PARIS, June 22, 2023— The World Bank Group today launched the Private Sector Investment Lab, a concrete step in a broader effort to develop and rapidly scale solutions that address the barriers that prevent private sector investments. private sector in emerging markets.
Billions of dollars of investment are needed each year in emerging markets and developing countries to make adequate progress toward climate goals, manage the risks of climate change, and fight poverty. The scale of this challenge requires the private sector to play an important role alongside the World Bank Group and other development institutions.
The World Bank Group is approaching this work with urgency and determination, leveraging its leadership, knowledge and resources to achieve tangible results. The laboratory’s work will focus on increasing financing for the transition, with an initial sectoral focus on renewable energies and energy infrastructure. It will build on the World Bank’s current work to address existing barriers and ensure preference for ideas that can be implemented quickly.
The core group will be responsible for using new approaches and recommendations that support the mobilization of World Bank capital at the scale needed. This includes ideas for improving financing structures, ways to better align the World Bank Group with the needs and speed of mobilizing private finance, approaches to balancing and spreading risks among investors, and new partnerships, as well as other areas where there is an opportunity to better catalyze private investment.
Ajay Banga, President of the World Bank Group, announced the new initiative at the New Global Financing Compact Summit, alongside the lab’s two co-chairs – Mark Carney and Shriti Vadera.
Mark Carney is currently the UN Special Envoy for Climate Action and Finance and Co-Chair of the Glasgow Financial Alliance for Net Zero (GFANZ). In addition to his roles at the UN and GFANZ, Carney is the former governor of the Bank of England and the Bank of Canada, and is chairman and head of transition investments at Brookfield Asset Management, an asset manager global alternative assets. Shriti Vadera is currently Chairman of Prudential plc, an insurance and asset management company focused on Asia and Africa. Before that, she chaired Santander UK and worked for almost forty years at the intersection of business, finance, development and public policy, including as a UK Government Minister.
The Lab will be comprised of senior executives from the world of private finance and business who have experience in financing, investing and doing business in emerging markets and developing economies. This team will be announced in the coming weeks. They will work closely with experts from government, regulatory policy and civil society – across all regions and sectors.
The Lab will meet regularly and report directly to World Bank Group President Ajay Banga and World Bank Group leaders, including Axel van Trotsenburg, Hiroshi Matano, Anna Bjerde, and Anshula Kant. Makhtar Diop, Managing Director of the International Finance Corporation, will oversee coordination and serve as the daily point of contact within the World Bank Group.
Ajay Banga, President of the World Bank Group: “For years, the World Bank Group, governments and other multilateral institutions have attempted – unsuccessfully – to mobilize significant private investment in emerging markets. Given the urgency and scale of our interconnected challenges, we must try a new approach – and the World Bank Group has a central role to play in this effort using its resources, convening power and knowledge to catalyze private capital more effectively.
Mark Carney, UN Special Envoy for Climate Action and Finance and Co-Chair of GFANZ: “Investment in emerging markets and developing economies must quadruple. The status quo won’t work. Public institutions can and should do more to mobilize private finance, and private finance must work with development partners to create blended finance vehicles that can be rapidly scaled up. I therefore applaud Ajay’s leadership in establishing the World Bank’s Private Sector Investment Lab to bring together private finance, MDBs and development finance institutions. And I look forward to working with him and Shriti Vadera to help implement this critical piece of transition financing that the planet needs and its people deserve.
Shriti Vadera, Chairman of Prudential plc: “I am delighted that Ajay Banga is prioritizing how the World Bank can mobilize and attract private finance that would otherwise not be available for global public goods such as climate transition, growth and poverty reduction, and that it focuses on delivery and implementation, moving beyond promises and commitments to credible execution. And that’s why I’m so honored to work with him alongside Mark Carney, and I hope many other colleagues in the public and private sectors will try to make a real impact on the ground.
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