British International Investment (BII), founded in 1948 as the Commonwealth Development Corporation (CDC), is the world’s oldest development finance institution. Relaunched in 2022 under its current name, BII is owned by the United Kingdom (U.K.) government and plays a central role in the country’s strategy to reduce global poverty.

Unlike traditional aid, BII invests public capital into private companies in low and middle-income countries. The aim is to create jobs, strengthen local economies and support long-term development in areas with limited access to finance. By providing long-term investments, BII helps businesses grow, build resilient economies, deliver essential goods and services and reduce global poverty.

Productive, Sustainable and Inclusive Development

BII’s investments focus on supporting productive, sustainable and inclusive development. Productive development means creating jobs and expanding local economies. Sustainable development addresses climate change by supporting projects that reduce greenhouse gas emissions and help communities adapt. Inclusive development targets poverty reduction and gender equality, prioritizing investments that empower women and support those in need.

The institution mainly invests in countries in Africa and Asia, with India being the largest single recipient. Key sectors include financial services, infrastructure, technology, businesses, health, food, agriculture and education, areas that either create jobs or improve access to essential services. Each investment is linked to one or more United Nations Sustainable Development Goals (SDGs) to ensure measurable impact.

The Impact of Investments: Jobs, Climate and Gender

In 2024, British International Investment committed nearly £1.8 billion to creating jobs, reducing aid dependency and combating climate change, including £903 million in climate finance. Over the last three years, it has invested more than $2 billion in climate action, supporting businesses leading the fight against climate change in emerging markets. Its 2024 investments helped provide jobs for over one million people across Africa and Asia.

The World Bank identifies employment as a key pathway out of poverty, with wider benefits such as promoting gender equality and economic stability. Alongside this, BII directed £880 million to the poorest and most fragile countries and invested around £500 million in gender finance commitments in 2024.

How BII Is Funded

BII funds come from several sources. A portion comes from the U.K. government’s Official Development Assistance (ODA) budget, also known as the overseas aid budget. It also reinvests financial returns from its investments and attracts private capital from companies and individuals seeking to support development in countries in need. Between 2020 and 2024, BII invested £9.5 million and mobilized around £6.5 billion in private sector capital (investments from non-government sources such as corporations or individuals).

The U.K. originally committed to 0.7% of its gross national income (GNI) to ODA, but this has since fallen to 0.5% and is set to drop to 0.3% by 2027.

These cuts could limit BII’s future investments. In response, International Development Committee Chair Sarah Champion has suggested allowing BII to borrow money. The government has said it is considering ways for BII to raise more private finance. This approach is also reflected in BII’s 2022–2026 strategy, which aims to mobilize greater levels of private capital for investments.

Criticism and Accountability

Despite its achievements, BII has faced criticism. The U.K. Parliament’s International Development Committee raised concerns about some investments lacking a clear poverty focus, potentially harming society or the environment or not aligning with U.K. government policies. Critics also highlighted a concentration of investments in middle-income countries where benefits to the poorest may be limited. They argued that BII should improve transparency by providing clearer investment and impact data, better explaining its activities and demonstrating the changes resulting from its investments.

In response, BII has increased transparency, publishing detailed data on jobs created, gender impact and overall results. It also committed to directing half of its annual investments to the poorest and most fragile countries by 2030.

Investment as a Pathway Out of Poverty

Ultimately, British International Investment and global poverty are closely linked. By prioritizing job creation, climate action and private-sector growth, BII provides a sustainable pathway out of poverty for millions. With strengthened transparency and a growing focus on the most vulnerable regions, BII continues to demonstrate that investments can reduce poverty and transform lives.

– Jeanne Pellet

Jeanne is based in London, UK and focuses on Business and New Markets for The Borgen Project.

Photo: Flickr