He outlined five Private Sector Investment Lab priorities for attracting investment into emerging markets:
- Regulatory certainty: Improve governance and business regulations to strengthen investor confidence. About 25–26% of World Bank financing in the past year supported regulatory reforms.
- Stronger investment guarantees: Expand the World Bank’s Unified Guarantee Platform to simplify access to guarantees and reduce risks for private investors.
- Local-currency financing: Use currency swaps with local banks to manage long-term exchange-rate risks, enabling the International Finance Corporation (IFC) to provide roughly 36–37% of its lending in local currencies.
- First-loss protection and capped returns: Use junior equity and capped-return structures to distribute investment risks. The IFC’s Frontier Opportunities Fund, initially capitalised with US$100 million of IFC’s retained earnings and designed to attract philanthropic support, aims to absorb initial losses and encourage private investment.
- New investable asset classes: Develop emerging-market projects into standardised investment products suitable for pension funds, insurers and other institutional investors.
Banga prioritised low-income, fragile and conflict-affected countries, alongside micro, small and medium-sized enterprises, for private investment next year.
Turning public backing into investable assets
Shriti Vadera, chair of the Private Sector Investment Lab, emphasised implementation rather than further reports.
The World Bank Group mobilised US$112 billion in private capital in the 2026 financial year, more than three times the US$35 billion recorded in 2022. She urged measuring success by capital reaching recipient countries, not by the bank’s own lending.
Vadera called for standardised loan-backed investment products, more equity financing and programmes that can be scaled up. She wants the Group of Twenty (G20) to prioritise private capital mobilisation over the coming year and MDBs to develop a shared investment platform.
Shemara Wikramanayake, Macquarie Group’s managing director and chief executive, stressed that capital drawn from pension funds and personal savings could flow into emerging markets only when returns justified the risks.
MDBs and development finance institutions could attract investors through guarantees and by taking on difficult risks.
Macquarie has invested more than US$17 billion in emerging markets, including India, Brazil, Mexico and the Philippines, over 15 years.
Wikramanayake highlighted plans to work with IFC on an electricity-grid project in Mexico and with the Green Climate Fund on electric vehicle leasing in India. She called for another two or three pilot partnerships, potentially including electric vehicle finance in Southeast Asia.
Building investment pipelines for institutional investors
In a separate “Investor Pulse” discussion moderated by Douglas Peterson, former president and chief executive of S&P Global, panellists examined creditworthiness, government policy and project bankability.
Michael Wehrle, BlueOrchard’s chief executive, argued that strong businesses alone did not guarantee institutional investment. Investment products must also meet investors’ requirements for currency, liquidity, risk, returns and legal structure. Combining IFC’s loan-origination expertise with BlueOrchard’s 25 years of investment-management experience, the partners aim to scale an originate-to-distribute model to US$2 billion or more.
For Wehrle, successfully mobilising private capital requires three conditions:
- Investment pipeline: Develop a consistent pipeline of projects that can be replicated and translated into actual investment transactions.
- Investment structure: Ensure fund structures and financial instruments meet investors’ accounting requirements, regulatory capital requirements, cash-flow needs and credit-rating criteria.
- Risk allocation: MDBs need not absorb all investment risks but should focus on risks that cannot be adequately addressed through pricing, using tools such as first-loss positions, guarantees and currency-risk solutions.
Atsi Sheth, chief credit officer at Moody’s Ratings, noted that government-related risks accounted for only about a third of defaults in emerging-market project finance, with corporate and industry factors responsible for the rest.
Investors increasingly compare these opportunities with global alternatives, including artificial intelligence supply chains and renewable energy, she explained. Diversified portfolios reviewed by IFC or the World Bank could help smaller businesses reach investors seeking investment-grade assets.
Renewable energy, market rules and trust
Basma Bentaher, chief development officer at AMEA Power, identified four obstacles to renewable energy investment: inadequate electricity grids, unclear government plans and power-purchase agreements, risk-sharing arrangements and return expectations that fall short of bankability standards, and gaps between perceived and actual risks.
AMEA Power has secured a political-risk guarantee framework worth nearly US$1.5 billion from the Multilateral Investment Guarantee Agency (MIGA), covering 23 solar, wind and energy storage projects.
Bentaher also cited liquidity support for an East African wind project and urged development lenders to offer simpler, standardised guarantees and faster approvals.
UK Foreign Secretary Ed Miliband highlighted pressures on developing countries from conflict, climate change, Covid-19 and rising food and energy costs.
He cited the UK’s MOBILIST initiative, under which US$50 million in public equity investment had helped attract approximately US$1 billion from IFC and institutional investors.
Miliband identified three priorities for unlocking private investment:
- Data and information: Provide investors with higher-quality data and clearer evidence of actual asset performance.
- Risk mitigation: Develop appropriate risk-management tools, including protection against currency fluctuations.
- Rules and regulations: Review prudential regulations and credit-rating requirements that influence institutional investment decisions.
Ashishkumar Chauhan, managing director and chief executive of India’s National Stock Exchange, attributed its expansion to automated trading, strong governance and enforceable contracts.
The exchange now serves 135 million retail investors holding 270 million accounts. Chauhan credited free access to market and company information, including by mobile phone, with strengthening investor confidence.
Faheen Allibhoy, J.P. Morgan’s managing director and global head of development finance and advisory, emphasised standardised contracts, liquid assets and structures compatible with institutional capital requirements.
World Bank and MIGA guarantees can reduce banks’ risk-weighted assets, while local-currency lending can ease financing for emerging-market companies.
Jean-Paul Servais, chair of Belgium’s Financial Services and Markets Authority and of the International Organization of Securities Commissions (IOSCO), argued that effective regulation must reflect individual national circumstances.
IOSCO spans 130 jurisdictions. Its ACCELERATE initiative with the World Bank helps countries identify weaknesses, learn from neighbours and tailor capital-market reforms.
Participants identified three priorities: viable investment pipelines, effective risk-sharing tools and transparent, trustworthy domestic capital markets. Together, these could channel global savings into investment, infrastructure and jobs in emerging economies.
