States hosting Internally Displaced Persons (IDPs) are set to earn up to $12 million from a World Bank–backed loan if they meet a series of strict data, governance, and integration benchmarks under a new federal project targeting displacement and host communities.
The funding forms part of a $300 million concessional credit approved by the International Development Association for the Solutions for the Internally Displaced and Host Communities Project, signed between the Federal Government and the World Bank.
The Solutions for the Internally Displaced and Host Communities Project was approved by the World Bank on August 7, 2025. The agreement ties disbursement of part of the loan to performance-based conditions rather than upfront spending, with states paid only after independently verified results are achieved.
Under Performance-Based Condition Two, which focuses on closing data gaps on displacement-related vulnerabilities, $12 million has been earmarked for states that successfully register and profile displaced persons living within host communities. The disbursement is spread over three years, with escalating requirements.
In the first year after the project becomes effective, participating Tier 1 and Tier 2 states must launch registration and profiling of IDPs in selected host communities and complete comprehensive demographic and vulnerability assessments in at least two wards. States that meet this initial threshold are entitled to $0.25 million ($250,000) each.
The report read, “Participating Tier 1 and Tier 2 States launched registration/profiling of IDPs in selected host communities, and completed: comprehensive demographic and vulnerability assessment; in at least 2wards. Each State which completes the assessment and surveys in the selected wards will receive $0.25m of the PBC allocation.”
By the second year, the requirements deepen for Tier 1 states, which must conduct intention surveys and stability index assessments in areas targeted for local integration. They must also produce detailed analyses of the drivers of displacement, including underlying causes, socioeconomic impacts on displaced persons, outward migration pressures, and risks linked to trafficking and smuggling. Completion of these tasks qualifies each Tier 1 state for an additional $0.5 million ($500,000).
The most substantial payout is tied to the third year, when 80 per cent of IDPs in host communities across all participating Tier 1 and Tier 2 states must be registered and profiled. Each state that meets this benchmark will receive $0.5 million ($500,000), bringing the total allocation under this performance condition to $12 million.
“80 per cent of IDPs in host communities in all Participating Tier 1 and Tier 2 States are registered and profiled. Each Participating State that completes all the above will receive $0.5m of the PBC allocation,” the report read.
By the fourth year, the agreement expects data gaps on displacement-related vulnerabilities to be comprehensively addressed, with no further payments attached. Beyond IDP data, the financing agreement outlines two additional performance-based conditions that states must meet to access other tranches of the loan.
Performance-Based Condition One focuses on improving asset management by participating local governments. Tier 1 states are required to issue asset inventory reporting guidelines and operations and maintenance standards aligned with international benchmarks, approved by state oversight agencies, and verified through project audits.
Selected local governments must then issue asset inventory reports and O&M plans, followed by full approval of all local government–level asset inventories by governors. Up to $9 million is allocated to this condition, with states receiving $0.5 million ($500,000) at each verified stage.
Performance-Based Condition Three targets the long-term integration of IDPs into development processes. Participating Tier 1 states must provide financial and technical support to local registration facilities to help IDPs access basic documentation such as birth, marriage, death and educational certificates, residence identification, travel documents and driving licences. States that complete this stage are eligible for $1 million each.
Further requirements include legalising ownership transfer of land and property to IDPs through transparent processes, establishing monitoring mechanisms to manage tensions between displaced persons and host communities, and opening at least three development programmes covering skills development, livelihoods or infrastructure to displaced populations. A total of $12 million is allocated under this condition, spread across successive milestones.
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