Mercer and British International Investment call on asset managers to help scale climate finance in emerging economies
11 December 2024
New mobilisation facility set to unlock hundreds of millions of pounds in private investment
What is driving this initiative?
Increasing the level of private investment into EMDEs is essential to accelerating the global climate transition. Between 2021 and 2022, average annual climate finance flows reached USD 1.3 trillion, yet this represents only 1% of global GDP. To avoid the worst impacts of climate change, climate finance must dramatically increase to an estimated USD 9 trillion by 2030.[2] Significantly more investment is required, particularly in EMDEs that are most vulnerable to the impacts of climate change.
The private sector has a critical role to play. Accelerating capital flows to these economies is critical to implementing climate transition across the global economy, yet often these regions are deemed to be too high risk by global asset allocators. That’s why Mercer and BII are delighted to be partnering to engage the investment community to deliver an innovative and collaborative initiative to help overcome the challenges of channeling institutional capital into EMDEs.
Capital available for successful proposals
Announced by the Prime Minister in September 2024 at the UN General Assembly, BII’s new £100m Mobilisation Facility aims to unlock hundreds of millions of pounds of private investment into climate and sustainability-focused investments in these important regions.
BII is ringfencing up to £50m of the Mobilisation Facility for 1-3 proposals sourced from asset managers. These will be selected through a process run in conjunction with Mercer. BII may consider awarding the whole allocation to one bid, should the proposal demonstrate outstanding deliverables against the criteria found below.
BII anticipates that submissions from asset managers will focus on concessional capital structures that make use of the funds available through the Mobilisation Facility to attract institutional capital alongside driving climate and sustainability-focused objectives in EMDEs. Consideration will be given to proposals which solve for investors’ EMDE private market participation constraints (e.g. risk tolerance or returns expectation mismatch) as well as EMDE deal origination. BII is open to playing an originating role on a deal-by-deal basis.
If you are an asset manager and would like to participate, register your interest here
After emailing us to confirm interest, asset managers will receive a Call for Proposal document via email on 28 January 2025. Mercer and BII will also hold a bidder briefing for interested parties on 6 February 2025 at the BII offices and virtually. Further information can be found in the FAQs below.
Contact us if you have any further questions
Important information
Launched at the UN General Assembly by Prime Minister Keir Starmer, BII’s Mobilisation Facility is a new £100m blended finance facility which focuses specifically on active mobilisation of institutional investor capital into BII investments, particularly with a climate focus.
The Mobilisation Facility will be BII’s first concessional mandate that is not aimed at mitigating BII’s own risk to increase depth of impact, but instead aimed at mitigating the risks of other investors to help mobilise their capital to increase collective impact at scale. This is critical to achieve BII’s climate impact ambitions, where impact scale is paramount.
The Mobilisation Facility financing is intended to bridge the ‘relative value gap’ between institutional investors’ risk-return appetite, and the risk-return profile of BII’s portfolio/pipeline, by offering considerable risk mitigation.
This initiative is open to asset managers with a proven track record in climate finance and investment in EMDEs. Eligible participants must demonstrate that:
- You have a demonstrable track record in private markets (at least one of private equity, private credit or infrastructure)
- Your total assets under management (AUM) exceed £5bn
- You have defined Net Zero targets and/or that you have started to develop an initial roadmap or transition plan
- You adhere to BII compliance, business integrity and environmental/social policies. This will be assessed by the following checks during the first phase of screening: Sophisticated/Professional Investor status; Environmental and social incident history; and sanctions checks.
- Active mobilisation objective: clear intent and strong likelihood of increasing private capital in EMDEs
- Large-scale climate impact: reducing CO2 emissions and/or supporting climate transition (covering mitigation and/or adaptation) at scale in EMDEs
- Subsidy kept to a minimum: lower subsidy solutions such as unfunded guarantees or returns caps preferred to higher subsidy solutions such as first loss tranches
- Subsidy is of a temporary or time-bound nature: Evidence given for why subsidy is expected to reduce over time or in future iterations of the concept
- Smallest subsidy size in proportion to impact (cost-effective)
- 90%+ focus on climate finance
- Minimum mobilisation ratio target of 5:1 (Private capital mobilised: Mobilisation Facility capital in $)
- Execution feasible within a 1–2-year timeframe.
- Scalability: The ability of the solution to scale commercial capital flows into EMDEs
- Impact: The potential environmental, social, and economic benefits
- Feasibility: The practicality and viability of the implementation plan
- Replicability: The ability to replicate and scale the strategy in other iterations
- Sustainability The long-term sustainability of the proposed solution.
BII and Mercer intend to hold a Bidders’ Briefing meeting at the BII offices in London after distribution of the Call for Proposals documents. This session will allow the Bidders to resolve any questions about BII’s Specification, the Call for Proposals documents and the process.
The bidder briefing will be held on 6 February 2025.
Bidders are asked to attend with no more than two representatives from their organisation and notify Mercer of attendees in advance. Bidders must confirm to Mercer via email the attendees (name and position) by 24 January 2025 in order for BII to make arrangements for the briefing. There will also be a streaming link available for bidders unable to attend in person.
- Dedicated time with the BII Deal Team to help develop the successful concept/s to the appropriate level to confidently enter BII’s internal investment committee (IC) process
- Entry into BII’s IC process for consideration of the required capital from BII to anchor each concept (for both concessional and non-concessional funding)
- Public recognition and promotion through BII’s and Mercer’s networks
- Ongoing support and collaboration opportunities with industry experts across climate and EM investing ecosystems.
- Call for Proposals documentation distributed to eligible asset managers: 28 January 2025
- Bidders Brief: 6 February 2025
- Submission deadline: 4 March 2025
- Notify longlisted asset managers: March 2025
- More detailed proposals requested from longlisted asset managers: March 2025
- Submission deadline: April 2025
- Discuss and refine proposals with shortlisted managers: April through June 2025
- Manager presentation to judging panel, evaluation and selection: June/July 2025
- Successful proposal/s enter into BII IC Process: Q3 2025.