British International Investment (BII), an institution that uses foreign aid to invest in development projects abroad, has been making investments in luxury hotel chains, fossil fuel fertiliser production and billionaire-owned companies, according to a new report.
The new analysis, produced by Bond – the UK network for organisations working in international development – comes a day before BII publishes its five-year strategy for 2026-31. It suggests that there are “shortcomings in BII’s current approach to support the world’s most marginalised communities,” Bond policy manager Sandra Martinsone said.
Only 14 per cent of BII’s investments have been made in the world’s least developed countries, Bond ha said, in spite of BII’s stated goal to reduce poverty and promote development to benefit the world’s poorest.
In addition, BII has made investment commitments worth some $640m (£470m) into billionaire-owned companies, including into sectors including luxury hotel chains, fossil fuel fertiliser production, and dual fuel power generation that will sometimes run on fossil fuels.
Some 37 per cent of BII’s active investment commitments go to just 20 businesses, Bond has said, with the majority of BII investments also going to companies that are domiciled outside of the ultimate aid recipient country.
These investments have been funded in part by more than £6 billion in capital contributions from the UK aid budget since 2015, with BII set to receive a further £140m in UK aid per year over the next three years even as funding for life-saving humanitarian aid is slashed.
“[Organisations] such as BII play a significant role supporting local businesses where private investors are absent,” said Ms Martinsone.
“But there is no justification for luxury hotel chains, private schools, upmarket housing, fossil fuel fertiliser companies, and businesses owned by billionaires to be part of BII’s investment portfolio.
“BII should not continue to hold these types of investments if they are not serving clear development purposes.”
Responding to the report, a BII spokesman told The Independent: “Bond’s analysis creates a misleading narrative and is in several places factually wrong.
“BII has over 1,600 investee companies that provide vital jobs to over 1 million people and which last year paid $2.5 billion in taxes to local governments.
“The countries in which we invest want a move away from aid-led development models. They want investment in their private sectors to build thriving economies, generate tax revenue and reduce aid dependency. That is what BII is focused on delivering.”
This article has been produced as part of The Independent’s Rethinking Global Aid project
