British International Investment (BII), the UK’s development finance institution, has launched a new five-year strategy that aims to channel £9 billion of capital into Africa between 2026 and 2031. BII will contribute nearly £5 billion directly — a sum that exceeds its entire current Africa portfolio — with the remaining £4 billion expected to come from private investors both within Africa and internationally. The strategy arrives at a pivotal moment: the UK government has confirmed deep cuts to its overseas aid budget, slashing spending from 0.5% to 0.3% of gross national income by 2027/28. Against that backdrop, BII is being positioned as a central instrument in a broader policy shift from traditional grant-based aid to investment-led partnerships. The new strategy raises the institution’s climate finance target from 30% to 40% of new investments, pledges at least 25% of capital to UN-classified Least Developed Countries, and commits to strengthened gender-lens investing through the 2X Challenge. It also forms part of a wider £15 billion global strategy in which BII aims to crowd in £1 of private capital for every £1 of public money invested.
Key Overview
- Total Africa target: £9 billion over five years (2026–2031)
- BII’s direct contribution: Nearly £5 billion (~$6.7 billion), exceeding its current $5.53 billion Africa portfolio
- Private capital expected: ~£4 billion (~$5.4 billion) from African and global investors
- Global strategy total: £15 billion across all developing countries; BII contributing up to £8 billion
- Frontier markets commitment: At least 25% of new investments to UN Least Developed Countries, with focus on Sierra Leone, Zambia, and Nepal
- Climate finance target: 40% of new investments (up from 30% in the previous strategy)
- Gender-lens investing: 30% of new core investments to qualify under the 2X Challenge (up from 25%)
- Priority sectors: Financial services, power, transport, trade, digital infrastructure, and sustainable industries
- New initiative: British Climate Partners (BCP), a £1.1 billion programme targeting emissions reduction in coal-reliant Asian economies
- Capital mobilisation ratio: £1 of private capital for every £1 of public money, a 40% increase on the previous strategy
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From Aid to Investment: A Strategic Pivot
BII’s new strategy represents a fundamental reorientation of how the United Kingdom engages with development finance in Africa and beyond. The institution, formerly known as the Commonwealth Development Corporation before its rebranding in 2022, has grown rapidly in recent years. Its total portfolio expanded from £4.7 billion in 2019 to £7.3 billion by 2023, with Africa accounting for approximately 60% of total holdings. Under the new plan, BII’s £5 billion direct contribution to Africa over the 2026–2031 period exceeds its entire current Africa portfolio of $5.53 billion by roughly 21%.
The broader context makes this strategy all the more significant. The Africa-focused £9 billion target is embedded within a global £15 billion mobilisation plan in which BII will contribute up to £8 billion directly, with the remainder expected from private institutional investors. The institution aims to attract roughly £1 of private capital for every £1 of public money, representing a 40% improvement in its capital mobilisation ratio compared to the previous five-year cycle. BII intends to create investment opportunities for insurers, pension funds, and asset managers who seek both risk-adjusted financial returns and measurable social and environmental impact.
Chris Chijiutomi, Managing Director and Head of Africa at BII, emphasised that the strategy draws on decades of institutional experience. He noted that BII’s long track record has provided deep understanding of what businesses need to grow in the continent’s most challenging markets, and that the new approach sharpens the focus on frontier markets, high-impact sectors, and domestic and international private capital mobilisation.
The UK Aid Landscape: Doing More With Less
BII’s new strategy cannot be understood in isolation from the dramatic changes to the UK’s overseas development budget. The British government has confirmed that aid spending will fall to 0.3% of gross national income by 2027/28, down from 0.7% before the pandemic and 0.5% in 2024. Annual aid spend is expected to shrink to approximately £8.2 billion, with a significant portion still allocated to domestic costs relating to refugees and asylum seekers.
The scale of reductions has drawn sharp criticism. The International Development Committee Chair Sarah Champion described the cuts as “unrelenting”, warning that there would be “no winners, just different degrees of losers.” Analysis from the Center for Global Development found that the UK’s planned 27% cut in 2026/27 is now steeper than the reductions the US Congress approved for its own fiscal year 2026 development spending. The World Resources Institute noted that the allocations confirmed in March 2026 include substantial reductions across Africa and the Middle East, with climate-related spending seeing an estimated 13% cut.
In this context, BII is being framed as a bridge between shrinking public aid and the much larger flows of private capital that development advocates argue are needed to close Africa’s financing gap. Minister for Development Jenny Chapman described the strategy as central to a new UK approach to development — one that moves from traditional aid grants to long-term partnerships bringing together investment, expertise, and international finance reform. She affirmed that BII’s new plan aligns with the direction the government has set and expressed confidence that the institution would deliver genuine results over the next five years.
The House of Commons Library has noted that the Labour Government specifically envisages BII as a vehicle for delivering economic growth, clean energy, and unlocking private capital for development. In 2024–25, BII launched both a £100 million Mobilisation Facility and a £50 million African Resilience Investment Facility to test this model. Sarah Champion has also suggested the government consider allowing BII to borrow to invest, which could expand its capacity without further straining the reduced ODA budget.
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Frontier Markets: Where Capital Is Scarce and Need Is Greatest
A defining feature of the new strategy is BII’s deepened commitment to frontier markets — countries classified by the United Nations as Least Developed Countries (LDCs). These nations, home to more than one billion people, face severe structural barriers that deter private investment despite enormous demand for capital. BII has pledged that at least 25% of new investments by value will be directed to these markets.
The institution has identified a select group of frontier markets for concentrated engagement, including Sierra Leone, Zambia, and Nepal. In these countries, BII will combine direct capital investment with policy engagement, technical assistance, and partnerships designed to strengthen local investment climates and deepen domestic capital markets. This approach reflects lessons from BII’s existing market-building programme, which has already contributed to 32 investments worth $415 million across programmes in Nepal, Ghana, and Zambia, alongside the Africa Resilience Investment Accelerator (ARIA).
The broader rationale is clear: Africa’s private capital gap is enormous. While the continent’s rapidly growing population represents a vast economic opportunity, borrowing costs on international markets remain prohibitive for most sub-Saharan economies. The World Bank has argued that only private capital and accelerated industrialisation can close the financing gap, particularly in the face of compounding shocks from climate change, the pandemic’s aftermath, and global trade disruptions.
BII’s strategy recognises that development finance institutions can play a catalytic role by absorbing risk that commercial investors will not. By taking higher-risk positions in projects and providing concessionary capital, BII aims to create conditions under which private institutions can participate with confidence in markets that would otherwise remain uninvestable.
Raising the Bar on Climate Finance
Climate finance is the other major pillar of the new strategy. BII has set a target of at least 40% of new investments qualifying as climate finance, a significant increase from the 30% target in the previous strategy period. The institution has already demonstrated momentum in this area: in 2024, BII invested £708 million in climate finance, representing 41% of its overall annual commitments, up from just £80 million in 2020.
With nearly 600 million people in Africa still lacking access to electricity, BII’s climate investments will focus on renewable energy projects, grid improvements, and clean energy access. This aligns with Mission 300, an ambitious partnership between the World Bank Group and the African Development Bank launched in 2024 to connect 300 million people in sub-Saharan Africa to electricity by 2030. Since its launch, Mission 300 has already connected 44 million people and secured endorsements from 48 African countries.
Beyond Africa, BII also announced the launch of British Climate Partners (BCP), a £1.1 billion initiative designed to mobilise private capital to support emissions reduction in Asian developing economies where coal-based energy systems remain dominant. Asian countries accounted for approximately three-quarters of global coal demand in 2024, and the region requires transformative levels of investment — an estimated $210 billion annually in Southeast Asia alone and at least $160 billion per year in India — to transition away from fossil fuels.
The dual focus on Africa and Asia positions BII at the intersection of two of the world’s most significant climate challenges: expanding energy access on a continent where hundreds of millions remain unconnected, and accelerating the coal-to-clean transition in the region responsible for the largest share of global emissions growth.
Gender-Lens Investing and the 2X Challenge
BII has also raised its ambitions on gender-lens investing. Under the new strategy, 30% of new core investments are expected to qualify under the 2X Challenge, up from 25% in the previous strategy period. The 2X Challenge is a flagship initiative launched at the G7 Summit in 2018 that has collectively raised more than $33.6 billion in gender-lens investments globally through 2023. The initiative is now entering a new phase targeting at least $20 billion over the 2024–2027 period, for the first time including commitments from private sector participants alongside the nearly 20 development finance institutions that have pledged support.
Qualifying investments under the 2X framework must meet specific criteria related to women’s access to leadership positions, quality employment, finance, and products or services that support women’s economic participation. For BII, this commitment reflects both an impact thesis and a business case: evidence supporting the economic returns of investing in women’s empowerment has grown significantly in recent years, driving increased interest from commercial investors.
BII also plans to expand its use of “market-level impact” investments — an approach designed to develop entire sectors rather than support individual companies in isolation. This builds on BII’s existing market-building work, which has focused on making businesses investment-ready, supporting investors to adapt their strategies, influencing policy reforms, and strengthening environmental, social, and governance practices across financial institutions.
Scale, Scrutiny, and the Road Ahead
BII enters this new strategy period as a substantially larger and more active institution than it was a decade ago. The organisation has more than tripled its annual investment levels since 2012, reaching £1.75 billion in 2024. Its total net assets stand at £9.87 billion with stakes in over 1,600 businesses across 66 countries. Under CEO Leslie Maasdorp, who took the helm in 2025, the institution has signalled that Africa will remain the largest regional focus, with an intensified push into frontier markets.
However, the strategy also faces scrutiny. The Ecofin Agency has noted that whether pledged capital ultimately reaches frontier economies — or concentrates instead in more bankable middle-income markets — will prove as consequential as the headline £9 billion figure. Bond, the umbrella organisation for UK civil society groups, has called on the government to publish detailed country allocations and assess the real-world impact of the broader aid cuts. The former International Development Minister Anneliese Dodds, who resigned following the aid spending announcement, warned that reduced funding would likely lead to a UK pullout from numerous African, Caribbean, and Western Balkan nations.
The first full test of the new framework is expected in BII’s 2027 annual report, as capital begins flowing under the strategy in the current quarter. Combined, BII’s Africa and global targets would generate approximately $12.1 billion of total investment impact across the African continent alone over the five-year period — more than double the pace of the previous strategy cycle.
For Africa, the stakes are high. The continent faces a growing population, an enormous energy deficit, accelerating climate impacts, and persistent capital scarcity. BII’s strategy represents a significant institutional bet that private capital, properly catalysed and de-risked, can deliver what shrinking aid budgets increasingly cannot.
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