Highlights

The World Bank’s fragility diagnostics have matured in structure, methodology, and scope, yet gaps persist in their utility to inform operational decision-making and in integrating geopolitical trends, scenario planning, and climate links into Risk and Resilience Assessments.

Country Partnership Frameworks in countries classified as fragile and conflict-affected situations (FCS) have increasingly integrated issues in countries affected by fragility, conflict, and violence but need to strengthen links to operational programming through better use of analytics, particularly Risk and Resilience Assessments, deeper conflict sensitivity of portfolios, and clearer fragility, conflict, and violence indicators.

The World Bank Group still lacks an effective approach for engaging in private sector development in FCS—so far, efforts have not realized the intended impacts.

The International Finance Corporation and the Multilateral Investment Guarantee Agency face hurdles in scaling up private sector engagement in FCS, with the International Finance Corporation falling short of corporate targets. The challenges are primarily due to a scarcity of bankable projects that meet International Finance Corporation and Multilateral Investment Guarantee Agency standards, compounded by the necessary adaptation of their business models to FCS realities.

The FCV strategy sought to ensure that country strategies and programming would systematically address the drivers of fragility in FCS to maximize impact, including developing the private sector. This objective is at the core of the operationalization of the programming pillar of the strategy, which seeks to (i) reflect IDA18 and IDA19 policy commitments to revise the methodology and prepare RRAs for all FCS; (ii) ensure Country Partnership Frameworks (CPFs) systematically address the key drivers of fragility; (iii) use fragility-sensitive programming in lending operations; and (iv) develop the private sector in FCS by using conflict-sensitive approaches (including working with the local private sector) and engage across the Bank Group to help create markets by scaling up upstream and downstream activities.

Adapting World Bank Group Country Strategies and World Bank Operational Programs in FCS

RRAs are key to enhancing fragility-sensitive programming. As stated in the FCV strategy (World Bank 2020), the RRAs are expected to analyze FCV drivers and sources of resilience in a country and offer operational recommendations that can be integrated into country programming. Following the new RRA guidance and methodology adopted in 2021, RRAs are intended to enable country strategies and programs to focus more systematically on FCV drivers and translate them into country program priorities.

Prior IEG evaluations identified progress and shortcomings in the quality of RRAs and in addressing drivers of fragility in the World Bank’s programming. The evaluations noted that the World Bank had enhanced its capacity to identify and analyze fragility and conflict drivers. However, while country strategies had increased the discussion of fragility, they had yet to systematically link conflict analysis to FCV-informed program priorities (World Bank 2018a, 2018c, 2021d, 2022c). IEG also noted shortcomings in sequencing the RRAs to align with the country engagement cycle, the lack of specificity to operationalize RRA recommendations, and ownership and use of RRAs by CMUs and staff. This evaluation assessed the extent to which a cohort of fragility and conflict diagnostics prepared since FY21 shaped country strategies and operational programs based on a document and portfolio review, as well as structured interviews as part of six country deep dives.

Quality of Risk and Resilience Assessments

Improved guidance has led to clear improvements in the structure, analytical rigor, and consistency of RRAs. The publication of a Methodology Note on RRAs in 2021 by the FCV Group has strengthened the assessments. RRAs published since then have more systematically identified conflict and resilience drivers, anchored in a more robust framework and evidence base. This was a marked shift away from the earlier state of more descriptive assessments, as identified by earlier IEG analysis (World Bank 2021d). However, the rationale for prioritizing certain drivers over others is often implicit, and many RRAs have relied on prevailing international perspectives rather than deeply contextualized, country-specific analysis. Hence, the provision of prioritized and actionable recommendations can still be improved.

The timely delivery of RRAs has improved. RRAs have the greatest impact when they are finalized shortly before country strategies are drafted so that they can inform the strategies and RRA team members can contribute to the strategy. The publication of RRAs in time to inform CPFs has improved during the evaluation period. Twenty-three of the 42 FCS in IEG’s evaluation universe adopted a new CPF or Country Engagement Note during the FCV strategy period (FY21–25). During the same period, RRAs covered 22 of the 42 countries. In 10 cases, RRAs were prepared in time to be followed by a CPF or Country Engagement Note. Several countries were operating during the strategy period without a CPF, including Lebanon and Mali. The reasons for these gaps included frequent changes in government, including through coups d’état, and political instability or conflict. The World Bank operated in some of these countries without a formal strategy and agreement with the government or de facto government on country priorities.

RRAs do not address sensitive topics and climate and disaster risks well, limiting their operational relevance. Compared with earlier IEG assessments of RRAs, the diagnostics now draw from a broader range of qualitative and quantitative sources, including both international and local evidence (table 4.1; World Bank 2021d). Stakeholder consultations have become more common and RRA teams more interdisciplinary. Even with improved team diversity, however, the integration of local knowledge into final outputs is often unclear. Critically, RRAs remain focused on risks and conflict drivers that fall within the World Bank’s traditional remit. RRAs do not systematically address certain sensitive dimensions, particularly geopolitical dynamics and corruption risks. Similarly, climate and disaster risks are often treated in a generic manner, with limited discussion of their significant interaction with FCV dynamics or their implications for sectoral planning.1 In sector-level analyses, fragility risks tend to be generalized rather than tailored to specific sectors or regions. These factors limit the RRA’s operational relevance.

Source: Independent Evaluation Group.

Note: RRA = Risk and Resilience Assessment.

Less than half of the RRAs in the case study sample describe the criteria or framework used to identify the drivers of conflict and resilience. For example, the Lebanon RRA uses a social contract framework to categorize fragility and resilience across three key areas: (i) elite bargaining and power-sharing, (ii) state–society relations, and (iii) intrasocietal relations. All the sample RRAs were assessed to draw on sufficient sources of evidence. The Republic of Yemen RRA refers often to a broad and diverse list of about 150 sources, including academic and nonacademic and Western and non-Western sources.

While most RRAs reflect on potential risks, the follow-through from risk identification to portfolio adjustments remains limited. Scenario analysis is becoming more common, and the inclusion of FCV-sensitive portfolio diagnostics has improved. However, in several instances, RRAs have highlighted risks that were not reflected in subsequent changes to lending, policy engagement, or operational design, taking a business-as-usual approach even in the face of rising fragility. The RRA for Mali identified several future FCV risks and included some project-specific and sector-specific lessons learned but did not refer to how the existing portfolio had incorporated previous lessons. Similarly, an RRA update noted that it followed some recommendations at the project level, but it did not cite past lessons or analysis connecting the recommendations to the existing lending portfolio.

RRAs influence strategic thinking and partner engagement. RRAs have been facilitating partner coordination, particularly with key bilateral partners and multilateral institutions. They have also promoted cross-country and regional perspectives, such as in West Africa and the Horn of Africa, where they have helped frame collective responses to shared risks. In this way, RRAs have contributed to the development of regional approaches aimed at mitigating conflict pressures spilling across borders, and in a few cases they have informed country climate diagnostics. The RRA for Mali made strategically and operationally relevant recommendations to both the FCV regional context and to regional constraints and priorities used by the World Bank and other international stakeholders (for example, recommending the establishment of decentralized project implementation units for larger projects, each with dedicated conflict analysts, to ensure that stabilization dividends are equitably distributed and do not disproportionately benefit local elites).

However, the strategic nature of RRA recommendations makes them often insufficiently actionable for decisions at the project level, which could be overcome by stronger involvement of staff with in-country operational experience. The RRAs’ program-level recommendations are often general and lack country specificity and therefore offer limited guidance to country teams. RRA recommendations can be numerous and often lack prioritization or sequencing. Stronger involvement of staff with significant in-country operational experience could help identify more context-specific and actionable recommendations. For example, recommendations in the RRA for South Sudan, while relevant, did not include clear steps or actions for country officers or TTLs to follow during implementation.

Systematic efforts to distill key RRA findings and communicate them effectively—through short summaries or visual infographics—could increase their operational relevance. Focus groups had mixed perceptions of the utility and use of RRAs by country teams. TTLs in several countries reported limited familiarity with CPFs or RRAs, particularly where staff turnover was high or where operational staff were not closely involved in strategy development. Sharing of RRA findings is often limited to select members of the CMU, further undercutting their use for operational staff. Where RRAs have been shared through CMU-wide presentations or highlighted at decision moments, uptake has been stronger. Improving internal communication and making RRA findings more easily accessible to TTLs is critical for their operational relevance; otherwise, RRAs will remain underused.

RRA teams are now larger and more diverse in skill sets and background, with more senior staff involvement. Previous evaluations found RRAs to be frequently produced by consultants not based in the country, resulting in limited CMU ownership (World Bank 2021d). This evaluation found that RRAs are less reliant on consultants and more frequently authored by larger and more diverse teams. To assess an RRA’s ownership, IEG looked for evidence of CMU participation in the RRA’s design and preparation. Such evidence was documented in more than half of cases (five out of seven). Country management is strongly involved in some countries but less so in others, indicating that ownership is not fully systematized. For example, for the Democratic Republic of Congo, the RRA authors interviewed program leaders, TTLs, and the CMU and found that the RRA draft had already been the basis for the dialogue on the PRA with the government and had formed an important input into the CPF. For Lebanon, the country director was part of the core team for the RRA, reflecting strong CMU involvement in the process. Additionally, the Lebanon country team collaborated closely on the RRA, ensuring that the findings and recommendations reflected local insights and expertise. For the Republic of Yemen, the RRA states that it was produced under the overall guidance of the country manager. For several countries, however, the RRA does not provide explicit evidence of direct involvement and participation by the CMU in its design and preparation. The degree to which RRAs are documented as undergoing a rigorous quality assurance process remains mixed.

Addressing Drivers of Fragility in Country Partnership Frameworks

RRAs now influence country strategies more systematically. In countries with prolonged high-intensity conflict, CPFs tend to reflect stronger conflict sensitivity across all pillars. These strategies frequently demonstrate an understanding of FCV dynamics and seek to address underlying drivers of conflict, such as state legitimacy, social inclusion, and economic opportunity. In contrast, CPFs in more recently designated fragile contexts render FCV a secondary issue by clustering relevant objectives into a stand-alone FCV pillar or referring to fragility through overarching language in an FCV cross-cutting theme. Better FCV focus could be achieved by applying an FCV lens for CPF pillars and each operation.

A few CPFs clearly distinguish between areas affected by conflict and those that are unaffected by offering spatially tailored interventions or implementation modalities. When differentiation does occur, it typically involves programmatic targeting rather than significant adaptation in delivery models. For example, the CPF for the Democratic Republic of Congo has a single focus area highlighting FCV challenges, particularly in the eastern part of the country. The CPF’s programmatic activities, however, do not differentiate between the four sets of provinces in its implementation modalities, even though the eastern part of the country is relatively more insecure than the other parts.

The adaptation of project portfolios to FCV dynamics is inconsistent. Portfolios do not explicitly aim to reduce fragility, despite often including conflict mitigation features or safeguard measures. In some countries, portfolios are clearly structured to address FCV drivers, such as social exclusion, state legitimacy, or uneven service delivery. In others, projects address poverty more broadly and incidentally touch on FCV issues without directly engaging with their root causes. In these cases, conflict sensitivity is defensive, avoiding harm rather than pursuing transformative outcomes (box 4.1).

Few CPF results frameworks track direct FCV outcomes such as violence reduction or trust in institutions. The overall lack of consistent FCV indicators undermines the World Bank’s ability to evaluate whether strategies and operations meaningfully contribute to reducing fragility or conflict risks. CPF results frameworks often include objectives that indirectly relate to FCV, such as service delivery, inclusion, and state–society relations. Conflict-related indicators tend to rely on perception data or fall outside the World Bank’s feasible impact, such as by measuring conflict casualties at the national level. The integration of PRA and Turn Around Regime milestones into CPFs is a step toward better outcome measurement.

CPFs can aim to anticipate major risks by giving more attention to the risk scenarios in RRAs. Most CPFs identify key FCV risks and shocks, including those flagged in RRAs, but do not always provide detailed mitigation strategies. FCV risks can be so significant that they cannot be mitigated. In those cases, scenario analysis—especially if supported by an RRA—can provide an alternative, yet this approach remains rare, as few CPFs (for example, South Sudan and the Republic of Yemen) include alternative pathways for engagement based on different conflict trajectories. In the absence of such planning, strategic adaptation is often reactive after crises force operational shifts, which was evident in Lebanon, where events led to a shift in engagement.

Few CPFs include robust partnership strategies. Countries for which robust partnership strategies are in place are those that are supported by multidonor trust funds, such as Afghanistan and the Federal Republic of Somalia. CPFs for countries that receive IDA FCV Envelope allocations include more extensive descriptions of divisions of labor with partners, especially in relation to addressing FCV drivers beyond the World Bank’s remit, yet they fall short of full partnership strategies. In the remaining countries, partnership descriptions are generic statements of intent. In countries such as Mali, the Federal Republic of Somalia, and the Republic of Yemen, CPFs cite coordination with humanitarian and development partners. In a few cases, they also acknowledge engagement with nontraditional partners, such as China and Gulf countries.

The results frameworks of Bank Group strategies do not capture FCV-related outcomes well at the country level. Higher-level objectives remain challenging to define and measure. Such objectives, which measure what successful Bank Group engagement looks like in FCS, often refer to creating more inclusive institutions, promoting cohesion, or rebuilding the social contract, yet project- and portfolio-level results frameworks often focus on outputs rather than outcomes. More robust M&E systems, including FCV-specific indicators, are needed to assess the true impact of interventions. Most operations measured technical aims, not conflict-related ones (World Bank 2021d). For example, the results frameworks for the Federal Republic of Somalia CPF and individual operations lacked suitable indicators to track progress beyond outputs or intermediate outcomes, which could provide links to broader state-building outcomes and impacts on FCV, such as stabilization, resilience, and peace building. World Bank operations do not identify links or causal relationships between portfolio-level outcomes and the achievement of strategic objectives well (World Bank 2025e).

Fragility-Sensitive Programming

World Bank portfolios increasingly focused on addressing FCV issues.2 The evaluation employed an artificial intelligence–assisted classification methodology and iterative validation and assessments based on manual documentary reviews to analyze all 1,169 FY15–24 FCS lending projects to identify the share that directly sought to address the drivers or impacts of FCV through targeted activities aimed at strengthening resilience, promoting reconciliation, supporting postconflict recovery, or enhancing state legitimacy in vulnerable contexts (see appendix A). This share has risen over the evaluation period to about 45 percent of all projects in FY23 and FY24 (compared with an average of 34 percent across the entire evaluation period). The data also indicate that the IDA FCV Envelope allocations contributed to countries creating more FCV-oriented programs, as their projects are about 46 percent more likely to address FCV issues.

Countries experiencing regional conflict or fragility lag in direct FCV-sensitive programming. FCV projects are largely limited to conflict-affected countries, where 75 percent of the projects take place, with the highest shares in the Central African Republic, South Sudan, Ukraine, the Republic of Yemen, and the Middle East and North Africa Region.3 The growth in the share of FCV-sensitive projects between the first and second phases of the evaluation period has been strongest in Burkina Faso, the Federal Republic of Somalia, and Ukraine. The share of FCV-sensitive projects declined in some countries, including Liberia and Mali. The share of FCV projects is lowest in small island states and secondarily in countries experiencing subnational conflict or fragility, including Côte d’Ivoire, The Gambia, and Togo.

Identifying pathways to address FCV is more challenging in countries experiencing institutional fragility. The annual share of FCV-sensitive projects that support countries affected by institutional fragility has decreased slightly, from 14 percent in FY20 to 12 percent in FY24. At the same time, the relative share of projects taking place in countries experiencing institutional fragility declined from 63 percent to 41 percent (figure 4.1).

Figure 4.1. Shares of FCV-Sensitive Projects Are Increasing but Countries with Institutional Fragility Lag Behind

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Figure 4.1. Shares of FCV-Sensitive Projects Are Increasing but Countries with Institutional Fragility Lag Behind

Source: Independent Evaluation Group.

Note: N = 642. FCV = fragility, conflict, and violence; IN = projects classified as seeking to address drivers of fragility and conflict directly; OUT = projects classified as not directly addressing drivers of fragility and conflict.

TPI is a key modality to facilitate the World Bank’s ability to directly address FCV in the most challenging operating environments. FCV-sensitive projects were often implemented through TPI, especially direct financing, of which 72 percent were FCV sensitive. The high share of FCV projects among operations implemented through direct financing TPI is due to the geographic concentration of such projects in countries where the need to directly address FCV is highest and where the World Bank is not able to directly implement projects (World Bank 2018c, 2021d).

Programming Private Sector Development in FCS

The FCV strategy committed the Bank Group to enhancing its operations and ensuring coordinated approaches across its institutions for upstream project development and downstream capacity building for the private sector. In particular, the FCV strategy contains several private sector programming measures, such as systematizing Bank Group conflict-sensitive approaches for private sector investments in FCV (measure 12), engaging across the Bank Group to develop the private sector and help create markets in FCV settings (measure 13), and scaling up IFC’s special advisory funding and implementation facilities (measure 14).

IFC and MIGA face important challenges and trade-offs affecting their ability to expand engagement in FCS. Private sector activity in FCS is constrained by insecurity, the lack of basic infrastructure, weak governance and corruption, a lack of access to finance and land, and a shortage of skills. These factors translated into financial and nonfinancial risks that deterred private investors and constrained the pipeline of bankable projects for IFC and MIGA (World Bank 2022b). IEG evaluations also identified important trade-offs for engaging with the private sector in FCS, with implications for IFC’s and MIGA’s existing business models, instruments, risk management, and financial sustainability (World Bank 2019a, 2021f, 2022b, 2024b). These include the smaller size, higher informality, and lower capacity of many local private entities, affecting their ability to meet IFC and MIGA corporate policies and standards; the possibility of private firms or individuals that may have been party to the conflict or involve integrity issues, limiting the pool of investment opportunities; the higher cost of doing business in FCS and the longer project gestation periods; the high risks constraining the supply of bankable projects, which even the availability of blended finance could not address; and issues related to incentives, corporate culture, and staffing (see also chapter 7; figure 4.2).

Meeting IFC’s and MIGA’s ambitious FCS business volume targets (see chapter 3) would require diversifying portfolios and client bases to reach and build the capacity of local private investors. The dearth of robust cross-country investment flows to FCS, the prevalence of informal companies in FCS, and FCV-specific risks pose new challenges to IFC’s and MIGA’s tools and business models. Responding to these challenges requires more programming of upstream investments to develop prospective clients’ capacity and acceptance of higher risks and costs and longer time periods to gestate bankable projects, as well as being realistic about volume targets that can be achieved when working with new and smaller clients, with a deliberate strategy of building their capacity to help them evolve into repeat clients. IFC has pursued an adaptation of this approach with projects with micro, small, and medium enterprises that seek to reach the local private sector, though these are done through local financial intermediaries, so their impact is not easy to measure (World Bank 2022b).

IFC and MIGA have adapted and increased their toolbox for operating in FCS. For IFC, these adaptations include the Africa Fragility Initiative (AFI), blended finance instruments, upstream engagements, a joint IFC-UNHCR initiative to help mobilize private responses to address forced displacement, and stepped up analytical work through conflict sensitivity analysis and Country Private Sector Diagnostic (CPSD) 2.0. Building on the experience with IFC’s Conflict Affected States in Africa initiative (2008–20), the AFI, begun in 2021 and funded by IFC, Ireland, and Norway, is now in its fourth year of implementation with the goal of supporting the growth and development of responsible private sector opportunities in FCS in Africa. AFI has so far supported 12 investments in six countries (Burundi, Guinea, Liberia, Mali, Sierra Leone, and South Sudan), totaling $120 million, against a target of 18 investments worth $147 million before the program’s conclusion in October 2026. AFI has also supported 68 advisory services against a target of 115. Early results reported by IFC on key performance indicators, such as increased investments by the private sector and improved access to services, look promising in overachieving their targets (IEG is unable to verify these results). Under AFI, IFC has launched the Local Champions Initiative for five countries in the Sahel (Burkina Faso, Chad, Guinea, Niger, and Togo), focused on identifying a pipeline of investable local sponsors and providing technical assistance to improve their investment readiness. The program has so far selected 30 champions (7 of which are women owned). However, many of the projects (both investment and advisory) related to these initiatives are still under implementation (and in some cases being piloted), and as such no results have been assessed by IEG. Further, the relatively small size of the investments has not significantly affected IFC’s progress toward its corporate targets in FCS and IDA countries. However, a review of AFI found that the thought leadership contributions of AFI, by providing support to development finance institutions seeking to strengthen their fragility strategies and guidance for IFC teams, have had an impact (Altai Consulting 2025). MIGA has used and expanded its tools in FCS based on trust-funded and blended instruments, building on the Conflict-Affected and Fragile Economies Facility (2013), the West Bank and Gaza Trust Fund (2013), and the Support for Ukraine’s Reconstruction and Economy Trust Fund (2023).4 The latter has helped support MIGA’s response, totaling $295 million in guarantees, in Ukraine during FY23–24.

The adaptation of the IFC business model and portfolio to FCV issues is not sufficient for more significant private sector development. Country cases prepared for this evaluation show variability in adapting to FCV issues. Six sample countries showed some post-2020 adaptation of the portfolio, but it often was not sufficient for significant private sector development. In the Republic of Yemen, the Bank Group’s engagement took a strategic and tailored approach to sustaining the private sector, balancing immediate crisis response with long-term economic resilience. Although the IFC program was small ($75 million in two investments, along with three advisory services), it aimed to sustain more than 4,000 jobs and food security at appraisal (though results have not been verified), complementing the World Bank’s more extensive efforts in infrastructure, economic opportunities, and jobs. Similarly, in Mali, the Bank Group attempted to prioritize rural electrification to support private sector activities in conflict-affected areas, leading to several projects. However, external challenges, including conflict and weak infrastructure, constrained IFC project implementation and resulted in modest IFC volumes, illustrating how Mali’s persistent constraints on private sector development affected project pipelines. Box 4.2 presents more detailed findings and lessons on IFC’s and MIGA’s engagement in FCS, as addressed in recent evaluations.

A shortage of bankable projects that meet IFC and MIGA standards and criteria is the key constraint to scaling up business in FCS; to address this constraint, IFC has scaled up its upstream engagements as part of support in FCS. IEG evaluations have consistently found that IFC and MIGA faced a dearth of bankable projects in FCS contexts that they were unable to sufficiently overcome. Furthermore, IEG has found that in challenging contexts where selecting high-quality clients may not be feasible, IFC can influence client quality by providing capacity-building support. IFC has increased the share of upstream engagements and conducted between 17 and 21 percent of its upstream engagements in FY20–25 in FCS (figure 4.2). For the FY20–25 period, IFC reports that 15 percent of the number of projects and 22 percent of volumes in the IFC FCS investment portfolio were enabled by an upstream engagement. In Burkina Faso, the Bank Group supported the development of bankable projects through various initiatives, including the Bagre Growth Pole Project, which aimed to increase economic activity in the project area and provide support to smallholders and small and medium enterprises through matching grants (World Bank 2018a). In Papua New Guinea, IFC used 48 advisory services projects to support objectives such as improving micro, small, and medium enterprises’ competitiveness and access to finance; enhancing gender diversity and inclusion; and supporting investments in small grids in remote areas (World Bank, forthcoming-a).

Figure 4.2. International Finance Corporation Upstream Engagements in FCS

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Figure 4.2. International Finance Corporation Upstream Engagements in FCS

Sources: Independent Evaluation Group; International Finance Corporation.

Note: FCS = fragile and conflict-affected situations; IFC = International Finance Corporation.

World Bank support and IFC sector-level advisory programs have been relevant but insufficient in overcoming constraints to private investment in FCS, often hampered by a lack of implementation by host country governments. As an important element of programming in FCS, IFC and the World Bank sought to support private investment indirectly by helping improve the business, legal, and regulatory environments through advisory services to governments (World Bank 2022c, 2023e, 2023i). FCS projects are subject to nonfinancial factors associated with sponsor integrity; environmental, social, and governance issues; conflict potential; and general development challenges (World Bank 2019a). Investment climate reforms are necessary but often insufficient for private sector development. Results of IFC and World Bank support for investment climate reform have been mixed, with challenges in implementation (World Bank 2019a).

The Bank Group has emphasized de-risking projects in FCV contexts through blended finance, the use of special trust funds, and capacity building for private sector clients, but these efforts have had modest effects on investment volumes. The IFC 3.0 strategy focused on creating markets in FCS by de-risking investments, leveraging blended finance, and engaging private sector partners. The Private Sector Window (a blended finance instrument for low-income and IDA countries) allows IFC and MIGA to enter some new sectors and countries, but the number of Private Sector Window approvals in FCS (about $1 billion in the past seven years) has not led to an overall significant increase in IFC’s and MIGA’s volumes. IFC’s advisory services have a higher share in FCS (16 percent) than its investment volumes, but the increase over the past decade has been modest.

The Bank Group has attempted to collaborate more systematically in FCV private sector contexts, but those programming attempts have not become established practice and have not yet realized their intended impacts. Collaboration across the Bank Group is central to the FCV strategy, with increased systematic collaboration and better coordinated programming—including planning and budgeting processes at the corporate level (World Bank 2022c). Prior IEG evaluations also point to the importance of holistic approaches in addressing constraints and enhancing opportunities for the private sector by encompassing both public and private instruments. Even before the FCV strategy, the importance of the Bank Group institutions working as One World Bank Group was emphasized in the 2016 Forward Look and the 2018 IBRD and IFC capital packages. The One World Bank Group was operationalized through the cascade approach, which urged the three Bank Group institutions to help countries maximize their development resources by using private financing and sustainable solutions from the private sector (World Bank 2024b). In particular, the contributions of IFC and MIGA could be better leveraged within CPFs. In some countries, the World Bank, IFC, and MIGA could work together more effectively to bring in other sources of private and official finance for greater development impact (World Bank 2022c). According to the FCV strategy MTR, RRAs increasingly address private sector considerations through engagement with IFC and MIGA; however, IEG could not verify this (World Bank 2023e).

Joint programming can be supported by joint private sector diagnostics and country strategies. The CPSDs, which are prepared jointly by IFC and the World Bank, seek to identify constraints in sectors in which the Bank Group can have the greatest impact by developing the private sector. However, out of 49 CPSDs published (as of March 2025), only 12 have been for the 39 FCS (by current FY25 classification). Furthermore, an evaluation that IEG conducted on IFC sector-level diagnostics (CPSDs and IFC Country Strategies) found that CPSDs did not have a significant impact on the pipeline of projects (IFC and private sector–related World Bank projects).5 The FCV strategy MTR also states that CPSDs systematically take account of RRA findings, but only a few CPSDs are in FCS, and their impact on the portfolio is insignificant. Building on the lessons from CPSD 1.0, the CPSD 2.0 (introduced in FY25) is mainstreaming an FCV lens.

IFC has strengthened its conflict sensitivity work through the AFI, but the effects are not yet evident in evaluations. The private sector differs greatly in its characteristics (as well as sectoral composition, size, and capacity) between countries: in some FCS, the private sector is interwound with the interests of one political party, while in others it is associated with specific ethnicities; beneficial ownership may be unclear, and corruption risks are high (Cliffe and Dwan 2023). IFC has proposed new frameworks for assessing country contexts for FCS, such as in 2022 when it introduced a Contextual Risk Framework for environmental and social screening that was intended to be used to better understand country context, risks, and fragility drivers to inform strategy and operations in FCS markets. While IFC says contextual risk screening is being applied to FCS projects, the application does not seem to be as rigorous as outlined by the framework (World Bank 2022c, 2024f). To support clients and ensure collaborative approaches with partners, IFC has stepped up conflict sensitivity work by providing technical support and resources to portfolio and pipeline projects in several countries in Africa, seeking to assess risks and to design and implement mitigation measures. The evaluation has not reviewed evidence of the downstream effects of conflict sensitivity work in project design and resilience. Country-level evaluations did not find evidence of the consistent use of conflict filters in private sector–related projects.6 The Ethiopia Country Program Evaluation offers one example of an instance when the Bank Group paused programs in conflict areas and attempted TPI and monitoring (World Bank, forthcoming-b).

In cases where IFC was able to work with the domestic private sector and smaller domestic sponsors, its engagement offered high additionality.7 The FCV strategy highlights the local private sector as an important partner in FCV settings. IFC can have high additionality when working with smaller domestic sponsors or existing clients investing in an FCS for the first time, often using blended finance to enable planned investments, such as with the Republic of Yemen’s HSA Foods projects. IFC’s implied political risk insurance and implementation support have enabled several investments in FCS. However, additionality was more limited when an established client may have been able to attract similar financing from commercial sources. IFC’s Local Champions Initiative is a relevant adaptation to engaging with the local private sector. Engaging with the private sector in FCS requires collaboration and offers opportunities for synergies among Bank Group institutions more than in other country contexts (World Bank 2019a, 2021f). In some cases, IFC has provided funding for technical assistance to support project development and capacity building for private clients receiving Private Sector Window support (World Bank 2021f).