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The World Bank Group, through its private-sector arm, the International Finance Corporation (IFC), has completed its first securitisation transaction—an initiative designed to unlock institutional capital for developing economies.

In a statement, IFC revealed that the $510m collateralised loan obligation is the first milestone in its new “originate-to-distribute” investment model. The deal repackages IFC’s loan portfolio into rated securities tailored to meet the risk and return profiles of global investors such as pension funds, insurers, and asset managers.

According to the IFC, the move is expected to open access to vast pools of international capital while freeing up its balance sheet for financing additional high-impact projects across developing countries.

World Bank Group President Ajay Banga described the transaction as a breakthrough in mobilising resources for long-term growth. “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,” he said.

He further explained, “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 transaction, already listed on the London Stock Exchange, consists of a $320m senior tranche bought by private investors, a $130m mezzanine tranche backed by a consortium of credit insurers, and a $60m equity tranche. Goldman Sachs acted as the arranger

The World Bank Group noted that the deal addresses two major development financing hurdles: creating access for institutional investors to emerging-market opportunities typically beyond their reach, and enabling the IFC to recycle capital for more projects in regions most in need.

The originate-to-distribute approach was a recommendation of the Private Sector Investment Lab, launched in June 2023 to identify barriers to private-sector investment in emerging markets and propose practical solutions.

Development experts argue that such innovative models are crucial to meeting the infrastructure, energy, and social investment needs of low- and middle-income countries. With aid and public funds proving inadequate, the Bank’s leadership has made private capital mobilisation a cornerstone of its strategy.

Analysts predict that this success could encourage other development finance institutions to adopt similar models, setting a new standard for global investment in underserved regions.

For the World Bank Group, this securitisation signals a broader shift—from acting solely as a lender to becoming a catalyst for large-scale private investment flows into emerging economies

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