World Bank Group Expands Private Sector Investment Lab to Boost Job Creation

The World Bank Group Scales Private Sector Investment Lab with New Members and Bold Implementation Strategy to Tackle Job Creation in Developing Economies.

The World Bank Group has launched the next phase of its flagship Private Sector Investment Lab (PSIL), shifting from ideation to implementation with a sharp focus on scaling investment solutions and boosting job creation in developing economies. This new chapter also sees a significant expansion of the Lab’s membership, bringing in heavyweight business leaders from industries that drive employment such as infrastructure, agribusiness, energy, healthcare, manufacturing, and tourism.

President Ajay Banga emphasized the dual purpose behind the Lab’s new direction, stating, “This isn’t about altruism—it’s about helping the private sector see a path to investments that will deliver returns and lift people and economies alike. It’s central to our mandate.”

From Problem Diagnosis to Action: Five Strategic Focus Areas

During its first 18 months, the Lab convened financial institutions and development leaders to diagnose core obstacles impeding private investment in low- and middle-income nations. The research yielded five strategic pillars now being embedded across World Bank Group operations:

1. Regulatory and Policy Certainty Countries need reliable, transparent regulatory frameworks to attract sustained capital. For example, connecting 300 million Africans to electricity hinges on upfront policy clarity to reduce investor risk and mobilize financing.

2. Political Risk Insurance Simplified and expanded guarantee instruments have increased issuance by 30% over the past year. This progress helps the World Bank Group move closer to its ambitious goal of tripling the use of guarantees by 2030—vital for de-risking investments in volatile regions.

3. Foreign Exchange Risk Mitigation Local currency financing is scaling up to stabilize returns and deepen domestic capital markets. In 2024, the International Finance Corporation (IFC) delivered one-third of its long-term financing in local currency, aiming for 40% by 2030.

4. Junior Equity Capital The newly created Frontier Opportunities Fund—seeded with IFC income and open to donor contributions—is designed to absorb early-stage investment risks and unlock capital for entrepreneurs in emerging markets.

5. Securitization and Portfolio Standardization Collaborations with financial giants like S&P and BlackRock are driving the securitization of standardized portfolios, unlocking institutional capital from pension funds, insurers, and sovereign wealth funds.

An Expanded Coalition: Industry Leaders Join the Lab

Recognizing that job creation requires expertise from sectors with real employment-generating potential, the Lab is welcoming new members with proven track records in building economies from the ground up:

• Bill Anderson, CEO, Bayer AG

• Sunil Bharti Mittal, Chair, Bharti Enterprises

• Aliko Dangote, President & CEO, Dangote Group

• Mark Hoplamazian, President & CEO, Hyatt Hotels Corporation

These additions bring unique perspectives and operational experience to the Lab. For instance, Sunil Bharti Mittal noted, “Connectivity transforms lives by creating opportunities for businesses to grow and communities to thrive. I’m excited to support the Lab in expanding this kind of impact.”

Likewise, Bill Anderson underscored the potential of private sector partnerships in catalyzing inclusive growth, stating, “Together, businesses and the WBG can unleash job creation in emerging markets by managing the risks and realizing the opportunities for the next generation growing up in low and middle income countries.”

Building on a Strong Foundation

The Lab is chaired by Shriti Vadera, Chair of Prudential plc, who praised the achievements of its inaugural phase and laid out a continued focus on the five core workstreams. Founding members such as AXA, BlackRock, HSBC, Macquarie, Mitsubishi UFJ Financial Group, Ninety One, Ping An Group, Royal Philips, Standard Bank, Standard Chartered, Sustainable Energy for All, Tata Sons, Temasek, and Three Cairns Group remain instrumental in providing direction and support.

Vadera emphasized, “We welcome our new members’ support in continuing our focus… and creating an asset class and liquid market to attract institutional funds.”

From Innovation to Implementation

As the Private Sector Investment Lab transitions into its implementation phase, it symbolizes a critical evolution in how the World Bank Group collaborates with private industry—not just to innovate solutions but to scale them where they are needed most.

With the expanded coalition and refined focus areas, the Lab aims to bridge the gap between capital and communities, turning financial instruments into real-world development outcomes. The goal is to prove that strategic investment in emerging economies not only yields financial returns but lifts millions out of poverty through jobs, infrastructure, and opportunity.