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Tag: climate finance

  • British International Investment to partner with City of London’s institutional investors to consolidate the UK’s position as global leader in climate finance

    British International Investment to partner with City of London’s institutional investors to consolidate the UK’s position as global leader in climate finance

    …New initiative will reduce risk for private institutions to inject capital to combat climate emergency.

    The City of London can consolidate its position as a global capital for climate finance by working with British International Investment (BII), the UK’s development finance institution and impact investor, in the battle to combat the climate emergency. 

    Last year, the UK Prime Minister, Keir Starmer, announced BII would manage a new £100 million Mobilisation Facility to boost the flow of private capital into emerging economies that are considered too risky by global investors.  

    Today, BII announced that up to £50 million of the facility has been ring-fenced for a groundbreaking new initiative. BII is partnering with Mercer, a global investment firm, to encourage the asset manager community to develop investment solutions, which will help to unlock private investment into climate related projects in emerging economies. It will also seek to address the gap between the risk appetite and return thresholds of institutional investors.  

    Emerging economies are expected to play a crucial role in global economic growth. They currently represent over 60 per cent of the world’s GDP and are projected to account for 74 per cent of global energy consumption by 2050. This creates investment opportunities in sectors like clean energy and infrastructure, offering potential for growth, diversification and impact. 

    Minister for Development, Anneliese Dodds welcomed the initiative: “Countries exposed to the climate crisis are facing extreme weather events which destabilise economies, hinder growth and displace people. Those countries need urgent access to finance to tackle and adapt to this crisis.

    “At the same time UK financial institutions are ideally placed to provide global leadership in climate finance and tap into these emerging markets, generating growth at home and providing much needed finance abroad.

    “By bringing together private and public expertise and capital, the UK is leading the world in mobilising the finance countries need to tackle the impacts of the climate crisis.”

    Asset Managers in the UK and globally, with a demonstratable track record in climate finance and interest in emerging economies, are invited to submit proposals to partner with BII. Proposals with a strong potential for accelerating private investment and which demonstrate large-scale climate impact will be granted access to concessional capital of up to £50 million from the facility. They will also have the opportunity to access non-concessional investment funding from BII. 

    Leslie Maasdorp, BII CEO said: “BII is the UK’s primary vehicle for delivering climate finance into our markets. But the scale of the climate emergency means we have to unlock the vast pools of capital that are held by private institutions. The partnership we have unveiled today is a truly innovative way of doing that.”

    Benoit Hudon, Mercer’s UK President and CEO said: “This initiative has the potential to encourage investment into new projects in emerging economies to support their economic development. Mercer will play a key role in identifying innovative asset manager proposals that support the energy transition and address some of the hesitancy institutional investors have about investing in emerging economies.” 

    For more information about the Mobilisation Facility initiative, please visit BII or Mercer websites.  

  • ONE Campaign Warns of Climate Finance “Wild West” as New Data lifts lid on $343 Billion Black Hole in Reported Finance

    ONE Campaign Warns of Climate Finance “Wild West” as New Data lifts lid on $343 Billion Black Hole in Reported Finance

    …Climate Finance Files highlight alarming lack of transparency and accuracy

    With world leaders meeting in Dubai for the start of the COP28 meetings today, analysis of a huge new set of data reveals the full extent to which efforts to tackle the climate crisis are being hampered by the opaque, inaccurate and inflated reporting of key financing commitments.

    The Climate Finance Files, published by anti-poverty organization The ONE Campaign, provide the world’s most comprehensive open-source data on public international climate financing. The files, which draw from public data on hundreds of thousands of climate projects, show in granular detail how lack of transparency is undermining the global fight against climate change.

    With leaders expected to formally announce they met the $100 billion annual target for financing climate action in developing countries in 2022, ONE is warning this is unlikely to be a true reflection of what countries spent. Instead, analysis of the new data has revealed that nearly two-thirds of climate finance commitments counted by the OECD between 2013 and 2021 – a staggering $343 billion – are never reported as disbursed or had little connection to climate. 

    Other key findings from the data include:

    ·       Over $1 in every $5 of climate finance commitments in the OECD’s open dataset between 2013 and 2021 – worth $115 billion — is spent on things that have little to do with climate.

    ·       Bilateral providers consistently report far less in disbursements than they have committed. Less than half of the climate finance they committed between 2013 and 2021 was reported as disbursed or was meaningfully related to climate. A difference of $135 billion. 

    ·       In 2021, the world’s 20 most climate-vulnerable countries received just 6.5% of the climate finance they need each year to address climate change.

    Dr David McNair, Executive Director of Policy at The ONE Campaign, said: “The global climate crisis threatens everything that we care about most – but we aren’t going to turn this around if no one is checking the receipts.

    “Putting the world back on track will take unprecedented investment, but instead we face the “wild west” of climate finance – where efforts to protect both people and planet are undermined by broken promises, falsehoods and dubious accounting. Without better reporting, hundreds of billions of dollars will continue to get swallowed in this black hole.” 

    “Transparency, accuracy and accountability are never just nice to haves. Faced with a global challenge of this scale, we must be sure that the money is flowing where it is needed most and is being used effectively. The Climate Finance Files finally provide people everywhere with the tools to track this finance and hold their governments and other contributors to account.”

    As COP28 gets underway, ONE is calling on countries to meet their historic climate finance commitments, including actually delivering the promised $100 billion and making up for the funding shortfall. They also must meet the commitment made at COP26 in Glasgow to double adaptation finance by 2025.

  • CDC Group, Africa’s oldest development finance institution, transforms into British International Investment

    CDC Group, Africa’s oldest development finance institution, transforms into British International Investment

    …British International Investment has a portfolio of more than $4billion in Africa, and over 600 valued partnerships with ambitious businesses

    CDC Group, the UK’s development finance institution and impact investor, has been formally renamed British International Investment (BII). Watch here.  

    The organisation will invest between £1.5 and £2 billion per year in green infrastructure, technology and other sectors to support countries in Africa, Asia and the Caribbean. Situated in seven locations across the Continent, BII has a portfolio value of over $4billion, with over 600 local businesses. Portfolio highlights include: Global Partnership for Ethiopia, FirstBank Nigeria, 14Trees, ETG, AfricInvest, Novastar, Zambeef, Equity Bank, Access Bank plc, Redstone Concentrated Solar Power Project among many more.

    Nick O’Donohoe, the Chief Executive, British International Investment, said: “This is an incredibly significant milestone in the history of our company. British International Investment will build on CDC’s legacy by inheriting its unparalleled experience of impact investing and deep-rooted knowledge of the markets in which it invests.

    We will continue to solve the biggest global development challenges by investing patient, flexible capital to support private sector growth and innovation. And, we will help to alleviate poverty by building productive, sustainable and inclusive economic outcomes for those that need fair and transparent investment the most.” 

    Founded in 1948, the UK’s development finance institution (DFI) invests patient, flexible capital to support private-sector growth and innovation. In 2022, the DFI announced that it exceeded its pledge to invest £2 billion in Africa over the last two years. British International Investment has a portfolio value of $4.2bn in Africa, with over 600 businesses in the portfolio.

    British International Investment is at the heart of the UK Government’s international financing offer to Africa and other emerging economies. It builds on a 74-year track record of forming strong partnerships with thousands of ambitious businesses to create positive social and economic outcomes for the countries in which it operates. The impact investor will play a key role in the UK Government’s wider plans to mobilise up to £8 billion a year of public and private sector investment in international projects by 2025. 

    Mr O’Donohoe added: “British International Investment is a strong, modern identity, which captures who we are and what we do. It communicates the increased breadth of what we do as an organisation. It also clearly defines us as a British institution that is working to bring not just capital but high standards and transparency to our investments. And it highlights our critical role as part of the UK Government’s international financing offer.”  

    Foreign, Commonwealth and Development Secretary, Liz Truss, said: “The revamped British International Investment is at the heart of Britain’s financing offer to low and middle income countries and our ambitious plan to mobilise up to £8 billion of investment a year by 2025. We will provide reliable and honest sources of finance to low and middle income nations including in Asia, Africa and the Caribbean and at the same time deliver for people in the UK, creating jobs and export opportunities.” 

    British International Investment has a clear focus on helping to address the huge challenge that climate change presents across Africa. At least 30 percent of its total investments over the next five years will be in climate finance – making it one of the largest such investor in African economies. It has also set a new ambition to scale investment into a range of vital sectors, including clean infrastructure, digital transformation and earlier-stage, disruptive businesses that offer radical solutions to the key development challenges on the African continent.

    The name change was first announced by the UK’s Foreign Secretary, Rt Hon Liz Truss MP, in November and comes into effect on 4th April 2022.  

    BII is also a founding member of the 2X Challenge which has raised $10 billion to empower women’s economic development.