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What is the IDA Private Sector Window?

As part of the Eighteenth Replenishment of IDA (IDA18), the World Bank Group (WBG) created a $2.5 billion IDA-IFC-MIGA1 Private Sector Window (see implementation Board paper) to catalyze private sector investment in IDA-only countries, with a focus on fragile and conflict-affected states (FCS).  The facility is being continued under IDA19 at the same funding level of $2.5 billion (see proposal paper). The IDA PSW is based on the recognition that the private sector is central to achieving the Sustainable Development Goals (SDGs) and the need to help mitigate the uncertainties and risks, real or perceived, to high impact private sector investment. The IDA PSW is an option when there is no commercial solution and the WBG's other tools and approaches are insufficient.

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 a key pillar of IFC’s 3.0 strategy, which aims 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 robust support 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 use of public resources to catalyze private investments in these challenging markets, by leveraging IFC’s and MIGA’s business models and client relationships, and complements IDA’s existing support for policy and business climate reforms.

The IDA PSW is deployed through four facilities:

  1. Local Currency Facility to provide long-term local currency IFC investments in IDA countries where capital markets are not developed, and market solutions are not sufficiently available.
  2. Blended Finance Facility to blend PSW support with pioneering IFC investments across sectors with high development impact, including small and medium enterprises (SMEs), agribusiness, health, education, affordable housing, infrastructure, climate change mitigation and adaptation, among others.
  3. Risk Mitigation Facility to provide project-based guarantees without sovereign indemnity to crowd-in private investment in large infrastructure projects
  4. MIGA Guarantee Facility to expand coverage through shared first-loss and risk participation via MIGA reinsurance.

The IDA PSW facilitates investments but does not fund private investment on its own. Through different facilities, it backstops or blends with IFC investments or MIGA guarantees to support private-sector investments. Investors with potential investment proposals should engage with relevant IFC and/or MIGA country or investment officers and follow IFC and MIGA’s engagement process. A list of approved IDA PSW projects is available here.

Questions about the PSW and its Facilities can be addressed to the following contacts:

  • Overall PSW: Federica Dal Bono, Lead Strategy Officer, World Bank, fdalbono@worldbank.org
  • Risk Mitigation Facility (RMF): Juan Carlos Pereira, Principal Investment Officer, IFC, jpereira@ifc.org
  • Local Currency Facility (LCF): Kevin Kime, Principal Financial Officer, IFC, kkime@ifc.org
  • Blended Finance Facility (BFF): Kruskaia Sierra-Escalante, Manager of Blended Finance Unit, IFC, ksierraescalante@ifc.org
  • MIGA Guarantee Facility (MGF): Nabil Fawaz, Operations Manager, MIGA, nfawaz@worldbank.org

[1] IFC: International Finance Corporation. It is the largest global development institution focused on the private sector in developing countries, providing and mobilizing scarce capital, knowledge, and partnerships that can help address critical constraints to private sector development. MIGA: Multilateral Investment Guarantee Agency. MIGA promotes foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, and improve people's lives.