World Bank Expands Private Sector Lab to Tackle Investment Barriers in Developing Nations

The World Bank has added four prominent business leaders to its Private Sector Investment Lab, a high-level group formed to identify and remove obstacles to private investment in developing economies. Among the new members are Bill Anderson, CEO of Bayer AG, and Mark Hoplamazian, CEO of Hyatt Hotels Corporation.

The Lab, launched in June 2023 by World Bank President Ajay Banga, brings together top global executives to develop strategies for increasing private sector involvement in job creation and economic development. Banga, the former CEO of Mastercard, has made employment generation a core focus of his leadership, highlighting a pressing gap between the 1.2 billion young people expected to enter the labor force in developing countries over the next decade and the projected availability of just 420 million jobs.

“You can’t get jobs without development, and you don’t get poverty alleviation and development without jobs,” Banga said in an interview with CNBC.

With the latest additions, the Lab now includes 19 members representing sectors essential to employment, including infrastructure, healthcare, manufacturing, tourism, and agribusiness. Joining Anderson and Hoplamazian are Sunil Bharti Mittal, chair of Bharti Enterprises, and Aliko Dangote, president and CEO of Dangote Group.

The initiative has outlined five key focus areas: regulatory and policy certainty, political risk insurance, foreign exchange risk, junior equity capital, and securitization. These are seen as critical levers for unlocking investment and driving inclusive growth.

“With the expanded membership, we are mainstreaming this work across our operations and tying it directly to the jobs agenda that is driving our strategy,” Banga said. “It’s about helping the private sector see a path to investments that will deliver returns and lift people and economies alike.”

The Lab’s founding members include executives from financial powerhouses such as AXA, BlackRock, HSBC, and Temasek. Shriti Vadera, Chair of Prudential Plc, serves as the Lab’s chair.

The World Bank says it has already begun implementing some of the Lab’s proposed solutions. For example, recent reforms to guarantee instruments have led to a 30% increase in issuances, helping to boost investor confidence. Meanwhile, the International Finance Corporation (IFC), the bank’s private sector arm, is ramping up its local currency financing efforts, with a goal of reaching 40% of long-term financing in local currency by 2030.

In addition, the bank is collaborating with institutional investors like BlackRock and S&P to standardize and securitize investment portfolios, a move aimed at unlocking capital from pension funds, insurers, and sovereign wealth funds to fuel growth in emerging markets.