British International Investment (BII), the UK’s development finance institution, has announced a new five-year strategy aimed at mobilising £15 billion of capital into developing economies. Of this total, BII will directly contribute up to £8 billion, while the remaining amount is expected to come from private investors. The strategy places strong emphasis on increasing private capital flows into emerging markets, with the institution expecting to crowd in around £1 of private investment for every £1 of public money, marking a significant increase compared to its previous strategy period.
A key priority of the new approach is expanding investments in the world’s poorest and most underserved countries. BII has committed that at least 25 per cent of its investments will go to Least Developed Countries, where access to private capital remains limited. The institution aims to support job creation, poverty reduction, and long-term economic development while also delivering financial returns. It plans to work closely with institutional investors such as pension funds and insurers to scale investments that generate both impact and profitability.
Alongside this broader strategy, BII has launched a major new climate initiative called British Climate Partners, backed by £1.1 billion. This initiative will focus on helping high-emitting developing economies, particularly in Asia, transition away from coal-based energy systems. Target countries include India, Indonesia, Vietnam, and the Philippines, where energy transition needs are substantial and capital requirements are high. The initiative will use blended finance structures, combining equity and mezzanine financing, to reduce risks for private investors and encourage large-scale participation in climate projects.
The climate programme is designed to accelerate emissions reduction while attracting long-term private capital into renewable energy and green infrastructure. BII expects that at least 40 per cent of its total new investments over the next five years will qualify as climate finance, an increase from its previous target. The institution believes that mobilising private investment at scale will be critical for supporting Asia’s energy transition, given the enormous funding gaps required to meet net-zero goals in the region.
BII is also strengthening its focus on frontier markets, including Least Developed Countries such as Sierra Leone, Zambia, and Nepal. These regions will receive a larger share of investment alongside policy support, technical assistance, and efforts to improve local investment environments. The strategy also introduces “market-level impact” investments aimed at strengthening entire sectors rather than individual companies, along with an increased focus on gender-lens investing to support women’s economic participation.
Overall, the strategy reflects a shift toward greater collaboration with private investors, increased climate financing, and a deeper focus on the world’s most vulnerable economies. However, its success will depend heavily on mobilising sufficient private capital and overcoming structural barriers in high-risk markets.
