Due to the size of the problem, the private sector along with the World Bank Group and other development organisations will play a large role.

Each year, trillions of dollars must be invested in emerging markets and economically developing countries to achieve the necessary climate targets, manage climate change risks, and combat poverty.

The World Bank Group is pursuing concrete results by tackling this work with urgency and intention and by applying its leadership ability, knowledge, and resources.

Aim of the Lab

Scaling transition financing will be a key component of the Lab’s work, with the initial sectors of renewable energy and energy infrastructure as the primary focus.

The World Bank’s ongoing efforts to eliminate obstacles will be built upon, and a bias in favour of practical proposals will be maintained.

The core group will be tasked with putting innovative concepts and suggestions into practise so as to help the World Bank raise funds at the necessary scale.

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It will include suggestions for better financing arrangements, means of bringing the World Bank Group closer to the demands and pace of private finance mobilisation, methods of balancing and dividing risks among investors, new partnerships, and other areas where private investment can be better stimulated.

The Lab will be comprised of senior executives and financial experts who are experienced in financing, investing in, and operating businesses in emerging and developing markets.

They will hold frequent meetings and directly answer to World Bank Group President Ajay Banga and other top executives like Axel van Trotsenburg, Hiroshi Matano, Anna Bjerde, and Anshula Kant.

The International Finance Corporation’s managing director, Makhtar Diop, will be in charge of coordination and operate as a regular point of contact with the World Bank Group.

Ajay Banga, World Bank group president, said: “For years, the World Bank Group, governments, and other multilateral institutions have tried – and fallen short – to mobilise meaningful private investment in emerging markets. Given the urgency and scale of our intertwined challenges, we must try a new approach – and the World Bank Group has a central role to play in this effort by using its resources, convening power, and knowledge to catalyse private capital more effectively.”

Mark Carney, UN Special Envoy on Climate Action and Finance and co-chair of GFANZ, added: “Investment in emerging markets and developing economies must scale fourfold. Business as Usual will not work. Public institutions can and must do more to mobilise private finance, and private finance must work with development partners to create blended finance vehicles that can be rapidly scaled. I therefore welcome 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 deliver this vital component of the transition finance the planet needs and its people deserve.”