OSLO, (Reuters) – Norway is blocking payments of 300 million crowns ($55.2 million) in aid to Afghanistan until issues surrounding the collapse of the country’s biggest private lender, Kabulbank, are resolved, a Norwegian newspaper said yesterday.
Kabulbank collapsed last year with outstanding loans of about $926 million, and was later taken over by Afghanistan’s central bank and split into two. The International Monetary Fund and the Afghan government are at loggerheads over how to wind up the bank, recover lost assets and strengthen the sector. The impasse has delayed tens of millions of dollars in aid.
In an interview with Norwegian daily Dagens Naeringsliv, deputy Foreign Minister Espen Barth Eide said the Afghan authorities’ failure to provide good governance was one of the biggest problems for Norway in Afghanistan.