The World Bank Report No: ISR8688 Implementation Status & Results Afghanistan Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Public Disclosure Copy Operation Name: Afghanistan: Sustainable Development of Natural Resources Project Stage: Implementation Seq.No: 2 Status: ARCHIVED Archive Date: 25-Mar-2013 Project II (P118925) Country: Afghanistan Approval FY: 2011 Product Line: IBRD/IDA Region: SOUTH ASIA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Key Dates Board Approval Date 31-May-2011 Original Closing Date 30-Jun-2016 Planned Mid Term Review Date Last Archived ISR Date 12-May-2012 Effectiveness Date 21-Sep-2011 Revised Closing Date 30-Jun-2016 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) to assist the Ministry of Mines (MoM) and the National Environmental Protection Agency (NEPA) in further improving their capacitiesto effectively regulate Afghanistan‘s mineral resource development in a transparent and efficient manner, and foster private sectordevelopment. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Component A. Award of Contracts and Licenses 12400000.00 Component B: Regulation and Monitoring of Operations 22000000.00 Component C: Preservation of Aynak Antiquities and Support for Alternative Livelihoodsthrough 7600000.00 Sustainable ASM Component D: Project Implementation Support 10000000.00 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview Afghanistan’s oil, gas and mining sector continues to attract international interest. There has been good progress in the negotiations of a mineral development agreement for Hajigak iron ore, with the award of three of four blocks to an India consortium led by state-owned Steel Authority of India Ltd. (SAIL) and the award of the fourth block to a Canadian company, Page 1 of 6 The World Bank Report No: ISR8688 Kilogold. In addition, as of October 2012, China’s National Petroleum Corporation (CPNC) has started extracting oil from the Amu Darya basin in northern Afghanistan, which is expected to generate significant revenues to the Government of Afghanistan (GoA) and provide some added confidence to international investors. Through the Resource Corridor Initiative efforts are well under ways to ensure that investments are adequately leveraged to make a sustained contribution towards broader economic Public Disclosure Copy growth and diversification. Earlier this year a National Resource Corridor Secretariat was established within the Ministry of Mines (MoM) as the key mechanism for dialogue and planning between all stakeholders (government, industry, donors, community/civil society) on the corridor approach. In June 2012, at the Tokyo conference, Donors and government came together to pledged their support for the resource corridors approach as a key component in Afghanistan’s economic transition strategy. SDNRP and SDNRP2 provide support to resource corridor development by funding technical studies and related advisory consultant services (i.e. the provision of specialists for the Resource Corridor Secretariat), in order to increase understanding of policies and actions that can be used to galvanize in-bound investments towards broader growth. Over time, the focus of the secretariat has shifted to providing support to sector specific transactions. At the Mes Aynak Archaeological site, steady progress is being made on the mapping of the site, documentation, and recovery of antiquities in the Mes Aynak red zone. However, a number of outstanding issues remain, including the immediate documentation and preservation of antiquities and longer-term the development a country-wide strategy to address with the coincidence of archeology and mining. There has been continued progress in the establishment of regulatory and legal oversight necessary to ensure sector governance and investor confidence. One setback however, was the rejection by the Cabinet of the new daft minerals law in May 2012. A series of amendments to the draft law has since been made and continues to be considered by the cabinet ahead of full parliamentary review. On EITI, the second reconciliation report has been prepared and public consultations have been held. The team anticipates that the validation process will conclude by early spring 2013, in anticipation of the EITI board meetings. Locations Country First Administrative Division Location Planned Actual Afghanistan Not Entered Shibirghan Afghanistan Not Entered Mazar-e Sharif Afghanistan Not Entered Kabul Afghanistan Not Entered Haji Gak Afghanistan Not Entered Aynak Public Disclosure Copy Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Cumulative number of tenders for larger mining Number Value 1.00 5.00 4.00 and hydrocarbon deposits Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 Comments Page 2 of 6 The World Bank Report No: ISR8688 Production data collected and reported for Number Value 1.00 1.00 10.00 medium scale and for large scale mining and Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 hydrocarbon operations Comments While contracts have been Public Disclosure Copy awarded, production data has not yet been collected Number of corporatizationplans drafted Number Value 0.00 2.00 3.00 (cumulative) Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 Comments View of key stakeholders such as local non Number Value 0.00 state actors, international companies and the Date 01-Sep-2011 30-Dec-2016 donor community as to how well the sector is Comments managed and how transparent are licensing decisions and approvals EITI Reconciliation Reports issued (cumulative) Number Value 1.00 2.00 3.00 Date 01-Sep-2010 03-Dec-2012 30-Dec-2016 Comments 2 reports have been received for the year. Field investigation reports for HSE compliance Number Value 1.00 0.00 5.00 at medium and large scale mining and oil/gas Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 operations (reports prepared, issued, corrective Comments actions taken by operator) Number of workers trained in gemstone cutting, Number Value 0.00 300.50 polishing and jewelry making, and percentage Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 of women Comments Percentage of sites in Aynak Valley with Percentage Value 10.00 25.00 50.00 antiquities where protection activities have Date 01-Sep-2010 03-Dec-2012 30-Dec-2016 started versus total number of sites Comments Public Disclosure Copy Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Publication of a new Mining Sector Text Value Overarching national Over 10 new prolivies have ASM Mining plan approved Development Strategy and new policies and Extractive Industries been drafted under the main and published plans regarding quarrying and ASM mining Excellence Program (NEIEP) minig pllicy and approved, published in draft which covers ASM and quarring plans. Date 01-Sep-2011 03-Dec-2012 31-Dec-2015 Comments Page 3 of 6 The World Bank Report No: ISR8688 Number of Sub-Sector Strategies drafted Number Value 1.00 1.00 5.00 Date 01-Sep-2011 03-Dec-2012 31-Dec-2015 Comments 1 strategy has been drafted Public Disclosure Copy for the year. % of new geodata collected as a percentage to Percentage Value 10.00 95.00 total area Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 Comments Number of licenses digitized Percentage Value 5.00 39.00 95.00 Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 Comments Number of days to process medium scale Days Value 180.00 90.00 licenses Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 Comments Number of trained mine inspectors (cumulative) Number Value 30.00 32.00 50.00 Date 01-Sep-2011 03-Dec-2012 30-Dec-2016 Comments Time taken for NEPA to respond to sector Months Value 9.00 1.00 4.00 environmental and social reports Date 01-Sep-2011 03-Dec-2012 30-Dec-2015 Comments Staffing and annual budget for the compliance Text Value 0 One national in addition to Additional staff positons office at NEPA two international postions identified and in the process filled, and international firm for of being filled. capacity buirling for NEPA is under process Date 01-Sep-2011 03-Dec-2012 31-Dec-2015 Comments MoM uses the complete resource corridor data Text Value Baseline report is drafted Due to not being at the stage Outward linkage analysis base to prepare an analysis of outward of mines production, the MoM completed Public Disclosure Copy economic linkages for the resource corridor has yet to use the complete database. Date 01-Sep-2011 03-Dec-2012 31-Dec-2015 Comments Number of workers trained at the gemstone Text Value 50/15 500/40 center and % who are women Date 01-Sep-2011 31-Mar-2016 Comments Data on Financial Performance (as of 09-Jan-2013) Page 4 of 6 The World Bank Report No: ISR8688 Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P118925 IDA-H6990 Effective 31-May-2011 16-Jul-2011 21-Sep-2011 30-Jun-2016 30-Jun-2016 Public Disclosure Copy Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P118925 IDA-H6990 Effective XDR 32.80 32.80 0.00 2.31 30.49 7.00 Disbursement Graph Key Decisions Regarding Implementation This ISR is based on on-going discussions with the PMU for the project and findings from a series of periodic supervision mission to Afghanistan which took place during the period of Public Disclosure Copy April – December 2012. The following key decisions have been reached with the Government during that period: • Need to maintain momentum around preservation of cultural heritage at Mes Aynak and country-wide through 1) Procurement of logistics and security coordinator for Mes Ayank; 2) Procurement of 3D scanning equipment for documentation of antiquities in the red zone; and 3) Development of a long-terms strategy to more systematically address the intersection between mining (and related infrastructure) development and cultural heritage. • The possibility of SDNRPII playing a more active role in the hydrocarbons sector, through: 1) the procurement of a hydrocarbons policy advisor; 2) providing technical support on the audit of the Amu Darya Hydrocarbon play; 3) beginning procurement of a firm for ongoing Amu Darya Contract Monitoring. • The MoM is in receipt of frameworks and templates that now require wide dissemination and day-to-day reference / application within business lines. The broadest agreement for environmental / social issues is that the Strategic Environmental Social Assessment (SESA) be rolled out now through workshops across the Ministry, while concurrently being further elaborated in key areas (i.e. illegal mining). Restructuring History Page 5 of 6 The World Bank Report No: ISR8688 There has been no restructuring to date. Related Projects Public Disclosure Copy There are no related projects. Public Disclosure Copy Page 6 of 6