The World Bank has taken aim at streamlining processes and speeding projects along, and now it’s getting some help: meet mAI, a proprietary artificial intelligence tool.
The global anti-poverty lender is ramping up how it uses AI both internally and externally, with the goal to always “use AI in a meaningful, effective, and responsible way,” Harry Daniel Lersch, an AI strategist at the World Bank, tells me.
This is a preview of Devex Invested
Sign up to this weekly newsletter to get the insider brief on business, finance, and the SDGs in your inbox every Tuesday.
The bank is using AI to boost productivity and free up time spent on repetitive, routine tasks in favor of more complex, value-creating activities. It has also developed public tools that can dig through environmental, social and governance data, assess the climate resilience of building projects, and track the climate impact of critical mineral supply chains.
Lersch says generative AI — think ChatGPT, Google’s Gemini, or AI that can create new data content — has been a “game changer” that presents “a very big opportunity with vast potential.”
“As a bank, we have an obligation to also tap into this opportunity and explore how we can best use it at the service of our mission, and at the same time, we also want to make sure that we do this in an effective and responsible manner,” Lersch tells me.
With AI there’s a lot to explore — the upsides, the potential risks, and the practicality of how to use it. At Devex we’re digging deeper into the issue as part of Devex Pro Week 2024.
Read: How the World Bank is using AI (Pro)
Related: The World Bank’s top 10 contractors in 2024 (Pro)
+ Join us for our Pro Week event on AI today at 12 p.m. ET (6 p.m. CET) and hear from speakers from OpenAI, the Gates Foundation, and UN Women on practical uses of AI in grant and report writing, and demos of existing AI tools designed for global development. Can’t attend live? Register anyway and we’ll send you a recording.
Not yet a Pro member? Now’s a great time to join! In celebration of Pro Week, we're offering $100 off an annual membership. Sign up now to enjoy all of this week’s content.
BII the numbers
British International Investment’s 2023 annual report card is in, and it’s the last for outgoing chief Nick O’Donohoe. A few things stood out to me: the number of climate investments were down significantly from last year, far more of the new commitments are to financial services companies, and BII tripled the amount of guarantees it provided.
While O’Donohoe said it has been another “difficult year” from a macroeconomic and political perspective, and that large-scale currency devaluations made things even more challenging, he was still pleased with the U.K. development finance agency’s performance.
He also reflected on his seven years at the helm of BII — known as the CDC Group when he started in the post — and his goal coming in: to build a world-class finance institution that had development impact at its core.
“The strong institutional foundation that we've built is going to allow us to do much more, particularly in partnership with other financial institutions,” O’Donohoe said at an event last week, adding that “we’ve made progress, but there’s just a lot more to do.”
His advice for his successor: BII won’t move the needle unless it can mobilize large amounts of commercial capital.
So here’s how BII stacks up:
• £1.31 billion ($1.69 billion) in new commitments, about on par with the £1.27 billion made in 2022.
• £449 million, or 37%, of those new commitments went to climate finance. Notably this is down from nearly 50% that went to climate finance in 2022.
• 61% of funding to Africa, by far the most of any region, and up from 2022, while funding to Asia dropped and funding to the elusive “other” regions increased.
• 46% of funding went to financial services, the top sector for BII, followed by infrastructure, and food and agriculture. The percentage of funding to financial services nearly doubled.
• 3-times the amount of guarantees as 2022.
• $63 of private capital mobilized for every $100 BII committed.
Related: UK development finance arm makes bid to be world's 'most transparent'
One more bond
Last week I wrote a lot about different types of bonds, but I left one kind out: the peace bond, a new asset class based on the premise that peace leads to prosperity.
In an opinion piece for Devex, Fiona Reynolds, who chairs the steering committee for Finance for Peace, writes, “we need to talk about profitable investments that also contribute to peace and social cohesion.”
What could that look like? Investments in food storage, infrastructure, and energy. “Peace can unlock and de-risk investment opportunities in fragile frontier markets,” she writes. With a new standards committee, and a set of benchmarks and definitions, the group will introduce what they call a peace finance label.
Opinion: Peace bonds, the new asset class every investor needs to now
Fertilizer finance
A fund that aims to improve agricultural productivity in Africa by boosting fertilizer use has been struggling. Envisaged by African leaders in 2006 and finally operational by 2018, it appears to be limping along — and now has ambitious goals of deploying some $2 billion.
The Africa Fertilizer Financing Mechanism has around $36.5 million today, far short of what the African Development Bank says it needs. AfDB plans to scale up and transform the fund, part of a broader push from African leaders who pledged in May to triple fertilizer use in the next decade.
A new road map aims at both bringing in more funds and diversifying the types of instruments the mechanism can deploy, as well as “refining and streamlining how the Mechanism works,” the fund’s coordinator, Marie Claire Kalihangabo, tells Devex contributor Sophie Edwards.
“Raising awareness about the importance of fertilizer use to improve agricultural yields in Africa is central to the Africa Fertilizer Financing Mechanism’s mission — not only to help feed Africa, but also to position the continent toward becoming a breadbasket to the world,” Kalihangabo says.
We’ll keep an eye out on the effort, which could have transformative impacts on food security, but will have to do something differently than it has in the past.
Read: Africa needs $2B for a fertilizer fund. Can it raise the money? (Pro)
ICYMI: African leaders pledge to triple fertilizer use to improve soil quality
What we’re reading
Development banks seek to revive the Grand Inga hydropower complex, the world's biggest power project. [Bloomberg]
The World Bank eyes its first “drought” bond in the next 12-18 months. [Reuters]
New climate fund makes progress on a leader, but not on scale [Devex Pro]
How the G7 can meet IDA’s replenishment goal without any additional spend. [Center for Global Development]
A blended finance solution for African small businesses. [Devex Opinion]
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
