The World Bank Group announced a big jump in private capital mobilization—from $35 billion in FY22 to $112 billion in FY26. Drawing on advice from its Private Sector Investment Lab, the bank got there by expanding the tools available to investors and speeding up to move on a similar timeline as the private sector. The result reflects the group’s ability to innovate and push boundaries—and the strong backing from senior management and shareholders to let it do so. This progress and focus are commendable.
As is often the case, though, good work is rewarded with more work. The challenges now are further boosting impact and unifying ambition across the multilateral development bank (MDB) system.
First, doing more is just one part of the equation: we also need to stress-test that higher mobilization numbers are having greater impact. A key question remains where the World Bank—and its private sector window, the International Finance Corporation (IFC)—sits on the risk-taking ladder. As a public development institution, IFC should be consistently taking more risk than private investors. Assessing whether it’s doing so requires a look at the details behind the topline numbers. Which countries, which sectors, and what kinds of instruments are doing the mobilizing? Did these investments require public support that strained budgets? Is IFC building new markets for private investment versus investing in projects that would likely have happened on their own? With this information, shareholders will have a clearer picture of what more the World Bank can do to boost impact—likely moving further into catalytic, risk-taking instruments like equity and local-currency financing, and doing more in less-developed sectors and economies.
Second, the focus on impact and greater risk-taking needs to go beyond the World Bank. The private-sector windows of the other MDBs are pushing similarly heightened ambition on private capital mobilization targets, though at different stages. For example, IDB Invest, part of the Inter-American Development Bank Group, recently closed a capitalization process to expand its balance sheet and was the first development finance institution to adopt originate-to-share as its core business model. The European Bank for Reconstruction and Development mobilized €27 billion in 2025 and has partnered with the UK to launch a task force to bring together investors, banks, insurers, and public institutions to mobilize greater private investment in emerging markets. With a systemwide effort to take on more risk, including in private sector financing, the MDBs can hone their comparative advantages, benefit from each other’s innovations, and develop more standardized and scalable initiatives across the system.
The G20: The right time and the right place for a system-wide push on MDB private sector window risk-taking?
The G20 is uniquely positioned to drive systemic change across the MDB system, as its members hold a supermajority of voting shares. As the 2022 Capital Adequacy Framework Review demonstrated, the G20’s comparative advantage in development finance lies in bringing together senior officials, who can issue high-level instructions that are carried back to individual MDB boards. Unlike single-institution boards, the G20 can take a holistic top-level view across the entire system. And finance ministers and leaders can make the decisive political calls needed to break through technical board-level deadlocks.
The goal of engaging the private sector and mobilizing more private investment is also uniquely popular in the G20. The recent chair’s statement from the US-hosted G20 finance ministers meeting included an entire paragraph affirming “the private sector’s critical role in driving broad-based economic growth, job creation, and innovation.” Yet, recent meetings have been short on specific initiatives in this space, and the G20 under the United States has unfortunately abandoned efforts to expand MDB financing capacity and resource deployment. A focus on the private sector windows could be the hook to channel G20 attention and ambition toward more tangible ways to enable private investment and drive forward the broader MDB reform agenda.
What can the G20 do beyond words of support?
CGD colleagues have already written—here and here—about the opportunity to use the upcoming G20 year to recalibrate MDB private-sector risk-taking to incentivize higher mobilization numbers and greater impact.
Specifically, the UK could use its G20 year to dig into the question of whether the MDBs have the risk appetite and business models needed to play a more catalytic role—and if not, what needs to change? Similar to the G20 engagement with the MDB CAF Review, the G20 could then identify specific reform priorities to be carried out across institutions. Just as important, the exercise would give MDB management the political space to keep innovating and pushing the boundary on risk for even better development results.
With work already underway across the MDBs—and what looks like near-universal recognition of the need to enhance private investment as part of the development finance mix—this initiative should be pushing on an open door at the G20. Done right, it could mean real impact, to the tune of hundreds of billions of dollars to support jobs, productive capacity, and more resilient infrastructure in low- and middle-income countries without adding further burden to government budgets.
