Afghan Investment Fund - 2014

CONFIDENTIAL
The Afghan Investment Fund

DRAFT Final July 2014

RUSSELL R. DIEHL
Diehl & Company
Russ@Diehl.net
(1)-949-955-2000
June 15, 2014

AID 306-O-14-00033
REQ 306-14-000072

The material views expressed in this assessment and the negative
primary finding reflect a joint determination of the author and officers of
the United States Agency for International Development.

The author, R.R. Diehl makes no representation about the validity or
accuracy of the data used in the report, which was obtained from a
variety of sources and interviews that were deemed reliable.

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Acknowledgements
Throughout the process of conducting this assessment, several individuals have
provided significantly enabling assistance. Mark Karns, USAID/OAPA/TS, technical
assistance and policy guidance was highly significant, broadly adopted and
indispensible.
Brendan ODonoghue, Director, the Task Force for Business and Stability Operations
(TFBSO) provided in-country logistics in Kabul, Herat, and Mazur which allowed for
mobility, safe living circumstances, as well as much needed administrative assistance
rendered by Amina Osmani.
The USAID/Kabul team, Kristen Cordell, Patti Buckles, and Iris Young provided the
project structure, patience and the assessment review for which I am deeply
appreciative.
***

Confidentiality
For purposes of this report "Confidential Information includes all information or
material that has been requested by the provider to remain confidential. Most of the
Confidential Information contained in this report was transmitted orally, with the
explicit and implicit warrantee that said information would be provided "Confidential
status. Individuals (providers) were made aware that the obligation of this Reports
Author, under the pledge of Confidentiality, did not extend to information that was: (a)
publicly known at the time of disclosure or subsequently became publicly known
through no fault of the Author; (b) discovered or created by the Reports Author before
disclosure by the provider; (c) or learned by the Author through legitimate means other
than from the provider or providers representatives.

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TABLE OF CONTENTS
Page

BACKGROUND 5

I. PROJECT CONCEPT DESIGN CONTEXT .. 6

II. FINDINGS . 6

III. USAID EFFORTS TO DEVELOP THE ENTERPRISE AND FINANCIAL
SECTORS .. 7

IV. PRIVATE INVESTMENT IN AFGHANISTAN 9
Fund Structure . 9
Funding Sources 10
Types of Investments 11
Exiting . 11
V. AIF PROJECTED DEVELOPMENT TIMELINE 12
Afghan Investment Fund Working Process . 15

1. Establish the Fund . 15
2. Mapping Potential Investments . 15
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3. Making an Investment . 15
4. Developing the Target Company . 15
5. Exit 16

A Model for the AIF . 17
Figure 1 21
Figure 2 22

VI. A BRIEF CASE FOR A REGIONAL CENTRAL ASIAN-AFGHAN-PAKISTAN
INVESTMENT FUND RIF 23
Footnotes . 29
ANNEX INDEX 30
Annex 1 Afghan Private Equity Investors 30
Annex 2 Business and Investment Climate in Afghanistan 34
Annex 3 Strengths, Weaknesses, Opportunities and Threats of Investing .. 36
Annex 4 Comments on Afghan Company Calls 37
Annex 5 List of Recent USAID Afghan Studies . 43
Annex 6 - USAID AFGHAN OVERVIEW 45
Annex 7 - USAID FAIDA FACTS .. 49
Annex 8 - USAID AFGHAN DASHBOARD 50

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Afghanistan Investment Fund
Scoping and Design Assessment

BACKGROUND

In June 2013, USAID tentatively set aside $60 million for the establishment of a legacy program,
Afghan Scholarships for Women (ASW). This prospective legacy program (ASW) will enable
highly qualified female students to attend a university to prepare for careers in high-growth,
emerging fields which will contribute to Afghanistans stability and prosperity, and in which
women are significantly underrepresented.

As a complement to USAIDs broader gender portfolio in Afghanistan, the ASW will leverage
relationships with private and public partners as well as institutes of higher education in
Afghanistan, the region, and in the U.S. The notional target for the Fund is 200 women per
year, although the numbers will likely fluctuate to accommodate attrition and advancement
rates. Seeded with USAIDs $60 million, the goal is to design a scholarship program that can
operate in perpetuity, thus serving as a lasting, visible, and effective legacy investment by the
American people in Afghan women and their ability to contribute to Afghanistans
development. The initial round of scholarship awards is envisioned for March 2015.

To support this undertaking, USAID commissioned a report to determine a Scoping and Design
assessment to outline the logistical, administrative, and technical feasibility requirements of an
Afghan Investment Fund (AIF) approximating US $40 Million. The assessment also required
analysis of the feasibility of the AIFs ability to provide significant financial support of the ASW
program from the annual investment surplus which would be dedicated to finance the
scholarships of the ASW.

The assessments key deliverable is the review of the AIFs prospective design and feasibility in
the context of the Afghan political economy. To facilitate this, the assessment will provide a
roadmap to guide the implementation processes and ensure that the AIF is designed to
complement USAIDs broader portfolio and make the best practices contribution to elevating
the status of women in Afghanistan.

The main topics assessed will represent the best options and best practices currently generally
practiced in the investment fund industry including:
Economic Demand and Feasibility of an investment fund for Afghanistan;
Fund governance/management structure options;
Investment model for the Fund expressed financially over time;
Prospective resource partners, Public & Private;
Detailed timeline and budget for implementation.
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I. PROJECT CONCEPT DESIGN CONTEXT

This assessment was undertaken from February through May, 2014 in the context of a shifting
Afghan landscape and the open consideration of a number of structural alternatives for
USAIDs prospective ASW program. Factors considered, but not limited to, were the Afghan
presidential election process, the pending withdrawal and continuing stand down of the ISAF
(NATO) military operations, weakening economic conditions, lower international donor
activity, and increasing need for individual security.

During the course of this assessment, specific information on the ASW was not generally
available as the ASW design was still under discussion with many options under exploration.
Therefore, the assessment more narrowly focused on the feasibility of organizing and operating
a USAID sponsored AIF and generating sufficient cash flow, after expenses, to financially
support the ASW program operations and scholarship costs. Initially, the $60 million allocated
to the ASW effort was divided between a General Securities Investment Fund (GSIF) and a
Private Equity Investment Fund (AIF). The $20 million GSIF was proposed to be managed by
professional money managers (i.e., Bank of New York, J.P. Morgan, and Wells Fargo), with the
main objective to yield a prudent man return: meaning, reasonable income and preservation of
capital. The GSIF would provide early and current income for the ASW program. The AIF
would need four to five years before it would financially contribute to the ASW. Subsequently,
it was determined by USAID that this study need only assess the feasibility of establishing a $40
million private equity investment fund; the AIF.

For the purposes of this assessment, 75% coverage of the ASW costs was used as the metric to
quantify feasibility of the AIFs financial support.
1
Also, based on USAID guidance, the
assessment used $40 million as the amount that the AIF would have available for operations
and investments from the USAID as the initial anchor investor; the remaining $20 million
formerly proposed to be allocated to the GSIF would be used to finance the set-up and
operations of the scholarship program and the direct costs of prospective scholarships to be
awarded in the initial years of program implementation.

II. FINDINGS

The Afghan Investment Fund is not feasible and USAID should not provide financial support
for its establishment or operations. The AIF will not provide sufficient funding for a
scholarship program, including operating costs, in a timely manner. The small size of the AIF at
$40 million would be both too small for profitable fund operations and likely too large for the
Afghanistan investment market at this point in the countrys development too small to permit

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the AIF to be operated without significant donor operating subsidies and too large given the
small number of investable companies (investees). Additionally the timeframe necessary to
set up and operate an AIF and more importantly, to generate positive cash flows to financially
support the scholarship program, would be too long (from 5-7 years or more) before any initial
cash flows would be available to support the scholarship program. In numerous discussions on
AIF structure and operating options with USAID/OAPA/TS, it was determined that any type of
AIF which might be set up would not provide effective and timely financial support to the ASW
project. Given this negative recommendation, the advice of OAPA/TS was to complete the
assessment to describe both the supply and demand side issues that would pertain to an
investment fund in Afghanistan, and explore a regional investment fund that could be
considered by USAID or other donors as an alternative program to support economic growth.
Therefore, this assessment provides detail on how an investment fund (the AIF) could be
established. This assessment explores: (i) the form of organization and operation of an AIF, (ii) a
prospective timeline for development and initial operations, and (iii) supporting discussion on
the demand side. Field visits to approximately forty Afghan enterprises and a dozen
governmental organizations was undertaken in Kabul, Mazar, and Herat in February, March,
2014 to provide prospective on possible types of enterprises that might qualify as investee
candidates for the AIF. In addition, a listing of prospective co-investors was developed for
general review and reference (See Annex I).
2

III. USAID EFFORTS TO DEVELOP THE ENTERPRISE AND FINANCIAL SECTORS

The informal sector is a thriving part of the economy of Kabul, Herat, and Mazare-Sharif.
Outside of agriculture, the private sector is overwhelmingly composed of informal, family-
owned micro enterprises, most of which are engaged in trading or basic services. The great
majority of economic activity (80-90%) in Afghanistan is informal.
3
As a result; there are a
limited number of small and medium sized enterprises and only a handful of large firms, which
could become prospective investee candidates for any type of viable AIF Fund that might be
established. Starting in 2006, the Afghanistan Rural Investment & Enterprise Strengthening
(ARIES) program had been USAIDs primary financial sector development activity. This
program was followed by the current leading USAID project in this area, Financial Access for
Investing in the Development of Afghanistan (FAIDA). The $160 million FAIDA project has
facilitated over 240 loans with about a dozen greater than $100,000, and less than half a dozen
greater than $1,000,000. After review and analysis, only a handful of these companies might
qualify as potential prospective AIF investments.

The Task Force for Business and Stability Operations (TFBSO), a Department of Defense
initiative dedicated to identifying and providing consulting assistance to viable Afghan
business enterprises, has catalogued over 600 Afghan commercial entities. After a
comprehensive review, perhaps 30 companies, with a majority near to $1 million in revenues,
and several with revenues exceeding $1 million, might qualify as prospective AIF investee
candidates.

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The World Bank office in Kabul predicts that Afghanistans economic GDP growth will decline
to under 3 percent in 2014 from 13 percent in 2012. Consumers, entrepreneurs, and investors
face an uncertain future for a nation long dependent on foreign troops (ISAF) and international
aid assistance. In addition, Afghanistans mineral resources have never been tapped and
agriculture is still dominated by illicit exports. The Afghan economy is not presently exhibiting
a take-off stage investment environment, and may not for the rest of this decade.
3

The Afghanistan Holding Group (AHG), a highly regarded Kabul based investment advisory
and financial services firm, commented that the upside in Afghanistan is very unclear, but the
downside is very clear. If the Taliban takes over, well all leave, an AHG partner said of
Afghan investors, many of whom already have second homes in Dubai and regularly move
most of their money to UAE Banks.

In fact, the outflow of capital from Afghanistan since 2009, including the proceeds of illegal
drug trafficking, has roughly equaled American financial assistance in the same period,
according to Ministry of Finance sources.

Discussions with Harakat, (http://www.harakat.af) re-emphasized the well-known
requirements needed to facilitate a business investment environment:
security and political stability,
anti-corruption efforts,
appropriate tax regime,
investment incentives,
access to infrastructures,
access to useful finance,
access to sufficient electricity,
access to land, legal support and
protection of investments.

Unfortunately, these elements are currently not present in the Afghan investment climate, but
are vital to a proper, internationally funded, investment fund similar to the contemplated AIF.
In addition, while corruption is endemic in almost all post-conflict countries, in Afghanistan,
most crucial to the success of any anti-corruption effort is the recognition that those who
are the subject of corruption need to want to break with corrupt and corruptive practices.

To date, little attempt has been made to deal with the more difficult aspects of
corruption; and the willingness of the general public, including the vast majority of
businesses, to allow corrupt practices to continue, appears prevalent. Without significant
improvement in curbing current and pervasive corrupt practices, most, if not all, potential AIF
investments would be subject to high levels of corruptive practices that would significantly
impact and increase set-up and operating costs and render the implementation of a best
practices investee investment process infeasible.

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It should be noted that while there are several interested and well qualified Investment
Management (IM) candidates who have expressed interested in establishing and managing an
investment fund (See Annex I), the general conditions for a successful private equity investment
project plainly do not currently exist in Afghanistan. Unfortunately, for international donors
and foreign direct investors these inhospitable conditions are likely to prevail throughout the
transition period estimated to extend to 2024.

IV. PRIVATE EQUITY INVESTMENT IN AFGHANISTAN: IS THERE A RATIONALE?
The Structure that fits the underdeveloped Regulatory Environment.

Two principal rationales have been offered for the increasing interest in private equity
investment over the past several years.

The first relates to the positive changes in Afghanistans legal and regulatory environment.
Much work still remains to be done, but considerable progress (albeit from a low or almost
zero base) has been made. Radical reforms, such as reduction of trade barriers, improved
support to the agriculture and agribusiness sectors, acceptance of intellectual property
protection, increased information access, increased access to finance, and significant innovation
in the transportation of goods have accelerated the integration of Afghanistan into the world
economy.

The second relates to the changing economic conditions in Afghanistan.

There has been substantial direct private investment from both Afghan and foreign investors
over the last decade in different sectors, including telecom, light manufacturing, hospitality, real
estate, media, and financial services. With its position at the heart of South and Central Asia,
entrepreneurial spirit, and impressive deposits of oil, natural gas, copper, iron, gold, lithium,
rare earth elements, and other natural resources, Afghanistan holds significant longer term
potential for attracting the private-sector investment ( foreign direct investment) necessary to
create a diversified economic growth and broaden the governments revenue base over time.

Fund Structure

Private equity investing in Afghanistan and in developed countries (USA-UK) would likely be
quite similar. In both settings, professional investors provide equity or equity-linked capital and
debt to privately held firms. Current practitioners in Kabul include the Afghan Growth
Finance, LLC, and the World Banks IFC. Another common element, and well implemented by
the IFC and the Afghan Growth Finance, is the ongoing involvement of the private equity
investor in monitoring and assisting investee companies in cash flow and general management
practices. Where private equity investing in developing countries like Afghanistan differs is in
its implementation.
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While the fund structure standard in developed countries is the limited partnership, in many
portions of the developing world, particularly in Asia and Central and South Asia, there has
been a general lack of legal structures that allow the effective establishment of limited
partnerships.
4
As a result, in Central Asia and perhaps especially in Afghanistan many funds
have been structured as Limited Liability Companies (LLCs) or Corporations, which often do
not have the forced liquidation features of U.S. limited partnerships.
5
Many business entities in
Afghanistan, especially financial operations, use the UAE and Dubai to legally organize and
operate from as a headquarters base. Travel and communications, and general logistics account
for much of this choice, as do business and trade lines developed over the past decade.
Investment Managers (IMs) of LLCs operating from Dubai will have significant useful
resources available to them including prospective participating financing institutions and
prospective investors, institutional as well as individuals. Dubai contains a significant number
of Afghan orientedinterested business entities which may well present opportunities for a
prospective Afghan investment fund.
LLC Investment Managers (IMs) are in charge of many necessary actions: establishing the
fund, hiring qualified staff, managing the fund, procuring additional funding among individual
and institutional investors, identifying (sourcing) investment opportunities, making and
monitoring exiting investments, as well as reporting to investors on operations and financial
performance. Below are some important characteristics a professional IM should possess:

Developing Market Experience the IM needs to have significant equity/debt
experience in similar environments.
Local Knowledge/Track Record the IM should be a recognized and respected firm in
the country.
Pipeline of Investments should have access to a number of investments that could
absorb equity/debt and promote efficient investment of capital.
Linkage to Business Community has to know the Afghan business community well
enough to negotiate equity/debt terms and exit.
Strong Managing Director and local team language and cultural understanding to
work with clients through investment and exit periods
Relationship with local and regional investors has to be able to raise additional
capital to that contributed by the anchor investor (USAID in this case).

Funding Sources

Many of the sources of capital for a private equity fund dedicated to investment in Afghanistan
would include Regional Investment Firms (MENA, Pakistan, India, GCC), and Family Offices
from the Gulf, South Asia, and special purpose Impact investor funds, typically based in the
developed world, i.e. Dubai, London, New York, or Hong Kong. Several additional parties,
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however, have played important roles in the raising of private equity funds in developing
nations in Central Asia. These have included donors such as DFID, USAID, quasi-
governmental corporations like the Overseas Private Investment Corporation, and multilateral
financial institutions such as the International Finance Corporation, among many others.
6

Types of investments

Investment funds in Afghanistan would likely undertake transactions similar to those in the
developed world, including leveraged buyouts, consolidations of fragmented industries, and
venture capital investments. But the AIF might undertake several types of transactions less
common in the U.S. or OECD developed world settings. These would include investments in
privatizations (a current IMF condition with respect to the New Kabul Bank), infrastructure
projects such as highways, various extractive operations, industrial zones (parks) and strategic
alliances.

The typical process for evaluating and completing a new private equity investment opportunity
usually has several different and structured steps that can vary widely by individual firms, and
can differ greatly due to specifics of the target company or the transaction process. The initial
investment evaluation can happen very quickly, but the entire process may take several months
or even a year or more. The discovery and assessment of the opportunity at the beginning of
the process is called sourcing in this phase, the AIF will locate potential targets and look at
the viability of the investment and the potential returns available. Then, as more information is
gathered, the AIF will conduct due diligence, create and develop detailed financial models, and
evaluate the pros and cons of the opportunity prior to final approval and execution of the
transaction.

Exiting
7

Perhaps the most difficult aspect of private equity investing in developing nations like
Afghanistan has been the uncertainty of investment exit. The investment returns of private
equity investors in the developed world have been largely linked to those of the organized
capital markets and the initial public offerings (IPOs) where Fund investments are sold into
well regulated capital markets thereby exiting their ownership stakes. Private equity investors
in Afghanistan cannot rely on this method of Exit since no capital market infrastructure exists to
enable this type of exit. Afghanistans smaller and newer firms typically will not attract
significant institutional holdings, and will have limited liquidity. Consequently, private equity
investors in Afghanistan will tend to rely on exiting through the sale of its portfolio firms to
local and regional strategic investors, and/or family business interests. This can be problematic,
however, when the number of potential buyers is small. The purchaser can exploit the private
equity investor's interest and even need to exit the investment, acquiring the company for
modest valuations.

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V. AFGHANISTAN INVESTMENT FUND PROJECTED DEVELOPMENT TIMELINE
8

Set forth below is a general outline of prospective tasks and a concomitant timeline for the
necessary process and procedures relative to organizing the Afghan Investment Fund.

Preparation of a Concept Paper September--December 2014

Approval of Concept Paper -- January 2015

Preparation of Expressions of Interest for Submission to fedbizops.gov
February 2015

Receipt of EOI and Preparation of an RFP Invite Listing -- March 2015

Preparation of Terms of Reference and Evaluation Criteria for IM Selection -
February-- March 2015

Preparation of the RFA (for Full and Open Competition) March--April 2015

Pre-bid Conference -- April 2015

Submission of the RFA on fedbizops.gov May 2015

Receipt of Proposals from Interested Investment Manager Groups --
2
July 2015

TEC Meetings -- August 2015

TEC Decisions -- October 2015

Pre-Award Survey - November--December 2015

Award to Winning IM - February--March 2016

Organizing the Fund April, 2016
Fund Documentation
Tender Process

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Initial Discussions with Tender Prospects
Negotiation of Fund Terms, January--March, 2015
Negotiating Fund Terms with Prospective Investment Managers
Finalizing Fund Structure
Prepare initial financial closing
Initial Closing December, 2016
Acceptance of Initial Commitments between
Investment Manager and AID
Launch date for Fund

Initial Investments June 2017

Subsequent Closings: December - 2018 Additional closings on New Commitments
Subsequent closing period subject to USAID Cooperative Agreement terms and
conditions
Funding period end-date for Fund
Making investments, Year one (2017) through five (2021)
Fund makes new Investments during investment period
Some liquidations are possible in this period

Existing Investments, Year six (2022) through seven (2023)
Fund Monitors and liquidates investments during term
Distributions made as and when received and approved
Some New Investments and follow on investments possible

Dissolution and Liquidation, Year eight (2024) through ten (2024-26)
Remaining Investments liquidated
Remaining Proceeds Distributed
Limited Extensions

It is likely that the AIF would need to be capitalized at near $100 million in order for it to
operate on a commercial basis with no operating or financial subsidies from USAID or other
donors. Therefore, the concept level of $40 million for the AIF would need to be expanded by
capital contributions from other investors. When an investment fund such as the AIF reaches its
target amount of funds raised, it is called a financial close or just close. Often and usually a
fund is only permitted to hold an initial closing after a minimum amount of capital has been
raised.

A first closing of the AIF could occur when the sponsor (USAID) identifies and appoints the
investment manager and additional investors, who are ready to commit sufficient capital to the
fund based on the sponsors capital raising target are also prepared to make a firm commitment
to the financial close of the Fund. After the first closing, subsequent closings may be held
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throughout the fundraising period, which often ends either 12 to 18 months after the funds
initial closing or, when the fund reaches its fund raising goals on commitments as set forth in
the Funds operating agreement.

In March and April of 2014 research was conducted by personal interviews and e-mail
correspondence with several potential Investment Management (IM) candidates, including,
Afghanistan Holding Group, INFrontier, Leopard Capital, Riz-q Capital Partners, Afghan
Growth Fund, Abraaj Capital, Burj Capital, HBG Holdings, as well as several international
organizations including the UKs DFI, the Germans DEG, ADB and the Kabul office of the IFC
and World Bank.

Based on extensive feedback from these investment groups with interest in investing activities
in Afghanistan, any and all Private Equity operations conducting business in Afghanistan will
be subject to several important business principles.

First, the extent of overall positive economic development in Afghanistan,
Second, the extent of the uncorrupted application Rule of Law in Afghanistan,
Third, thorough knowledge of the local markets (Kabul, Mazur-e-Sharif, Herat),
Fourth, a long-term vision for Afghanistan,
Fifth, access to additional capable investors (Afghan or Developing Economy Centric).

Addressing these points briefly, the following observations are noted:

The nature of the opportunities that will be presented to private equity investors will
depend substantially on the degree of economic development experienced by
Afghanistan.

The economy of Afghanistan has improved significantly since 2002 due to the infusion
of billions of dollars in international assistance and investments,

as well as remittances
from Afghan expats. Nevertheless, about 35% of its population is unemployed and 36%
live below the national poverty line. The government of Afghanistan claims that the
country holds up to $3 trillion in proven untapped mineral deposits, which could make
it one of the richest mining regions on earth.

Due to the ongoing hostilities, Afghanistan remains one of the least developed countries
in the world, ranking 175
th
on the United Nations' Human Development Index. The
nation's GDP stands at about $34 billion (2012) with an exchange rate of $19.85 billion,
and a GDP per capita of about US$1,150. Many Economists believe Afghanistan is
closing in on the Take Off stage of economic growth, which potentially may be led by
the mining-extractive sector. (See Annex V, A link)

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Since the relationship between a private equity investor and an entrepreneur is
fundamentally a contractual one, the manner and ease with which property rights can
be protected in the courts is a critical measure. The Rule of Law must be functional.

The Afghan courts and Afghanistans legal and regulatory institutions are plagued by
corruption, inefficiency, and a lack of capacity. While strides have been made in
enacting a significant body of commercial legislation over the last decade, very
significant gaps exist between what is written on paper and the willingness and/or
capacity of the judiciary to interpret and apply new law and complex commercial
arrangements impartially. While Afghan law, for example, may not expressly prohibit
transactional or legal structures, or may provide for the local enforcement of
international arbitration awards, Afghan courts may not always apply, know how to
apply, or be willing to apply for any number of reasons, the letter of the law.

Two of the most important qualities that a prospective Investment Management
candidate should possess include: (i) a thorough knowledge of the local market and (ii) a
long term vision for Afghanistan. It was noted that previous Private Equity Investment
Fund projects in Afghanistan failed, in the main, due to deficiencies in these principles.

Lastly, a $40 Million private equity investment fund is small by current standards. To
make the AIF a feasible endeavor (for both the scholarship program and for the AIF as
an operating entity) a fund size of $100 million would be required to permit operations
on a commercial basis with no USAID or donor subsidy requirement.

USAID has always made clear that the IM candidate would be expected to match USAIDs
funding amount for the first financial closing and prior to any investments being made. This
matching of funds was required for the Pakistan Private Investment Initiative (PPII), a USAID-
supported effort that is now in the fund-raising stage. With characteristic optimism, a majority
of the investment managers interviewed indicated that an additional raise of $40-60 Million,
given the starter amount provided by the USAID, was feasible and likely to be completed
within 12-18 months from the initiation of the AIF. Institutional investors, domestic and
international, with an interest in Afghanistan as well as Afghan high net worth individuals and
Afghan Diaspora were believed to be the most appropriate and most likely candidates as
potential investors. (See Annex I)

Afghan Investment Fund Working Process

1. Establish the Fund

The AIF managers (IM) receive capital from the USAID and then proceed to raise capital
from institutional investors to establish AIF and begin operations. Typically, investors
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include both private and institutional investors like pension funds, funds of funds, life
insurance companies, foundations, Sovereign Wealth funds, and other institutional
investors are participants. Often the fund manager also commits capital to the newly
established fund. For the AIF, USAID would require that the chosen IM contribute some
capital to have skin in the game - thus aligning risk exposure of the IM with other
investors in the AIF.

Private equity investment funds are typically organized as Limited Liability Companies
with a life cycle of approximately ten years. Often capital is called from investors when
investments are made into portfolio companies and returned after exits. However, with
international investment funds, resources are banked by the IM for ease and assured
availability. The fund manager (IM) acts as an advisor to the fund, (sometimes guided by a
Board) making the investment and exit proposals and developing the investment targets
during the ownership period. It should be noted that recently raising international capital
for investment in a post-conflict nation state has been extremely problematic. That is likely
to continue to be the case. As expected the past experience and successful operation of
previous portfolios of private equity investments are key elements in assessing the
prospective Investment Managers track record.

2. Mapping Potential Investments

The AIF manager would map potential investment targets for the fund. Generally, the
targets need to fulfill certain criteria in terms of size, industry, and life cycle phase in
accordance with the investment fund's strategy. In addition, the AIF manager evaluates the
attractiveness of each potential target based on its value creation and exit potential.
Investment targets are usually sourced either through proprietary networks or by
participating in auction processes, which may be less likely in Afghanistan. Efficient deal
sourcing, therefore, calls for strong business networks across the funds target geography,
which may need to be expanded to a more Regional strategy.

3. Making an Investment
After an investment target is identified, a more detailed analysis on the business is
performed. This due diligence analysis usually involves going through the companys
financial and legal documents in more detail, as well as evaluating its commercial
attractiveness. Negotiations with banks to arrange financing are also initiated at this stage.
Provided that bank financing is available and due diligence findings support the
investment, final negotiations regarding the transaction are initiated.

4. Developing the target company
Once the investment is made, the AIF manager begins developing the company based on a
detailed value creation plan. In addition to financial capital, the manager supports the
target company by providing sector knowledge, operational experience, and access to a
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wider business/industry network. This usually involves taking a seat in the target
companys board.

5. Exit

Private equity investors are temporary owners. Consequently, a portfolio company is
usually held between 4 to 6 years, during which time the value creation plan is being
implemented in cooperation with the management team. There are several alternatives
available for the private equity fund to exit the investment. Most commonly exits take place
via:

Trade sale to an industrial buyer.
Secondary sale to another private equity fund interested in a more fully developed
company - with a proven success record.
Sale to the management group.

Once the exit is finalized, the initial capital and proceeds from the investment are returned
to the fund investors.

A Model for the AIF

In contrast to public equity (Common Stock), private equity investments initially have negative
returns and accumulated negative net cash flows for a relatively long time period. Investors
have to bear this fact in mind when setting up a new program or approving new investments.
Due to the characteristics of the return and cash flow profile, a pattern is developed known as
the J-Curve.

The J-Curve illustrates the tendency of private equity investment funds to deliver negative
returns and negative cash flows in the early years, plus investment gains and positive cash
flows later in the investment funds life as the portfolio companies mature and are gradually
exited. Portfolios of Investment Funds have similar J-Curve patterns, but usually for Private
Equity investment funds the J-Curve effect is more pronounced in the sense that it takes longer
to report a positive internal rate of return (IRR) as capital calls of funds are drawn over a longer
period of time. Clearly this phenomenon will have a direct effect on financing any endowment
like a legacy scholarship program.

The depth and length of a J-Curve depends on several factors. First, the J-Curve is influenced
by the level of fees early on in the funds life. Since management fees are based on the entire
committed capital, this capital is only gradually invested over the first few years and
distributions are usually miniscule. Expensed management fees and organizational expenses
have a significant effect on the shape of the J-Curve.

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Second, a fund usually consists of different types of transactions: (i) some very successful
transactions, (ii) those that meet expectations and (iii) those that underperform. The latter can
usually be identified fairly quickly and are usually written down, or off, early on in the funds
life. Briefly stated, the unsuccessful investments usually identify themselves early on. For the
companies meeting or exceeding expectations, it takes a longer time period to implement the
changes creating value to finally realize the positive outcome.

Third, the J-Curve effect is also more pronounced where private equity investment managers
are more conservative. Conservative IMs would write down assets early on or carry the value
of their investments at or close to cost until they are forced to write up the value of their
assets close to or at the time of the realization period or exit. While these differences in
valuation between managers are gradually disappearing with the acceptance ofmark-to-
market valuations, there is still some leeway for the private equity managers preferences.

Fourth, the most important factor for the shape of the J-Curve is the timing of the investments
and divestments. The more quickly fund managers invest capital, the steeper the J-Curve. The
longer it takes to generate distributions, the longer (and usually deeper) the trough of the J-
Curve. However, there are instruments that mitigate the relatively late distributions in an
investment program. In addition, investors can attempt to manage fees and other disburse-
ments more effectively through Board Management.

This may be changing currently as terms in todays private equity investment landscape are, at
least to some extent, becoming standardized and have similar patterns. Also, they can acquire
lower yield returning investments such as mezzanine or debt securities, usually subordinated
debt, which promises a more current income but lower longer term returns. In addition, they
can effectively structure their investment program with accounting techniques that would allow
the Fund to incorporate early returns by shifting some of the later gains to the earlier accrued
returns.

All of these measures can usually be modeled in a cash flow model to try to predict the cash
flow pattern (and the length and depth of the J-Curve) of a private equity investment program.

Modeling private equity investment cash flows and net asset values (NAV) in the Afghan
environment is clearly challenging, mainly for two reasons: the scarcity of publicly available
Afghan business data and the illiquidity of the asset class that characterizes Afghan debt and
equity securities. These two limiting factors, however, are precisely the main reasons why
private equity investment, as an asset class, may well out-perform alternative investments in
other markets.

The following points examine what a J-Curve model could describe, and what factors influence
the AIF model.

Timing of Cash Flows
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How long is the investment period, when do distributions start, and what does net cash
flow look like?

Timing of Performance
How and to what extent do managers write up or write down NAVs?
Afghan Market Performance
How are the overall private equity investment markets developing and what influence does
this have on a portfolio of private equity funds?

The theoretical example of the Afghanistan Private Equity Funds Cash Flow using certain basic
assumptions (see Fig-1) and based on various Afghan centric assumptions is a reasonable
case business model for the expected performance of the AIF.

The J-Curve chart (See Fig-2) reveals in general terms the expected cash flow from operations
given the AIF business model noted in Fig-1. In short, Cash Flow is negative (out-flowing) for
the AIF Fund for the first four years.

Beginning in about the middle of the fourth year through to the tenth year of the AIF, cash flow
is in a positive position as income from investments and investment liquidations begin to
generate positive cash returns for investors. As USAID would be a 40% owner/investor of the
fund in this model, it would be entitled to 40% of the distributions made to investors by the
managers of the AIF. The model demonstrates that in year ten, with all investments exited and
returns fully harvested, the AIF would yield a net multiple to investors of 2.08 times. In cash
terms, the AIF could have produced a value or worth of $208 Million.

In cash flow terms, small distributions to USAID could be projected to commence in year five,
perhaps slightly earlier, although amounts would be small and would not provide sufficient
funding to the ASWs operations. Subsequent years six/seven and beyond could generate cash
flows of $3-5 Million per year growing to a possible $8-10 Million in the last two + years of the
AIFs operations. In this hypothetical model the AIF would return the original $40 Million of
the USAID investment and yield, at the end of the tenth year, an additional $43 Million for a
2.08 multiple and 19.2% internal rate of return.

Although these reasonable case investment return metrics for the AIF are attractive, they
would still not provide, from a timing view, the needed cash flows for the ASW, and, of course,
they are not guaranteed. This reasonable case return scenario demonstrates that the AIF cannot
feasibly provide acceptable levels of significant financial support in at least the first five to six
years. Only in years seven to nine would significant cash flow be generated, but this would
become available to the ASW long after the program had been established and operating
(presumably with other sources of finance). Thus, despite the projected large cash flows in
years seven through nine, the AIF, as a provider of finance for the ASW, should not be
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considered as a feasible, timely, or properly reliable provider of finance for the ASW. The AIF is
potentially an unreliable source of finance since the J-curve analysis was a reasonable case
analysis. A less than reasonable case scenario would necessarily show the AIF generating
smaller cash flows and at a later period of time even demonstrating no, or very small ,cash
flows in the latter years (8-10) of the AIFs portfolio liquidation.

Projected cash flow needs for the ASW Legacy Scholarship Program appear to be in year one,
two, and three, $4 Million, $6.2 Million, and $7.7 Million, respectively. To make the AIF useful
to the ASW, the ASW cash flow needs would have to be adjusted in years four through ten to
be more in line with AIF cash flow distributions of $4 million per annum-growing to $6 million
to $7 million per annum. Perhaps the AIF and the ASW could develop some type of partnership
to provide supporting cash flows for direct scholarship costs and some portion of program
operational costs. But more information on the ASWs Scholarship Programs would need to be
forthcoming. As the ASW programs operating parameters become more defined, it would need
to offer up additional program design, operations, and financing options for further assessment.

Nevertheless, given the characteristics of the AIFs operations and cash flow generation and the
apparent (preliminary) needs of the Afghan Scholarship Program for Women (ASW), the AIF
does not appear to be the best practice vehicle to finance the Legacy Scholarship Program at the
current time. It is recommended that USAID explore the use of (i) an endowment that would
be managed by a professional institution such as a university endowment office or (ii) a
designated fund that would be managed by a highly credentialed wealth management firm
with current income and preservation of capital management experience.

***

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A HYPOTHETICAL EXAMPLE OF
AFGHANISTAN INVESTMENT FUNDS CASH FLOW
Fig. 1

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Basic Assumptions about the AIF:
The fund's size is $100 million.
The fund makes 20 Investment Bundles of
$5 million each, at six-month intervals.
Each Bundle may contain 8-12 actual
investments of $500K to $3 Million in size.
The first investment is made six months
after the funds establishment.
The value of each investment grows by a
factor of 2.5 over a 5-year holding period.
The funds management fee (2% p.a.) is
based on the funds size ($100 million)
during the investment period (e.g. 4.5
years), and thereafter on the remaining
portfolio at acquisition cost.
The funds hurdle rate is 8%. The
combined share of the management
company and the investment team which
is responsible for the fund's investment
operations of carried interest is 20%. The
management company and the
investment team share the carried interest
equally (50%-50% split).

Based on These Assumptions:
The fund's gross multiple is 2.5.
Net multiple to investors is 2.08.
Net IRR to investors is 19.2% p.a.
The fund transfers to carry in its seventh year.
Carried interest received by the management
company and the investment team responsible
for the funds investments amounts to $27.1
million. Of this, the management company
receives $13.5 million and the investment team
$15.5 million.
Management fees (2%) received by the
management company amount to $14.6 million.
Important terms:
Internal rate of return (IRR) the interest rate at
which a certain amount of capital today would
have to be invested in order to grow to a
specific value at a specific time in the future.
Carried interest a share in the profits of a
private equity fund. Typically, a fund must
return the capital given to it by investors plus
any hurdle rate of return before the manager
can share in the profits of the fund. The
manager will then receive a 20% carried
interest. Also known as carry.

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CUMULATIVE CASH FLOWS DURING THEORETICAL AIFS LIFE CYCLE
Fig. 2

US$---Years

Private Equity Glossary:
http://www.calpers.ca.gov/index.jsp?bc=/investments/assets/equities/pe/pe-glossary.xml

Private Equity Description:
http://www.investopedia.com/articles/financial-careers/09/private-equity.asp

VI. A BRIEF CASE FOR A REGIONAL CENTRAL ASIAN-AFGHAN-PAKISTAN
INVESTMENT FUND (RIF)

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Although the AIF is not a feasible instrument to generate the needed finance for the ASW
project, a general investment fund could be used as a tool by donors and USAID to spur
additional private sector business investment which could lead to additional job creation.

As noted previously, the AIF at a projected $40 million initial size would be too small to enable
a professional and qualified investment manager to operate and manage the AIF without donor
or other financial subsidies. A larger investment fund with at least $100 million of funds would
have a much better chance of operating on a commercial basis. A regional investment fund
encompassing the Central Asian Republics, Pakistan, and Afghanistan could generate
additional interest among both investment managers and potential institutional investors. This
Regional Investment Fund, or RIF, could be supported by appropriations from several
country fiscal-year account allocations as part of a larger strategy and policy framework to
promote regional economic cooperation. These frameworks exist.

A key recommendation of the Tokyo Conference on July 7, 2012 and the Delhi Investment
Summit on Afghanistan, held on 28 June 2012, was for the establishment of an International
Fund for Afghan SMEs. With the Afghan constraints noted above, while this idea has a real
world application, it may more probably be successful if it were to have a Regional context.

Given the research and findings of the scoping and design assessment, the following general
recommendation is offered as an alternative to the AIF:

If a RIF were established to:
provide development money to unlock private funding,
ensure against political risk, and
increase access to investors, and
make conventional credit/equity blended investments
AND
If the RIF were supported by lenders/investors such as:
Overseas Private Investment Corporation(OPIC) and
the World Banks Multilateral Investment Guarantee Agency (MIGA),
the USAIDs Development Credit Authority, and
IFC, ADB, DFID, and
Afghan Growth Finance, LLC(SEAF),

It is highly likely that the outcome would be improved access to credit and investment
capital for the development of private sector businesses in Afghanistan and its surrounding
six border neighbors. (China, Pakistan, Iran, Uzbekistan, Tajikistan, and Turkmenistan).

Furthermore, to lower the cost of credit from all of the above and attract foreign direct
investment, this Regional Central Asian-Afghan Investment Fund (RIF) should be able to
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provide political risk insurance in accordance with a Risk Mitigation Strategy, which should
also be used to support potentially vital public/private partnerships.

Underpinning this recommendation is the belief that expanded investment support to the
private sector will foster an expansion in private investment across the several regions of
Afghanistan and Central Asia, including Pakistan.

The RIF would be centered on increasing the Afghan and Regional focus on small and medium-
sized enterprises (SMEs), which have the potential to create innovation, new employment
opportunities, and Macro-economic growth.

A prospective RIF could be constituted with the active support of Regional Central Asia and
Afghan private sector investors, Impact investors, international development agencies, Afghan
individual (Diaspora) investors, and industry bodies. The RIFs mission would be to support
critical private sector investments by providing Regional risk financing and mitigation. The aim
would be to provide understandable and timely credit and long-term investment capital to
SMEs that otherwise find it difficult to finance their businesses due to insufficient or illiquid
collateral or available risk capital.

The RIF would be invested exclusively in defined Central Asian regions, Afghanistan, and
Pakistan. Its investment focus would center on economic activities that promote cross border
trade and regional integration, especially in agribusiness, mining-extractives, financial market
development, health, energy, and light manufacturing. (See Annex II)

The international community, public and private, would be called upon to contribute to the RIF
under the aegis of a suitable international development institution, such as the IFC, ADB, OPIC,
DEG, Abraaj UAE, Burj Capital UAE, or Acumen USA among many others. (See Annex I)

The International Finance Corporation has successfully used similar mechanisms, most notably
sovereign wealth funds, to support development in the Middle East and Africa. Another model
is in South-East Asia, where ASEAN-member countries and the ADB have provided initial
equity of USD $485 million for the establishment of the ASEAN Infrastructure Fund.
Another model is The Central Asia Regional Economic Cooperation (CAREC) Program; an
Asian Development Bank (ADB) supported initiative which was established in 1997 to
encourage economic cooperation among countries in the Central Asian region. In particular,
cooperation among the ADB member states of Afghanistan, Azerbaijan, and Peoples Republic
of China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Turkmenistan, Tajikistan, and
Uzbekistan. CAREC could sponsor a private equity investment fund for the Region and its
members much like The European Bank for Reconstruction and Development (EBRD) has
sponsored the initiation of The ADM CEECAT Recovery Fund, targeting Central and Eastern
Europe, Central Asia, and Turkey.
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At the present time, Afghanistan remains a donor economy reliant on international non-
governmental organizations (NGOs) for financial support. While the mineral industry may be
Afghanistan's most promising asset, there are currently no long-term plans in place to facilitate
the kind of stable and sustainable infrastructure needed to ensure Afghanistan's future as an
independent, sovereign economy.
Afghanistan's current "donor economy" status means that post-2014; the Kabul government will
sustain itself with the assistance of the other countries and private foreign investors. With the
U.S. presence minimized, other investors in Afghanistan's economy will more prominently
feature those of other countries currently also invested in the region, such as Iran, Pakistan,
China, Japan, the UK, India, and Turkey. With this in mind, the Senate Committee on Foreign
Relations has released reports that support former Secretary of State Hillary Clinton's "New Silk
Road" vision for Afghanistan's future. In India, the summer of 2011, Secretary of State Hillary
Clinton called on countries to draw inspiration from the ancient Silk Road that for centuries
connected the Far East and Europe.
*Let's build+ an international web and network of economic and transit connections,
she said. That means building more rail lines, highways, *and+ energy infrastructure,
like the proposed pipeline to run from Turkmenistan through Afghanistan through
Pakistan into India (TAPI). It means upgrading the facilities at border crossings. And it
certainly means removing the bureaucratic barriers and other impediments to the free
flow of goods and people.
If achieved, avenues would be opened for Kabul to increase regional trade, providing much-
needed income to help offset the expected drop in international aid after foreign troops (ISAF)
draw down in 2014.
The US New Silk Road initiative drew a lot of interest, though it is not the only approach
capitalizing on the resurgence of the ancient Silk Road. There are other ongoing international
initiatives and projects such as those launched by Turkey, China, Kazakhstan, and
Turkmenistan, in addition to a Customs Union, TRACECA (transport), CAREC (ADB-IMF
sponsored regional economic growth program), SPECA (UN sponsored regional cooperation
project), and INOGATE (energy).
All sides are asking: How can Afghanistan attract new sources of foreign private-sector
investment and connect to markets abroad while generating new resources, markets, and
investment opportunities for the entire region?
A Regional Investment Fund coupled to the New Silk Road initiative focused on Afghanistan as
a main hub for economic integration and transportation can become an indispensible
implementation tool for policy as well as a successful investment vehicle. A functioning
example of that type of regional effort is the Northern Distribution Network (NDN), which
consists of a series of commercially based logistic arrangements connecting Baltic and Caspian
ports with Afghanistan via Russia, Central Asia, and the Caucasus. It is expected that if
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Afghanistan is firmly embedded in the economic life of the region, it will be better able to attract
new investments, benefit from its resource potential, and provide increasing economic
opportunities, as well as hope for its people.
9

The Silk Road concept as implemented by the various new Silk Road initiatives began with the
USAID program in 2002/2003 and with other donor programs approximately at the same time.
In order to achieve fast growing economies and sustained development, Afghanistan and its
bordering Central Asian states have no other option than to participate in the new Silk Road
initiatives since their landlocked economies compel them to begin to more seriously consider
cooperating in economic development, trade, and investment. The broader investment
geography and much larger business universe would likely assist the RIF in meeting better
returns (IRR) as well as make reaching the economy of scale ($100 million) in fund size more
likely to be supported by donors and many private sector investors.

The RIF should be structured to make equity and equity-related investments in small and
medium-sized enterprises (SMEs) located in Central Asia primarily in Kazakhstan, Afghanistan
and Pakistan and secondarily in Azerbaijan, Georgia, Kyrgyz Republic, Tajikistan,
Turkmenistan, and Uzbekistan. Target industries should include consumer goods, food
processing, oil and gas-related services, pharmaceutical, telecom, construction materials,
financial services and logistics.

The Fund would best be formed as a Mauritius limited liability company (LLC) and would
support local Investment Teams based in Kabul, Afghanistan, Almaty, Kazakhstan and Baku,
Azerbaijan.

In addition to promoting Private Sector development the RIF Fund would add value to its
investee companies, by providing managerial and strategic support to improve their
competitiveness and sustainability. The RIF would also promote the adoption of Best Practices
for corporate governance and environmental standards. In addition, the Fund would also adopt
and promote international best practices for environmental and social risk assessment and
management, as well as transparency and value chain analysis, fostering knowledge and skill
transfer, and encouraging best practices across industry and the economy.

The RIF would be an accomplished success if it the following three elements were attained:
1. Development of private equity markets in the target countries;
2. Demonstration that private equity funds are a sustainable form of financing;
3. Transfer of technical, operational and financial skills to the portfolio companies.
In the end, the RIF would have the opportunity to be a significant change agent in a region that
would welcome sustainable international involvement.

One interesting observation on the important outcome effects of a prospective Regional
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Investment Fund effort can be found in a study headed by Fredrick Starr, and published by the
Central Asia-Caucasus Institute & Silk Road Studies Program. Actually, the authors advance
two important observations. Underlying nearly all discussion of economic matters are these
closely related assumptions:
(i) First, that the level of political stability or instability in post-Karzai
Afghanistan will determine the security situation; and
(ii) Second, that the level of security will in turn determine the chances for
economic progress.
These assumptions give rise to an extremely important corollary which, while rarely articulated,
has nonetheless defined the phasing of U.S. and NATO strategy in Afghanistan for a decade.
The first task is to establish political stability; then, and only then, will it be possible to address
the problem of physical security; and that only with the establishment of physical security and
peace will it be possible to address the problem of the economy.

It is undeniable that this formulation is partially valid, and that in an ideal world strategy
would be built around precisely such a phasing. But a decades experience has shown that
people with no economic prospects can easily be recruited by insurgent forces, especially if
those forces offer better pay than the poor can earn on their own or even as members of the
Afghan National Army. Experience has shown that under poor economic circumstances it is
difficult, if not impossible, for a newly established government to rule effectively, or even to
establish its legitimacy. Anyone seeking to build political stability and peace in Afghanistan
must therefore figure out how to spark the economy while at the same time undertaking the
political and security tasks. The economy cannot wait. Of course, this creates formidable
challenges. But the phased strategy outlined above has failed not because it is illogical but
because it ignores the human factor. Given the extreme poverty in which most Afghans live,
signs of economic progress have become the essential condition for political progress and social
peace.

The recent establishment of a coalition of national political parties and coalitions seems to have
provided the basis for a peaceful political transition and generally successful presidential
elections in 2014. But even as this occurs, economic development is not something to be pursued after
political stability and security have been established; rather, it is what must be achieved in order to forge
political stability and communal peace.

Many observers and experts assume that political and military conflicts are ubiquitous though
every region of Afghanistan. However, this is by no means the case. It has clearly not been the
case in Herat, nor in Mazar. Even as the constant news of horrific conflicts in some parts of the
country are received almost weekly, most of the thirty million Afghans are busy not with
politics and guerrilla war but with surviving and earning a living. Certainly this is the case with
the some ninety business, academic and public-private sector people encountered during this
assessment study in Kabul, Herat and Mazar. These people judge the countrys contending
powers in terms of their ability, or inability, to improve the economic lot of ordinary people. If
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they discern progress in a neighboring region, they immediately seek to identify its causes and
work to apply them on their own territory as well.

An awareness of economic progress will do more than anything else to advance political
stability.
10

Economics, in other words, while not an independent variable, will shape the prospects for
political stability and military security at least as much as they shape the economy.

***
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Footnotes:

1. Metric of 75% provided by USAID/OAPATS, Mark Karns, Multi-sector
Advisor, 202 712 5516, mkarns@usaid.gov.
2. Annex I Potential Afghan Private Equity Investors contains a listing of
International Private Equity firms that may have an interest in Afghanistan given
attractive investing partners.
3. World Bank, Afghanistan State Building, Sustaining Growth, and Reducing
Poverty: a country economic report, Poverty Reduction and Economic Management
Sector Unit, South Asia Region, Report 29551-AF
4. The Asia Limited Partners Directory, Third Edition December, 2013

5. Afghanistan Legal Educational Project ALEP, Stanford University Law
School, Commercial Law of Afghanistan, Second Edition, P.140-142)
6. Annex I Potential Afghan Private Equity Investors contains a listing of
International Private Equity firms that may have an interest in Afghanistan given
attractive investing partners.
7. Exit is a term used in the investment business which would mean for the
AIF a sale of an investment to a buyer where the AIF would receive cash or other
remuneration. Exit can take many forms but for this assessment the assumption
is made of a 100% cash sale to a buyer with the AIF retaining no further
ownership or other interests.
8. This assessment has found the AIF to not be a feasible instrument to finance
in a timely and significant manner the costs of the ASW. Therefore, this section
detailing a prospective timeline is provided for future reference for the types of
major actions that would need to be undertaken if a decision, due to other
currently unforeseen circumstances, were taken by USAID to develop the AIF or
some other investment fund variation such as a regional investment fund
discussed further in this assessment
.

9. Northern Distribution Network, Center for Strategic & International
Studies, available at http://csis.org/program/northern-distribution-network-ndn
10. S. Frederick Starr and Adib Farhadi, Finish the Job: Jump-Start
Afghanistans Economy, SILK ROAD PAPER, November 2012.
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ANNEX INDEX

Annex--I Lists potentially interested emerging and frontier market financiers who may
be potential AIF investors. There are four categories:
1. Government/multilateral development finance institutions and banks
2. Private equity houses, family offices, investment houses, and debt providers with
frontier and emerging market activities
3. Non-microfinance focused Impact Investors
4. Individual Afghan Investors

Those names in bold have been interviewed directly and have provided opinion and
views on topics covered in this report. All of the entities listed in this Annex have
investments in developing countries - many with investment in post-conflict countries.

Annex II Key current investment opportunities in Afghanistan

Annex III SWOT Analysis for Afghanistan

Annex IV Comments on Afghan Company Calls

Annex V Listing of Recent USAID Afghan studies and publications

ANNEX I -- AFGHAN PRIVATE EQUITY INVESTORS

List of Emerging and Frontier Market Financiers:

Government/Multilateral Development Finance Institutions and Banks

International Finance Corporation (IFC), the for-profit arm of the World Bank
Overseas Private Investment Corporation (OPIC), US
CDC Group (formerly Commonwealth Development Corporation), UK
DEG, German
LAgence Franaise de Dveloppement (AFD), French for government projects
FMO, Dutch
SwedFund, Swedish
NorFund, Norwegian
Africa Development Bank (AfDB)
Asia Development Bank (ADB)
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European Investment Bank (EIB)
European Bank of Reconstruction & Development, EBRD
Africa Finance Corp (AFC), Nigerian

Private Equity Houses, Family Offices, Investment Houses & Debt Providers with Frontier
and Emerging Market Activities

Abraaj Capital/ Dubai Based, MENA, South Asia Focus
Afghanistan Holding Group, Kabul Based, Financial Services Firm
Afghan Growth Finance, LLC, Kabul based, SEAF sponsored, Investment Fund
Burj Capital, Dubai based, Pakistan & South Asia focus
Leopard Capital, Frontier and pre-emerging market investors, SE Asia focus
HBG Holdings, Dubai Based, MENA, India
INFRONTIER LTD, Kabul-London Based frontier investor
Riz-q Capital Partners, Dubai based, pre-frontier investor

Actis, Africa, LA & Asia foci
Helios Investment Partners, SSA focus (Sub-Saharan Africa)
Vital Capital, SSA focus
Frontier Market Fund Managers/Emerging Africa Infrastructure Fund
HSBC Private Equity
Development Partners International, SSA focus
SAMENA Capital, MENASA focus
Planet Capital, first VC firm to utilize global model, offices in Asia, Europe, and US
Emerging Capital Partners (ECP), SSA focus
Salford Capital Partners, former Soviet Union & CE Europe focus
Carlyle Group, Carlyles Emerging Sovereign Group subsidiary manages 7 hedge
funds with approximately $4 billion in assets under management as of 12/31/13
Kohlberg Kravis Roberts (KKR), Portfolio companies span 14 industry segments
located throughout the US, Europe, and Asia.
CVC Capital Partners
Och-Ziff, OZ makes investments on a global basis - with offices in NYC, London,
Hong Kong, Mumbai, Beijing, and Dubai. Asia investments account for $4 Billion for a
total of $44 Billion under management
Summit Partners
QuilVest
Silk Invest
Africa Development Corporation, Africa focus
Brait (South African)
Ethos Capital (South African)
8 Miles Fund, Africa focus
Vital Capital
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Duet Private Equity, Private Equity and VC in Real Estate and Infrastructure
Duet Africa Private Equity, Africa focus
Duet India, India focus
TLG Capital
Satya Capital, focused on Africa
Joule Investments
Vasari Global
TBL Mirror Fund, E Africa
Fleming Family & Partners
Maris Capital, Africa
EMVest, S&C Africa agriculture
ManoCap, W Africa
Mauritius Commercial Bank Capital Partners, E Africa focus
Jahangir Siddiqui Private Equity, Pakistan focus
Bastion Wealth Management
Investec, UK based Global investor
Vantage Mezzanine Capital (South African)

Non-Microfinance Focused Impact Investors

Acumen Fund, NYC based with offices in Karachi, Mumbai. A non-Profit, donations Investor.
Dasra, India focus
Impact Investment Partners, India focus
Omidyar Network
Gray Ghost Ventures
The Eleos Foundation

Individual Afghan Investors

Rashid & Rateb Popal 0796211211
Haji Attiq 0799555572
Mohammad Rafi Azimi 0796988888
Haji Najeeb Zarab 0799655555

Khan Jan Alokozay, Khan Jan Alakoza LTD, Khanjan_alokozay@yahoo.com

Nizamuddin, Ittehad Aftab LTD ittehad_aftab@yahoo.com

Baz Mohammad, Marco Polo Plastic co., marcopolo_bgc@yahoo.com
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Jamaludding, IRAA Ishaq Construction Co.,jamaluddin.ishaq@gmail.com

Sadat Naderi, CEO SMN Investments; +971 (0) 563927370, smnaderi100@yahoo.com

Najib Safi, President/CEO Safi & Safi Enterprises; 020220313, najib8631@hotmail.com

Abdul Rahman Alkozay, President Alokozay; 0799241313, aman@alokozay.af

Eshan Byat, CEO Afghan Wireless; 704888888, e.bayat@cbgiglobe.com

Abdul Ghafor Dawi, CEO Dawi Oil; 799700800, dawi@dawioil.af

Ali Asgharzadeh, CCO Etisalat; 971 (0) 507856366, +93 (0) 781203888, aasgharzadeh@etisalat.af

Habibullah Gulzar, Chairman Habib Gulzar International; +971 422 55077,
habib@habibgulzar.com

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ANNEX II -- BUSINESS AND INVESTMENT CLIMATE IN AFGHANISTAN

Key Investment Opportunities in Afghanistan

There has been substantial private investment from both Afghan and foreign investors over the
last decade in various different sectors, including in the fields of telecoms, light manufacturing,
hospitality, real estate, media, and financial services.

Examples of sectors that are ripe for further growth and business investment include:

a) Metals & Mining, Oil & Gas, and Infrastructure: According to some estimates, Afghanistan
has many hundreds of billions in mineral reserves (market prices of ore estimates that
remain in the ground) so there is a very real opportunity for the country to develop the
mining sector and allow mining services and companies to flourish, creating employment
and economic prosperity for the entire nation. The new mining laws, expected to pass
towards the second half of 2014, are expected to pave the way for substantial foreign
investment. Furthermore, many development projects are underway to help Afghanistan
produce local renewable (hydro and/or solar) electricity, with the intention of helping the
rural households gain access to basic services such as heating, lighting, and clean water. In
order for Afghanistan to reach a classic take-off stage in its economic development, at
least one economic sector has to excel. For Afghanistan this is that sector.

b) Agriculture and Consumer Goods/Services: This market has been expanding considerably,
demonstrating strong underlying market opportunity to exploit local production (to meet
local demands) and to enable Afghanistan to lead an export-led economy. Increasing local
wealth is also leading to increasing demand for international products and therefore
creating opportunities to import international brands into Afghanistan.

The following three sectors need to attract internal growth and become better utilized by the
Afghan population.

c) Financial Services: A small proportion of the Afghan population has access to basic
banking services. Lack of banking infrastructure (e.g. bank branches), especially in the rural
parts of the country, presents a strong market opportunity to develop alternative payment
solutions to facilitate transfer of funds for personal (family and friends) and business
transactions. There is a deep gap in the market in the provision of start-up and growth
capital to Afghan entrepreneurs, as well as small and medium enterprises eager to exploit
business opportunities.

d) Healthcare: More than 10,000 Afghans seek medical treatment in India and Pakistan every
month, spending more than US $200 million a year on treatments abroad. The private sector
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offers opportunities to expand facilities within Afghanistan plus improve the supply of
effective medication and medical equipment. There is strong consumer demand and need
for improved healthcare services including clinics and hospitals, as well as diagnostic and
pharmaceutical products and services.

e) Education: After decades of war, most Afghans are keen to exploit the opportunity to
educate themselves and their children as they see this as the basis stepping stone to a
brighter future for themselves and the country. The youth of Afghanistan are generally
motivated, hard-working, and creative. Many attend private evening classes in English,
ICT, and Business Management after work and/or school. There is a strong demand for
high end international schools, universities, and vocational courses and qualifications.

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ANNEX III -- STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS OF
INVESTING IN AFGHANISTAN

Some of the current strengths, weaknesses, opportunities, and threats of investing in
Afghanistan include:

Strengths: Afghanistan is a nominally growing economy (it is expected to grow around 3-5%
per annum in 2014 and 2015) despite perceptions of possible challenges in Afghanistan after a
downturn change in the involvement of the international community.
Several small and medium-sized Afghan enterprises have the potential to grow into strong
domestic and regional players, if provided with access to financial and (perhaps more
importantly) intellectual capital. The Afghan government has developed, and continues to
develop, an enabling regulatory environment with regard to foreign investment into the
country (the investment law currently allows for 100% foreign ownership), paving the way for
international investors to inject capital and resources into the country.

More than 50% of the Afghan population is under 15 years of age. This new generation, with
the right support from the Afghan professional community, as well as the Afghan government,
has the potential to make a positive impact in every aspect of future life in Afghanistan.

Weakness: Among the local Afghan community, focus on solutions to problems is not always
the norm as there tends to be discussion on the problems, and the people causing the problems,
versus finding effective ways to tackle the problems. Corruption within the government is still
a major issue, unfortunately. The economy is still very much aid-dependant.

Opportunities: Currently there are two distinct economies in Afghanistan: (a) the International
Security Assistance Force (ISAF) led economy, to which around half a million people provide
products and services; and (b) the agriculture-led local Afghan economy. As the role of the
international community changes, there is an opportunity to employ the Afghan staff from the
ISAF-led economy into the local Afghan economy, avoiding an otherwise resultant increase in
unemployment of the skilled workers in Afghanistan.

Considering that women make up half of the population, supporting Afghan women
entrepreneurs and nurturing the unique skill-sets of rural Afghan women in traditional
handicrafts (such as embroidery, tailoring, carpet weaving, and jewelry making) are vital for a
sustainable economy.

Threats: Security, especially in the southern part of Afghanistan, is still perceived to be a threat.
To mitigate this risk, the current Afghan government is negotiating the terms of a bilateral
security agreement (BSA) with the international community. Access to finance for Afghanistan
remains a constraint to sustainable growth. Only 5.4% of firms in Afghanistan held a bank loan
or line of credit in 2013 and only 3.4% of Afghan firms use banks to finance their investments.
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ANNEX IV -- COMMENTS ON AFGHAN COMPANY CALLS

With few exceptions, the operating enterprises visited in February, March 2014 were
undercapitalized, under financed and family managed. Common amongst these companies was
the need for and interest in obtaining technical assistance, and all manner of financial assistance.
Technical assistance included booking keeping, accounting, and general office and plant
management training. Financial assistance ranged from requests for direct grants and interest
by practically every company in obtaining guaranties for third party loans from banks to
support growth. Direct equity investment remains an unexplored business strategy in
Afghanistan, except among family and in limited cases, extended family members.
Several of Afghanistans largest companies have had the privilege of experiencing investment
from the World Banks International Finance Corporation (IFC) which has included the Primary
Afghan Telecomm Company (Roshan) and the largest Hospitality Company in Afghanistan
(Serena) among a handful of others. These are sophisticated business entities with professional
management.

The Afghan Growth Finance LLC (AGF), sponsored by SEAF, has made investments in a dozen
promising, operationally sound middle market companies. Currently the IFC and the AFG are
considered the only professional investors in the Afghan national market.

But whether large or promising every Afghan company has been experiencing Afghanistans
economy which remains bound to the countrys politics and security after more than a dozen
years of international intervention.

The affect is seen every day in the operations of one of the largest paint and coating
manufacturers in Afghanistan. The plant in Mazar-e-Sharif makes 14 varieties of liquid paints
and coatings in 70 different colors. This Plant employs 40 people and had about $3 million in
sales in 2012. Sales have fallen off in the last 18 months because customers are postponing
home and business remodeling projects, and plant refurbishing until after the Afghanistan
presidential election is determined and perhaps even the departure of most international troops
by the end of 2014.
People are waiting because they dont know what will happen after the elections, the owner
said through an interpreter, Theyre keeping the money. Even if some projects are completed
50 percent, theyve stopped work.

These sentiments are shared by the managers of Asia Pharma Ltd., headquartered in Herat.
Asia Pharma Ltd. is a well-regarded manufacturer and importer/exporter of medical equipment
(orthopedic products, hospital equipment, and furniture) employing 250 people with nine
branches in Afghanistan, including Dubai, Pakistan, and China (http://www.asiapharma.af/).
As suppliers to doctors offices, clinics, and hospitals who have relied partially on international
aid donors, Asias Pharma sales have stalled in the past year. The companys marketing and
sales manager observed that Asias Pharma clients do not wish to carry inventory which
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assists both patient and institutional users of the companys products as general aid
subsidies are becoming harder to obtain.

The TN Group of Companies, current customers and donors include US Department of the
Army, ISAF, the Italian Army, the Spanish Army, and NATO Maintenance and Supply Agency
(www.tn-grp.com). Its Vice President is engaged in redirecting the companies resources into
the civilian construction business as well as the food business, primarily flour and saffron
processing. A subsidiary, TN Food Industries Company, is looking to borrow from the German
GTZ, the ADB, the Islamic Development Bank, and others. He has authored an impressive
PowerPoint presentation on the transition matter, but he readily admits it will be an uphill
effort until after new leadership is confirmed and Afghans are comfortable that the Taliban
are a thing of the past.

The Head of the World Bank office in Kabul, predicts that Afghanistans economic growth will
decline to under 3 percent in 2014 from 13 percent in 2012 as consumers, entrepreneurs, and
investors can only guess whats ahead for a nation long dependent on foreign troops (ISAF) and
international aid assistance, with mineral resources that have never been tapped and agriculture
still dominated by illicit exports.

The upside in Afghanistan is very unclear, but the downside is very clear, commented the
Director of Kabul-based Afghanistan Holding Group, an investment advisory and financial
services firm. If the Taliban take over, well all leave, he said of Afghan investors, many of
whom already have second homes in Dubai and regularly move most of their money to UAE
banks.

In fact, the outflow of capital from Afghanistan since 2009, including the proceeds of illegal
drug trafficking, has roughly equaled American financial assistance in the same period,
according to Ministry of Finance sources who asked not to be identified discussing classified
estimates.

The Afghanistan Chamber of Commerce and Industries (ACCI) and Harakat Afghanistan
Investment Climate Facility Organization jointly organized the Afghanistan National Business
Forum held February 27, 2014. According to the CEO of Harakat, who was visited March 1,
2014, just a few days later, the Private Sector representatives from across Afghanistan including
business leaders, economists, and prominent business and investment specialists from small,
medium, and large enterprises gathered in this Forum with an aim to discuss and analyze the
barriers that impede the private sector in Afghanistan and recommend possible practical
solutions. The Forum emphasized that security and political stability, anti-corruption efforts,
appropriate tax regime, investment incentives, access to infrastructures, access to finance,
access to electricity, access to land, legal support, and protection of investment, are the main
requirements to facilitate an encouraging business environment.

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Harakat also pointed out that the political will within the new government was a key basis for
the reform of the business and investment climate. It was made clear that the lack of political
will and practical steps against corruption as well as lack of investment incentive policies for
economic development has and will continue to impede the business investment environment.

The Chairman of the Balkh Afghanistan Chamber of Commerce and Industries (ACCI) in
Mazar, commenting on the Forum said that findings on the challenges and practical solutions
for private sector development will be formulated in an Economic Policy Paper that will be
shared with the presidential candidates. He was hopeful that the presidential candidates would
have to incorporate the proposed policy paper in their economic agenda.

For the fiscal year that ended in March, 2014, 75 percent of Afghanistans development budget
and 45 percent of its security budget came from international aid and donor agencies, according
to the Minister of Finance. The Ministry of Finance also projected that the failure to reach a
security agreement with the U.S. that would permit some U.S. and coalition forces to remain in
his country beyond 2014 may jeopardize pledges of as much as $10 billion a year in economic
and military assistance through 2017. This issue has clearly further exacerbated the already
high economic anxiety reverberating through the Afghan business community.

Without a security agreement in place, there has been significant capital flight, reported, the
Director of the Afghanistan Investment Support Agency. He further allowed that real estate
prices have softened significantly in the past year.

Clearly, the dependence on the international community has been vital to Afghanistan. The
most significant donor has been the World Bank. The International Development Association
(IDA) and the Afghanistan Reconstruction Trust Fund (ARTF) are the main sources of the
World Bank financing for priorities in Afghanistan. The ARTF is nearly five-fold larger than
IDA and has been managed by the Bank since its creation in 2002; it is a key vehicle for
providing the Afghan Government with predictable and transparent on-budget financing.

The ARTF also plays a critical role as a forum for policy dialogue between the Afghan
Government and donors. A 2012 external review of the ARTF concluded that the ARTF is fit
for purpose and stands as a best practice trust fund. It is, however, not much, if any,
assistance to the private sector.

However, the Multilateral Investment Guarantee Agency of the World Bank Group
(MIGA) has $150 million of guarantees outstanding in support of MTN cell phone operations in
the country. A recent review of MIGA confirmed the significant development impact from the
project, including connecting 4.6 million customers and supporting many thousands of SMEs.
MIGA is currently underwriting a $4.5M textile investment in Afghanistan which will have
significant employment impact, perhaps especially SME female employment.

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The Country Officer Afghanistan for the International Finance Corporations (IFC) indicated
that the IFCs current committed investment exposure in Afghanistan amounts to US$140
million in 5 companies in the Telecommunications (Roshan), hospitality (Serena), and financial
sectors (Afghan International Bank).

IFC has an active Advisory Services program with six active mandates amounting to a budget
of US$5.7 million in the following areas:
Access to Finance;
Investment Climate;
SME Capacity Development; and
Private Public Partnerships.

In FY14, IFC committed US$65 million in the telecom sector and expected to commit another
US$5 million in the manufacturing and financial sectors by the end of June 2014. This would
double their portfolio over FY12.

It was emphasized that IFCs investments in Afghanistan have contributed to increasing access
and outreach in the financial and telecom sectors and they are looking for additional
opportunities to expand IFCs portfolio with a focus on the SME market. It was further noted
that registrations of new companies declined 40 percent in 2013 to 2,000 from 3,500 in the same
period a year earlier, citing data from Afghanistans Investment Support Agency.

For most Afghan entrepreneurs, business decisions are a daily exercise in country risk
assessments. They must weigh the approaching departure of U.S. and allied combat forces after
12 years; the threat of attacks by resurgent terrorist groups, persistent corruption, and
uncertainty over who will succeed Karzai, who has ruled for 10 years.

In 2009, an interviewed entrepreneur invested $25 Million from his familys century-old imports
business to start a Fruits Processing company which makes concentrates and juices from
pomegranates, apples, and other fruits in an industrial park in Kabul. In 2013, he said sales
have dropped as much as 40 percent.

Business is declining rapidly because of uncertainty after 2014, as Afghan buyers do not earn
as they used to, and thats why they spend less, he said in the interview.

According to the Task Force for Business and Stability Operations, the Juice factory began with
funding from USAID who provided technical assistance, a cold storage facility, equipment,
logistical support, and market linkages with farmers and international buyers. Overall, the U.S.
Agency for International Development has spent about $17 Billion on development programs in
Afghanistan since 2002.

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The plant, which employs 450 workers, was damaged in a December 2012 suicide car-bomb
attack, forcing him to spend $7 million to rebuild. The owner added, While the project was
completed two months ago, the factory still runs at only 40 percent of capacity.
He also stated that hes put on hold a planned $70 million for expansion to produce yogurt and
fruit-flavored milk products because of the attack, falling demand, and a lack of official support.
He said the government canceled plans to give him a three-year tax break for the plants losses
in the bombing.

Afghanistans unemployment rate reached an estimated 40 percent in 2012, according to
officials from the Ministry of Finance. They indicated that the jobless rate may climb to 50
percent with the loss of work for Afghans as international forces (ISAF) and their contractors
depart.

Creating jobs through private investment will be a mammoth, mammoth task for the Afghan
government, commented the Dubai-based Director for Industrial Promotion Services, Asia
Region. Industrial Promotion Services (IPS) is the industrial development arm of the Aga Khan
Fund for Economic Development (AKFED). AKFED is a member of the Aga Khan
Development Network.

If you think about the employment that needs to be generated, its about 150,000 to 200,000
jobs needed per year, he estimated and was confirmed by the Program Manager for the
Pentagons Task Force for Business and Stability Operations.

Big enterprises including exploring and extracting Afghanistans mineral riches, valued by the
Pentagon and the U.S. Geological Survey at about $1 trillion will require a substantial
investment in infrastructure that will take years to build, according to the Deputy Chief of Party
of a USAID project called Mining Investment and Development for Afghanistan Sustainability
(MIDAS). MIDAS focuses on three primary areas in the Ministry of Mines and Petroleum
(MoMP): (1) legal and regulatory reform, (2) technical assistance to the MoMP, and (3) Small
and Medium Enterprise (SME) development. The projects goal is to develop the MoMPs
ability to implement effective policies and to facilitate international investment in the
Afghanistans mining sector.

In meetings with Afghan officials there was often talk about exporting of agricultural products
and other agri-commodities. It was hoped that these products might generate about $1
Billion of exports each year, but wont fill the massive gap that military spending will leave
when the ISAF troops depart the country.

It is deeply hoped that exports of fresh and dried fruits, trade and transit, and service industries
will help keep the economy going until the mineral and mining industries take off in the next
decade.

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Nevertheless, opium remains Afghanistans most lucrative agricultural export, and U.S. officials
have acknowledged that the effort to eradicate its export has failed. Opium production
remains a substantial portion of overall agricultural output and will continue to fuel
corruption and fund the insurgency, the Pentagon said in a report to Congress in late 2013.
In addition to fighting insurgents, U.S. and coalition forces ran development projects and
health-care clinics, provided grants, and brought in agricultural experts. The question is: What
is the substitute for all that? Its not clear who will fill the gap. Although the government of
Afghanistan should fill the gap, does it have the resources, the ability, and capacity?

The paint merchant said The lack of reliable power hobbles business in this factory. He is
joined by, the CEO of the MullaZada Group of Companies, a salt processor in Mazar, the Ansar
Slaughterhouse in Herat, the Sanaizada Edible Oil Company, Bano Food Processor , Bahar
Marble, and the nationally famous Herat Ice Cream Company.

All the SMEs visited in Kabul, Mazar, and Herat lacked dependable sources of power for
machinery to cut marble, bottle food oils, make paint, manufacture ice cream, or process flour
or animals. Additionally, if and when line power is not available and these SMEs dont have
sufficient petrol or diesel, which is often the current case, then they are not able to acquire
electricity from generators. It puts all the newly acquired equipment from India, China and
Pakistan in great peril of being a wasted investment.

If there is a doomsday analysis for Afghanistan, is it likely based on the inefficiency of power
distribution for its light manufacturing sector. This is of course, notwithstanding the Taliban
resurgence.

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ANNEX V -- LIST OF RECENT USAID AFGHAN STUDIES

http://www.usaid.gov/afghanistan Afghanistan General Data
http://www.af.undp.org/content/dam/afghanistan/docs/MDGs/NRVA%20REPORT-
rev-5%202013.pdf The National Risk and Vulnerability Assessment 2011-12

http://www.usaid.gov/sites/default/files/documents/1871/Top%2010%20Accomplishm
ents.pdf TOP TEN ACHIEVEMENTS IN AFGHANISTAN

http://www.usaid.gov/news-information/fact-sheets/afghan-growth-finance-agf
Afghan Growth Finance (SEAF-AGF)

http://www.usaid.gov/news-information/fact-sheets/afghanistan-trade-and-revenue-
project-atar Afghanistan Trade and Revenue Project (ATAR support for Afghanistans
accession to the World Trade Organization (WTO)

http://www.usaid.gov/news-information/fact-sheets/assistance-building-afghanistan-
developing-enterprises-abade USAID ABADE Program

http://www.usaid.gov/news-information/fact-sheets/commercial-law-development-
program-cldp Commercial Law Development Program (CLDP)

http://www.usaid.gov/news-information/fact-sheets/financial-access-investing-
development-afghanistan-faida USAID FAIDA Program

http://www.usaid.gov/news-information/fact-sheets/investment-climate-reform-
program Investment Climate Reform Program

http://en.wikipedia.org/wiki/Rostow%27s_stages_of_growth
Take Off Stage Principles
http://www.adb.org/sites/default/files/xvr-12.pdf
Afghan International Bank

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ANNEX VI -- USAID AFGHAN OVERVIEW

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ANNEX VII USAID FAIDA FACTS

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ANNEX VIII -- USAID AFGHAN DASHBOARD

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