building and implementation assistance is being provided as part of the EPAP, PCF financed technical assistance, and IMF and other donor programs. The expected implementation period is nine-months. Follow-up operations are likely; this possibility would be discussed more fully in the next TSS scheduled for Board presentation by January 2003. The Credit would be disbursed in two tranches and would assist Afghanistan in meeting its recurrent financing needs. However, signing of the proposed Credit would not take place until all arrears to IDA have been cleared. The clearance of arrears before signing and disbursement of the first tranche will be made possible by a bridge-financing loan currently being negotiated between the ATA and a third party. Mr. Stephane Guimbert is the co-task leader of this project.