Exclusive: World Bank supports use of $ 280 million in frozen aid funds for Afghanistan

A group of women wearing burqas cross the street as Taliban operatives pass through Kabul, Afghanistan on October 9, 2021. REUTERS / Jorge Silva / File Photo

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WASHINGTON, Dec. 1 (Reuters) – The World Bank’s board has backed the transfer of $ 280 million from a frozen trust fund to two aid agencies to help Afghanistan cope with a humanitarian crisis emerging after the US withdrawal, said Wednesday two sources familiar with the matter.

The 31 donors to the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF) must approve the transfer before funds can flow to the World Food Program and UNICEF, the sources said. The donors were due to meet on Friday, the sources said.

The World Bank’s board met informally on Tuesday to discuss transferring up to $ 500 million of ARTF’s $ 1.5 billion to aid agencies, told Reuters people familiar with the plan.

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Afghanistan’s 39 million people face a cratered economy, a winter of food shortages and growing poverty three months after the Taliban seized power as the last US troops withdrew by 20 years of war.

Afghan experts have said the aid will help, but big questions remain, including how to get funds into Afghanistan without exposing the financial institutions involved to US sanctions.

While the US Treasury has provided “comfort letters” assuring banks they can process humanitarian transactions, concerns over US sanctions continue to impede the passage of even basic supplies, including food and medicine. .

Any decision to redirect the ARTF’s money requires the approval of all of its donors, of which the United States has been the most important.

The White House and Treasury made no immediate comment on the World Bank’s board approval to transfer funds to the World Food Program and UNICEF.

A World Bank spokesperson confirmed that the bank’s board has discussed the matter and that donors are due to meet on Friday.

The board “discussed an approach to transfer funds from the ARTF to humanitarian aid agencies with a presence and logistics on the ground to allow basic humanitarian support directly to the people of the country”, said the spokesperson. “The ARTF donor steering committee is due to meet on December 3 to review transfers out of the fund.”

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Reporting by Arshad Mohammed and Andrea Shalal; Editing by Peter Cooney, Shri Navaratnam and Grant McCool

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