Washington — The U.S. Department of State and the U.S. Agency for International Development (USAID) have signed a memorandum of understanding with the Aga Khan Foundation (AKF) to establish the first investment fund in Badakhshan, Afghanistan, for social development projects.

When the fund is finalized, USAID and AKF will each provide $30 million over a five-year period, subject to the availability of funds, to help leverage the Afghan private sector to advance social development.

At a signing ceremony at the State Department, Deputy Secretary of State Thomas Nides said, "Public-private partnerships like this one are the right way to do development. They can have a huge, sustainable impact and a significant return on investment."

Alex Thier, assistant to the USAID administrator for Afghanistan and Pakistan, added, "We are focused on sustainability and increased self-sufficiency in Afghanistan. This agreement will help empower the Afghan people by marrying social development needs and private sector growth."

Aga Khan Foundation CEO Mirza Jahani said, “We are delighted to mark this new phase of our partnership with USAID for strengthening Afghanistan. This new alliance — one of the largest GDAs [Global Development Alliances] ever — builds on the depth of AKF’s … approach to reducing poverty. And it takes our experience a step further, with an innovative public-private model for driving social and economic development, both in Afghanistan and more broadly in Central Asia.”

The seed money from both USAID and the foundation is intended to create a virtuous cycle of economic and social development in Badakhshan province in Afghanistan. The partnership reflects the importance of leveraging private industry to fund development efforts.