We welcome the publication of BII’s Infrastructure Evaluation: Final Synthesis report, which brings together insights from an independent evaluation of BII’s infrastructure investments. Commissioned by FCDO under our FCDO-BII Evaluation and Learning Programme, this synthesis draws on a portfolio-wide review and five in-depth studies conducted between 2020 and 2025.
These independent evaluations are a vital part of how we, the FCDO, and the wider public understand the development impact of our investments. They provide valuable lessons that inform our portfolio management and investment decisions, and the development of our next five-year strategy.
We are pleased the report recognises our catalytic role in addressing critical infrastructure gaps in emerging markets. It also highlights several ways we have strengthened our development impact since the 2022 publication of the portfolio-wide review. These include:
- Increasing our climate finance investments: Since 2019, we have significantly increased our climate finance investments in our infrastructure portfolio, with 61% of our infrastructure investments qualifying as climate finance, between 2019 and 2024.
- Enabling economic impact in frontier markets: We have continued to invest in platforms, partnerships and strategies, that support early-stage projects – particularly in frontier markets where infrastructure gaps are widest and private capital is scarce. For example our Gridworks platform, to support transmission, distribution and distributed energy, and our partnership with DP World to develop trade infrastructure in Africa.
- Enhancing our needs-based approach to investment decision-making: In our 2022-2026 strategy we introduced an impact scoring system, that incentivises investments that contribute to productive, sustainable, and inclusive development. In response to the previous portfolio review, we incorporated an assessment of the relative need for each investment – by country and infrastructure subsector – into our Impact Score. We also welcome the evaluators’ latest recommendations on how to further refine this approach, which we address in more detail below.
Considering the progress we have made in response to the portfolio review, the synthesis report makes thirteen recommendations to help further strengthen our impact. Below, we outline our response to each recommendation.
- Prioritise economic development in frontier markets through locally relevant infrastructure investments, and climate mitigation efforts in more mature emerging markets.
This recommendation builds on the in-depth study considering the economic and climate impact of independent power producer (IPP) investments across six African countries, which highlighted how the same power generation technologies can have different greenhouse gas and GDP impacts in different countries, depending on their country and regional context.
We agree with the need for context-specific investment strategies, and the importance of our continued support for climate mitigation in the most highly polluting countries.
In frontier markets (as with any others) we will continue to support net zero pathways, in line with the Paris agreement. This means we will continue to invest in line with our fossil fuel policy, which prioritises renewables while allowing gas investments only under specific conditions. 90% of our 2019-2024 power investments were climate-finance qualified. Our Globeleq investment in the Temane gas project in Mozambique is an example of where we have carefully applied our fossil fuel policy to deliver investments that are meeting energy needs in a context where energy access is critical.
- Continue, and if possible, increase, investment in transmission and commercial and industrial (C&I) power
We agree that transmission infrastructure and C&I power are critical for enabling renewable energy integration and improving grid resilience. The evaluators highlighted greenfield transmission investments such as EnerGrid in India and Gridworks in Africa as innovative platforms which BII should continue to build on. The evaluation also found that our investment in Fourth Partner Energy in India is supporting businesses to use green energy at a lower cost than carbon-based alternatives, while avoiding 3.2 million tonnes of CO2 emissions annually. We welcome these findings and intend to increase our investments in transmission, where grids need expansion or improvement, as well as in C&I power.
- Develop high-level plans for a select number of countries or regions on how to increase availability and reliability of power supply while minimising GHG emissions.
We recognise the importance of supporting national and regional development plans to strengthen power systems, including interconnectors and regional power pools. In selected regions where BII’s investments and platforms play a pivotal role and where a systems-level perspective can add value, we will consider more co-ordinated approaches to the development of power systems. This builds on work that is already underway, for example in countries that have developed National Energy Compacts as part of the World Bank’s Mission 300 initiative.
Our investment in the Ruzizi hydropower plant in the Great Lakes region – in partnership with the FCDO, IPS, and the Governments of Burundi, DRC and Rwanda – is an example of how our convening power can support multi-country initiatives that can make a significant regional impact. This work is complemented by our other electricity investments in the region, including Virunga Energies in Nord-Kivu (DRC) Anzana Electric Group’s Weza Power project in Burundi (via Gridworks), and DC Frontier Energy via Frontier Energy Fund II in Rwanda.
- For the Impact Score, use a more granular assessment of relative degree of need at the infrastructure subsector and country-level (where appropriate)
The evaluators recommended separating indicators of the need for reliable power supply (e.g. hours of power outages per year) and power access (e.g. percentage of population with access to power) in our Impact Score. This would help to incentivise investments in power supply in contexts where access indicators alone don’t reflect supply constraints, or conversely where there is surplus power generation but limited transmission and distribution capacity.
They also recommended using local (or sub-national) scores for investments in off-grid, mini-grids, and telecoms, to capture underserved areas at the local level. While we recognise that data availability may limit this in some cases, we agree that more granular assessments are valuable for these subsectors. Much of this analysis already occurs at the transaction level. We will consider whether further granularity can be built into the Impact Score itself, while balancing the need for simplicity in portfolio-level tools – and noting that the score is complemented by much more detailed assessments of the expected impact of individual investments. You can read more about our impact management approach on our website.
- Increase the share of infrastructure climate finance allocated to adaptation
The evaluators recommend we expand our portfolio of adaptation-focused investments, particularly in countries which are the most vulnerable to climate change. The report acknowledged that finding bankable investments in this space is an industry-wide challenge and highlighted our efforts to identify opportunities through platforms and joint ventures, using countries’ National Adaptation Plans (NAPs). We have also just launched the Investor’s Resilience Challenge – a collaborative initiative aimed at helping overcome barriers that currently limit the scale of A&R finance.
We are committed to increasing our investments in adaptation finance in line with the evaluators’ recommendation. We will aim to invest in both climate resilient infrastructure, and in infrastructure for enhanced adaptation and resilience. This builds on transactions like our investment in coastal rehabilitation in Nouakchott in Mauritania, which aims to prevent coastal erosion and submersion in the capital city. Another example is our investment in SunCulture, which provides solar-powered irrigation for farmers in Kenya affected by unpredictable rainfall and drought. Both investments are part of our Kinetic portfolio, which supports early-stage, higher-risk investments using concessional capital. We will continue to leverage concessional capital to support businesses that are driving adaptation and resilience and addressing crucial gaps. We will also consider opportunities to support the development of early-stage sectors that are key to strengthening climate resilience, for example climate-resilient cold chain infrastructure, which is key to preventing and reducing food loss as global temperatures rise.
- Continue equity investment in platforms
We welcome the evaluators’ assessment that our platforms are essential for project development and market shaping, citing examples such as Globeleq, Africa Power Platform, and Gridworks. We recognise the role our equity platforms play in assuming development risk and mobilising additional investment. We will continue to look for opportunities to build and grow these important mechanisms to support infrastructure project development where it is most needed.
- Focus debt and project finance where they are most additional: in Asia supporting the green transition by financing innovative sectors and mobilising commercial capital in mainstream sectors, through mezzanine and subordinated finance; in Africa increasing deal flow in a range of infrastructure sectors using blended finance.
The evaluators recommended we build on our differentiated approach by country and region to further enhance the additionality of our debt and project finance investments according to market maturity. In Asia, we will look for opportunities to expand our use of mezzanine finance which the evaluators note has enabled us to expand nascent sectors, such as C&I power through our investment in Fourth Partner Energy. In Africa, consistent with the recommendation, we will continue to prioritise deal flow, strengthening the supply of bankable projects by assuming project risk, that help sustain and attract project developers, including through new mezzanine and debt instruments. We will use blended finance selectively to support deal flow in new technologies, for example though our Greenovate Catalyst Strategy which provides concessional project development loans to high impact infrastructure projects struggling to access capital.
- Invest in backbone internet coverage in the few regions where it is insufficient and otherwise continue to focus on improving utilisation and market structures.
We will continue to prioritise investments such as Liquid Intelligent Technologies – which has been critical for improving connectivity in the DRC – in regions where broadband penetration rates remain low. In countries and regions with higher penetration rates, the evaluators note the important role our investments can play in increasing usage by improving market structures. For example, in Ethiopia, our investment in Safaricom (the first private company to be awarded a mobile network licence in the country) is estimated to have decreased the cost of mobile data services by up to 70%, and doubled the availability of 4G services by increasing competition. In Pakistan, our investment in PTCL is supporting the merger of two providers to increase investment in critical infrastructure, and ultimately improve access, quality, and affordability of mobile network coverage. We will continue to look for opportunities to support the development of new market structures, such as innovative partnerships with mobile network operators to expand coverage in rural areas and improve affordability.
- Continue to look for opportunities that aim to improve access to infrastructure for underserved communities
The evaluators recommended that in addition to investing in electricity access through solar home systems and investments such as SunKing, we continue to look for opportunities to enhance access to essential infrastructure for underserved communities. This includes expanding access to mobile handsets, e-mobility, clean cooking and solar water pumps and cooling. We agree, and will continue to look for opportunities to build on investments such as M-Kopa (mobile handsets), Loadshare (e-mobility) and SunCulture (solar water pumps). Many of these sectors are being incubated using concessional capital, a key tool to support nascent and high-risk sectors and address critical market gaps.
- Continue to look for opportunities to maximise gender and diversity impact
We remain committed to advancing gender and diversity impact across our infrastructure portfolio. This includes supporting investee-led initiatives, leveraging BII Plus (our technical assistance programme) and impact-linked finance, alongside our commitment to the 2X Challenge and supporting Black-owned and -led businesses in Africa. Through ongoing initiatives such as the Gender and Diversity Advisory Programme, we are working with investees to improve female participation and inclusive leadership in traditionally male-dominated sectors. We are also improving our understanding of the populations we reach by strengthening data quality, including through research such as our recent paper on how investing in electricity supports inclusion.
- Measure the intensity of economic and climate impact of investments by measuring key impact variables relative to project investment costs.
The evaluators recommended we assess investment impacts relative to costs. They note that for certain infrastructure sub-sectors, such as those evaluated as part of the IPPs, mini-grids and ports in-depth studies, it is possible to develop quantitative estimates of impact (for variables such as GDP contribution, GHG emissions avoidance and household asset wealth) which could be compared with investment costs and across comparable infrastructure investments within the same sub-sector. We already measure climate impact intensity for our climate finance investments and will consider measuring economic intensity (such as total employment and/or GDP contribution per million dollars invested) for selected investments going forward where the benefits of generating these estimates outweigh the costs. We note that such models are unlikely to be cost-effective across the portfolio and aim to take a pragmatic approach: using these metrics selectively where they add value, for example when comparing similar projects, or through targeted ex-post evaluations.
- More regularly assess reach to and impact for underserved and low-income populations, especially where there is a link to the end user
We are committed to understanding our reach and impact on underserved and low-income stakeholders. Where feasible, we conduct consumer surveys for our investments with a ‘line of sight’ to end users, such as for customers of our solar home system investees. In line with this recommendation, we will consider how we can utilise the geospatial data and synthetic control approaches — trialled in our evaluation of the impact of Virunga Energies’ mini-grid and Liquid Intelligent Technologies fibre broadband— to more regularly assess reach and impact. These approaches are promising because they are relatively low-cost, easily scalable and allow researchers to infer changes in living standards, offering a robust way to assess reach and impact without relying on costly surveys. However, their application is limited to situations where end-users or areas reached by our investments can be clearly identified and differentiated from those that aren’t. Importantly these approaches do not explain the causal pathways of impact, nor enable us to disaggregate the results by population group e.g. women. We therefore see value in using these techniques selectively for ex-post evaluations in suitable contexts.
- Adopt a systems-based rather than deal-based perspective, supported by a portfolio-wide strategy for applying cost-effective methods, where appropriate
We will adopt a systems-level perspective where appropriate, particularly for investments that influence broader infrastructure systems—such as IPPs, transmission, and ports. We agree these types of investments often have ripple effects across national or regional systems, which cannot be captured through deal-level analysis alone. However, modelling should be applied selectively and cost-effectively. It is most useful when there is a genuine choice between investment options and when system-level dynamics are critical to understanding impact. Open datasets and improved data infrastructure can enhance the value of these models and reduce costs over time. We will consider ‘systems-based’ as well as ‘deal-based’ perspectives in the development of our next five-year strategy.
Authors:
Holger Rothenbusch, Managing Director and Head of Infrastructure and Climate
Maria Smith, Managing Director and Chief Impact Officer
About our sector evaluations
This is the second of three sector group evaluations, commissioned by FCDO under our FCDO-BII Evaluation and Learning Programme, covering our entire portfolio. The final report from the Financial Services evaluation is available here alongside our management response, and the final report from the Industries, Technology & Services sector group will be published next year.
