British International Investment, the UK’s development finance institution and impact investor, is to launch a new facility to boost the flow of private capital to meet the twin challenges of development and the climate emergency.
The new facility aims to unlock hundreds of millions of pounds of private investment into climate and sustainability-focused investments in emerging economies that are currently deemed to be too risky by global investors.
According to BII, it will address the gap between the risk appetite and return thresholds of commercial investors who are currently inclined to place capital in more developed markets.
Chief Executive of BII, Nick O’Donohoe said: “With the launch of this facility, BII and the UK Government are demonstrating global leadership in unlocking the private capital that is so desperately needed to accelerate the green transition in emerging economies.
“The role for BII, and the development finance community, is to judiciously deploy concessionary finance to give global investors the confidence to put their capital where it is most needed.”
According to O’Donohoe, these investments are expected to include utility-scale climate infrastructure, such as renewable energy generation and transmission; other climate infrastructure, such as water, waste-to-energy, and battery storage; green finance, through banks and specialist finance companies that lend to climate-focused businesses; and investments that deepen capital markets for gender finance.
The facility will target deep and long-term pools of capital, such as pension savings and life insurance policies; as well as focus on asset managers in the City of London and beyond, to design investment products that increase investment allocations to emerging markets.
BII will use the facility to support a mix of existing pipelines and newly identified projects.