Unlocking Futures: How the IDA Private Sector Window Is Creating Jobs Where They Are Needed Most

Jobs are more than a source of income; they are a pathway to dignity, stability, and hope. This is especially true for people living in countries facing fragility, conflict, and economic isolation. The private sector plays an essential role in sustained job creation, economic transformation, and domestic resource mobilization. Yet the private sector often struggles to gain traction in high-risk, fragile, and conflict-affected settings.

To address this challenge, the International Development Association (IDA)—the World Bank’s fund for the most vulnerable—established the Private Sector Window (PSW) to leverage IDA’s resources and help mobilize sustainable private sector investment in the poorest and most fragile markets. The IDA PSW works closely with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA)—members of the World Bank Group—to de-risk investments and catalyze job creation in the world’s poorest and most fragile countries. In addition, IFC has created a Concessional Capital Window (CCW) to provide concessional financing for the most vulnerable countries, targeting projects in IDA countries, non-IDA fragile and conflict-affected situations and those supporting forcibly displaced persons and their host communities.

Why the Private Sector Struggles—and Why It Matters

In low-income and fragile states, the risks of doing business are steep: weak infrastructure, limited access to finance, and unpredictable regulatory environments often keep investors away. Without private sector growth, economies remain dependent on aid, and people—especially youth and women—face shrinking prospects for meaningful work.

That’s where the IDA PSW comes in. By leveraging IFC and MIGA business platforms, IDA PSW creates an opportunity for the strategic use of public resources to catalyze private investment. By transferring some of the risks in IFC’s and MIGA’s supported investment operations to IDA, the PSW helps to remove their participation constraints and allows investments to happen. Absorbing some of the initial risks, the IDA PSW helps crowd in private capital, making it possible for companies and industries to operate where few dared to before.

A Catalyst for Job Creation

Since its inception in 2017, the IDA PSW has enabled over 337 investments in 52 countries, helping to unlock new investments in nearly every sector of the economy, from manufacturing to agribusiness to renewable energy. These investments are creating thousands of jobs—and more importantly, the ecosystems to sustain them.

As of end-December 2024, a total of $5.4 billion from IDA PSW has catalyzed over $31 billion in commercial investments in low-income and fragile countries. IDA PSW-supported transactions are expected to create 3 million jobs, provide 4 million additional loans to micro, small, and medium-sized enterprises (MSMEs), and expand digital connectivity to 31 million subscribers. This includes direct jobs—such as those created by companies supported through IDA PSW projects; indirect jobs—generated along the supply chain as a result of IDA PSW-supported projects; and induced jobs—driven by increased household spending resulting from higher employment and incomes.

Fueling Opportunity by Expanding Finance to MSMEs

One of the ways the IDA PSW fuels job creation is through support to MSMEs. The IDA PSW is enabling 4 million loans to micro and small businesses through its support for banks and microfinance institutions. Under the Base of the Pyramid Platform, intended to reach the very poorest, IFC—with support from the IDA PSW—partnered with three local financial institutions in the Kyrgyz Republic to expand access to credit, particularly for micro and small enterprises and women-owned businesses. The private sector accounts for up to 75 percent of the Kyrgyz Republic’s economy, yet growth has remained sluggish for nearly two decades. A key reason is the country’s underdeveloped financial sector, which has struggled to meet the financing needs of businesses. Since 2022, the project has reached over 100,000 individuals and businesses in the Kyrgyz Republic—helping to spur job creation and support economic growth across the country.

Similarly, in Madagascar, where limited access to finance remains a significant obstacle for small businesses, IFC is expanding opportunities through its Base of the Pyramid Platform. Since 2022, IFC has committed the equivalent of $49.5 million in local currency across six projects, partnering with local financial institutions to provide microcredit to entrepreneurs with little or no collateral. This initiative aims to reach 140,000 MSMEs by 2027, enabling people to start or grow income-generating activities and improve the quality of life for themselves and their families.

Establishing the Infrastructure for Job Creation

In Liberia, Guinea, and Guinea-Bissau, MIGA—backed by the IDA PSW—is supporting the upgrade and expansion of telecom infrastructure to improve mobile connectivity and unlock mobile money services, eliminating a constraint on social and economic development. Poor road access, lack of electricity, and high network costs have made rural service commercially unviable. In Liberia for example, only half of rural households own a mobile phone, and less than one-fifth of the population lives within 50 km of a national transmission link. The expansion plans address these barriers to access and will expand telecom service in rural areas across Liberia. 

Bottling Resilience in Fragile Markets

In Haiti, where political instability and natural disasters have disrupted development, the private sector plays a crucial role in delivering basic services. With IDA PSW backing, IFC invested in the Caribbean Bottling Company (CBC), a leading Haitian beverage and bottled water producer.

The project is providing more than just hydration: it has already created around 400 direct and indirect jobs, while delivering safe drinking water to communities where public infrastructure remains inadequate—especially in rural areas where only 40 percent of residents have reliable access to safe drinking water. Beyond its social impact, CBC is demonstrating the viability of investing in manufacturing in one of the world’s most fragile economies, helping to build investor confidence and drive sustainable job growth.

“The situation is pretty dire when it comes to quality drinking water and so the vastness of the problem requires the involvement of all players, especially the private sector,” said Tamara Guerin Barrau, CBC’s Chief Financial Officer. “We know a better future is coming and that’s what keeps us here and going, despite all the challenges.” 

Growing Opportunity from the Ground Up

In 2020, with support from the IDA PSW and co-investor AgDevCo, IFC invested in an agribusiness producing avocados and litchis for export in Mozambique. The investment enabled Westfalia Fruto Mozambique to develop 100 hectares of orchards and build vital infrastructure in the remote Barue District. Already, the project has created over 600 jobs, with 95 percent of the positions filled locally—transforming the lives of rural workers. Beyond direct employment, the farm’s success has attracted other producers to the area and inspired local smallholder farmers to shift into avocados. In just two years, the number of commercial fruit and vegetable farmers in the district more than doubled.

Toward a More Resilient Private Sector

The demand for IDA PSW support is growing. As conflict, climate shocks, and global disruptions continue to affect developing economies, the IDA PSW’s unique role is more important than ever. Given the challenging global landscape and its impact on IDA countries, as well as increasing demand for private sector resources—including mobilization—an enhanced IDA PSW under IDA21 will continue to mobilize sustainable private sector investment, supporting IFC’s and MIGA’s strategic priorities. By helping to make it possible for businesses to enter some of the world’s toughest markets, the IDA PSW is doing more than just financing risk—it’s financing resilience, opportunity, and jobs that transform lives.