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The phrase "institutional capacity" is correct and can be used in written English.
It refers to a company, organization, or institution's ability to undertake activities, such as its financial resources, personnel, and technology. For example: "The company developed a strategy to increase its institutional capacity in order to grow the business."
Exact(60)
However, core funding to build institutional capacity is exactly what is needed by institutions like MakCHS.
Institutional capacity for ongoing strategic planning and implementation.
They and others are to be permanently stationed in Athens to "further strengthen Greece's institutional capacity".
Still, institutional capacity at the PCB is weak and additional capacity building is needed.
In large parts of the world, this means fighting urban corruption and supporting institutional capacity.
"North Korea simply does not have the technical background or institutional capacity," he argued.
The main shortage facing today's MFIs is not of capital, but of institutional capacity.
"Brazil is in the privileged position of finally reaching the institutional capacity to do this".
Previously, the money and the vision were in place, but the institutional capacity to implement reform was lacking.
"This assertion is based on what we view as the UK's weaker institutional capacity for effective, predictable, and stable policymaking".
Architect and MIT Professor James Wescoat promotes institutional capacity building to manage a critical resource.
More suggestions(15)
corporate capacity
institutional leadership
constitutional capacity
institutional power
institutional service
institutional skill
institutional proficiency
organizational capacity
institutional know how
institutional capacities
institutional capabilities
establishment capacity
institutional competences
institutional powers
frameworks capacity
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com