Project Case Study
Harnessing the Economic Potential of Minerals and Hydrocarbons in Afghanistan
Harnessing the Economic Potential of Minerals and Hydrocarbons in Afghanistan
Afghanistan is in urgent need of an alternative revenue source to fund the 60% budget shortfall currently provided for by development partner support. Hydrocarbon and mineral resources present a potentially viable solution for economic growth and revenue generation.
The minerals and hydrocarbons (oil and gas) sectors represent one of the most viable sources of economic growth in Afghanistan, potentially generating government revenue in the form of royalties and taxes, boosting foreign exchange earnings, creating employment opportunities and contributing to infrastructure development. The Government of Afghanistan is pursuing a private sector-led policy to develop the extractive industries with the aims of significantly increasing the government’s own-source revenue and providing opportunities for increased employment.
The Extractives Sector Support Programme (ESSP) aimed to support Afghanistan’s Ministry of Mines and Petroleum (MoMP) in policy and regulatory reforms to attract foreign investment and develop the minerals and hydrocarbons sectors.
The project aims to enable poor rural communities to benefit from improved access to basic infrastructure services. Engagement of community members at the village level strengthens cohesion and promotes accountability of the local government at the township level.
Project achievements:
- Worked closely with the Ministry of Mines and Petroleum and the Independent Administrative Reform and Civil Service Reform Commission to prepare detailed plans for wholesale organisational restructuring of the Ministry;
- Established a dedicated General Directorate, tasked with regulation of Afghanistan’s hydrocarbons sector.
- Assisted the Ministry to develop policy options for a competitive fiscal regime for the national hydrocarbons sector;
- Provided technical expertise for the review of Afghanistan’s hydrocarbons legislation;
- Extractive Industries Development Framework (EIDF) consultation completed – 800 stakeholder interviews, 55 key informant interviews, 6 community focus groups;
- Ongoing commercial training at geotechnical consultancy;
- 22 people from the MoMP trained on fiscal policy and commercial aspects of oil and gas;
