World Bank Draws Record $112 Billion in Private Capital

The World Bank attracted $112 billion in private capital in the year ended June, a record for the institution and a sharp rise from $69 billion a year earlier, it said on Thursday. The figure is more than triple the amount mobilised in fiscal 2022, before former Mastercard chief executive Ajay Banga took over as president.

The private commitments sit alongside $123 billion deployed from the bank's own resources during the year, taking the combined total to $235 billion.

The bank is working to standardise and package loans so they appeal to institutional investors such as pension funds, insurance companies and asset managers, including BlackRock. Banga said in an interview that the aim is to more than double private capital to over $200 billion within two to three years.

"That's where the large pools of money are, and they don't come for individual projects," he said, recalling that BlackRock founder Larry Fink had urged him several years ago to build an asset class capable of drawing in larger private-sector funds.

Attracting private capital has become a priority for Banga as developing countries face vast financing needs for energy transition, education, healthcare and agriculture, even as official development assistance declines.

"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," he said.

Data from the Glasgow Financial Alliance for Net Zero, Boston Consulting Group and British International Investment indicate that the market for managed institutional capital exceeds $280 trillion, of which only 5% to 8% has historically flowed to developing economies.

Private firms have been reluctant to make large investments in developing countries because of regulatory uncertainty, political risk and difficulties with local currencies. After becoming president in June 2023, Banga convened a Private Sector Investment Lab, drawing in experts including Fink, to work through those concerns, and has since taken steps across the bank and its subsidiaries to address them.

He attributed the $112 billion mobilised in fiscal 2026 to several initiatives. These include streamlining the bank's operations and assigning a single manager as country liaison, rather than requiring countries to deal with separate managers from the World Bank, the International Finance Corp and other units. The bank has also deepened ties with development institutions and cut average project approval times from a year or more to nine months, or less for simpler projects.

Banga said borrowing countries are increasingly keen to draw private investment rather than depend on external aid, and that they need to improve infrastructure, raise revenue and enact regulatory reform. About 40% of World Bank lending last fiscal year went into infrastructure, while 26% went to projects focused on regulatory reform.

"It's a complex web of things, but 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," he said.

Private capital flows rose sharply to lower-middle-income countries, upper-middle-income countries and across Africa, while remaining steady for low-income countries.

Among the projects supported was a Rio Tinto greenfield lithium venture in northwestern Argentina. The IFC provided a $400 million loan that helped attract $775 million from other lenders, with total committed equity and debt reaching $2.5 billion. Rio Tinto wanted to invest but needed regulatory certainty, more local currency financing and investment in roads and ports, which the bank helped facilitate, Banga said, enabling job growth and revenue expected to continue for decades.

Another project involved Guatemala's largest lender, Banco Industrial, World Bank officials said. It included a $100 million loan and a second loan funded through a bond that drew 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 placement raised Banco Industrial's international profile and generated proceeds to support job creation in Guatemala.