The World Bank intends to provide a $50 million financing package to create a Pakistan Fund of Funds, designed to pull both domestic and foreign private investors into the country's under-developed venture-capital sector.
The money, to be delivered through the International Bank for Reconstruction and Development (IBRD), will cover the full estimated cost of the project, leaving no financing gap.
According to the initial project information document, the Pakistan Entrepreneurship and Private Investment Catalyst Project will be carried out by Ignite, part of the Ministry of Information Technology and Telecommunication. A review is slated for January 20, 2027, and the project will be considered for approval on March 24, 2027.
The initiative seeks to mobilise private investment and broaden access to risk capital for innovative, high-growth firms. Rather than funding individual companies, it will place public money into professionally managed venture-capital funds, using the public stake as an anchor to draw additional private investors.
The document notes that venture-capital investment per capita in Pakistan is under one-tenth of that in Egypt, Indonesia and Vietnam. Access to patient equity and professionally run funds remains scarce, leaving many startups and fast-growing businesses without risk capital.
The operation comprises two parts: the capitalisation and investment of the Pakistan Fund of Funds, and the project-management set-up required to establish, run and oversee it.
The model draws on international experience, such as the Innovative Startups and SMEs Fund in Jordan. The World Bank expects the scheme to boost business expansion, productivity, innovation and job creation.
The proposal arrives as Pakistan places digital transformation, artificial intelligence and innovation-led growth at the core of its economic agenda. The document also cites the country's pledge to invest $1 billion in the national AI ecosystem by 2030.
The World Bank highlighted limited institutional capacity in the domestic venture-capital industry and weak environmental and social risk management among local fund managers as implementation challenges. Earlier startup investments have focused on fintech, e-commerce, health technology, education technology and logistics technology.
While these sectors have a modest direct environmental footprint, the document flags risks concerning consumer protection, data privacy, gig-economy labour conditions and unequal access to digital services.
The project must also tackle gender gaps in finance, digital services and entrepreneurship, as well as workplace harassment and exploitation within portfolio companies.
The World Bank has classified the environmental and social risks of the project as moderate and said appropriate safeguards will be required as the fund's portfolio grows.
