British International Investment (BII), the UK’s development finance institution and impact investor, has announced its role as an anchor investor in the Allianz Credit Emerging Markets fund (ACE), a new landmark blended finance initiative targeting a final size of $1 billion. The fund is designed to support Paris Agreement goals by mobilising private capital for climate-focused investments in emerging and developing economies.
The blended finance structure brings together public and private investors, with development finance institutions and multilateral development banks providing $150 million in concessionary capital for the junior tranche. This structure is intended to reduce risk and volatility for private investors, encouraging up to $850 million in additional senior capital once the fund reaches its final close. BII will contribute $40 million to the junior tranche alongside partners including Global Affairs Canada, IDB Invest, the Swedish International Development Cooperation Agency and Impact Fund Denmark.
The announcement marks the first close of the ACE fund, which has already secured $690 million in commitments. Allianz SE and GastroSocial Pensionskasse are serving as anchor investors for the senior tranche, underscoring growing institutional interest in blended finance vehicles that balance financial returns with measurable development and climate impact.
The fund represents a major milestone in BII’s strategy to use limited concessionary capital to unlock significantly larger pools of private finance for international development. It is the third investment announced under BII’s £100 mobilisation facility, launched in 2024, which aims to accelerate private sector participation in climate and sustainable development financing.
ACE is expected to become one of the largest blended finance funds raised to date, reflecting renewed appetite for collaborative public-private investment models. The fund will allocate around 40 per cent of its disbursements to Africa, with the remainder directed to other emerging markets, and will invest across sectors such as renewable energy, clean transport, agriculture and financial services, supporting inclusive growth and climate resilience in the Global South.
