PROJECT INFORMATION DOCUMENT (PID)
APPRAISAL STAGE
Report No.: AB6447
Project Name
Region
Sector
Project ID
Borrower(s)
Implementing Agency
Environment Category
Date PID Prepared
Date of Appraisal
Authorization
Date of Board Approval
I.
Afghanistan ICT Sector Development Project
SOUTH ASIA
Telecommunications (40%); Information technology
(25%);General information and communications sector
(25%);Public administration- Other social services (10%)
P121755
ISLAMIC REPUBLIC OF AFGHANISTAN
Ministry of Communications and IT (MCIT); Islamic Republic of
Afghanistan; Kabul
Afghanistan
Tel: 0799-30-1945
mi.bhat@mcit.gov.af
Ministry of Communications and Information Technology
Mohammad Jan Khan Watt
Kabul
Afghanistan
Tel: (93-20) 210-2655 Fax: (93-20) 290-022
[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
February 14, 2011
February 23, 2011
April 26, 2011
Country Context
1.
The Government of the Islamic Republic of Afghanistan (GoIRA) has made remarkable
progress since December 2001 in many areas such as primary education, basic health services,
irrigation rehabilitation, telecommunications, and rural development. There has been strong,
though slowing, economic growth in Afghanistan since 2002, with the GDP growth varying
between 9 percent and 16.2 percent.1 Per capita annual income has increased from US$189 in
2002/03 to US$426 in 2008/09.
2.
However, these achievements remain fragile. Security remains a serious obstacle to the
delivery of reconstruction assistance and implementation of reconstruction programs.
Afghanistan’s poverty and social indicators remain among the lowest in the world. Despite
ongoing reconstruction efforts Afghanistan remains one of the poorest countries in the world. In
2007, Afghanistan ranked 174 out of 178 countries on the global Human Development Index
(HDI). Government capacity is weak despite improvements and the pace of implementation of
reconstruction programs has been short of popular expectations. The combination of poverty,
1
World Bank World Development Indicators
insecurity, a drug economy, and poor governance means the GoIRA faces daunting challenges in
taking the reconstruction agenda forward.
3.
As Afghanistan enters the new decade, it faces significant challenges. Key challenges
include deteriorating security conditions and growing frustration among citizens about the
Government’s limited ability to deliver basic services. It will be critical for the Government to
find ways in which it can improve governance, expand the reach of public services, and
accelerate economic growth.
II.
Sectoral and Institutional Context
4.
The information and communication technologies (ICT) sector has seen significant
growth thus far in Afghanistan. In 2002, there were fewer than 60,000 telephones in operation
across Afghanistan. As of early 2010, the number of mobile telephone subscriptions is estimated
to be about 13 million and the mobile telephone networks cover about 60 percent of the
population. This has had significant impact. Over US$1.2 billion has been invested by the private
sector, and 60,000 jobs created directly or indirectly. ICT also offers new opportunities for
inclusive growth.
5.
The policy and regulatory frameworks have enabled private sector participation. The
market has four mobile telephone companies and seven operating Internet service providers
(ISPs). There are also a small number of IT services companies. State-owned Afghan Telecom is
a unified service provider and operates fixed and mobile telephone, Internet, and domestic and
international connectivity networks.2
6.
Intercity and international connectivity has improved significantly. The national fiber
optic backbone network now connects 20 Afghan provinces and most of Afghanistan’s
neighboring countries. It also connects Afghanistan to international telecommunications
networks. However, retail Internet services remain expensive and limited in their reach.
Estimates suggest that Internet users are only about 5 percent of the population3.
7.
The use of IT remains limited in both the public and private sectors. Afghanistan ranks
poorly on international e-Government rankings and the majority of ministries do not use IT
strategically to support their programs.4 The focus is on automating as opposed to re-engineering
existing procedures and processes. Furthermore, significant investments have been made in
public sector IT, but these are not adequately underpinned by a coherent strategy. In the private
sector, local IT services focus on low value tasks (such as supply and maintenance) and are
dependent on the ebb and flow of foreign aid funded programs.
2
The Government plans to privatize Afghan Telecom over the medium term and had gone through one privatization
process in 2009. However, a lack of interest from prospective bidders led to the process being abandoned. There is
also a need to strengthen the regulatory frameworks that will govern Afghan Telecom post-privatization, because it
owns or operates a number of strategic and monopoly assets (such as the national fiber optic backbone).
3
Source: Ministry of Communications and IT
4
Afghanistan lags behind other post conflict and fragile states in the UN’s e-Government scoring: Iraq (0.2690),
Lao PDR (0.2383), DR Congo (0.2177), Liberia (0.2170), Afghanistan (0.2048). Source: UN, e-Government
Survey: From e-Government to Connected Governance, 2008
8.
The Ministry of Communications and IT (MCIT) and the Afghan Telecommunications
Regulatory Authority (ATRA) govern the sector. MCIT is the policymaker for the ICT sector
and oversees the development of the telecommunications and IT sectors. It is also responsible for
coordinating ICT efforts for and across the Government. ATRA regulates the
telecommunications markets including voice and data service providers.5
9.
The key challenge in the ICT sector is to build on the success of the sector while
capturing opportunities to create the requisite infrastructure and ecosystem to mainstream use of
ICT for social and economic development in a complex and volatile environment. The strategy
adopted is to focus on high priority activities that have substantial Government support and result
in irreversible gains in terms of investments, job creation, and economic growth. The Project
complements activities undertaken by other donors, notably USAID, which is focusing on
building eGovernment capacity and supporting the increased use of mobile money transfer
services.
10.
The proposed operation builds on the strong growth seen thus far in mobile services to
expand service delivery while accelerating expansion and improvements in backbone network
connectivity. It also aims to expand broadband connectivity to retail consumers and accelerate
the development of the local private sector IT industry.
III.
Project Development Objectives
11.
The Project Development Objective is to expand connectivity, mainstream the use of
mobile applications in strategic sectors in the Government, and support the development of the
local IT industry.
IV.
Rationale for Bank Involvement
12.
The proposed Project builds on the successful outcome of the Bank-funded Emergency
Communications Development Project (ECDP).6 It will help catalyze the second phase of ICT
sector development, focusing on mainstreaming the use of ICT and mobile applications in
government programs and stimulating growth of the local ICT industry by expanding the
backbone network, creating an enabling environment, and skills development. Put together, these
activities will support improvements in public service delivery, simplify access to information
and markets, and will create crosscutting enablers for economic growth and social inclusion.
V.
Project Description
13.
5
The Project includes four components.
Other institutions with a role in the ICT sector include the Ministry of Finance, which receives taxes generated
from the sector totaling about 10 percent of all Government revenues; and the Ministry of Information and Culture,
which regulates the content carried by media services including the ISPs.
6
The World Bank has been involved in the Afghan ICT sector through the Emergency Communications
Development Project (US$24 million IDA credit), ARTF supported activities (US$6 million), and PPIAF trust fund
support.
Component 1: Expanding connectivity
14.
The Government seeks to promote the rollout of Internet services while ensuring mobile
telephone services are competitive and of high quality. The Project will assist in expanding
connectivity by supporting the creation of an enabling policy and regulatory environment and
through strategic investments in infrastructure. Using a two-pronged approach, the Project will
finance the expansion of backbone networks and support the creation of an enabling environment
to increase the reach of high quality mobile telephone and Internet services to more users.
15.
This component will finance:
(a) Technical assistance to MCIT to update the ICT sector policy, aimed at spurring growth
in access to and use of ICT; to ATRA to implement regulatory reforms to create an
enabling environment for rapid broadband network deployment and for even wider
access to high quality mobile telephone services;
(b) The extension of the national backbone network to central, northeast, and southern
provinces of Afghanistan, totaling about 1,000km, to support the expansion of telephony
and Internet services in the central provinces, the northeast, and in the south, and to allow
redundancy for the national backbone network; and
(c) Capacity building activities for MCIT and ATRA
Component 2: Mainstreaming mobile applications
16.
This component will finance activities to build on the wide reach and use of mobile
telephones in Afghanistan to mainstream the use of mobile telephone-based applications (mobile
applications or m-apps) across Government ministries, agencies, and programs. This will include
m-apps that expand the reach and improve the quality of public services and applications that
support program management.
17.
Specifically, the component will finance:
(a) Technical assistance for the creation of an mGovernment strategy and roadmap, the
development of required policy or regulatory instruments to enable the m-apps
ecosystem, and capacity building activities; associated strategic advisory and capacity
building support to promote mainstreaming of mApplications;
(b) The creation of shared services and infrastructure for use by various ministries, agencies,
and programs that will enable less expensive and faster design, testing, deploying, and
operation of mGovernment services, including the creation of a service delivery platform
(SDP) for mGovernment; and
(c) An innovation support program to fund the most innovative ideas selected through a
competition that address specific development challenges in priority areas identified by
various ministries and agencies of the Government.
Component 3: IT industry development
18.
There is scope for Afghan IT services companies to serve local demand arising from the
increased use of IT in Government, the growing private sector, and the international community.
However, growth is held back by key gaps in the ecosystem such as lack of high-quality office
facilities and of a skilled talent pool within Afghanistan.
19.
This component will finance:
(a) Technical assistance to define an IT sector development policy within the context of the
ICT policy update, and to develop required legal, regulatory, and investment instruments
to capture growth opportunities;
(b) A skills development program aimed at developing a pool of skilled and qualified IT
professionals as a key building block for IT sector development in Afghanistan;
(c) Technical assistance to develop a business plan for the ICT Village being developed by
MCIT and shared services and facilities such as high-capacity telecommunications
connectivity and backup power supply that will help make the ICT Village an attractive
location for Afghan ICT firms; and
(d) The setting up of an incubator for ICT firms in the ICT Village and operational support,
including rental charges for the incubator space, the acquisition of furniture and some
communications facilities for the incubator, and the hiring of an incubator manager.
Component 4: Project management support
20.
This component will finance the creation and functioning of the Project Management
Office (PMO) that will become part of the MCIT’s PICU and support MCIT in Project
implementation. Responding to the need to build capacity within MCIT’s finance, procurement,
and administration departments, this component will also finance training and capacity building
activities for high-performing MCIT staff.
VI.
Financing
($m.)
Source:
Borrower/Recipient
IBRD
IDA
Others (specify)
Total
VII.
0
0
50
0
50
Implementation
21.
The Project will be set up, managed, and implemented by the Government of Afghanistan
through the Ministry of Communications and IT (MCIT).
22.
High-level management of the Project and strategic policy guidance in its
implementation will be provided by a Project Steering Committee (PSC), chaired by the Minister
of Communications and IT, with right of veto, and with representation of several key agencies
including Ministry of Finance, Ministry of Economy, and Ministry of Law and Justice.
23.
MCIT is implementing a number of projects in the ICT sector funded by the government
and by other development partners. To manage its portfolio of investment projects better, MCIT
has established a Program Implementation and Coordination Unit (PICU) chaired by the Deputy
Minister (Technical). The Directors of the Policy and Planning Department and ICT Department
are core members of the PICU, and the Finance and Procurement Directorates of MCIT support
the PICU. This is to ensure further strengthening and sustainability of program management
capacity that has been developed over the last few years within MCIT.
24.
The Policy and Planning Department will be responsible for implementing the fiber optic
connectivity component of the Project. ATRA will implement specific subcomponents under
Component 1. The ICT Department will implement Components 2 and 3 of the Project. Each
agency will be responsible for the technical aspects of their respective sub-components and
activities. A Project Management Office (PMO) will support the implementation of the various
Project components.
25.
A PMO dedicated to this Project has already been established within MCIT to manage
and support MCIT with Project implementation. The PMO will report to PICU. The PMO will
employ a few international and national consultants. The PMO is already staffed with a project
management specialist, financial management specialist, translator, logistics and administrative
assistants, and will also include procurement, Monitoring and Evaluation (M&E),
communications and safeguards support.
26.
Core financial management and procurement functions for the Project will be handled by
the respective departments within MCIT with support from the PMO. The PMO shall be
responsible for the fiduciary aspects of the Project, which will be conducted in a timely manner
in accordance with World Bank guidelines. On overall project financial management and
procurement issues, the PMO will report directly to the PICU. The PMO will also support the
Finance Department of the Ministry, as well as its Procurement Department. The PMO will be
responsible for all procurement activities under the Project and will help develop capacity of the
Procurement Department.
VIII.
Sustainability
27.
There is a high level of ownership of the Project and its associated activities within the
MCIT and broadly across Government. A number of ministries and agencies have expressed
support for and interest in using some of the facilities and services created through this Project
pointing to a strong case for sustainability in terms of responsible ownership, management, and
use of the resources created through this Project.
28.
The infrastructures created through this Project are sustainable through either their
revenue generating or their cost-saving potential. The investments made in the backbone network
and the ICT Village will be revenue generating through the provision of telecommunications
services through the backbone or the leasing of space in the ICT Village. Investments in the
mGovernment SDP could be revenue generating through the provision of services across
Government; it is also sustainable through the cost-savings that will be realized through the
shared services and facilities that reduce the need for individual agencies and ministries to invest
in their own facilities. The SDP will also aggregate demand and bring down the cost of
mGovernment service provision.
29.
For those activities that have a specific lifetime e.g. the innovation support program, the
skills development program, and the CIO training, it is possible to evaluate sustainability in
terms of lasting impact of these activities on the ICT sector. The innovation support program
creates opportunities for local ICT firms to grow, creating jobs, and helping drive economic
growth in Afghanistan. The skills development program will create the talent pool to support the
growth of the ICT industry while also helping its direct beneficiaries in improving their incomeearning potential. Finally, the CIO training programs will create a cadre of e-Leaders that will be
able to mainstream ICT in the working of the Government in innovative ways and help improve
service delivery and the efficiency of internal processes.
IX.
Lessons Learned from Past Operations in the Country/Sector
30.
The proposed Project design draws on lessons learned from operations both within
Afghanistan and outside, particularly from other post-conflict countries, and from the
experiences of ECDP.
31.
Key lessons learned and applied to the project design are: (1) project development
objectives should be realistic, focused and achievable in the country, sector and implementing
agency context; (b) project components should support country priorities and have broad
ownership among stakeholders; (c) project design should be flexible to adapt to a rapidly
changing environment; (d) implementation support should be included in Project activities with a
focus on retaining staff to ensure continuity and an accumulation of capacity within the
implementing agency; and (e) activities should aim to yield quick returns, build basic building
blocks to support transition from emergency recovery to medium to long term reconstruction and
development, and be sustainable over the long term.
X.
Safeguard Policies (including public consultation)
Safeguard Policies Triggered by the Project
Yes
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Involuntary Resettlement (OP/BP 4.12)
Indigenous Peoples (OP/BP 4.10)
Forests (OP/BP 4.36)
Safety of Dams (OP/BP 4.37)
Projects in Disputed Areas (OP/BP 7.60)*
Projects on International Waterways (OP/BP 7.50)
Yes
XI.
No
No
No
No
No
No
No
No
No
No
Contact point at World Bank and Borrower
World Bank
*
By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the
disputed areas
Contact:
Title:
Tel:
Email:
Tenzin Norbhu
Sr. ICT Policy Specialist
+91 414 79435
tnorbhu@worldbank.org
Borrower/Client/Recipient
Contact:
Minister Amirzai Sangin
Title:
Minister of Communication and IT
Tel:
+93 20 210 1100
Email:
a.sangin@mcit.gov.af
Implementing Agencies
Contact:
Title:
Tel:
Email:
XII.
Mr. Mohamad Ismail Bhat
Project Management Specialist
+93 20 210 1100
mi.bhat@mcit.gov.af
For more information contact:
The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-4500
Fax: (202) 522-1500
Web: http://www.worldbank.org/infoshop