The World Bank announced on Thursday that it had mobilised a record $112 billion in private capital for developing countries during the last financial year, according to reports from Reuters. This represents a more than 60 percent increase from the previous year and is now more than triple the amount mobilised in fiscal 2022 before former Mastercard CEO Ajay Banga became president**. The bank's chief hailed this decision as "adding another arrow to the quiver," marking a significant strategic shift in development financing approaches. The record figure is in addition to the $123 billion from the bank's own resources for that year, bringing the combined total to $235 billion. As reported by Reuters, private capital mobilised by the World Bank Group has more than tripled over the past four years, rising from $35 billion in FY22 to $112 billion in FY26. The World Bank on Thursday said it attracted $112 billion in private capital in the year ended June versus $69 billion a year earlier, with the size of the market for managed institutional capital being more than $280 trillion, of which just 5% to 8% historically goes to developing economies.
World Bank Group President Ajay Banga, who took the helm in June 2023, has been methodically retooling the 80-year-old institution into something that looks less like a traditional aid bank and more like a deal-structuring platform for institutional money. The centerpiece of the new strategy is an "originate-to-distribute" model, where the World Bank's private-sector arm, the International Finance Corporation (IFC), packages loans into securities and sells them to outside investors. The IFC put this into practice with its first-ever collateralized loan obligation (CLO), closing a $510 million deal in September 2025 that bundled loans from 57 borrowers across developing economies. Every dollar the IFC recycles off its balance sheet through securitization is a dollar it can redeploy into new projects. Banga's team is targeting $20 billion in annual guarantee issuance by 2030, with the World Bank Group having issued more than $25 billion in guarantees, surpassing its goal of $20 billion in annual issuance by 2030 four years ahead of schedule. The World Bank Group has also launched a new guarantees platform and a Private Sector Investment Lab, both designed to reduce the perceived risk of investing in frontier markets.
According to Reuters, the $112 billion mobilised in fiscal 2026 was the result of several operational improvements implemented by Banga. The bank streamlined its work by assigning a single manager as country liaison instead of countries having to work with separate managers from the World Bank, the International Finance Corporation (IFC) and other bank units. The World Bank has also tightened ties with development institutions and cut average project approval times from a year or more to nine months, or shorter for simple projects. The Private Sector Investment Lab has helped identify practical barriers holding back investment in developing economies and developed a work plan to address them. The World Bank Group has pursued this agenda across the institution: improving the business and regulatory environment, expanding guarantees and local-currency financing, addressing foreign-exchange challenges, increasing equity tools, and advancing new ways for institutional investors to participate at scale. Banga said the $112 billion mobilized was the result of a number of initiatives, noting that "it starts from making the bank more capable of being the right partner, one structure, quicker to react, understanding of its clients and catering to their needs."
According to Reuters citing the World Bank, about 40% of World Bank lending last fiscal year went into infrastructure, while 26% went to projects focused on regulatory reform. The bank's private capital mobilisation strategy involves various methods including prioritising regulatory certainty in emerging markets, taking on risk through guarantees and seed money in larger funds, and creating emerging markets asset classes to attract institutional investors. As reported by Reuters, the bank's efforts helped fund a Rio Tinto greenfield lithium project in northwestern Argentina, with the IFC providing a $400 million loan that helped attract $775 million from other lenders, combining with equity and debt to reach $2.5 billion in total committed funding. Another successful project involved Guatemala's largest lender, Banco Industrial, with the project including a $100 million loan and a second loan funded through a bond that attracted more than 190 global investors, including asset managers such as PIMCO. The bond was 3.6 times oversubscribed, with cumulative secondary market trading volume reaching about $1.1 billion as of last week. The bond raised the international profile of Banco Industrial, which had only done smaller placements, and generated proceeds to support job creation in Guatemala.
For the World Bank Group President, as reported by Reuters, the work done in the last four years represents just the beginning of this strategy. "This is wet paint, and as the paint dries, you get a little more result," he stated. The approach emphasises that private capital will not be deployed indiscriminately, with funds and projects being offered in combinations that suit member states, recognising that "one size doesn't fit all." Banga noted that private capital flows rose sharply to lower-middle-income countries, upper-middle-income countries and across Africa, while remaining steady for low-income countries. The World Bank Group is now working to build on that progress by expanding the range of investors able to participate through its originate-to-distribute (O2D) work, developing ways to package and distribute investments to institutional investors at greater scale. Banga has made attracting private capital a priority given the vast financial needs facing developing countries to pay for energy transition, education, healthcare and agriculture at a time when official development assistance is dropping.
