The European Union has entered into a new EUR 5 million Administration Agreement with the International Finance Corporation (IFC) to deliver the Afghanistan Private Sector Stabilisation Programme, marking a further step in joint efforts to support Afghanistan’s economy.
The IFC is a member of the World Bank Group (WBG) and works globally to advance private sector development. According to the partners, the programme reflects ongoing cooperation between the European Union and the World Bank Group in Afghanistan, with the aim of economic stabilisation and the creation of livelihoods through inclusive, private sector-led recovery.
Under the agreement, the programme will support investment in small and medium-sized enterprises (SMEs), assist entrepreneurs, and expand access to financial services. Particular attention will be given to increasing the economic participation of women, young people, and returnees. The initiative will work closely with private sector actors to improve conditions for business activity and employment growth.
The Afghanistan Private Sector Stabilisation Programme is expected to complement existing European Union actions, especially those linked to rural development and micro-finance. It is also intended to align with future initiatives planned by the World Bank.
The programme is scheduled to begin next month and will run for 42 months. It is structured around five core objectives: strengthening coordination and advocacy within the private sector to improve the business environment; building the capacity of SMEs and start-ups, with a focus on women, returnees, and Internally Displaced Persons (IDPs); expanding financial inclusion; stimulating private capital mobilisation and job creation across key sectors; and encouraging private sector engagement to increase women’s economic participation and employment.
H.E. Veronika Boskovic Pohar, EU Chargée d’Affaires to Afghanistan, said, “this initiative is part of the comprehensive support of the European Union to the Afghan population, from immediate humanitarian response to a more long-term approach strengthening the Afghan private sector. This programme is important as it supports job creation and entrepreneurship in strategic value chains, in particular for the Afghan women, youth, and returnees.”
Khawaja Aftab Ahmed, Regional Director Middle East, Pakistan & Afghanistan at IFC, added: “This agreement between IFC and the EU reaffirms our commitment to Afghanistan’s entrepreneurs. By joining our forces, we will aim to help the private sector stabilize, grow, and create jobs, especially for women, youth, and returnees. While no single effort can solve every challenge, strengthening businesses is a practical way to protect livelihoods and support Afghans in rebuilding with dignity.”
