British International Investment Partners with Impact Investor BlueOrchard for new $250M Fund to Tackle Climate Emergency in Emerging Markets

British International Investment (BII), the UK’s development finance institution and impact investor, is partnering with global impact investment manager BlueOrchard Finance to create a new fund to unlock insurance capital for fighting the climate emergency in emerging markets.

BlueOrchard -- among the winners of a BII mobilisation initiative called on the private investment community to help design products to increase the level of investment into climate-related projects in emerging markets. 

BII said it has ringfenced at least half of a £100 million mobilisation facility announced by the UK Prime Minister Keir Starmer at the UN General Assembly last year for the initiative. The impact investor is looking to provide a substantial anchor investment to the BlueOrchard Climate Action Mobilisation Fund (BOCAMF), which has a capital structure optimised to mobilise insurance investors at scale. 

Leslie Maasdorp, the Chief Executive of BII, said, “The only chance we have of meeting the monumental funding demands of the climate emergency is to mobilise private capital at scale.”

“Today’s announcement demonstrates how British development finance, working in partnership with a leading private institution, can forge a new path in getting capital to where it is needed most.”

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BOCAMF will primarily aim to provide loans to banks, microfinance providers and other financial intermediaries that provide climate finance to SMEs in emerging markets. 

BlueOrchard is working to secure investments from insurance providers in the senior notes tranche and other commercially and impact-minded investors in the senior and junior equity tranches with the aim of a final close targeting more than $250 million. 

A senior note is a type of bond that takes precedence over other debts in case the company declares bankruptcy and is forced into liquidation.

“With an almost 25-year track record, BlueOrchard is a pioneer in impact investing across emerging markets. Meeting investors’ needs and enabling them to participate in impactful investments is one of our top priorities,” said Michael Wehrle, CEO of BlueOrchard.

Focusing on the underlying causes of poverty and the climate crisis, BII says at least 30 per cent of its total new commitments by value will be in climate finance between 2022 and 2026. The investor has also pledged to commit up to $1 billion in climate finance in India over this period.