World Bank holds talks with dozens of nations on crisis financing support

KUALA LUMPUR, 12 OCTOBER 2026 —

World Bank Engages 30-40 Nations in Crisis Aid Talks as Energy Shocks and Debt Pressures Mount

The World Bank is in advanced discussions with 30 to 40 developing nations to deploy emergency financial support—potentially tapping into a $50 billion to $60 billion war chest—as soaring energy prices, fertilizer costs, and the looming El Niño weather phenomenon deepen economic strain, World Bank President Ajay Banga told Reuters in an exclusive interview ahead of this week’s IMF-World Bank annual meetings.

While the global economy has shown resilience—partly due to AI-driven investments and oil supply-demand adjustments—the initial $25 billion crisis fund announced after the Middle East conflict escalated in late February has seen limited uptake. Yet, with diesel and fertilizer prices spiking, and fiscal buffers still depleted from COVID-19 recovery efforts and post-Ukraine inflation, demand for liquidity is now rising.

Banga warned that "over the coming months, more countries will come for some slice" of the expanded funding pool, which includes an additional $35 billion that can be redirected from existing World Bank projects.

The urgency is compounded by debt servicing pressures: the World Bank estimates developing economies will owe $400 billion in external debt by 2026, with one-third of that total going toward interest payments alone. Many nations, still grappling with high borrowing costs and shrinking tax revenues, are turning to the World Bank not just for immediate cash but for project restructuring—a preference Banga highlighted as a key trend.

If conditions deteriorate further, the bank could mobilize up to $100 billion, surpassing the $70 billion deployed during the pandemic.

Banga’s push for expanded crisis aid comes as the World Bank itself has doubled its private capital mobilization, raising a record $112 billion in the fiscal year ended June 2026—up from $69 billion the prior year and more than triple the 2022 total. Combined with $123 billion in public funds, the bank’s total deployment reached $235 billion, a figure that underscores its growing role as a financial lifeline amid shrinking Western bilateral aid.

"There is no one-size-fits-all solution," Banga said. "You have to tailor the response to each country’s needs."

The surge in private capital—$50 billion in upper-middle-income nations like Argentina and India, and $37 billion in lower-middle-income economies such as Bangladesh and Angola—has been uneven. While Latin America and the Caribbean led with $36.3 billion, Africa saw $22 billion, and South Asia $19.2 billion, low-income countries remain underserved, with private flows stagnating at just $3 billion.

To address this, the bank will unveil new initiatives this week aimed at micro, small, and medium enterprises (MSMEs), a critical gap in global financing.

Banga attributed the private capital boom to expanded political risk guarantees from the bank’s Multilateral Investment Guarantee Agency (MIGA), local currency financing growth, and regulatory reforms easing foreign investment. Yet challenges persist, particularly in smaller economies, where "it hasn’t multiplied enough," he acknowledged.

The top 10 recipients of private capital last year were Brazil, India, Turkey, Romania, Nigeria, Argentina, South Africa, Bangladesh, Mexico, and Chile, reflecting a regional and income-level disparity in access to global capital.

To tackle the debt crisis, the World Bank and IMF are collaborating on portfolio-based guarantees, debt-for-development swaps, and revenue-enhancement programs. Already, Angola and Ivory Coast have benefited from such swaps, while Argentina secured a portfolio guarantee. With 14 to 15 additional projects in the pipeline, the bank is working to replace high-cost debt with lower-interest loans, redirecting savings toward education, healthcare, water, and climate programs.

"The difference goes straight into critical sectors," Banga explained, emphasizing that these measures are "not just about debt relief—they’re about unlocking growth."

As the IMF-World Bank annual meetings begin, the focus will sharpen on whether the $50 billion to $60 billion crisis fund can be deployed swiftly enough to offset energy shocks, El Niño risks, and debt servicing burdens. With 30 to 40 countries already in talks, the bank’s ability to balance private capital mobilization with public sector support will determine whether developing nations can weather the storm—or face deeper fiscal crises.

The next critical test will be whether low-income nations, long overlooked in private capital flows, can finally access the tools needed to stabilize their economies.

Related: Ajay Banga