British International Investment (BII), the UK’s development finance institution and impact investor, has launched  two  major schemes to tackle economic development and climate risks.

It unveiled a£15 billion new five-year capital scheme aimed at  developing countries as it announced it would consolidate its role as a key climate investor in its markets with the launch of British Climate Partners.

The £1.1 billion initiative will focus on investments that will support emissions reductions in countries that have coal-based energy networks. These countries include India as well as the Philippines, Indonesia, Vietnam and other South-East Asia economies.

It added Asian countries contributed three-quarters of global coal demand in 2024. India still needs at least $160 billion a year in investment to meet its net zero commitments, while countries in South-East Asia need a further $210 billion annually until 2030.

“BII will continue to provide climate finance to its other markets,” The organisation announced. “In the next five years, BII expects that at least 40 per cent of new investments, including BCP, will qualify as climate finance – up from the target of 30 per cent in the last strategy period.

“In addition, BII will enhance its commitment to frontier markets – those identified by the UN as being the Least Developed Countries – with at least 25 per cent of new investments by value going to these nations. These countries have the greatest investment needs as they are largely ignored by commercial investors for being too risky.”

The new $15 billion investment strategy, launched by the UK’s secretary of state for international development and Africa,  Baroness Chapman, will focus on accelerating the flow of private capital to developing countries.

Of the £15 billion, BII will contribute up to £8 billion, with the balance coming from private institutions. For every £1 of public money, BII expects to crowd-in around another £1 of private capital (OECD methodology), a rise of up to 40 per cent compared to its last five-year strategy.

The company added it will use its “deep-rooted experience of investing in emerging economies and its concessionary capital” to generate opportunities for private institutions. It said it will work alongside life insurers, pension funds and other asset managers to make investments that deliver positive economic, environmental and social outcomes as well as risk-adjusted financial returns.

“This means that the total amount of capital marshalled by BII that will go to those countries most in need of investment to alleviate poverty, create jobs and to move beyond aid, will rise over the next five years compared to the previous period,” it added.

Chapman said: “Over the past few months, I have been setting out the need for a new UK approach to development – one moving from traditional aid grants to long-term partnerships that bring investment, expertise and international finance reform together. It also means investing responsibly: bringing everything the UK can offer – from our work through international organisations and our investment tools, to research, practical advice and diplomacy.  Used together, this can help businesses grow, create jobs and support the reforms and policies our partners choose for themselves.

“BII sits right at the heart of this approach, and its new strategy is pulling in the same direction we have set as a Government. I know BII will lead from the front in turning our joint ambitions into genuine results over the next five years.”

Leslie Maasdorp, chief executive of BII, said: “Britain has a proud history of acting as a global leader in international development. BII is committed to demonstrating that a new, mutually-beneficial path exists that creates secure jobs and stable economic conditions in the countries in which we invest, while providing value for money for the UK taxpayer.

“We cannot solve the global challenges we all face – poverty, instability, conflict and global public health – without bringing the least developed countries with us on the journey to shared prosperity.”