World Bank Says It Nearly Doubled Private Capital, Reaching About $112 Billion

What the numbers show

Private investment catalyzed by the lender rose to around $112 billion in the most recent fiscal year, nearly twice the prior tally. Alongside that, the institution deployed about $123 billion from its own resources, which are funded largely by member-country capital and borrowing in public markets. The institution's portfolio remains concentrated in infrastructure, the financial industry, and energy.

What Banga did and said

Ajay Banga, the former Mastercard Inc. chief executive, points to the record haul as evidence that his drive to streamline the Washington-based lender - making it leaner, faster, and more effective - is gaining traction. Since stepping in mid-2023, he has combined parts of the organization, including some departments and country offices, and shortened approval timelines. As he put it at the bank's Washington offices, "The private sector doesn't like working with people who take three and a half years to make up their minds." He has brought more investor-friendly practices to the development lender in ways that could appeal to Wall Street, even if that has occasionally ruffled feathers inside the institution.

How the World Bank is tapping private investors

A big share of the nearly $112 billion still comes through the International Finance Corporation, the bank's private-sector arm, while programs that de-risk projects with guarantees and insurance are expanding. Earlier this year, Argentina secured a $2 billion facility from commercial lenders, supported by World Bank institutional guarantees, to retire a relevant share of its near-term debt coming due.

Banga said he is looking at ways to bundle different projects into a single security, such as a bond or composite loan, so pension funds and asset managements can put larger amounts to work. "They are not interested in individual projects," he said, noting those could range from Kenya to Vietnam and Egypt. "This is looking forward," he added, while pointing out the bank completed two securitizations this year totaling $1.5 billion. "So at least we know now there is a demand in the market."

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Why this happened and what it could mean for your portfolio

The pivot toward private finance lands while foreign aid - often referred to as official development assistance - declined at a record pace last year, down 23% to $174 billion, per OECD data. The US - the development lender's most influential and biggest shareholder - accounted for nearly three-quarters of the drop, following foreign-assistance reductions under the Trump administration. Most of the remainder was from Germany, the UK, Japan and France, where budgets tightened and debts rose, particularly as defense outlays climbed in the face of worsening geopolitical tensions. Or as Banga summed it up, even wealthy countries have fiscal strains now, so "it's getting harder to raise money in the old way."

The World Bank has attempted similar private-sector overhauls before - in 1999, 2003, 2007, and 2014 - per the Center for Global Development. Banga said he's exploring how to roll multiple projects into a single security to give pension funds and asset managers a way to deploy larger sums, and noted the bank completed two securitizations this year totaling $1.5 billion.

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