WB ready to increase funding for self-employment program in Azerbaijan to $250M

The World Bank (WB) will provide Azerbaijan with $150 million as additional financing for the employment support project, Report informs referring to the WB.

The estimated board date of the loan by the bank’s Board of Directors is July 25.

The total cost of the project is $176.26 million. The project closure date is proposed to be extended until December 31, 2029.

The project consists of three components: enhancing the scope and effectiveness of the Self-Employment Program (SEP), strengthening employment services and programs, as well as project management, monitoring and evaluation.

The SEP activities will be expanded to increase the program outreach in response to increased demand for financing economic activities in alternative occupations outside agriculture with a focus on manufacturing and services to promote diversification of economic activity and resilience against shocks.

“Furthermore, the AF (additional financing) will provide an opportunity to pilot an improved cash-matching grant scheme with an extended group of successful beneficiaries. The existing matching grant scheme is an in-kind/asset-based grant that allows limited flexibility to beneficiaries in economic activities expansion.

With a cash-based matching grant scheme, successful micro-businesses/beneficiaries will be able to apply for a cash grant to utilize the funds toward indicated expenditures in their business plans. A cash grant program could also reduce some of the administrative costs associated with the procurement and distribution of assets, which can be used toward supporting more beneficiaries and/or increasing the grant amounts,” the WB noted.

The AF is expected to support climate change adaptation and mitigation aspect to a greater extent than the parent project. The operation is aligned with the goals of the Paris Agreement on both mitigation and adaptation.

“Component 1 will also finance asset packages, which will include new technological equipment that meets modern standards, as well as new packages for businesses which are aligned with market demand. New asset packages will include “green” equipment and elements. Business and online technical trainings will include elements to raise awareness on energy efficient business practices including water conservation, using green energy sources, sustainable waste management practices and occupational safety in hazardous climate conditions.

In addition, low-cost measures such as inclusion of solar panels and other energy saving complementary equipment in asset packages will be financed in a sustainable manner. Occupations and business selection will also favor “green business” models in beneficiary selection,” the bank added.

The employment support project came into force on August 17, 2020, and the first payment was made on October 7 of the same year. The WB provided $100 million for its implementation. The project implementation covers 2020-2025.