British International Investment targets £15 billion of capital for developing economies as it launches climate initiative as part of new five-year strategy

• British Climate Partners will target highest emitting developing economies with over £1 billion in climate finance
• Mobilising private capital to become a central pillar of the new approach by the UK’s development finance institution
• BII commits at least 25 per cent of its investments to the Least Developed Countries where private capital is scarce

British International Investment (BII), the UK’s development finance institution and impact investor, today said it is aiming to drive £15 billion of new capital into developing countries as it unveiled its new five-year strategy.

A central pillar of the new strategy, launched by Minister for Development Jenny Chapman, is a focus on accelerating the flow of private capital to developing countries.

Of the £15 billion, BII will contribute up to £8 billion, with the balance coming from private institutions. For every £1 of public money, BII expects to crowd-in around another £1 of private capital (OECD methodology), a rise of up to 40 per cent compared to its last five-year strategy. The company will use its deep-rooted experience of investing in emerging economies and its concessionary capital to generate opportunities for private institutions. It will work alongside life insurers, pension funds and other asset managers to make investments that deliver positive economic, environmental and social outcomes as well as risk-adjusted financial returns.

This means that the total amount of capital marshalled by BII that will go to those countries most in need of investment to alleviate poverty, create jobs and to move beyond aid, will rise over the next five years compared to the previous period.

Minister for Development, Jenny Chapman said: “Over the past few months, I have been setting out the need for a new UK approach to development – one moving from traditional aid grants to long-term partnerships that bring investment, expertise and international finance reform together. It also means investing responsibly: bringing everything the UK can offer – from our work through international organisations and our investment tools, to research, practical advice and diplomacy.  Used together, this can help businesses grow, create jobs and support the reforms and policies our partners choose for themselves.

BII sits right at the heart of this approach, and its new strategy is pulling in the same direction we have set as a Government. I know BII will lead from the front in turning our joint ambitions into genuine results over the next five years.”

Leslie Maasdorp, Chief Executive of BII, said: “Britain has a proud history of acting as a global leader in international development. BII is committed to demonstrating that a new, mutually-beneficial path exists that creates secure jobs and stable economic conditions in the countries in which we invest, while providing value for money for the UK taxpayer.  

“We cannot solve the global challenges we all face – poverty, instability, conflict and global public health – without bringing the least developed countries with us on the journey to shared prosperity.”

Launch of the new climate initiative

BII today also announced that it would consolidate its role as a key climate investor in its markets with the launch of British Climate Partners (BCP). The £1.1 billion initiative will focus on investments that will support emissions reduction in countries that have coal-based energy networks. These countries include India as well as the Philippines, Indonesia, Vietnam and other South-East Asian economies.

Asian countries contributed three-quarters of global coal demand in 2024. India still needs at least $160 billion a year in investment to meet its net zero commitments, while countries in South-East Asia need a further $210 billion annually until 2030.

Through BCP, BII will mobilise private capital alongside its own, working in partnership with private investors to deploy capital through a combination of equity platforms and mezzanine finance. This approach is designed to scale climate projects, reduce early‑stage risks and offer potential higher returns to attract commercial investors.

Srini Nagarajan, MD and Head of Asia, BII said: “Asia’s energy transition will depend on mobilising private capital at scale and British Climate Partners is designed to do exactly that. Through this new initiative, we’ll use our experience, capital and partnerships to build platforms, de‑risk projects and crowd in long‑term investment into commercially viable climate opportunities across the region.”

BII will continue to provide climate finance to its other markets. In the next five years, BII expects that at least 40 per cent of new investments, including BCP, will qualify as climate finance – up from the target of 30 per cent in the last strategy period.

Deepening focus on frontier markets

In addition, BII will enhance its commitment to frontier markets – those identified by the UN as Least Developed Countries – with at least 25 per cent of new investments by value going to these countries. Frontier markets are home to more than a billion people and have the greatest investment need yet remain underserved by private capital due to structural barriers to investment.

Furthermore, BII will focus on a select number of frontier markets, including Sierra Leone, Zambia and Nepal, combining investment, policy engagement, technical assistance and partnerships to strengthen investment environments and capital markets.

Chris Chijiutomi, MD and Head of Africa, BII, said: “Africa has been at the heart of BII’s work since our inception. That long track record has given us deep experience of investing through economic cycles and a clear understanding of what businesses need to grow in some of the continent’s most challenging markets.

This strategy builds directly on that experience. By sharpening our focus on frontier markets, investing in high-impact sectors and mobilising domestic and international private capital, we are concentrating our efforts where our capital and expertise can make the greatest difference for African economies.”

In a further evolution of BII’s strategy, the company will also seek to make “market-level impact” investments. These are investments that go beyond a commitment to a single company, and help to develop a wider sector or market.

BII will also increase its commitment to gender-lens investing in support of women. The company intends that 30 per cent of new core investments (not including BCP investments) will qualify under the 2X Challenge, compared to 25 per cent in the last strategy period.