The announcement comes as the UK Government reduces international climate funding.
BII, the UK’s development finance institution, is majority-owned by the UK Government. While the organisation makes its investment decisions independently from the Government, the Government sets its strategic direction.
CEO Leslie Maasdorp said the BII’s new plan, launched on 23 April, responds to economic shocks, widening inequality between countries and the urgency of the climate crisis, while maintaining the organisation’s mission to invest in the private sector across Africa and Asia.
The strategy concentrates investment on sectors linked to economic transformation, including financial systems, sustainable industries that create jobs and infrastructure connecting power, data, people and markets. It also seeks to drive market-level change so these systems function more effectively.
BII will deepen its focus on frontier markets, with at least a quarter of new core investments directed to countries classified by the UN as Least Developed Countries (LDCs). These investments will be supported by technical assistance, policy engagement and local partnerships.
The organisation plans to mobilise up to £7.5bn of private capital over five years. As part of this, it is launching a £1.1bn climate initiative called British Climate Partners to channel private investment into Asia’s energy transition.
UK cuts aid budget
The announcement comes as the UK Government reduces international climate funding.
Cuts were first suggested in February 2026, with reports that the existing £11.6bn five-year pledge could fall to £9bn. The Treasury confirmed in March that climate aid for developing countries would be cut by more than 10%.
The Government is reforming aid allocation with a focus on fragile states, humanitarian support and conflict-related spending, including in Ukraine and Palestinian territories.
By 2028 to 2029, around 70% of international support is expected to go to conflict-affected states. The overall aid budget has been reduced by 0.3% of gross national income to prioritise national security.
Under the revised plans, around £6bn will go to international climate finance, alongside £6.7bn in UK-supported climate and nature spending. Funding previously earmarked for nature and forest projects, estimated at £3bn, has been scrapped.