How British International Investment is Transforming Africa with £725 Million in Sustainable Funding

British International Investment (BII), the UK’s development finance institution and impact investor, has announced a significant increase in its commitment to sustainable development in Africa. The 2023 Annual Review, entitled Creating Impact Together, outlines a year of substantial investments and growth, with a particular focus on African nations.

In 2023, BII committed a total of £1.31 billion globally, with a remarkable £725 million dedicated to sustainable development investments in Africa. This represents 61% of British International Investment’s total commitments for the year, underscoring the organization’s focus on addressing the needs of the continent.

Climate Finance and Environmental Impact

One of the critical areas of BBI’s focus has been climate finance. In 2023, British International Investment invested £449 million in climate finance across Africa and Asia, bringing the total over the last two years to more than £1 billion. This investment is part of British International Investment’s strategic objective to ensure that 30% of its total commitments over a five-year period are directed towards climate finance.

Support for African Businesses

BII’s investments in African businesses reached £724.9 million in 2023, an increase from £692 million in 2022. The institution supports 1,580 companies that directly employ nearly a million people across 65 countries. BII’s Africa portfolio now stands at $5.6 billion, encompassing 812 businesses that provide 499,232 jobs and pay $1.46 billion in taxes.

British International Investment Notable Investments in 2023

AFEX:

British International Investment invested £21.8 million in AFEX, a leading commodities platform operating over 200 warehouses in Nigeria, Kenya, and Uganda. This investment will facilitate the construction of 20 modern warehouses, enabling up to 200,000 more farmers to access low-cost storage and maximize sales from their crop harvests.

Planet Solar:

BII committed £8.5 million to Planet Solar to provide clean, affordable solar power in Sierra Leone. This will be the country’s first large-scale solar project connected to the grid, improving electricity access for the population, including industries and communities in Freetown and other regions.

Financial Performance and Portfolio Growth

British International Investment’s total net assets increased to £8.5 billion in 2023 from £8.1 billion in 2022, while its portfolio grew to £7.3 billion from £6.9 billion. The portfolio’s growth was primarily due to a higher pace of drawdowns compared to realisations and foreign currency valuation gains. Despite the growth, BII reported a financial loss after tax of £44.0 million, contrasting with a £167.7 million profit in 2022. This resulted in a portfolio return of £71.5 million, a decrease from the £285.6 million return in 2022.

Strategic Returns and Long-Term Goals

British International Investment aims to achieve a 2% return across its portfolio, measured on a rolling seven-year basis. This goal aligns with British International Investment’s mandate to support economic stability and improve the lives of millions of people. As of 2023, the institution remains ahead of this target with a seven-year weighted average annual portfolio return of 5.2%.

Leadership Insights

Diana Layfield, Chair of British International Investment, highlighted the organization’s vital role in addressing global challenges such as climate change, inequality, and access to basic services. She emphasized British International Investment’s commitment of £1.3 billion during a year marked by declining foreign direct investment in many critical regions. Layfield pointed out the disparity in foreign direct investment, noting that Africa receives just $40 per person compared to $651 in North America.

Chris Chijiutomi, Managing Director and Head of Africa for British International Investment, reiterated British International Investment’s dedication to improving the lives of millions in Africa. He emphasized the significant impact of British International Investment’s investments in creating jobs, providing essential services, and building resilient economies capable of withstanding the impacts of the climate emergency.

Conclusion

British International Investment’s 2023 Annual Review demonstrates a steadfast commitment to sustainable development, particularly in Africa. Through substantial financial investments and strategic support for key sectors, BII continues to play a pivotal role in driving economic growth and improving the quality of life for millions of people across the continent. As global challenges persist, British International Investment’s mission and impact remain as crucial as ever, ensuring that capital reaches those most in need and fostering resilient, thriving communities.