Islamabad, Oct 24,2026: Global development financing is gaining momentum as the World Bank Group mobilised a record $112 billion in private capital during fiscal year 2026, reflecting growing international efforts to channel investment into developing economies facing high borrowing costs and limited public resources.
The figure represented more than a threefold increase from $35 billion in FY2022. Combined with the World Bank Group’s own resources, total financing and capital mobilisation for developing economies exceeded $200 billion during FY2026.
The institution also issued more than $25 billion in guarantees, surpassing four years ahead of schedule its previous target of reaching $20 billion in annual guarantee issuance by 2030. Its financing through loans, grants, equity investments and guarantees reached $123.5 billion during FY2026.
The expansion has extended to middle-income economies, with private capital mobilisation in lower-middle-income countries increasing from $14 billion in FY2022 to $37 billion in FY2026. Mobilisation in upper-middle-income countries rose from $12 billion to $50 billion, while the corresponding figure for Africa increased from approximately $9 billion to $22 billion.
Dr Uzma Zia, Senior Research Economist at the Pakistan Institute of Development Economics (PIDE), told Wealth Pakistan that the emerging development financing model increasingly focused on using multilateral resources to attract larger pools of private investment rather than relying exclusively on conventional sovereign lending.
“The important shift is that development institutions are trying to use their capital more strategically. Guarantees, co-financing and risk-sharing mechanisms can make projects in developing economies investable for institutions that might otherwise consider the risk too high,” she said.
Zia said the approach could be particularly beneficial for developing countries facing substantial infrastructure and development financing requirements but lacking sufficient fiscal capacity to undertake large-scale projects through additional public borrowing.
She explained that guarantees and risk-sharing arrangements could encourage private investors to participate in projects that might otherwise be considered too risky, helping developing economies diversify their financing sources.
“The advantage of blended financing is that public and multilateral institutions can absorb or reduce some risks while private investors provide additional capital. That can potentially extend maturities, lower financing costs and make projects in infrastructure, energy and productive sectors easier to fund,” she said.
The World Bank is also expanding cooperation with other multilateral development banks to increase financing opportunities and strengthen coordination on development projects.
At the 2026 Annual Meetings, World Bank Group President Ajay Banga said the co-financing pipeline had tripled in two years to approximately 250 projects seeking $138 billion in financing.
Balance-sheet reforms have also created more than $100 billion in additional potential lending capacity for the International Bank for Reconstruction and Development (IBRD) over the coming decade.
The expansion reflects efforts by multilateral institutions to use their existing resources more effectively while encouraging greater private-sector participation in infrastructure and other development projects.
The International Monetary Fund (IMF) is separately maintaining concessional financing channels for lower-income economies facing external financing pressures.
Its Poverty Reduction and Growth Trust (PRGT) is expected to have a self-sustaining annual lending capacity of approximately SDR 2.7 billion, while demand for PRGT financing is projected at SDR 3 billion to SDR 5 billion annually during 2026 and 2027.
The financing push comes as developing economies face a challenging growth environment. World Bank projections released during 2026 indicate slower growth in developing economies amid elevated energy costs, inflation and expensive external financing.
These pressures are increasing the importance of attracting long-term investment without further weakening public debt sustainability.
For countries with limited fiscal resources, greater use of guarantees, co-financing and private capital mobilisation could provide additional options for financing infrastructure, energy and productive economic activities.
Zia, however, cautioned that the availability of international financing instruments would not automatically translate into greater investment in every developing economy.
She said countries needed to strengthen their regulatory frameworks, improve project preparation and establish credible institutions capable of attracting and managing long-term investment.
“More global capital becoming available does not automatically mean it will reach every developing economy. Countries need transparent regulation, bankable projects and credible institutions. Those that can combine these conditions with multilateral risk-sharing mechanisms will be in a much stronger position to attract long-term investment,” she said.
For Pakistan, the expanding international development financing framework could create opportunities to attract investment in infrastructure, energy and other productive sectors, particularly through commercially viable projects backed by multilateral support.
However, benefiting from these opportunities would require stronger project preparation, transparent regulations and effective coordination between public institutions, development partners and private investors.
The World Bank Group’s record private capital mobilisation, expanded guarantee issuance and growing cooperation with other development banks highlight a shift towards using multilateral resources to attract additional investment rather than relying solely on conventional lending.
For developing economies, this approach offers an opportunity to bridge the gap between constrained public resources and the larger pools of institutional capital needed to support infrastructure development, productive investment and sustainable economic growth.
