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European Union Announces Financial Assistance to Support Reforms in Afghanistan

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Last Updated on: October 24, 2022

555The European Commission has published a press release stating that The European Commission announced new financial assistance to the Afghan Government in the form of a State-building contract in Brussels conference on Tuesday. Through State-building contracts, the European Union provides direct budget support to countries in fragile and transitional situations.

The signing ceremony of the State-building contract took place today at the margins of the Brussels Conference on Afghanistan. The agreement was signed by the Commissioner for International Cooperation and Development, Neven Mimica, and the Afghan Minister of Finance, Eklil Ahmad Hakimi in the presence of President Ashraf Ghani.

At the signing ceremony, Commissioner for International Cooperation and Development, Neven Mimica, said: “Today’s signature is an important step forward for the EU’s development partnership with the Afghan Government. The EU is committed to increasing the effectiveness of our aid, as a sign of our confidence in the Afghan side to deliver on its reform program. As the State-building contract is indeed a contract, both sides agree to play their part. We will provide the funding on the basis of satisfactory progress in key reform areas.”

The Minister of Finance of Afghanistan, Eklil Ahmad Hakimi, said: “The State Building Contract is an effective mechanism that aligns EU’s development assistance with the Afghanistan’s reform agenda. As an on-budget funding, it gives the Government of Afghanistan the required fiscal space to implement its development priorities that will improve the lives of the Afghan people.”

This first State-building contract for Afghanistan will provide up to €200 million in direct budget support over a two-year period from 2017 onwards. It will assist the Government of Afghanistan in defining its own strategic development priorities and policies, as outlined in the new Afghanistan National Peace and Development Framework. The Afghanistan National Peace and Development Framework will be presented at the main event of the Brussels Conference on Afghanistan. It will provide a credible strategic framework for Afghanistan’s development towards increasing self-reliance. The State-building contract will support more effective budgetary management and the fight against corruption.

A robust policy dialogue on reform progress in public policies, the macroeconomic framework, public financial management, as well as on transparency and oversight, will be put in place with the Afghan Government and determine the payments under this contract. The EU will closely coordinate with other partners and disburse when specific reform targets are reached.

The European Union aims to deliver assistance in an effective and flexible way by making use of partner countries’ systems.

For the period 2014-2016, the EU strategy for Afghanistan pursued four overall objectives: promoting peace, stability and security in the region; reinforcing democracy; encouraging economic and human development; and fostering the rule of law and respect for human rights.

The current EU development assistance program (also known as the Multi-annual Indicative program) for the period 2014 – 2020 has four focal areas: agriculture and rural development; health; rule of law and policing; as well as governance and democratization. The EU’s financial support amounts to €200 million per year, or €1.4 billion for the whole period. The State-building contract is part of the current development program.

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Afghanistan, Uzbekistan sign $400 million trade deals in push to deepen ties

The agreements span multiple sectors, including textiles, raw materials, pharmaceuticals and other key industries.

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Afghanistan and Uzbekistan have signed 20 commercial agreements worth more than $400 million, marking a significant step toward expanding economic cooperation between the two neighboring countries.

The deals were finalized during a high-level business meeting in Uzbekistan’s Fergana Province, where Afghan and Uzbek private sector representatives gathered as part of an official Afghan trade delegation visit.

The agreements span multiple sectors, including textiles, raw materials, pharmaceuticals and other key industries.

The Afghan delegation was led by Zalgai Azimi, deputy for investment at the Afghan Chamber of Commerce, and included senior business figures such as Abdullah Rahimi, Syed Ahmad Noorzad, Ubaidullah Hotak, and Deputy Chief Executive Mirzaman Popal. Participants from both sides highlighted the importance of strengthening cross-border trade and building long-term commercial partnerships.

As part of the visit, Afghan delegates toured major industrial facilities in Fergana Valley to assess Uzbekistan’s manufacturing capacity and explore opportunities for future collaboration.

The agreements come as Afghanistan seeks to boost regional connectivity and revive its economy following years of conflict, isolation and economic disruption.

Trade with Central Asian neighbors—particularly Uzbekistan—has become increasingly important, with both sides investing in transport links, energy cooperation and cross-border markets.

Uzbekistan has positioned itself as a key economic partner for Afghanistan in recent years, supporting infrastructure projects and promoting trade corridors that connect South and Central Asia.

Analysts say deals of this scale could help generate jobs, increase exports and gradually integrate Afghanistan more deeply into regional supply chains.

The latest agreements signal growing momentum in bilateral relations, as both countries look to translate geographic proximity into stronger economic interdependence.

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Afghanistan, Kyrgyzstan aim to boost trade to $1 billion

Both sides welcomed the steady growth in trade between the two countries in recent years and agreed on the strategic goal of increasing bilateral trade to reach $1 billion.

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Afghanistan’s Minister of Industry and Commerce, Nooruddin Azizi, met with Kairat Tursunkulov, Deputy Foreign Minister of Kyrgyzstan, in Kabul this week to discuss ways to strengthen economic and trade ties between the two countries.

The meeting was also attended by Turdakun Sadykov, Kyrgyzstan’s ambassador to Afghanistan.

Azizi expressed appreciation for Kyrgyzstan’s participation in the recent Afghanistan–Central Asia consultative meeting and underlined the importance of expanding bilateral trade and economic cooperation.

Tursunkulov described Afghanistan and Kyrgyzstan as “brotherly nations” with strong cultural connections. He extended an invitation for Azizi to visit Kyrgyzstan to further enhance collaboration.

Both sides welcomed the steady growth in trade between the two countries in recent years and agreed on the strategic goal of increasing bilateral trade to reach $1 billion.

In addition, Azizi highlighted ongoing construction projects in Kyrgyzstan and suggested that Afghan construction companies and skilled workers could contribute their expertise to support development efforts in the country.

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Kazakhstan eyes rare metals mining projects in Afghanistan and Rwanda

As Kazakhstan looks to expand its global mining footprint, the exploration of rare metals in Afghanistan and Rwanda marks a significant step towards diversifying its mining interests.

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Kazakhstan is actively exploring mining opportunities in Afghanistan and Rwanda, focusing on rare metals, as part of a broader strategy to expand its resource development portfolio. According to a report by Kazinform, Tau-Ken Samruk, Kazakhstan’s national mining company, is conducting laboratory studies on mineral samples obtained from both countries.

The announcement was made by Iran Sharkhan, Kazakhstan’s Vice Minister of Industry and Construction, during the Geoscience & Exploration Central Asia 2026 event. Sharkhan emphasized the substantial resource potential in Afghanistan and Rwanda, noting that current efforts are directed towards evaluating the legal and regulatory frameworks in these countries, as well as verifying the geological prospects before proceeding with potential mining operations.

The laboratory testing, which is taking place at Tau-Ken Samruk’s facilities and additional labs in Kazakhstan’s Karaganda region, involves comprehensive analysis of base metals, rare metals, and rare earth elements from the two countries. These tests will determine the viability of large-scale mining operations in the future.

Sharkhan further indicated that if the laboratory results confirm promising geological findings, more detailed plans for mining projects will be disclosed in the coming months.

The report also highlighted that Kazakhstan’s major mining companies have already invested nearly 150 billion tenge into scientific research in the country’s mining sector, reinforcing the nation’s commitment to advancing its mining industry on both the local and international stages.

As Kazakhstan looks to expand its global mining footprint, the exploration of rare metals in Afghanistan and Rwanda marks a significant step towards diversifying its mining interests.

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