British International Investment (BII) has announced it will anchor the $1 billion Allianz Credit Emerging Markets (ACE) fund. The blended finance vehicle is designed to mobilise private capital for climate and development projects in emerging markets.
Launched in London, the fund brings together public and private investors, with development finance institutions (DFIs) and multilateral development banks (MDBs) committing $150 million in concessional capital to the junior tranche.
This structure is designed to absorb risk and stabilise returns, enabling private investors to contribute up to $850 million to the senior tranche once the fund reaches its targeted final close.
BII will contribute $40 million of the junior tranche capital, alongside Global Affairs Canada, IDB Invest, the Swedish International Development Cooperation Agency and Impact Fund Denmark.
The announcement marks the fund’s first close, which has already secured $690 million in commitments. Allianz SE and GastroSocial Pensionskasse are the anchor investors for the senior tranche.
Once fully raised, ACE is expected to rank among the largest blended finance funds globally, highlighting renewed investor appetite for structures that align development impact with competitive financial returns.
UK Minister for International Development and Africa, Baroness Chapman, said BII’s participation reflects a shift in the UK’s development strategy towards partnerships that crowd in private investment.
She noted that the approach is intended to maximise the impact of public funding, accelerate climate action in the Global South and generate returns that also benefit UK taxpayers.
BII Chief Executive Leslie Maasdorp said the investment underscores the institution’s strategy of deploying concessional capital to unlock significantly larger pools of private finance. He added that mobilising such capital is critical to addressing the climate emergency while driving sustainable, impact-led growth in lower-income economies.
The ACE investment is the third to be announced under BII’s £100 million mobilisation facility launched in 2024. Previous commitments include an anchor investment in the Pentagreen Green Investment Partnership focused on sustainable infrastructure in South-East Asia, and a partnership with BlueOrchard aimed at unlocking life insurance capital for climate finance.
Allianz Global Investors’ Head of Private Markets, Edouard Jozan, said the launch of ACE demonstrates the importance of directing institutional capital beyond developed markets to tackle global development and climate challenges. He described the fund as a strong example of public–private collaboration capable of delivering both attractive returns and measurable impact.
Around 40 per cent of ACE fund disbursements are expected to be deployed in Africa, a higher allocation than is typical for comparable blended finance vehicles.
The remaining investments will be spread across other emerging markets, targeting sectors such as renewable energy, clean transport, agriculture and financial services.