The Private Sector Investment lab is a collaborative initiative between the World Bank Group and CEOs of leading global private sector institutions. Its goal is to develop solutions that address existing barriers to private sector investment in emerging markets and developing economies.
The Lab is developing approaches that can be implemented and scaled to effectively mobilize more significant volumes of private capital to tackle the world”s most pressing development challenges. Mobilizing more private capital is a WBG priority. It touches on many aspects of our new development playbook and is being tracked in the new WBG Scorecard.
The core goal of this initiative is to enhance WBG’s role in mobilizing private capital for emerging markets by mitigating risks for private sector investors and fostering environments that support the development of bankable projects.
The Lab’s core group of CEOs and Chair come from AXA, Bayer, Bharti Enterprises, BlackRock, Dangote Group, Hyatt, HSBC, Macquarie, Mitsubishi UFJ Financial Group, Ninety-One, PIMCO, Royal Philips, Standard Bank, Standard Chartered, Sustainable Energy for All, Tata Sons, Temasek, and Three Cairns Group. The chair of the lab is Shriti Vadera, Chair of Prudential plc.
Since the Lab’s launch in 2023, private sector leaders have provided the World Bank Group with valuable feedback that has helped us better align our strategies and undertake several new initiatives to increase the speed and scale of private capital flows for development.
Several initiatives are already underway to implement other lab recommendations, including the launch of the Mission 300 platform to connect 300 million people to electricity in Sub-Saharan Africa, the development of new concessional funding programs from the IFC, and a pioneering capital markets transaction to distribute assets from IFC’s balance sheet in the form of asset-backed securities.
Other initiatives being implemented include solutions to mitigate foreign exchange risk in long-term loans to projects in emerging markets, the rollout of the Unified Guarantee Program, and a long-term program to develop mechanisms for mobilizing institutional investor capital for urgent development priorities at scale, using the combined capabilities of WBG.
PSIL members meets twice a year to discuss progress on initiatives related to these five areas. The last meeting was hosted in Washington, D.C., in October 2025, and the next meeting will be in April 2026 at the Spring Meetings.
These new solutions will continue to be tested with PSIL members and other counterparts to achieve proof of concept prior to scaling. It was also agreed that new members may be added, most likely from the real sector, such as project developers.
WBG will engage both with PSIL members and nonmembers to identify and pursue execution opportunities for PSIL recommendations.
Achievements and next steps
To date, the Lab has delivered recommendations in five areas:
- Ensuring regulatory certainty
- Increasing the use and improving the efficiency of WBG guarantees
- Mitigating foreign exchange risk
- Creating an EMDE asset class
- Deploying more junior equity capital
Progress so far:
Regulatory certainty: Building stable, investable environments gives private investors the confidence to commit long-term capital. The WBG has deepened work to support greater clarity on regulatory policies, aiming to create bankable project opportunities for the private sector to participate at scale.
- Mission 300, the WBG’s flagship energy access platform in Africa, has already connected nearly 39 million people to electricity since its launch in 2024, through this approach. Mission 300 is now the blueprint for WBG’s Knowledge Bank, with a dedicated team focused on the policy and regulatory reform to draw greater private capital to emerging markets across sectors.
Guarantee program: Enhancing the WBG’s guarantee solutions that reduce investor exposure to commercial and political risks in emerging markets has been a priority. On the Lab’s recommendation, the WBG’s guarantee business has been overhauled to deliver greater scale, innovation, and simplify user access. A Unified Guarantee Platform was created to bring guarantee products across different WBG entities within a single storefront—to streamline and simplify the product offer, improve marketing to the private sector through expanded client coverage and cross selling of MIGA guarantee products to IFC clients.
- Early signs, both in volume and client feedback, have been promising. Since the launch of the platform in July 2024, issuance grew 19 percent, to $12.3 billion in its first year. This fiscal year the platform expects to exceed the target of $14 billion in new issuance, and overall is on track to meet the target of $20 billion in annual new business by 2030. This target is expected to be achieved through an increase in deployment of guarantee products from all WBG entities. The WBG continues to work on product innovation with private sector feedback, from portfolio cover for funds and financial institutions; blended political and commercial risk cover; expansion of WBG trade finance capabilities; and combined first loss/second loss structures for sovereign credit enhancement for borrowings from private sector lenders. Work is continuing to try and ensure users of Political Risk Insurance are eligible for regulatory capital relief.
Foreign exchange risk: Currency volatility was identified by the Lab as one of the most significant barriers to investment. The WBG is developing solutions for foreign exchange risk mitigation, including increasing local currency financing. One-third of IFC’s long-term debt commitments are now in local currency – up from 20% in 2020, and 28% in 2023 – with a target of 40% by 2030. The WBG is reflecting on feedback on existing Transfer & Convertibility solutions to better help address risks for international investors.
- Other solutions for hedging or protecting long term currency risk for hard-currency funded projects continue to be actively pursued. In parallel, the WBG is working with IMF to deepen local capital markets in 20 countries.
Creating an EMDE Asset Class: The Lab identified early that the most effective way of unlocking large-scale institutional investment was by turning fragmented development assets into investable products. A key route identified was to distribute assets originated by the WBG, and eventually other development and commercial banks, to create a liquid, tradeable asset class. Liquidity requires greater issuance and for the WBG to work with the other MDBs and DFIs, and eventually private issuers, to standardize and package loan portfolios.
- In 2025, IFC’s inaugural Collateralized Loan Obligation issuance under the Emerging Market Securitization Program mobilized $510 million including a rated senior tranche, across a diversified portfolio of loans to 57 borrowers, an example of a critical shift from holding loans on its books to securitizing loans to mobilize private capital at scale.
- A working group of MDBs has also been launched to foster greater standardization of assets originated by various MDBs and develop distribution platforms that can pool MDB assets to achieve scale, diversification and liquidity. The MDB working group is also pursuing a pilot MDB debt fund transaction with a view to making tangible progress in its structuring by the World Bank Group Annual Meetings in October 2026. This work will involve close engagement with investors to get feedback and we look forward to continued support from Lab members in this process.
Junior Equity Capital: The Lab recommended tackling the shortage of early-stage risk capital that deters private investment in frontier markets. To achieve this, IFC has expanded its capacity to deploy junior equity by investing $100 million of its retained earnings into a new Frontier Opportunities Fund (FOF) with an initial target fund size of $500 million (of which $160 million has been raised in direct contributions and co-investment), deepening its ability to take on more complex risk positions and catalyze private sector investment for where it is needed most. The current pipeline of FOF stands at about $100 million.
Taken together, these changes contribute to an ongoing, structural shift in private capital mobilization and demonstrating the value of public-private insights and cooperation. There is much more to do, and the Lab’s upcoming CEO meeting will explore how to further advance this agenda.
Last Updated: Apr 01, 2026
