The World Bank’s Board of Executive Directors has approved an additional $150 million in financing to expand the ongoing Azerbaijan Employment Support Project (AESP). The project aims to assist vulnerable populations, particularly internally displaced persons, women, youth, and the long-term unemployed, by promoting self-employment opportunities.
Over the past three years, 15,000 beneficiaries, including more than 5,000 women, have received asset packages to start their businesses. According to a beneficiary assessment, over 70% of AESP participants remained in business 24 months after receiving project-provided assets. The newly approved financing will scale up existing employment programs and services and adapt others to serve more people and ensure business sustainability under AESP.
“Azerbaijan has been making efforts to improve labor market outcomes for vulnerable people. However, challenges such as skill mismatches, high informality, and high unemployment among women remain,” said Steffi Stallmeister, World Bank Country Manager for Azerbaijan. “This project helps address these challenges, which is key to ensuring more inclusive, private sector-led economic growth in the country.”
The additional financing will continue supporting Azerbaijan’s Self-Employment Program (SEP) by expanding its outreach to new sectors like manufacturing and services. This expansion aims to promote economic diversification and resilience against shocks. Additionally, the financing will pilot an improved cash-based grants scheme that allows beneficiaries to utilize funds for business expansion.
The funding will also enhance the capacity of the Azerbaijan Public Employment Agency to broaden its range of services and programs for jobseekers. Through this support, the agency will implement active labor market measures such as on-the-job training, wage subsidies, apprenticeship programs, vocational training development, and certification fee reimbursement for selected occupations. These initiatives are expected to stimulate employment among jobseekers—including women and other vulnerable populations—and increase their opportunities in manufacturing and service sectors.
“With this new financing we will test the viability of a set of active labor market measures to support skills development and incentives for jobseekers and employers," said Mirey Ovadiya, leader of the World Bank team that prepared the project. “By pioneering this approach Azerbaijan has an opportunity to generate more productive and sustainable jobs for the future.”
AESP is anticipated to contribute significantly towards advancing Azerbaijan’s key development priorities such as raising human capital potential and enhancing employment services' effectiveness. Furthermore, it aligns with promoting more productive and inclusive jobs as highlighted in the World Bank Group’s Country Partnership Framework for Azerbaijan (2025–29), currently being discussed with the Government of Azerbaijan.