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World Bank President Ajay Banga’s job requires navigating a variety of often competing interests and demands. His participation in U.S. President Donald Trump’s Board of Peace for postwar reconstruction in Gaza puts that challenge in the spotlight.
While it might not exactly set a new precedent, his involvement in an initiative some see as inherently political has sparked questions about the bank’s neutrality and potential harm to its reputation, including from bank staffers at a recent townhall, as Devex contributor Sophie Edwards reports. Others suggest the move could help the bank’s relationship with its largest shareholder, the United States.
Banga, who sits on the Board of Peace’s executive board, which is responsible for its operational work, said the bank will be “worker bees” bringing technical and financial expertise that will remain separate from the board’s political leadership, whom he referred to as the “deciders.” After the first Board of Peace meeting on Thursday, Banga added that the bank would leverage public finance, de-risk private investment, and offer the expertise of its staff.
“It’s an unusual move for a World Bank President, but these are unusual times,” Clemence Landers, vice president and senior policy fellow at the Center for Global Development, tells Sophie. “The Bank has fared much better than most multilateral organizations over the past year, and that’s likely the result of effective behind-the-scenes legwork. But there’s clearly real risk being closely associated with the Board of Peace, especially if it becomes enmeshed in dubious undertakings.”
The bank will also act as a “limited trustee” for the Gaza Reconstruction and Development Fund, which is designed to channel donor contributions to the Board of Peace. This role is not new for the bank — it is the trustee for 27 financial intermediary funds. But insiders question how much transparency this particular fund will have — pointing out that the bank does not have oversight over how funds are ultimately spent once transferred.
While it wouldn’t be a surprise to see the World Bank involved in a major post-conflict reconstruction, the Board of Peace is certainly a new approach for doing so. It comes with a $1 billion price tag to be a permanent member of the Board of Peace, and its charter has little in the way of environmental and social safeguards, anti-corruption measures, or independent evaluation. Some critics, including a senior bank insider, tell Devex that without the bank’s involvement, the board would be viewed as a purely political entity with no independent accountability. Other critics question the move because the Board of Peace model and structure is seen as an effort designed to bypass the United Nations and traditional multilateral frameworks.
Needless to say, many people will be watching how this plays out.
Read: World Bank chief’s role on Trump-led Board of Peace prompts questions (Pro)
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Show me the money
I’ve covered the U.S. International Development Finance Corporation since its inception — or really even before it actually existed — and as you read in Invested, last week I recently sat down with DFC investment chief Conor Coleman to learn about its new strategy. So I was closely watching the board meeting on Friday — the first in Ben Black’s tenure as CEO — to learn more about DFC’s direction.
These board meetings are always closed to the public, though the board held a 30-minute public hearing in advance in which organizations weighed in with advice or concerns about everything from DFC’s critical mineral strategy to energy projects and accountability at the agency.
When the post-meeting press release came out, I expected to see details of investments that had been approved, so I was surprised when there were few specifics. Typically, the agency will release some basic information, including project location, investment size, and intended purpose for at least some of the larger approved projects.
DFC said it had approved transactions in Africa related to critical mineral supply chains, energy security, economic development, and stability. But it added that it was not identifying the specific deals due to confidentiality considerations. The agency declined to comment on what type of concerns are involved but said it would comply with all necessary requirements including notifying the U.S. Congress.
A source familiar with DFC tells me that the agency has a mechanism to classify certain projects as sensitive either due to security or commercial interests while they are being finalized and that details should eventually be disclosed. But I also spoke to some experts who found the omission of details odd and questioned the agency’s transparency. “How can you support an organization when you don’t know what it is doing?” George Ingram, a senior fellow emeritus at the Brookings Institution, tells me.
Read: DFC board approves new Africa deals but keeps details private
ICYMI: Senior DFC official details agency's plans, new vision (Pro)
On the lookout
Last week, my colleague Ayenat Mersie scooped that the U.S. government is looking for a new cross-border infrastructure corridor project to pilot in Africa. It is seeking input from governments and businesses on which project to pursue, insiders told her at the African Union Summit earlier this month.
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The model is the Lobito corridor which links Angola, Zambia, and the Democratic Republic of Congo through a rail, road, and port network focused on improving trade especially when it comes to critical minerals. Lobito was considered a flagship project of former U.S. President Joe Biden’s administration on the continent but the Trump administration has embraced the model.
Now the U.S. wants to find another project to prove that the model can be scaled, U.S. officials said at the meeting, according to two people in the room.
Unlike Lobito, the new pilot project would be part of a new U.S.-African Union Commission Strategic Infrastructure and Investment Working Group announced last month. But as Ayenat reports, there was also a lot of conversation about moving beyond exporting raw materials and a need for the continent to align against old extractive or neocolonial patterns.
Scoop: US looks to pilot next African trade corridor project
What we’re reading
Should defense spending ramp-up also tackle climate change? [Devex]
German development agency head: Cuts “will haunt us in the future.” [Devex Pro]
Bill Gates’ key climate tech fund halts new investment, lays off workers. [Bloomberg]
Payments modernization for global impact: Opportunities for multilateral development banks. [J.P. Morgan]
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.
