The World Bank Group is betting that the next era of development finance will be defined not by how much money multilateral institutions can lend, but by how much private capital they can persuade to follow.
That strategy delivered its biggest result yet in fiscal year 2026, when the World Bank Group mobilised a record $112 billion in private capital for developing economies, more than three times the $35 billion mobilised four years earlier.
Combined with the group’s own financing, total financing and private capital mobilisation in developing economies exceeded $200 billion in FY2026.
The scale of the mobilisation marks a significant shift in the way development institutions are approaching the financing gap confronting emerging markets. Rather than relying principally on public and multilateral balance sheets, the World Bank is seeking to use its financing, guarantees, policy expertise and risk-management capacity to bring commercial investors into markets where perceived risks have traditionally kept capital on the sidelines.
For Africa, where the need for infrastructure, energy, healthcare, manufacturing and productive investment remains substantial, the approach could become increasingly important.
Private capital mobilisation across Africa rose from approximately $9 billion in FY2022 to $22 billion in FY2026, an increase of nearly 150 percent.
But the numbers also expose the fact that the markets that need capital most are often the markets where private investment is hardest to attract.
The World Bank Group’s private capital mobilisation has grown rapidly across much of the developing world.
In lower-middle-income countries, mobilisation increased from $14 billion in FY2022 to $37 billion in FY2026, while upper-middle-income economies recorded an even sharper increase, from $12 billion to $50 billion.
In low-income countries, however, mobilisation remained at about $3 billion.
The problem is not always a shortage of money. It is a shortage of investable opportunities. Investors may see the potential of large markets, but they also price the risks around unreliable infrastructure, uncertain regulation, volatile currencies, political intervention, weak contracts and shallow financial markets. Where those risks overwhelm prospective returns, capital stays away. The World Bank Group has spent the past three years trying to alter that equation by changing the way it works with private investors.
The institution says it has sought to become faster and simpler, bring its public- and private-sector operations closer together and provide investors with a wider range of financing tools.
It has also begun developing integrated country strategies and a single point of contact across its public and private-sector operations in individual markets.
The objective is to make the institution operate less like a collection of separate financing arms and more like a coordinated platform for mobilising capital.
“Three years ago, our shareholders and clients were clear: utilize World Bank Group financing and knowledge to mobilize more private capital and become a better partner to the private sector,” Ajay Banga, president of the World Bank Group, said.
“We changed how we work to do that—faster, simpler, and as one World Bank Group,” he added.
The result, Banga said, was $112 billion in private capital mobilised in FY2026.
The World Bank Group issued more than $25 billion in guarantees in FY2026, exceeding its target of $20 billion in annual issuance by 2030 four years ahead of schedule.
The growth was led by the World Bank Group Guarantee Platform, created in 2024 to provide clients and investors with a single access point to guarantee products across the institution.
The economics of a guarantee are different from those of conventional lending.
Instead of providing all the financing itself, a development institution can absorb or mitigate specific risks that prevent commercial investors from participating.
That can allow banks, funds and institutional investors to put their own capital behind projects while the World Bank Group provides part of the risk protection.
The approach effectively seeks to make scarce development capital work harder.
A dollar deployed through a guarantee or risk-sharing instrument can potentially support several dollars of private financing, depending on the structure and risk involved.
That leverage is increasingly attractive for governments facing competing demands on public finances. It also changes the role of the multilateral institution, from being principally a lender to becoming a catalyst for private investment.
Africa at the centre of the test
Africa provides one of the clearest tests of whether that model can work at scale.
The continent’s private capital mobilisation increased from about $9 billion to $22 billion between FY2022 and FY2026, according to the World Bank Group.
But the financing challenge extends far beyond the headline investment numbers.
Developing economies are confronting a demographic shift in which millions of young people will enter the labour market faster than economies are generating productive jobs.
The World Bank Group estimates that 1.2 billion young people in developing economies will reach working age over the next 10 to 15 years, while only around 420 million jobs are projected to be created.
The private sector is responsible for nine out of every 10 jobs in developing economies.
That makes private investment central to the employment question.
Bringing pension money to development markets
The World Bank Group said it is now looking beyond banks and traditional development-finance partners to another potentially much larger source of capital: institutional investors.
Through its originate-to-distribute, or O2D, initiative, the group is developing ways to package investments and distribute them to institutional investors at greater scale.
The objective is to connect developing-economy investment opportunities with global pools of long-term capital.
Pension funds, insurers and asset managers control significant pools of capital, but their investment mandates and risk requirements can make direct exposure to developing-market projects difficult.
Standardising, packaging or distributing investments could potentially make more of those opportunities accessible to institutional portfolios.
If the model works, it could expand the universe of investors participating in development finance well beyond traditional bilateral donors, commercial banks and multilateral institutions.
The difficult last mile
The record $112 billion mobilisation is considered a major milestone for the World Bank Group, but the harder question is where that money ends up and whether it can generate lasting economic value in the markets that need investment most.
A record mobilisation shows that the institution has become more effective at attracting private capital. It does not automatically mean that the capital is reaching underserved economies, creating sufficient jobs or producing businesses capable of sustaining themselves commercially.
The roughly $3 billion mobilised in low-income economies highlights the gap. These markets often present the greatest development needs but also the greatest investment hurdles, from smaller transactions and shallow capital markets to regulatory uncertainty, infrastructure deficits and currency risks.
Guarantees can reduce some of those risks, but they are not a substitute for the wider investment ecosystem required to make projects commercially viable. That means stronger institutions, reliable infrastructure, deeper domestic financial markets, better currency-risk solutions and regulatory systems that give investors greater certainty.
The increasing participation of local and regional investors is therefore important. Domestic and regional capital can complement international financing while helping deepen local financial markets and potentially reduce dependence on external funding.
The next chapter of development finance
The World Bank Group’s FY2026 performance points to a changing role for multilateral finance.
The institution is increasingly using its balance sheet not simply to lend, but to unlock other pools of capital.
That is what makes the $112 billion figure significant. It showcases the potential leverage created when development finance, guarantees, policy reform and private investment are combined.
For Africa, however, the opportunity will be measured in more than capital flows.
The continent needs financing that supports productive businesses, infrastructure, manufacturing, energy and job creation for a rapidly expanding workforce.
As it stands, the real measure of the World Bank’s experiment will be whether capital mobilised today creates businesses and markets capable of attracting capital tomorrow, with less dependence on the institution that helped bring the first investors through the door.
