The Fund Explained

The goal of the Challenge Fund for Youth Employment is to support robust and innovative ideas for creating or improving decent work prospects for youth, especially young women. For the purposes of this program, youth is defined as between the ages of 15 – 35. Over the next 7 years, we’ll work with selected Implementing Partners across the Middle East, North Africa, Sahel/West Africa and the Horn of Africa to tackle the challenge of youth underemployment and unemployment in these regions. Our projects will enable 230,000 young people to access new or better employment, including wage or salary jobs, or self-employment.

Our ambitious targets mean we seek market-based solutions with innovative and scalable approaches. We will support projects that put youth, especially young women, to work in decent jobs that better reflect their aspirations and skills. The focus of this call is therefore to support the scale up of successful approaches or development and testing of new approaches to: 1) increase youth access to new or existing decent jobs; and/or 2) improve the quality of jobs for youth.

Young women and men are unemployed, vulnerably employed, and underemployed across the Middle East, North Africa, Sahel/West Africa and the Horn of Africa. Market weaknesses exist on the demand and the supply sides: employers require capacity, capital, and targeted strategies to hire young jobseekers, while young people lack relevant information, skills and capabilities for today’s and tomorrow’s job markets. The challenge is more acutely felt by women, who experience specific barriers, especially to higher paid work. As a result, youth face low prospects for the future.


Actively targeting women

The Challenge Fund for Youth Employment makes a deliberate point of creating equal opportunities for young women in the job market; we have an explicit gender component to ensure that 50% of the young people reached by the Fund are young women. Analysing and understanding the gender dimension of youth unemployment is critical, and we require Implementing Partners to present a targeted strategy for ensuring women are not just considered and included, but actively benefit from their project.

The Fund is aligned with the Netherlands Ministry of Foreign Affairs’ policy mandate to strengthen the economic role of women, both as entrepreneurs and employees. This is based on the understanding that investing in women’s future is smart economics. An explicit focus on gender equality and women and girls’ empowerment is also critical to drive progress towards achieving the Sustainable Development Goals, especially Goal Five: Achieve gender equality and empower all women and girls.

The Role of Private Sector

We actively welcome partnerships and consortium responses to this challenge. While we welcome ideas and responses from any organisation, we are looking for market-based solutions, tailored to the specific context of the Call. There is therefore an expectation that all projects will involve at least one partner from the private sector and at least one national partner or a partner with a local operating presence.

Private sector companies, and particularly SMEs are the backbone of most economies. In the target regions, they are the engine driving economic growth and job creation, in both formal and informal markets. What’s more, the potential for innovation in the private sector is infinite. We will need to rely on pragmatic ideas to spur new approaches to the existing and worsening challenge of youth unemployment. The private sector is the most efficient and effective mechanism through which to focus, develop, and test solutions that respond to this persistent, unsolved challenge.


Given the emphasis on market-based solutions, we will only consider working with Implementing Partners presenting ideas that would not be possible without support from the Fund. We will not fund existing operations, or ‘business as usual’. We are interested in supporting solutions that would not be possible within the same timeline or to the same scale without support from the Challenge Fund.

We will therefore assess the level of additionality as part of our selection criteria.  This includes looking at what type of project is being proposed, assess the level of risk involved, and the potential for employment opportunities for youth, especially women.  Based on this assessment, we will offer Implementing Partners the co-investment and technical assistance support from the Challenge Fund. It is expected that the contribution of the Challenge Fund, either though co-investment, technical assistance or a combination of both, will range from 10% to 50% of the total project budget.

The minimum contribution by the Fund will be Euro 100,000 and there is an expectation that projects will provide prospects for at least 250 youth.

Youth Engagement

Actively involving youth, and especially young women, is a pre-requisite for being considered as an Implementing Partner of the Fund. Interventions should be able to demonstrate how young people were involved in developing the proposed solution and how these solutions are likely to contribute to the goals and aspirations of those youth who will ultimately end up in employment through the successful implementation of the intervention.

Taking an integrated approach leading to jobs

Matching supply and demand is a critical element of the Fund’s design. We will therefore look for proposals which include a clear, integrated matching component, with the aim to link and maximise the synergies between supply- and demand-side interventions. For example, a skills training program proposal should demonstrate how young graduates are paired with work placements. Demand-side interventions should look to increase the number and quality of jobs available, and match this with mutually reinforcing activities to improve the assets and capabilities of young jobseekers.

Such an integrated approach, hinged on matching supply and demand interventions, is the most effective way to have a programme impact that results in gains in youth employment.

Sustainability (long term prospects)

As part of the design of each project/investment, prospective Implementing Partners will be required to demonstrate how their initiatives will become independent of external funding as part of their business cases and proposals, outlining how the initiative will become embedded in the youth employment value chain / market system.