EXCLUSIVE-World Bank backs using $280 mln in frozen aid funds for Afghanistan

The 31 donors to the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF) must approve the transfer before the funds could flow to the World Food Program and UNICEF, the sources said, saying the donors were expected to meet on Friday. The World Bank board met informally on Tuesday to discuss transferring up to $500 million of the $1.5 billion in the ARTF to humanitarian aid agencies, people familiar with the plan previously told Reuters.

The World Bank's board has endorsed transferring $280 million from a frozen trust fund to two aid agencies to help Afghanistan cope with a brewing humanitarian crisis after the U.S. withdrawal, two sources familiar with the matter said on Wednesday. The 31 donors to the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF) must approve the transfer before the funds could flow to the World Food Program and UNICEF, the sources said, saying the donors were expected to meet on Friday.

The World Bank board met informally on Tuesday to discuss transferring up to $500 million of the $1.5 billion in the ARTF to humanitarian aid agencies, people familiar with the plan previously told Reuters. Afghanistan's 39 million people face a cratering economy, a winter of food shortages and growing poverty three months after the Taliban seized power as the last U.S. troops withdrew from 20 years of war.

Afghan experts have said the aid would help, but big questions remain, including how to get funds into Afghanistan without exposing any financial institutions involved to U.S. sanctions. While the U.S. Treasury has provided "comfort letters" assuring banks that they can process humanitarian transactions, concern about U.S. sanctions continues to prevent passage of even basic supplies, including food and medicine.

Any decision to redirect ARTF money requires the approval of all its donors, of which the United States has been the largest. The White House and the Treasury had no immediate comment on the World Bank board's endorsement of transferring the funds to the World Food Program and UNICEF.

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