The British International Investment (BII) has launched a new strategy to mobilise £15bn of capital towards developing countries, with a focus on increasing private funding and building climate partnerships.

The first phase of the UK’s development finance institution’s new five-year strategy will focus on accelerating the flow of private capital to developing economies. Of the £15bn target, BII will contribute up to £8bn, with the remainder expected to come from private institutions, including insurers, pension funds and other asset managers.

Alongside this mobilisation target, BII has also launched British Climate Partners, a £1.1bn (approximately $1.5bn) initiative focused on investments designed to support emissions reductions in countries with coal-dependent energy systems. These include India, the Philippines, Indonesia, Vietnam and other South-East Asian economies.

Read more: AllianzGI rolls out $1bn climate-focused EM credit fund

According to Srini Nagarajan, managing director and head of Asia, around $500m (£370.3m) of this capital will be used to crowd in investment for mezzanine debt, while the remaining $1bn will be allocated to equity investments. The programme is expected to support between 15 and 18 assets across Asia.

“What is happening in emerging Asia is there are many commercial investors who are willing to provide long-term commercial finance, but there are very few people who are willing to provide any structured form of instruments… such as mezzanine debt platforms,” Nagarajan said.

Nagarajan said BII already has a number of mezzanine partners, including support for a German developer in East Asia with an $80m mezzanine debt transaction. Pentagreen Capital, a joint venture between Temasek and HSBC, also helped on the deal.

He said private credit is defined differently in emerging markets than in the US. In emerging markets, he said, these are secured transactions backed by underlying cash-flowing assets, with defined debt-to-equity ratios and lenders holding a first claim on cash flows.

Read more: BII and BlueOrchard launch $250m climate fund for insurers 

“Britain has a proud history of acting as a global leader in international development,” said Leslie Maasdorp, chief executive of BII. “We cannot solve the global challenges we all face, poverty, instability, conflict and global public health, without bringing the least developed countries with us on the journey to shared prosperity.”

Read more: AXA IM Alts closes natural capital strategy with $560m