World Bank Approves $150M to Expand Azerbaijan Employment Support Project

In the past three years, the AESP has provided asset packages to 15,000 beneficiaries, including over 5,000 women, helping them start their own businesses.

The World Bank’s Board of Executive Directors has approved an additional $150 million to expand the ongoing Azerbaijan Employment Support Project (AESP). The project focuses on aiding vulnerable populations—including internally displaced persons, women, youth, and the long-term unemployed—by promoting self-employment opportunities.

In the past three years, the AESP has provided asset packages to 15,000 beneficiaries, including over 5,000 women, helping them start their own businesses. A beneficiary assessment revealed that over 70% of participants remained in business two years after receiving project support. The new financing will build on this success by scaling up existing programs, introducing new services, and enhancing the sustainability of businesses under AESP.

Steffi Stallmeister, World Bank Country Manager for Azerbaijan, noted, “Azerbaijan has made strides in improving labor market outcomes for vulnerable populations. However, challenges such as skill mismatches, high informality, and high unemployment among women persist. This project addresses these issues and is crucial for fostering inclusive, private-sector-led economic growth in the country.”

The additional funds will support the expansion of Azerbaijan’s Self-Employment Program (SEP) into new sectors like manufacturing and services, promoting economic diversification and resilience. The financing will also pilot an improved cash-based grants scheme, enabling beneficiaries to use funds for business expansion.

Moreover, the new financing will enhance the Azerbaijan Public Employment Agency’s capacity to offer a broader range of services and programs for job seekers. This includes implementing active labor market measures such as on-the-job training, wage subsidies, apprenticeships, vocational training development, and certification fee reimbursements. These initiatives aim to boost employment opportunities, particularly for women and other vulnerable groups, in the manufacturing and services sectors.

Mirey Ovadiya, leader of the World Bank team preparing the project, said, “With this new financing, we will test various active labor market measures to support skills development and incentivize jobseekers and employers. Azerbaijan has an opportunity to create more productive and sustainable jobs for the future.”

The AESP expansion aligns with Azerbaijan’s development priorities, including enhancing human capital and improving employment services. It also supports the World Bank Group’s Country Partnership Framework for Azerbaijan (2025–29), which is under discussion with the Government of Azerbaijan.