The World Bank Group’s institutions have unique financial models that are efficient and amplify the impact of every dollar received – delivering substantial value for shareholders. Capital contributed by shareholders helps borrow money from capital markets at very low cost that is on-lent to clients. The income that is generated more than fully covers our running costs and we can then provide concessional grants to the world’s poorest countries, supporting their efforts to create new jobs.
Since their inception, three of World Bank Group’s institutions (IBRD, IFC and MIGA) have received $29 billion in total from shareholders, leveraging that amount to deliver about $1.5 trillion in grants, loans, guarantees, and equity investments to developing countries, a multiple of over 50 times. The resulting assets have generated enough income to contribute $24 billion to IDA, our fund for the world’s poorest countries. In turn, IDA has turned this and other donor contributions into more than $567 billion in grants and highly concessional loans.
On top of the financing that we provide to clients from our own resources, the World Bank Group also mobilizes capital from private investors for development, further multiplying our impact. In fiscal year 2025, the World Bank Group mobilized $69 billion in private capital, up from $47 billion two years earlier.
Recent Innovations
We are constantly innovating our financial model to build a better, more efficient, and bigger World Bank Group, one that is equipped to address urgent, overlapping global challenges.
Since 2023, we have delivered several new financing instruments and made changes to our financial model that have made us even more efficient and attractive. For example,
IBRD lowered its policy minimum equity-to-loans ratio to 18 percent from 20 percent, generating the potential for $70 billion in new lending capacity over 10 years. This prudent increase in our risk appetite was enabled by new protections that safeguarded our triple-A rating, including a strengthened credit rating monitoring system and contingency measures to restore IBRD’s financial health in a stress event.
IBRD increased limits for shareholder bilateral guarantees and implemented a guarantee from the Asian Infrastructure Investment Bank, generating a further $10 billion in lending capacity.
Other innovations include a shareholder hybrid capital instrument and a Portfolio Guarantee Platform. So far, 14 shareholders have made pledges for the two instruments, which can be leveraged to expand financial capacity by close to $20 billion over 10 years.
Marshalling the private sector
We are stepping up our efforts to mobilize private capital. In FY25 alone, around $79 billion was raised from bonds issued to private investors as part of IBRD, IDA and IFC’s sustainable business models. These funds raised from the private sector go to fund the World Bank Group’s mission. IBRD also pioneered Outcome Bonds that link financial returns to measurable development outcomes. Outcome bonds amounting to $625 million have been issued since the first one was issued in 2021. Examples include a Wildlife Conservation Bond that measured success based on the growth of the Black Rhino population and supported wildlife and local communities in South Africa, and a plastic waste reduction-linked bond, which channeled private capital to two projects in Ghana and Indonesia that aim to reduce and recycle plastic waste in vulnerable communities, cutting plastics leaking into nature and oceans. The largest outcome bond – a $225 million Amazon Reforestation-linked bond – was issued in August 2024. Investors will forgo parts of their coupon payments that are used to support Amazon reforestation projects and in turn will receive payments from monetized carbon credits generated from the supported projects.
Building a New Asset Class
The World Bank Group is pioneering new ways to attract institutional private capital into emerging markets. Our private sector arm, the International Finance Corporation, closed its inaugural $510 million securitization deal in September 2025, pooling a globally diverse portfolio of high quality IFC-originated assets spanning multiple sectors and geographies in emerging markets. This collateralized loan transaction is a step towards creating a new asset class and opens the door to the world's largest pools of capital - pension funds, insurance companies, and asset managers – to invest more substantially in emerging markets. Additionally, it allows the World Bank Group to mobilize private investment at scale while recycling capital to support more developing countries and projects.
These efforts to mobilize private sector investment amplify our impact, make progress toward our development goals, and empower businesses to flourish in sectors that are critical to job creation.
We are also connecting global insurance companies to impact-driven opportunities in emerging markets. IFC’s credit risk insurance facility enables global insurance companies to partner with IFC to gain exposure to high-impact transactions while allowing IFC to significantly expand its lending capacity—thereby helping companies grow, create jobs and drive economic development. We are working to help clients manage exchange rate volatility by incentivizing local currency lending. For example, IFC is scaling up its local currency pool programs in Mexico, Brazil, Colombia, and South Africa and seeking to expand the program elsewhere. IFC is also setting up local currency borrowing lines with domestic banks, kicking off with transactions in Kenya that will be replicated elsewhere.
Another innovation is a new “multi-layer” foreign exchange facility that provides investors with a liquidity backstop in the event of non-payment by a state-owned enterprise, caused by unexpected local currency depreciation.
Making our loans more accessible and affordable
In a move to better serve countries and to ease costs, IBRD introduced a series of changes to its financing terms in October 2024, which made our loans more accessible and affordable. Changes include:
- A grace period for paying commitment fees on undisbursed balances
- Removing the pre-payment premium to widen clients’ repayment options
- Discounted pricing for short maturity loans with a final maturity of seven years
- Extending IBRD’s lowest pricing to more vulnerable, small states
Incentives have also been introduced for both donors and borrowing countries to increase investments in eight global challenges with a cross-border impact: climate change mitigation and adaptation, biodiversity, food and nutrition security, water security and access, energy access, fragility and conflict, pandemic prevention and preparedness, and enabling digitalization.
The Framework for Financial Incentives (FFI), approved by the World Bank’s Board of Executive Directors on April 9, 2024, includes measures to help borrowing countries access more funding and price incentives to reduce costs for eligible projects. It is the first holistic framework among MDBs to provide dedicated financing for projects that benefit multiple countries. The FFI includes the creation of the Global Solutions Accelerator Platform, which provides additional financing for projects that address global challenges. As of June 2025, 17 projects have been awarded FFI support.
Financing Solutions During Tough Times
We are also providing fiscal solutions to countries in the face of climate, health and other crises. In April 2024, we executed five catastrophe bond renewals totaling $745 million, including four Mexico catastrophe bonds providing $595 million in coverage against earthquake and hurricane disaster risks, and one Jamaica catastrophe bond providing $150 million in coverage against named storm risks. As of September 2025, we have helped countries transfer $6.5 billion of disaster risk to international markets. Of this amount, $1.4 billion addressing earthquake and hurricane risks in Chile, Jamaica, and Mexico are outstanding.
Another important tool in World Bank Group Crisis Response Toolkit is the Climate Resilient Debt Clause, which allows IBRD and IDA small state borrowers the option to defer interest and principal loan payments for up to two years in the case of all natural disasters, including droughts, floods and health emergencies like pandemics. So far, 22 countries have signed up for this clause and one country, St Vincent and the Grenadines, exercised this option following Hurricane Beryl in 2024.