The World Bank reported on Thursday that it received $112 billion in private financing in the year that ended in June, up from $69 billion the previous year.
This is more than three times the amount that it received in fiscal 2022 before the appointment of former Mastercard CEO Ajay Banga as president.
According to the bank, the record amount committed for projects it supports is in addition to the $123 billion it spent that year of its own resources, for a total of $235 billion.
With the goal of more than doubling private capital to over $200 billion in two to three years, it is attempting to standardize and package loans to appeal to institutional investors like pension funds, insurance firms, and asset managers like BlackRock, Banga stated in an interview.
He stated, “That’s where the big money is, and they don’t come for individual projects,” adding that Larry Fink, the creator of BlackRock, had encouraged him to create an asset class that would allow him to access bigger funds located in the private sector a number of years prior.
Given the enormous financial needs that developing nations face—to pay for energy transition, education, healthcare, and agriculture at a time when government development support is declining—Banga has made luring private finance a top goal.
“Neither the government nor we, nor even philanthropy, have trillions in the system. Therefore, you must find a way to obtain private capital, which is abundant, and search for profitable investment possibilities,” Banga stated.
Glasgow Financial Alliance for Net Zero, Boston Consulting Group, and British International Investment stated that the market for managed institutional capital is worth over $280 trillion, of which only 5% to 8% has historically gone to developing economies.
Due to political risk, regulatory uncertainty, and difficulties with local currency, private companies have avoided making significant investments in developing nations.
After taking over as bank president in June 2023, Banga organized a Private Sector Investment Lab, enlisting the help of specialists like Fink to come up with solutions to those issues.
Since then, the bank and its subsidiaries have taken action to solve these issues.
He said that several measures contributed to the $112 billion raised in fiscal 2026.
These include simplifying the bank’s operations and designating a single manager as the country liaison rather than requiring nations to collaborate with different managers from the World Bank, the International Finance Corp (IFC), and other bank divisions.
World Bank President Ajay Banga said that the organization has strengthened its partnerships with other development agencies and streamlined its operations, reducing the average timeline for project approvals from over a year to nine months (and even less for straightforward initiatives).
Banga noted that developing nations are shifting away from a reliance on foreign aid, opting instead to draw in private capital.
To achieve this, he emphasized that these nations must prioritize infrastructure development, boost internal revenue, and implement regulatory updates.
He highlighted that during the previous fiscal year, the World Bank directed approximately 40% of its lending toward infrastructure and 26% toward regulatory reform projects.
World Bank President Ajay Banga explained that transforming the bank into a faster, more unified, and client-focused partner is the foundation for navigating complex global challenges.
This evolution coincides with a sharp increase in private capital flows to lower-middle-income countries, upper-middle-income countries, and Africa, while funding remained stable for low-income nations.
As a key example of this approach, the bank successfully backed a $2.5 billion greenfield lithium project by Rio Tinto in northwestern Argentina.
The International Finance Corporation (IFC) initiated a $400 million loan, which mobilized an additional $775 million from external lenders alongside equity and debt.
This intervention delivered the regulatory stability, local currency financing, and infrastructure investments (like roads and ports) Rio Tinto required, ultimately securing long-term economic growth and job creation for the region.
According to World Bank officials, another highly impactful initiative centered on Banco Industrial, the largest financial institution in Guatemala.
The initiative featured a $100 million loan alongside a secondary loan generated via a bond issuance.
This bond successfully drew in over 190 international investors, including prominent asset management firms like PIMCO.
The offering was in high demand, becoming 3.6 times oversubscribed, with secondary market trading volumes totaling roughly $1.1 billion recently.
Beyond providing funds to stimulate local job creation, this transaction significantly elevated Banco Industrial’s global market profile, which had previously executed only smaller debt placements.
