Islamic Republic of Afghanistan - Enhanced Integrated Framework ...

pertise, ability to manage risk and access tofinancial resources to take advantage of themany opportunities that exist for investment inAfghanistan. Efforts at investment promotionwill be designed to convince these investorsthat they are both needed in Afghanistan andthat they will be able to operate profitably withfull government support consistent with maintaininga competitive environment.EnergyThe ANDS strategic objective for the energysector strategy is an energy sector that providesreliable, affordable energy increasingly basedon market-based private sector investment andpublic sector oversight. The immediate task ofthe ANDS strategy, with assistance from thedonor community, is to expand energy availabilityat a price that covers cost (for all but thepoorest members of society) and to do so in themost cost effective manner. The Governmentwill also take steps to provide the basis for thetransition of the sector from public provision toprivate provision of electricity. As the Afghanenergy sector moves from primarily stateowned operations to a more private marketorientation, new institutional arrangementswill be established.Until recently a focus in the energy sector hasbeen on using donor funds and contractors torehabilitate and expand the infrastructure ofthe government-owned electric companyDABM, with virtually no attention being givento establishing an enabling environment thatwould promote increased private investment inthe sector. This will change with a major effortto set up a transparent regulatory frameworkand a pricing system that is designed to encourageprivate sector investment in the sector.A new market oriented paradigm, significantinstitutional changes and considerable capacitydevelopment will be established under guidancefrom the Inter-Ministerial Commission forEnergy (ICE). Streamlined government oversightand greater reliance on private sector investmentis essential. As the energy line ministriesshift from operating as production-basedinstitutions to becoming policy making regulatoryagencies, staff capacity and in-house functionswill be reoriented to market practices.The Government will assess its sector assetsand establish a plan for liquidation, restructuringand commercialization or sale. In particularthe Government will provide more supportfor the corporatization and commercializationof national power operations. All these effortswill occur even while donor funded projectscontinue to work to relax the severe constraintsin the energy and power sectors, but will laythe framework for a shift to a more commercialenergy system in the coming years..MiningWhile geological studies of Afghanistan havebeen conducted over the last 50 years, due topolitical, social and economic factors, 90 percentof the territory of Afghanistan has notbeen systematically studied. However the limitedresults have been highly promising withover 400 mineral occurrences having been identified,including Aynak copper, coal and anumber of small and medium mines such asgold, silver, platinum, zinc, nickel, emerald,lapis, ruby, canset, tourmaline, fluorite, chromate,salt, radioactive elements and numerousdeposits suitable for construction materials.The availability of significant oil and gas fieldsin Afghanistan has been well known for almost50 years.The ANDS strategic objective in the miningsector is to encourage legitimate private investmentin the sector so as to substantiallyincrease government revenues, improve employmentopportunities and foster ancillarydevelopment. Implementation of the strategywill help to develop effective market-basedeconomy sector policies, promote and regulatesustainable development of minerals and ensurethat the nation’s geological resources areprogressively investigated and developed. TheMinistry of Mines is making the transition frombeing primarily a producer of minerals andother commodities to a policy making andregulatory institution. For mining and minerals,the emphasis is on the exploration, extractionand delivery to market; for hydrocarbonsthe emphasis is exploration and development.There is a great potential for the mining sector.The test will be in moving quickly from thesuccess in attracting investment in the Aynakcopper deposits to the development and explorationof the many other mineral resources ofthe country.8Afghanistan National Development Strategy (ANDS)