BRITISH International Investment (BII), the United Kingdom’s development finance institution and impact investor, has confirmed its role as an anchor investor in the Allianz Credit Emerging Markets (ACE) fund, a $1 billion blended finance vehicle.
The ACE fund is structured to advance the objectives of the Paris Agreement, with a strong emphasis on climate-related financing across emerging markets. The BII said the investment aligned with its broader ambition to crowd in private capital at scale to support sustainable development.
Launched this week in London at BII, the fund brings together a mix of public and private sector participants. Development finance institutions, including BII and multilateral development banks, are committing $150 million in concessional capital to the junior tranche. This structure is designed to cushion risk and stabilise returns, enabling private investors to contribute up to $850 million toward the fund’s targeted $1 billion final close.
The BII will contribute $40 million of the junior tranche, alongside Global Affairs Canada, the Inter-American Development Bank Invest (IDB Invest), the Swedish International Development Cooperation Agency, and Impact Fund Denmark (IFDK).
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The announcement represents the fund’s first close, with total commitments so far reaching $690 million. Allianz SE and GastroSocial Pensionskasse are anchoring the senior tranche of the vehicle.
Once fully raised, the ACE is expected to rank among the largest blended finance funds globally, highlighting growing investor interest in structures that combine development impact with differentiated risk and return profiles.
The UK Minister for International Development and Africa, Baroness Chapman, said the BII’s participation underscored a shift in the UK’s development strategy toward partnership-led investing. According to her, government-backed capital was being used to unlock significantly larger pools of private investment, helping countries in the Global South respond to climate challenges while also delivering growth and returns for UK taxpayers.
Chief Executive of BII, Leslie Maasdorp, noted that concessional capital must be deployed strategically to mobilise private finance at scale. He said the ACE investment markED another step in BII’s efforts to support climate action and sustainable, impact-driven growth in lower-income economies.
The ACE investment is BII’s third under its £100 million mobilisation facility introduced in 2024 by UK Prime Minister Sir Keir Starmer. Previous commitments include an anchor role in the Pentagreen Green Investment Partnership for sustainable infrastructure in Southeast Asia, and a collaboration with BlueOrchard to channel life insurance capital into climate finance through a blended structure.
head of Private Markets at Allianz Global Investors, Edouard Jozan, said tackling climate change required greater investment in emerging and developing economies. He described the ACE fund as a demonstration of effective public–private collaboration, aimed at delivering competitive returns alongside measurable development and climate outcomes.
Around 40 percent of the fund’s disbursements are earmarked for Africa, a proportion that exceeds allocations typically seen in comparable blended finance vehicles. The balance will be invested across other emerging regions, spanning sectors such as renewable energy, clean transport, agriculture, and financial services.
