Investment for development: The UK’s strategy towards Development Finance Institutions

International Development Committee Closed Inquiry
Opened: 9 Nov 2022 Closed: 7 Dec 2023 Parliament page
The International Development Committee launched an inquiry on Investment for Development: the UK’s strategy towards development finance institutions and the effectiveness of aid spending through British International Investment (BII). This inquiry assessed whether BII is best placed to deliver impact and value for the UK taxpayer, given that a greater … Read more
8 Recommendations
15 Conclusions
1 Report
4 Oral sessions
3 Letters
4 Events
Activity timeline 13 events
10 Jan
2024
Correspondence
10 Jan
2024
Correspondence
7 Dec
2023
Report published
15 Sep
2023
Report published
5 Jul
2023
Correspondence
6 Jun
2023
Oral evidence
6 Jun
2023
Formal meeting (oral evidence session) · Room 8, Palace of Westminster
25 Apr
2023
Oral evidence
25 Apr
2023
Formal meeting (oral evidence session) · The Thatcher Room, Portcullis House
7 Mar
2023
Oral evidence
7 Mar
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
24 Jan
2023
Oral evidence
Oral evidence sessions 4 sessions
6 Jun 2023
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Investment for development: The UK’s strategy towards Development Finance Institutions
Rt Hon Andrew Mitchell · Foreign, Commonwealth & Development Office
25 Apr 2023
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Investment for development: The UK’s strategy towards Development Finance Institutions
Diana Layfield · British International Investment Nick O’Donohoe CMG · British International Investment
7 Mar 2023
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Investment for development: The UK’s strategy towards Development Finance Institutions
David Kuijper · FMO Joe Dharampal-Hornby · Impact Investing Institute Mr Stuart Bradley · Phatisa Group Limited Samantha Attridge · Overseas Development Institute
24 Jan 2023
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Investment for development: The UK’s strategy towards Development Finance Institutions
Anna Marriot · Oxfam Daniel Willis · Global Justice Now Graham Gordon · Catholic International Development Charity (CAFOD) Paul James · Publish What You Fund
Title HC No. Published Items Response
Ninth Report - Investment for development: The UK’s strategy tow… HC 884 15 Sep 2023 23 Responded
Recommendations & Conclusions
6 results
Clear
2 Conclusion Deferred
Ninth Report - Investment for deve…
Increase FCDO oversight of BII by taking a non-voting seat on its board.
Under the current arm’s-length relationship, BII holds some investments that conflict with the UK Government’s policies, such as those relating to fossil fuels and there have been few attempts by BII to adapt its legacy investment portfolio to align with … Read more
Government Response
The Government agrees on the need for effective collaboration between FCDO and BII, noting existing guidance and close work. Ministers will explore opportunities to strengthen this, including integrating collaboration into country business plans, but the response does not address the specific recommendation for a non-voting FCDO seat on the BII board.
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3 Conclusion Deferred
Ninth Report - Investment for deve…
FCDO and BII benefit from enhanced collaboration at country and regional levels.
The FCDO and BII can both benefit from greater collaboration at the country office and regional levels.
Government Response
The Government acknowledges the importance of monitoring BII's impact, detailing existing oversight arrangements and annual reviews. It commits to review the log frame for additional indicators and to review SMART targets for the next strategy period (2027), but rejects introducing new SMART targets in the current period. The response does not directly address greater collaboration at country/regional levels.
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6 Conclusion Deferred
Ninth Report - Investment for deve…
Incorporate SMART targets into FCDO strategy for BII's development impact by March 2024.
The FCDO must incorporate SMART targets into its strategy documents that stretch the development impact that BII achieves, such as the number of quality jobs created through its gender lens investments. This must be done by March 2024 to achieve … Read more
Government Response
The Government agrees on the importance of measuring BIP impact and commits to publishing its British Investment Partnerships strategy by summer 2024, following consultation. However, it does not specifically commit to incorporating new stretching SMART targets for BII into FCDO strategy documents by March 2024, as recommended.
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9 Conclusion Deferred
Ninth Report - Investment for deve…
Create a British Investment Partnerships strategy defining expectations and publicly reporting progress annually.
A British Investment Partnerships strategy is urgently needed to drive effective co- ordination of actors within the BIPs and to ensure the International Development Strategy’s objective of delivering development in partnership achieves maximum impact. The FCDO must create this strategy, … Read more
Government Response
The Government's response addresses BII's internal processes for assessing additionality in its investments and its exit strategy, explaining how these ensure development outcomes. However, it does not address the urgent need for a broader British Investment Partnerships strategy or the specified deadline and reporting requirements for such a strategy.
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11 Conclusion Deferred
Ninth Report - Investment for deve…
Cap BII investments in middle-income countries to better distribute across different development needs.
BII must better distribute its investment across countries with different development needs and income status by capping the proportion of investments that it holds in middle-income countries, at a percentage determined by the Minister for Development, by 31 March 2025. … Read more
Government Response
The government largely deflects the recommendation, describing existing oversight mechanisms and rejecting a 'full rolling audit'. It commits only to reviewing in 2024 whether additional spot checks of BII investments are required, rather than capping investments in middle-income countries.
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14 Conclusion Deferred
Ninth Report - Investment for deve…
Target nascent markets and exit BII investments lacking proven additionality annually.
BII must target nascent markets that struggle to stimulate investment from the private sector. BII must annually assess the value it adds to investee companies. Where BII has not proven its additionality to an investment or its case for additionality … Read more
Government Response
The government deflects the recommendation regarding additionality and market focus, focusing instead on BII's transparency and stating that BII will publish a Transparency Roadmap with milestones to become the most transparent bilateral DFI.
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Government Response AI assessment · 23 of 8 classified
Accepted 12
Accepted in Part 3
Deferred 6
Rejected 2
Total 8 recs + 15 conclusions
Correspondence 3 letters
10 Jan 2024 Correspondence from the Minister for Development & Africa relating to Clarification on BII Funding Eligibility for Overseas Territories - 20 December 2023
Parliament page
10 Jan 2024 Correspondence to the Minister for Development & Africa relating to Clarification on BII Funding Eligibility for Overseas Territories - 5 December 2023
Parliament page
5 Jul 2023 Correspondence from the Minister for Development and Africa regarding British International Investment (BII) Statutory Instrument - 20 June 2023
Parliament page