Deal opens fresh pathway for private capital into developing economies, listed on London Stock Exchange
By Damilola Abiola
The World Bank Group has announced a landmark step in its drive to mobilize private investment for developing economies, closing its first-ever securitization transaction through the International Finance Corporation (IFC).
The $510 million collateralized loan obligation (CLO) repackages IFC loans into rated securities, creating a brand-new asset class designed to meet institutional investment standards. By doing so, the Bank says it has unlocked opportunities for the world’s largest investors, including pension funds, insurance companies, and asset managers, to channel more capital into emerging markets.
“This is step one in an originate-to-distribute strategy that holds significant potential to attract private capital at scale,” said World Bank Group President Ajay Banga. “Mobilizing private investment at scale is essential to creating the jobs that give people a ladder out of poverty and begin the journey of changing a family’s trajectory for generations. It also frees up our balance sheet so we can support more countries and more private-sector players.”
The securitization, listed on the London Stock Exchange, attracted strong investor interest. It includes a $320 million senior tranche sold to private investors, a $130 million mezzanine tranche insured by a consortium of credit insurers, and a \$60 million equity tranche. Goldman Sachs acted as arranger for the deal.
Officials described the transaction as the first tangible step toward building a scalable and replicable originate-to-distribute model, an approach that allows the World Bank Group to recycle its own capital while drawing in much larger pools of private funding for development projects.
“This effort is about more than finance, it is about ambition,” Banga stressed. “The opportunity and the need are much larger, and so is our commitment to finding real-world solutions.”
The move also reflects priorities identified by the Private Sector Investment Lab, launched in June 2023 to address barriers to private sector investment in emerging markets. The World Bank Group says it will make regular issuances going forward, with the aim of expanding access to private financing for critical development projects worldwide