The World Bank Group, through its private sector arm, the International Finance Corporation, has completed its first securitisation transaction, marking a milestone in the global effort to channel private institutional capital into emerging markets.
In a statement sent to Saturday PUNCH, the lender disclosed that the $510m collateralised loan obligation represents the first tangible step in IFC’s broader strategy to establish an “originate-to-distribute” model for investments in developing economies.
The transaction involves repackaging IFC’s loan portfolio into rated securities, thereby creating a new asset class that meets the risk and return requirements of global institutional investors, including pension funds, insurance companies, and asset managers.
According to IFC, this approach is expected to unlock access to the world’s largest pools of capital while freeing up its balance sheet to finance additional projects across developing countries.
World Bank Group President, Ajay Banga, said the initiative underscores the institution’s ambition to mobilise private investment at scale, describing it as crucial for long-term economic transformation.
“Mobilising 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,” Banga said.
“This is step one in an originate-to-distribute strategy that holds significant potential to attract private capital at scale. It also frees up our balance sheet so we can support more countries and more private-sector players. The opportunity and the need are much larger, and so is our ambition.”
The deal has already attracted significant interest from investors and was listed on the London Stock Exchange. It features a $320m senior tranche purchased by private investors, a $130m mezzanine tranche insured by a consortium of credit insurers, and a $60m equity tranche.
Goldman Sachs acted as the arranger for the transaction, which is expected to serve as a scalable and replicable model for future issuances. The World Bank Group said it would continue launching regular issuances under this framework, reinforcing its commitment to building a sustainable pipeline for private-sector participation in development finance.
The structure of the deal is designed to address two critical challenges facing development financing. Firstly, it creates a vehicle that gives institutional investors exposure to emerging market credit opportunities that are typically out of their reach. Secondly, it enables the IFC to recycle capital and expand its lending to high-impact projects in countries most in need of support.
The originate-to-distribute approach was one of the key recommendations of the Private Sector Investment Lab, an advisory body established in June 2023. The Lab was tasked with identifying barriers to private-sector investment in emerging markets and designing practical solutions.
By securitising its portfolio, the IFC is demonstrating how innovative financial instruments can bridge the gap between global investors’ appetite for yield and the financing needs of developing nations.
Development experts note that such initiatives are vital for meeting the massive infrastructure, energy, and social investment requirements of low- and middle-income countries. With public funding and traditional aid flows proving insufficient, attracting private capital has become a cornerstone of the World Bank’s strategy under Banga’s leadership.
Analysts believe the success of this transaction will encourage similar models across other development finance institutions, setting the stage for a broader mobilisation of private capital into regions often overlooked by mainstream markets.
For the World Bank Group, this pioneering securitisation is not only a financial innovation but also a signal of its evolving role—transitioning from being just a lender to becoming a catalyst for large-scale investment flows into developing economies.
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