The World Bank president, Ajay Banga, has
worked to make the development institution a magnet for private capital as donor
nations face budget constraints.
·
Private
capital rises 62%: The World Bank attracted $112
billion of private capital in 2026, a 62%
increase from the previous year.
·
Nearly
tripled in three years: Private investment
mobilized by the World Bank has almost
tripled over the past three years under
President Ajay Banga.
·
Private
sector increasingly central: Banga has made
attracting private investors a key strategy because developing countries face tight
government budgets and high borrowing costs.
·
Financing
gap: The World Bank argues that public and
philanthropic funds alone cannot meet the enormous financing requirements for infrastructure,
education, energy, healthcare and development.
·
Investment
partners: The bank has attracted capital from pension
funds, corporations, asset managers and local financial institutions,
including companies such as Nestlé and General Motors and asset managers such
as BlackRock.
·
Risk-sharing
measures: The World Bank is expanding political-risk
insurance, accepting greater financial risk in
poorer countries and encouraging governments to improve investment regulations.
·
Investment
concentrated in richer developing economies:
Around $50 billion, or
nearly half of the private capital, went to upper-middle-income
countries.
·
Limited
low-income-country investment: Only
about $3 billion of
the private investment reached low-income
countries, raising questions about the development
impact of the strategy.
·
Development-impact
concerns: The Center for
Global Development has questioned whether the mobilized capital is reaching the
countries with the greatest development needs,
since private investors generally prefer markets offering stronger financial
returns.
·
Original
climate focus: The initiative was initially designed
largely to mobilize the trillions of dollars required for
climate-change action.
·
Shift
under Trump administration: With the United States
as the World Bank's largest shareholder, the bank has increasingly shifted its
emphasis toward infrastructure, job creation and poverty
reduction.
·
Greater
emphasis on nuclear energy: The Trump
administration has encouraged the World Bank to support nuclear
energy and dependable energy technologies,
rather than prioritizing climate-finance targets.
·
Climate-finance
target removed: In June, the World Bank revised its
Climate Action Plan and scrapped its commitment to allocate 45%
of spending to projects with climate benefits.
·
From
mitigation to resilience: The bank is placing
greater emphasis on helping countries cope with climate-related risks through resilient
infrastructure, rather than focusing primarily on
reducing global greenhouse-gas emissions.
·
Examples
of resilience spending: Banga highlighted hurricane-resistant
roads, flood-resistant housing and heat-resistant seeds as
examples of development spending that addresses climate risks.
·
Balancing
189 shareholders: The World Bank is owned by 189
member countries, requiring its leadership to balance
different national priorities and development needs.
·
Public-private
model: Banga is emphasizing public-private
partnerships as a way to mobilize substantially larger
amounts of development finance without relying exclusively on government
budgets.
·
Key
challenge: The central issue is whether increased
private-capital mobilization can translate into meaningful development in low-income
and high-risk countries, where commercial
investors are less willing to commit funds.
·
Overall
significance: The World Bank is increasingly
positioning itself as a catalyst for private investment,
using its guarantees, insurance and public financing to attract private capital
while simultaneously shifting its development priorities toward infrastructure,
energy, jobs, poverty reduction and climate resilience.
[ABS News Service/18.09.2026]
The
World Bank said on Thursday (17.09.2026) that it had attracted $112 billion of private
capital in 2026, a 62 percent increase from last year, as the development organization
has increasingly turned to private sector investors to help finance projects in
developing countries.
The
effort to make the World Bank a magnet for private investment has been a priority
for its president, Ajay Banga. The organization has been trying to accelerate its
poverty reduction and development goals at a time when poor countries facing tight
budget constraints and high interest rates are struggling to build new roads and
housing.
The
initiative was originally intended to raise trillions of dollars needed to combat
climate change. But with President Trump leading the United States, which is the
bank’s largest shareholder, Mr. Banga has been shifting the organization’s ambitions
toward infrastructure and job creation.
The
private investment total has nearly tripled over the last three years since Mr.
Banga, who was appointed by former President Joseph R. Biden Jr., assumed leadership
of the bank.
“If you’re a rich country or a developing country,
everybody’s got fiscal challenges,” Mr. Banga said in an interview at his office
at the World Bank in Washington. “The old idea of thinking that public coffers,
philanthropic coffers, in some way will fund this development challenge in the world
— whether it is education or energy or resilient infrastructure or health care,
whichever subscription of it you care about — there’s just too many zeros attached
to that demand.”
He
added: “You’re not going to get this without the private sector.”
The
World Bank has rapidly expanded private investment by tapping pension funds and
companies like Nestlé and General Motors, but also asset managers such as BlackRock
and local investors and financial institutions in countries around the world. Mr.
Banga said that the bank has been expanding its political risk insurance offerings,
taking on more financial risk to draw investments to the poorest countries and pushing
governments to clarify their investment regulations.
But
the immediate impact of the infusion of private capital is hard to quantify and
the World Bank has for years tried to leverage public sector funds to finance development
work with mixed success.
The
fact that the funds are coming from private investors interested in returns and
profits has meant that nearly half of the money, about $50 billion, is being directed
at upper-middle income countries. Low-income countries got just $3 billion in private
investment.
“We’re
somewhat skeptical of the development impact of this money,”
said Álvaro González, a senior fellow at the Center for
Global Development. “If you look at where it’s distributed, it’s in pretty well developed markets, not the tough places.”
Another
wrinkle is that the bank’s priorities have shifted sharply over the last two years
since Mr. Trump took office. Rather than focusing on climate change and green energy
investments, the Trump administration wants the World Bank to be investing in nuclear
energy and general poverty reduction initiatives.
“The
World Bank must respond to countries’ energy priorities and needs and focus on dependable
technologies that can sustain economic growth rather than seek to meet distortionary
climate finance targets,” Treasury Secretary Scott Bessent said during a speech
in April 2025.
The
World Bank is owned and funded by 189 member countries and the United States is
the largest shareholder. Mr. Banga, a former executive at Mastercard and Citigroup,
has managed to avoid Mr. Trump’s ire by emphasizing the importance of public-private
partnerships and downplaying the urgency of climate change.
In
June, the World Bank overhauled a key part of its Climate Action Plan and scrapped
its commitment to direct 45 percent of its spending to projects with climate benefits.
Mr.
Banga noted in the interview that he answers to a broad array of countries and that
the change to the action plan was determined after a “hefty” negotiation with the
bank’s board. While climate change was a priority of the Biden administration, under
Mr. Trump the World Bank has been dedicating its resources to making countries more
resilient to volatile climate events rather than trying to slow global warming.
Mr.
Banga explained that the World Bank is trying to steer clear from the “emotional”
language that charges the climate debate while still working to build roads that
are hurricane resistant, homes that are flood resistant and seeds that are heat
resistant.
“Let’s
get away from the word to what we are actually doing,” Mr. Banga said. “And what
are we actually doing? You’re spending money on resilient infrastructure.”