- CEO of British International Investment issues rallying cry for deeper collaboration among development finance institutions (DFIs) and multilateral development banks (MDBs)
Leslie Maasdorp, the Chief Executive of British International Investment, the UK’s development finance institution (DFI), today said that DFIs and MDBs have a unique opportunity to deepen their collaboration to accelerate the flow of capital into climate finance.
He will tell delegates at the Finance in Common Summit in Cape Town, the world’s largest gathering of DFIs and MDBs, that the international development finance industry must work together to simplify how it engages with private investors to make it easier to combine public and private finance.
Mr Maasdorp said: “One of our principal objectives today as an industry is to mobilise larger volumes of private capital into development. In order to succeed in this effort, DFIs need to adjust their business models to support this new objective of private capital mobilisation. We are entering a new era during which the international DFI community is expected to scale our activities without significant inflows of new financial resources. Our mandate requires us to use the limited and scarce public resources in a more catalytic fashion.”
He added that more efforts are required to standardise contracts and processes and reduce the high transaction costs associated with DFI deals.
“At BII we are in active dialogue with our peers to explore further ways to converge around core standards. Each DFI and MDB has their own unique policies, standards and approaches to development impact, and bespoke metrics, which acts as a deterrent for private investors. While work in this regard has been underway for some time, we need a step change in the pace and scale of these efforts if we wish to succeed in mobilising large volumes of private capital.”
2025 marks the fifth year since the establishment of the Finance in Common summit. Since 2020 initiatives have been underway to reduce fragmentation amongst DFIs and MDBs and search for new ways of deepening collaboration across the development finance system.
Mr Maasdorp will issue the rallying cry to the industry for a greater focus on financial innovation and the scaling of financial mechanisms including blended finance structures and a greater adoption of sustainability linked products. The Finance in Common Summit, offers a unique platform for peer-to-peer exchanges, and lays the foundation for more sharing of data and best practices amongst DFIs.
BII has signalled that private capital mobilisation is one of its top strategic priorities.
In September last year, Sir Keir Starmer the UK Prime Minister, announced that BII would launch a new £100 million concessionary finance facility to accelerate the flow of private capital into emerging economies, such as South Africa. BII has announced that half of that sum will be ringfenced in a partnership with Mercer, a global investment firm. This capital will be used to encourage the asset manager community to work with BII to develop solutions to help unlock private investment into climate related projects in emerging economies.
The need for private investors to play a greater role in addressing the climate emergency is acute. The Independent High-Level Expert Group on Climate Finance puts the amount of climate finance required by emerging economies (minus China) at as much as $2.5 trillion per year by 2030.
Mr Maasdorp said: “The new concessionary capital facility demonstrates our commitment to unlocking private capital for developing and emerging economies. You will see BII develop our investment approach to harness more private capital to deliver sustainable and inclusive economic growth for the countries in which we invest.”
South Africa is a core market for BII’s mobilisation approach. BII and GuarantCo recently announced they were to provide $100 million ($50 million each) of default guarantee finance for Etana in South Africa’s largest “energy wheeling framework” transaction.
The deal is designed to unlock new renewable energy capacity by providing independent power producers (IPPs) with the revenue certainty they need to break ground on new renewable energy projects. It is expected that the $100 million in guarantee financing will unlock an estimated $500 million of new renewable energy projects – providing a major boost to South Africa’s green energy transition.
For more information please email [email protected].
About BII
British International Investment is the UK’s development finance institution and impact investor. As a trusted investment partner to businesses in Africa, Asia and the Caribbean, BII invests to create productive, sustainable and inclusive economies in our markets. Between 2022-2026, at least 30 per cent of BII’s total new commitments by value will be in climate finance. BII is also a founding member of the 2X Challenge which has raised over $33.6 billion to empower women’s economic development. The company has investments in over 1,580 businesses across 65 countries and total net assets of £8.5 billion.
