Development organisations including the World Bank are sitting on $180 billion (£100 billion) in "idle capital" – enough to bridge the estimated shortfall in funding for projects to bring power and water to the world’s poor, according to new research.

After interviewing 200 experts over two years, the World Economic Forum (WEF) argues that the large development banks have fallen out of tune with the needs of clients in a way that has led to a chronic underuse of money earmarked to tackle poverty.

Richard Samans, the think tank's managing director, told Times Online that "middle-income" Asian and Latin American economies had been hit especially hard by the failure of the World Bank and others to make use of their "excess financial capacity".

"Relatively little attention has been paid to middle income countries and how the public capital in multilateral and bilateral development agencies can best be used to facilitate much larger amounts of domestic and foreign private investment," he said.

Forty per cent of the world’s poor, or more than one billion people, live in these countries.

Mr Samans’s comments came as the WEF published its report, Building on the Monterrey Consensus, a document that calls for the World Bank and others to act as a catalyst to spur private sector investment – and not only to lend to governments.

The report comes as evidence suggests the war on poverty is being lost with several United Nations targets being missed and the situation surrounding issues such as disease actually deteriorating in some areas.

Richard Frank, Chief Executive Officer of Darby Overseas Investment and former Chairman of the World Bank’s Private Sector Group, said: "This situation cries out for action.

"The development banks are sitting on over $100 billion of idle capital, while projects to improve infrastructure and help the poor go unfunded."

It is estimated that unmet investments in the power sector stand at $120 billion, while power and sanitation projects need an injection of $50 billion.

The WEF says the financial capacity exists to tackle these projects. But it argues that the development banks need to turn from making direct loans to poor countries, an area where demand has fallen, to offer a broader portfolio that includes support for the private sector and the ability to bear some of the risk involved in large infrastructure projects.

Lower demand for development loans is thought to reflect the growth of private capital markets and changing attitudes on the part of borrowing countries.

Recruitment from financial centres such as the City of London would be key in unlocking what the WEF sees as a chronic underuse of financial firepower that should be used to help people escape poverty.

"Organisations such as the World Bank need to reorientate their culture," Mr Samans said.

"They need to recruit people with experience of complex infrastructure finance and of risk mitigation – not just aid."

The think tank believes bodies such as the World Bank, the Asian Development Bank and the Inter-American Development Bank are failing to respond to a changing financial landscape.

The WEF points out that many infrastructure projects come under the jurisdiction of "sub-sovereign" entities such as cities and municipalities, to which the development banks are not allowed to lend.

It has also called for funds to be used for building the professional infrastructure of middle-income countries, including the training of accountants and lawyers.

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