The World Bank yesterday said it attracted $112 billion in private capital in the year ended June versus $69bn a year earlier, and more than triple the amount in fiscal 2022 before former Mastercard CEO Ajay Banga became president.
The bank said the record figure committed for projects it facilitates is in addition to the $123bn from its own resources for that year, for a combined $235bn.
It is working to standardise and package loans to appeal to institutional investors such as pension funds, insurance companies and asset managers like BlackRock, with the aim of more than doubling private capital to over $200bn within two to three years, Banga said in an interview.
“That’s where the large pools of money are, and they don’t come for individual projects,” he said, noting that BlackRock founder Larry Fink urged him several years ago to build an asset class that could tap larger funds present in the private sector.
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.
“There aren’t trillions in the system with governments or us, or even philanthropy. So what you need to do is to find a way to get private capital, of which there is plenty, which is looking for good investment opportunities and a good return,” Banga said.
The size of the market for managed institutional capital is more than $280 trillion, of which just 5 per cent to 8pc historically goes to developing economies, according to data from the Glasgow Financial Alliance for Net Zero, Boston Consulting Group and British International Investment.
Private firms have shied away from large investments in developing countries given regulatory uncertainty, political risk and challenges with local currencies.
Banga convened a Private Sector Investment Lab after becoming bank president in June 2023, tapping experts, including Fink, to brainstorm ways to tackle those concerns, and has taken steps across the bank and its subsidiaries to address them.
He said the $112bn mobilised in fiscal 2026 was the result of a number of initiatives.
Those include streamlining the bank’s work and assigning a single manager as country liaison, instead of countries having to work with separate managers from the World Bank, the International Finance Corp (IFC) and other bank units.
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