British International Investment (BII), a UK government-owned company, has come under scrutiny for its investments in overseas fossil-fuel assets. While BII pledged to align future investments with the Paris Agreement, its portfolio still includes gas-fired power plants in Africa and south Asia.
According to data from 2023, BII had nearly $700 million invested in fossil-fuel energy projects, comprising around 6% of its total assets. Despite doubling its funding for renewable energy since 2020, BII faced criticism for conflicting with UK climate objectives and diverting aid resources.
BII operates as the UK’s development finance institution, investing in businesses in developing countries to promote economic growth. Although it aims to sustain itself through financial returns, it also receives significant funding from the UK government’s aid budget.
The company’s commitment to phasing out overseas fossil-fuel funding beyond March 2021 led to increased scrutiny over its continued investments in gas projects. Despite claims of reducing its fossil-fuel exposure since 2020, BII faced backlash for holding active investments in the sector.
Natalie Jones from the International Institute for Sustainable Development expressed concerns about BII’s lingering fossil fuel investments amid commitments to climate alignment. The organization faced calls from civil-society groups and MPs to establish a clear divestment timeline and transition toward green energy investments.
Sandra Martinsone of Bond highlighted the risk of stranded assets if BII delays divesting from fossil fuels. With ongoing pressure on BII to reallocate funds from existing assets into sustainable projects, questions arise about the responsible management of aid finances.
While some argue that gas power remains essential for providing electricity access in many African nations, critics like Nick Dearden from Global Justice Now question the appropriateness of aiding gas power expansion. They emphasize redirecting resources towards clean energy solutions instead.
As debates continue over balancing energy needs with environmental goals, stakeholders urge greater transparency and accountability from institutions like BII. The evolving landscape of international investment underscores the complexities of navigating climate commitments while supporting economic development effectively.
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