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

The Government agrees that BII investments must support inclusive economic growth, stating that BII’s current 2022-26 strategy already includes objectives for inclusive development, integrated through its Impact Framework and Impact Score. The FCDO continues to monitor BII’s performance against this, including an analysis requested in 2023.

The government partially accepts the recommendation, stating that BII already has appropriate oversight and monitoring processes in place, which Ministers are satisfied with. The response highlights existing mechanisms for ensuring compliance with BII's policies and promoting poverty reduction through its strategic objectives, but does not commit to new actions for greater oversight, specifically targeting tax receipts, or intervening on misaligned values beyond current legal requirements.

The government partially accepts, agreeing it should hold BII accountable for due diligence and monitoring. It asserts that existing corporate governance arrangements, FCA regulation, and independent verification by bodies like BlueMark, ICAI, and NAO already ensure best practice and validate BII's internal assessments.

The government accepts the recommendation, setting a goal for BII to rank as the most transparent bilateral DFI. BII will publish a Transparency Roadmap outlining its ambition and specific short-term milestones.

The government accepts the recommendation, setting a goal for BII to rank as the most transparent bilateral DFI in the next Publish What You Fund index. BII will publish a Transparency Roadmap with specific short-term milestones to achieve this.

The Government agrees BII should promote gender equality and target under-represented groups, noting BII’s existing 2022-26 Strategy, 2X Criteria, and BOLD framework for diversity finance. It commits to ensuring gender, development impact, and environmental and social outcomes are a specified feature of future portfolio and investment evaluations.

The Government agrees on monitoring BII’s geographic split, noting existing monitoring through Quarterly Shareholder Meetings and publicly available data. The Minister for Development has set a new ambition for BII to commit over 50% of its annual investments to the poorest and most fragile countries by 2030.

The Government agrees that poverty reduction must be central to BII's investments, stating that BII's existing strategic objectives and Impact Score already integrate productive, sustainable, and inclusive development. It confirms BII's oversight of investments, including through intermediaries, and is satisfied with BII’s existing procedures and safeguards, arguing that altering them could reduce foreign direct investment.

The government describes existing mechanisms for ministerial scrutiny of BII's budget and activities, and highlights independent evaluations that show BII's investments are on track to meet development impact goals, arguing that poverty reduction is already central.

The government agrees with the importance of transparency and states that BII will publish a Transparency Roadmap before the end of 2023, outlining its ambition to be the most transparent bilateral development finance institution and detailing specific short-term actions.

The government partially accepts, agreeing on the importance of poverty reduction but states they are satisfied with BII's existing processes and oversight of investments made through intermediaries, which comply with key policies and support development.

The government partially accepts, agreeing to hold BII accountable, but details existing mechanisms like corporate governance, FCA regulation, and independent verification by BlueMark, ICAI, and NAO, which it claims already ensure BII's due diligence and monitoring meet best practice standards.