The IDA Private
Sector Window
Leveraging the Private Sector in the Poorest and Most
Fragile Countries
Through the Private Sector Window (PSW), the International Development Association (IDA) works closely with theWorld Bank Group private sector arms—International Finance Corporation (IFC) and Multilateral Investment
Guarantee Agency (MIGA)—to leverage IDA’s resources and help mobilize sustainable private sector investment inthe poorest and most fragile markets.
New sources of finance, knowledge, partnerships, and innovation
are creating opportunities for the poorest countries. Helping countries
seize these opportunities, while also addressing the ongoing challenges
that inhibit broad and inclusive growth, requires close collaboration acrossthe World Bank Group (WBG) to leverage private sector solutions.

IDA, the part of the World Bank that helps low-income
economies, works with governments on policy reforms
to improve the business climate, enabling private sector
investment and job creation. The private sector lies atthe center of sustainable development and accounts fora vast majority of jobs in IDA countries.

The IDA PSW was launched in 2017, during the IDA18 replenishment cycle, to complement IDA’s public sector lendingand help catalyze private sector investment in the poorest IDA countries, with a focus on fragile and conflict-affectedstates. The IDA PSW blends concessional funds with private investments to help mitigate specific risks for high-impact
development projects.1=+

Concessional
Funds

Risk
Mitigation+

PrivateInvestment

The creation of the IDA PSW is based on the recognition thatthe private sector is central to achieving the Sustainable
Development Goals, and the need to allay uncertainties, real orperceived, that impede high-impact private sector investment.
The IDA PSW helps IFC and MIGA mitigate the risks of selectedhigh development impact projects in the poorest and most fragile
IDA markets by transferring some of the risk to IDA.

(over)Jobs andGrowthIDAIFCMIGAPSW
The addition of the IDA PSW to the WBG’s toolbox enables IDA to deepen its
work in the space where public policy and private investment meet. The IDA PSW
is an option when there is no commercial solution and the WBG’s other tools andapproaches are insufficient. The IDA PSW is a key pillar of IFC’s 3.0 strategy, whichaims to tackle difficult development challenges by creating markets and mobilizing
private investors, and MIGA’s strategy focusing on IDA countries.

+The IDA PSW builds on the WBG’s track record ofsupport for private sector investment in IDA countries,
totaling more than $100 billion in the past decade.
It provides an opportunity for IDA to make strategic useof public resources to catalyze private investments inthese challenging markets.

The IDA PSW is deployed through four facilities:
1. The Local Currency Facility provides long-term local currency IFC investments in IDA countries wherecapital markets are not developed, and market solutions are inadequate.

2. The Blended Finance Facility blends PSW support with pioneering IFC investments across sectors withhigh development impact, including small and medium enterprises (SMEs), agribusiness, health, education,affordable housing, infrastructure, climate change mitigation and adaptation.

3. The Risk Mitigation Facility provides project-based guarantees without sovereign indemnity tocrowd-in private investment in large infrastructure projects.

4. The MIGA Guarantee Facility expands coverage through shared first-loss and risk participation reinsurance.

The IDA PSW supports and guarantees investments by IFC and MIGA, but does not fund private
investment on its own.

1

ida.worldbank.org
IDA PSW
Facebook.com/ida.wbg
Twitter.com/wbg_ida