PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB5787 Project Name. Afghanistan ICT sector development Region

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1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB5787 Project Name Afghanistan ICT sector development Region SOUTH ASIA Sector Telecommunications (40%);Information technology (25%);General information and communications sector (25%);Public administration- Other social services (10%) Project ID P Borrower(s) ISLAMIC REPUBLIC OF AFGHANISTAN Implementing Agency Ministry of Communications and Information Technology Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared May 27, 2010 Estimated Date of November 11, 2010 Appraisal Authorization Estimated Date of Board April 29, 2011 Approval 1. Key development issues and rationale for Bank involvement As Afghanistan enters the new decade, it faces significant challenges. Key challenges include deteriorating security conditions and growing frustration among citizens about the Government s ability to deliver basic services. The achievements since the collapse of the Taliban regime are significant yet fragile. It will be critical for the Government to find ways in which it can improve governance, expand the reach of public services, and accelerate economic growth. Despite these challenges, the growing number of educated young women and men and improved connectivity through better communications infrastructures offer new development prospects and opportunities to the country. Afghanistan might thus begin to exploit some of these opportunities to accelerate economic development, promote social inclusion, and participate in the global information and knowledge economy. One of the success stories over the recent past has been the telecommunications revolution in Afghanistan, and the growth of the information and communication technology (ICT) sector has had significant impact thus far. Over US$1.2 billion has been invested by the private sector, and 60,000 jobs created directly or indirectly. ICT also offers new opportunities for inclusive growth by enabling individuals and small enterprises to have better access to information, finance, and markets. Wider access to and use of ICT will accelerate economic growth. Indeed, if broadband subscriptions increase to 10 percent of the population by 2015, the positive impact on Afghanistan s GDP due to this growth could be estimated at up to US$340 million. Widespread mobile telephones offer a means for citizens and the Government to communicate, and permits improved monitoring of programs and beneficiary verification. And while the Internet and IT based service sectors are still nascent, there is an opportunity to grow them to address the domestic demand for such services while creating jobs and connecting more businesses and citizens to regional and global networks and markets.

2 The key challenge in the ICT sector is to build on the sector s existing success in a way that captures opportunities to create the requisite infrastructure and ecosystem to leverage widespread use of ICT for social and economic development in a complex and volatile environment. The strategy adopted is to focus on high priority activities that have substantial Government support and result in irreversible gains in terms of investments, jobs, and economic growth. Consequently, the proposed operation builds on the strong growth seen thus far in mobile services to expand service delivery while accelerating expansion and improvements in backbone network connectivity. It also aims to expand broadband connectivity to retail consumers and accelerate the development of local IT capacity in both the public and private sectors. 2. Proposed objective(s) The proposed project development objective is to expand broadband connectivity, mainstream use of mobile applications across the Government, and develop the capacity of the IT sector to facilitate improved delivery of public services across Afghanistan. This will help accelerate job creation in the ICT sector, and contribute to economic growth through wider access to and use of ICT. The project will include four components: Creating the enabling environment and making strategic investments for the development of Afghanistan s backbone and broadband infrastructure. Addresses the missing backbone connectivity across the central provinces and supporting expansion of Internet use across Afghanistan; Supporting the mainstreaming of mobile applications (m-apps) across Government. Support an innovation grants program and creates cross cutting enablers for m-apps. Provides the necessary facilities for the Government to use the widespread mobile telephone networks for public service delivery and program management; Developing local IT infrastructure and capacity in the private sector. Creates infrastructure and skills to grow the IT based services sector in Afghanistan that can support local demand and complete the ecosystem for Internet services and m-apps mainstreaming; and Support development of IT capacity in the public sector. Provides required training, expertise, and program management services to support mainstreaming and strategic use of ICT across the Government. 3. Preliminary description Creating the enabling environment and making strategic investments to support the expansion of broadband connectivity will create the foundations for further growth in the reach of mobile telephony and enable wider access to mobile applications and information in traditionally underserved communities. The wider reach of public services and the available platform for mobile applications creates opportunities for private sector led applications development, which can serve as a starting point to develop the local IT capacity in both the public and private sectors. Component 1: Expanding broadband connectivity (approximately US$23 million) MCIT and ATRA aim to increase the percentage of Afghans who use the Internet from the current 5 percent to 20 percent by This component will support three activities towards achieving this goal through the development of the broadband market in Afghanistan. First, it will support MCIT and ATRA as they develop and implement a national broadband strategy including specific programs and initiatives.

3 It will also support the required reforms to implement the amended Telecom Law through the licensing regime, spectrum management, universal service policy and Telecom Development Fund strategy, and strengthen competition and tariff regulation. Furthermore, this component will support analysis and if necessary regulation of tariffs and quality of service (QoS). Second, this component will also enable twinning between ATRA and regulatory agencies in other countries for capacity building and knowledge sharing on specific regulatory issues. Finally, this component will support the construction of the third phase of the national backbone network that will be operated by Afghan Telecom, the state-owned telecommunications company. In Phase 1, approximately 2000 km of the planned 3100 km has been completed, mainly around the ring road. Work has also begun on Phase 2, on a secondary network that will connect cities in the South East of the country (e.g. Logar, Khost, Paktya). The Government now plans to undertake Phase 3 of the backbone infrastructure program to build redundancy in the network and connect the remaining 15 provinces to the backbone. This phase will be implemented by MCIT and connect Kabul to Herat directly through the central provinces. This component will support the implementation of Phase 3 of the Government s program. The team will also evaluate mechanisms to enable later private sector involvement as investment risks reduce. This component will also be supplemented and coordinated with the Government s own investments and other donors programs (e.g. USAID). Component 2: Mainstreaming mobile applications in Government (approximately US$9 million) This component will create the required enablers, tools, and mechanisms to support the use of mobile applications (m-apps) across Government. As a way to coordinate the mainstreaming of m-apps, the component will first support the creation of an mgovernment strategy and roadmap that will link with the egovernment strategic masterplan that MCIT is currently preparing. This activity will include the development of any required legal or regulatory instruments to enable m-apps. Second, the component will include mechanisms to support the quick development and deployment of simple applications to address the Government s challenges in service delivery and program management. There is high demand for such support among a range of ministries. The component will create an innovation grants program as a mechanism to quickly identify, test, and deploy simple mobile applications in support of specific government objectives in priority sectors. The specific method to be followed will be detailed during project preparation. For example, the grant program will provide seed funding to implement these proposals. After the initial rounds of this innovation grant program, it could also focus on scaling up specific applications that prove to be successful through these initial rounds. It could focus, for instance, on two sectors and provide support to develop PPP arrangements or complement support from the relevant sector programs. Third, in order to facilitate the rapid deployment of m-apps at a low cost, this component will also develop shared services and infrastructure that will be used by various ministries, agencies, and programs. This includes the creation of an applications delivery platform connecting various Government ministries and agencies and the mobile telephone networks, the arrangement of bulk communication services (such as bulk SMS or voice minute purchases), and development of a basic applications toolkit and plug-andplay components. It will include hiring a firm that can deploy this platform, acquire the required services, and manage the entire infrastructure on a public private partnership (PPP) basis. Component 3: Private sector ICT capacity development (US$5 million)

4 This component will support the development of private sector capacity to respond to the increased demand for m-apps and IT services from Government. Increased private sector capacity will accelerate innovation-based growth and create job opportunities in the ICT sector. First, it will include support to create an IT sector development strategy and the required legal and regulatory instruments to support that strategy. One critical area for this strategy is to consider how Afghanistan could improve IT education and increase digital literacy among the population. Another area is to consider what infrastructure (e.g. IT parks) and services (e.g. promotion services) might benefit the IT sector. Second, in order to support sustainable applications creation and the development of a local IT sector which will be able to better provide solutions and services, this component will support an incubator and IT education quality program for mobile applications. The incubator could be managed by a professional services firm, or a qualified NGO or other agency, and linked with the planned ICT Village (an ICT park, described below). The IT education program will include the development of a competency framework to improve the relevance and standards of IT education in the public and private sectors, and design a means to certify high quality programs. Both programs will build linkages with local firms and ministries IT departments to drive demand for skilled workers and incubated businesses. The third activity will include technical assistance to MCIT to design and develop a business plan for the ICT Village. The ICT Village responds to strong demands from local ICT firms who seek affordable and high quality space that also has reliable electricity, security, and communications facilities. It will also provide nascent IT firms an opportunity to collocate, supporting incubation activities and collaborations. The team will consider regional best practices and emerging innovative models for IT parks. MCIT has already identified and allocated land for the ICT Village. Component 4: Public sector ICT capacity development (US$3 million) This component will develop the capacity of the public sector to use ICT strategically to transform service delivery and program management. First, it will create a core group of advisors within MCIT that will work with ministries, agencies, and programs across Government to identify opportunities to use ICT and assist them in designing and deploying these applications. In line with the focus on mgovernment, this advisory group will focus, at least initially, on mainstreaming m-apps across Government. This group will also support at a technical level, the program management approach MCIT is planning to implement in the near future to manage its various projects through one unit. Second, in order to support the strategic use of ICT across the Government, this component will also support the creation and training of a core CIO/e-Leadership cadre that includes members from across Government. This training program will focus on 10 key ministries with a proven record of either using or planning for transformational uses of ICT. The program will focus on creating this core group as a starting point to the development of a community of practice that can slowly expand to other ministries and agencies as they begin to use IT more strategically. This component will set up the Project Management Office (PMO) for this project and hire the Project Management Specialist, required procurement and financial management personnel, and other support staff.

5 4. Safeguard policies that might apply OP/BP 4.12 Involuntary Resettlement to be determined. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 International Development Association (IDA) 40 Total Contact point Contact: Tenzin Dolma Norbhu Title: Senior ICT Policy Specialist Tel: / tnorbhu@worldbank.org Location: New Delhi, India (IBRD)