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 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.”
More on Mobilisation Facility initiative, visit BII or Mercer websites.
