British International Investment (BII), the UK's development finance institution (DFI), has subscribed to a $75 million (around Rs 585 crore) “Green Basket Bond” to finance micro, small and medium-sized enterprise (MSME) projects across Africa, South and Southeast Asia through local banks.
“The green lending programme will direct much-needed financing (across multiple currencies) to small-scale green projects across Africa, South and Southeast Asia through local MSME banks,” the company said in a statement.
Arranged by Symbiotics - an emerging markets access platform and financial lender – the Green Basket Bond is a first of its kind in BII’s markets – covering the African continent, India, Pakistan, Bangladesh, Sri Lanka, Nepal, Indonesia, Philippines, Vietnam, Cambodia and Laos.
The financing will be towards supporting 10 – 15 MSME banks who require smaller investment capital than BII is typically able to fund directly, the statement added.
The program will facilitate loans to fund small-scale green projects such as rooftop solar panels, sustainable agriculture, energy-efficient appliances including clean cookstoves, energy efficiency improvements to buildings, electric vehicles and more.
To further drive impact, BII is providing an additional around $520,000 through its technical assistance (TA) facility which will be managed by Symbiotics’ provider, Symbiotics Association for Sustainable Development (SASD). The facility will help banks to develop their green financing capabilities by enhancing their ability to identify and manage green assets.
"This investment will increase access to climate finance for small scale entrepreneurs and businesses that are developing green projects. It will also increase MSME banks’ capabilities to identify and manage climate assets. BII’s intention is that this new, innovative funding structure will enable other investors to replicate and invest in this space,” said Jo Fry, Investment Director & Head of Intermediated Credit, BII.
Established in 1948 as CDC, which was rebranded as BII beginning April 2022, the investment company has added Southeast Asia and the broader Indo-Pacific region as its new focus areas for business expansion.
Active in India, BII recently committed $89 million (around Rs 676 crore) to scale clean energy capacity in India where it has an existing portfolio of over $2 billion.
In April, BII also appointed Oman India Joint Investment Fund’s Satish Chavva to lead its direct private equity division for South Asia.
Globally, in the last five years it has invested close to £7 billion (around Rs 69,620 crore).