The ARTF Recurrent Cost Window (RCW) was established in 2002 to provide coordinated and predictable support to recurring civilian costs of government, helping to fill a gap between non-security expenditure needs and revenue collections.
Today, Incentive Program Development Policy Grants (IPDPG) are the sole instrument used to provide financing through the RCW. The current series of IPDPG programs are accessible via the links at the right.
Two other projects have been active under the RCW window. Details of these initiatives are accessible under “Closed RCW projects”. The Fiscal Stability Facility was a one-time project established in 2018 and closed in 2019. It was designed as a bridge that aimed to reduce potential risks that could arise in transitioning away from the long-running Recurrent and Capital Costs (RCC).
The RCC that ran from 2002 through 2019. It was established to help finance the new Government of the Islamic Republic of Afghanistan. Between 2002 and 2018, the RCC disbursed more than US$5 billion, financing an annual average of 36 percent of government’s civilian recurrent costs. Three modes of financing were active during the RCC operation:
- Baseline recurrent cost financing (2002-2017): operated from 2002 through 2017 and was intended to provide predictable and timely financing support to the government budget. Recurrent cost support aimed to provide a secure source of funding for basic civilian operating expenses. Funding was subject to fiduciary requirements but not to policy or results-based conditionality. With the introduction of the Incentive Program in 2009 (see below) the percentage of “baseline” recurrent financing steadily declined as the incentivized support group.
- Incentive program (2009-2017): introduced in 2009 to incentivize government policy actions in pursuit of fiscal sustainability. The Incentive Program employed three mechanisms: a Revenue Matching Grant, and Operations and Maintenance Facility, and a Structural Reform Scheme. From 2009 through 2017, the percentage of incentivized funds disbursed through the RCC grew, while the percentage of baseline financing declined.
- Ad Hoc Payments facility (2014-2019): introduced in 2014 at the request of several ARTF donors, the Ad Hoc Payments facility enabled bilateral budget support to be channeled through the ARTF and subjected to the strong fiduciary controls offered by the fund. The ARTF Administrator was not privy to the specific conditions for disbursements, which were agreed bilaterally between each participating donor and the Ministry of Finance.