PPP’s Background in Afghanistan

Fostering Public-Private Partnerships for Infrastructure Development, especially during the initial stages, are the key Critical Success Factors in developing countries. Currently, Afghanistan Government has taken enormous initiatives to provide its citizens with quality infrastructure and public services through PPP, but when it comes to an after war country with very limited budget resources, than this seems to be a challenging hurdles unless we go for alternative ways like Public Private Partnership initiatives.

Although there was a small PPP unit in the structure of Ministry of Finance of GoIRA since 2014, but the work on PPPs was formally and with full power started in Afghanistan with the establishment of Directorate General of Public Private Partnership or Central Partnership Authority, based on PPPs law, in 2016 as soon as His Excellency, Mr. Ashraf Ghani won the election and came to the power. The CPA was established based on decree number(1650) dated 17/8/2016 of the president to support the investors and boost the economic growth through infrastructure development in the country by inviting and securing the public and private sectors’ partnerships.

The Government of Afghanistan is committed to a fully transparent process which ensures that information about PPP projects and the performance of the PPP program is publically available. This will enable international investors, independent auditing entities and the general public to hold the Government accountable for its management of the PPP program. To implement PPP in international level, Government has taken National PPP Policy, drafted the relevant laws and regulations and standard documents as well as appointed international transaction advisors & international law firms for the growth of the prospective projects.

As per the approved PPP National Policy the main objectives of the PPP in Afghanistan are:

  • -To mobilize private sector investment to expand access to infrastructure and services to support sustained and inclusive economic growth;
  • -To reduce the investment burden of the government through transition of financing responsibilities from donor support to private investors;
  • -To promote the better and more efficient operation of public assets, properties and quality service delivery;
  • -Utilizing the investment and business skills of the private sector for establishment and reconstruction of infrastructure for supply of public services;
  • -To ensure consumers of public services are provided with high quality services at a reasonable price;
  • -To support and development of Afghanistan’s capital markets as a means of financing infrastructure and services;
  • -To provide financial support and incentives (such as, political risks insurance, tariff exemptions and tax holidays) to private partners in PPPs contracts.