New Pathways Towards Mobilizing Private Capital

The World Bank highlights a shift from solely financing assets to financing risk capital to mobilize private capital more effectively, especially for climate and development needs. 

Amid fiscal constraints and private sector hesitation due to risk-return mismatches, the Bank proposes using its funds for de-risking, in partnership with governments, to attract investment. Examples from Rwanda, Turkiye, and others show success in leveraging small public contributions to attract much larger private investments. While risks remain, careful structuring—such as first-loss guarantees and credit enhancements—can yield scalable results. 

This strategy stretches limited public funds, boosts development outcomes, and aligns with the Bank’s sustainability and capital mobilization goals. Countries like India and Malawi are also independently applying this approach. Broader reforms and capacity-building are essential to sustain and scale these initiatives.