The new initiative falls under BII’s recently launched £100m mobilisation facility that’s aimed at unlocking private capital for emerging economies deemed to be too risky by international investors.
British International Investment (BII), the UK’s development finance institution and impact investor, is partnering with Mercer, the global consulting firm, to find “best-in-class” investment strategies that can boost the flow of private capital into climate-related projects in emerging markets and developing economies.
Emerging markets and developing countries, excluding China, may need close to $2.4trn (€2.3trn) of investment by 2030 to meet their climate goals, according to a 2023 report by the Independent High-Level Expert Group on Climate Finance. That’s four times more than what is currently invested, and is partly due to the risk perceptions associated with investing in these economies.
BII has set aside £50m (€60.3m) under its recently launched £100m mobilisation facility for innovative proposals by asset managers with a proven track record in climate finance and interest in emerging markets and developing economies. There will also be a chance to access non-concessional investment funding from BII.
“Mercer’s role as BII’s delivery partner will be to manage the process of engaging with asset managers, to ensure we’re identifying the most innovative strategies to boost private investment in emerging economies,” a BII spokesperson told Impact Investor.
“It is also an efficient, effective and fair way of extending our reach and mobilising capital beyond asset managers who are already familiar with BII.”
Expert panel
All proposals will be judged by a panel of experts. Between one to three proposals will receive a portion of the £50 million, based on their potential for significant mobilisation, impact, scalability and sustainability.
BII “may consider awarding the whole allocation to one bid, should the proposal demonstrate outstanding deliverables against the selection criteria”, the spokesperson said.
BII said it plans to use the remaining £50m in its mobilisation facility to look for new projects through its own investment channels and across a range of sectors, regions and financing products.
In the past two years, BII has invested more than £1bn in climate finance and mobilised nearly £1bn of private capital into climate projects.
