Country context (development lens)

Afghanistan is a landlocked, low-income country in South and Central Asia with significant long-term needs across transport, energy, water, telecommunications, health, and urban services. Decades of conflict have left major infrastructure gaps, while rapid population growth continues to increase demand for basic services.

International development institutions continue to assess Afghanistan primarily through humanitarian, basic service delivery, and asset preservation lenses, rather than large-scale expansion projects.

Verified sources: World Bank, IMF, UNDP, Asian Development Bank.

Economic and infrastructure conditions

• Economy: Highly constrained, with limited fiscal space and weak domestic revenue mobilization. Public investment capacity is extremely limited.

• Infrastructure stock:

  • Roads and transport assets are incomplete and under-maintained

  • Electricity access remains low and highly dependent on imports

  • Water, sanitation, and municipal services are fragmented and under-served

• Private sector: Small, risk-averse, and largely informal, with limited access to finance.

From a P3 perspective, this environment significantly affects bankability, risk allocation, and project preparation feasibility.

Public Private Partnerships environment

Legal and institutional status

• Afghanistan previously adopted a Public Private Partnership law and unit with World Bank support.

• As of recent assessments, formal P3 project development and procurement is largely inactive.

• There is no verified pipeline of bankable P3 transactions currently moving to market.

Key constraints for P3s

• Sovereign risk and absence of recognized government financing mechanisms

• Lack of enforceable payment guarantees and creditworthy off-takers

• Limited capacity for contract management and long-term regulation

• Restrictions on international financing and insurance instruments

As a result, traditional availability-payment or user-fee P3 models are not currently viable at scale.

Where limited P3-type approaches may still apply

Development partners continue to explore adapted, non-traditional P3 structures, such as:

• Service-based contracts for operations and maintenance

• Management contracts in energy, water, or health services

• Donor-backed risk-mitigated arrangements with short tenors

• NGO–private sector delivery models for basic services

These are typically small, highly controlled, and grant-supported, rather than investment-led P3s.

Outlook

In the near term, Afghanistan’s development focus remains on:

• Preserving existing infrastructure assets

• Maintaining essential services

• Building minimal institutional capacity

Large-scale P3 investment programs are unlikely without substantial changes in macroeconomic stability, institutional recognition, and risk-mitigation frameworks, as assessed by international development institutions.