The World Bank Group has approved $5m financing in both IDA credits and grants for the Public Sector Strengthening Project in the West African nation of Guinea-Bissau.

This financing is aimed to improve Guinea-Bissau’s public finance management in order to create a foundation for enhanced transparency and accountability in the management and use of public resources.

The World Bank Group said it plans to pledge about $250m over the next five years.

The announcement came during a discussion by the Bank’s Board of Executive Directors on the future of its relationship with Guinea-Bissau after the Bank suspended operations following a military coup in April 2012.

General elections in 2014 marked a return to constitutional order and an opportunity for donors to recommit their support in support of a peace dividend for the people of Guinea-Bissau.

The Bank’s recommendations for re-engagement and other policy measures, contained in a Guinea-Bissau Country Engagement Note.

According to Vera Songwe, World Bank Country Director for Guinea-Bissau, it marks a resumption in the World Bank’s continued support for Guinea-Bissau, and will provide critical help for the country over the next two years.

“It will also pave the way for the country’s transition from a post-conflict crisis situation to that of sustained peace and rapid development,” she said.

The World Bank’s new commitments are part of a broader coordinated effort by the international community, including the International Monetary Fund, the European Union, the African Development Bank and others to provide comprehensive support to the new government.

The Bank’s support will focus on the short-term stabilization needs of the government, which include building institutions and public sector capacity, and strengthening the provision of basic services to the poor.

The Bank will leverage IDA, IFC and MIGA interventions and will build on robust knowledge and analytical work including a recent Country Economic Memorandum and an ongoing Systematic Country Diagnostic.

The proposed support is in line with the 2011 World Development Report on Conflict and the IDA17 focus on fragile states.

As part of the World Bank Group's re-engagement in Guinea-Bissau, IFC is working with the World Bank to support the improvement of service delivery with private sector participation in key infrastructure sectors including water, electricity, and ports.

IFC will also directly finance private sector projects to encourage others to invest, as well as improve the investment climate and enhance both access to finance and the capacity of the country's small and medium enterprises.

Jerome Cretegny, IFC Principal Country Officer for Guinea-Bissau, said: "Guinea-Bissau presents promising opportunities for private enterprise, however, some of the fundamentals need to be in place to attract investors.”

"IFC's objective is to help create a favorable environment in which the private sector can play its role as an engine of economic growth and job creation," he added.