'A laboratory of ideas': New CEO Maasdorp on his priorities for BII

Leslie Maasdorp, the newly appointed CEO of British International Investment, has four priorities in his new job: climate finance, attracting more private capital, working more closely with other bilateral and multilateral development finance institutions, and more innovation. Maasdorp took the helm of the U.K. development finance institution — which provides equity, debt, and other investments to address development challenges — in late 2024. He was previously the chief financial officer at the New Development Bank, a multilateral development bank he helped build over nearly a decade. BII made £1.31 billion in new commitments in 2023, growing its portfolio to £7.3 billion ($9.2 billion), with 60% in Africa, 34% in Asia, and 5% in other regions. “I knew about BII for many, many years, during my investment banking days, I've always admired the work of BII from a distance. So for me to be asked to lead the institution is a huge, huge honor,” Maasdorp told Devex in an interview shortly after the U.K. announced cuts to its aid budget. Despite reductions in U.K. aid spending, Maasdorp said there are no short- or medium-term impacts on BII. The institution is well-capitalized, has the resources to execute its strategy, and generates returns for the government. While not dependent on the government, “the decision naturally does alter the overall kind of global framework within which we work,” Maasdorp said. The world, he added, is at a “crossroads” on multilateralism, climate, and development finance — dynamics that are driving his priorities for the job. Climate His first major objective is to raise climate finance ambition, and BII “is the perfect platform for that,” Maasdorp told Devex. While some may question the climate agenda, and some corporations double down on fossil fuels production or investment, climate is at the center of development finance, he said. The climate agenda is central to BII’s mandate, he said. In the 2022 strategy, which extends through 2026, BII set a goal of having at least 30% of its annual commitments to finance climate projects. BII has exceeded that, with about 40% of projects related to climate finance, and Maasdorp believes there is potential for further growth. “Most of the MDBs, most of the DFIs, this is the direction of travel,” Maasdorp said. “We have to, as DFIs, play a leadership role to mobilize the rest of the financial services industry, more generally the institutional investor community, and financial flows” towards net-zero carbon emissions. However, Maasdorp’s predecessor, Nick O’Donohoe, cautioned in his final interview with Devex, that BII should not lose sight of its core historic focus on poverty alleviation, even as it pursues climate objectives. “There is some inherent structural tension in the relationship between climate and development in some of your more fragile and frontier markets,” Maasdorp said, acknowledging the potential tradeoff. Africa, which comprises more than 50% of BII’s portfolio, will remain a key focus, but climate goals will require investment elsewhere as well. “We have to make sure we don't hemorrhage the development agenda in Africa, the poverty alleviation agenda. But at the same time, our work in Southeast Asia, for example, and South Asia is about decarbonizing, and we've got to devote more resources towards that aspect,” he said. Private capital mobilization The second major priority is mobilizing private capital — ensuring BII’s investments attract private sector partners. Lofty mobilization goals set a decade ago failed to live up to expectations, and blended finance — the use of concessional capital, typically public or philanthropic, to catalyze private investment — has not scaled, Massdorp said, adding that there has been a lot of experimentation and learning. “I believe we are at a crossroads, because there is a general recognition, whether it's the IFC, EBRD, all of the private sector focused development finance institutions, that we have to be much more catalytic,” he said, referring to the International Finance Corporation, the World Bank’s private sector arm, and the European Bank for Reconstruction and Development. While not yet formalized, Maasdorp anticipates that DFIs and MDBs will eventually be required by shareholders to set clear mobilization ratios — metrics measuring how much private investment is attracted with each dollar, he said. These targets will vary depending on each institution’s structure, investment geographies, and shareholder expectations. For example, mobilizing private capital into fragile or very low-income markets where risk-averse institutional investors don’t want to put their money may be difficult or impossible. But for more mature markets like the Philippines, Indonesia, and Vietnam — where BII gained investment authority in 2002 as part of a geographic expansion — there is more potential for private investment, and BII should have higher mobilization targets there, Maasdorp said. Another option for DFIs to mobilize private capital is to issue public bonds and reinvest the proceeds, as done by the World Bank and its private sector arm, IFC. But many DFIs, including BII, lack the legal framework and credit ratings needed to issue bonds today. “It will be one of the menu of options that all of the institutions will look at,” Maasdorp said, adding that it will require different structures and legislative changes. Improve how DFIs work together Maasdorp’s third priority is to improve strategic collaboration between DFIs and MDBs, particularly between BII and its European DFI counterparts. That means harmonizing standards to simplify the investment process. Too often, companies seeking support from multiple DFIs must navigate duplicate processes, which “takes them away from running their own business to comply with all the complex investment metrics that you set,” Maasdorp said. Part of that process is leveraging each organization’s strengths, he said. BII should utilize the World Bank’s market reform work rather than venture into areas outside of its expertise. “We should work in a much more cohesive way with them,” Maasdorp said, acknowledging that closer alignment is a process and will take time. Innovation Finally, Maasdorp wants BII to embrace innovation — to rethink how it operates and consider what it can do differently, Maasdorp said. To that end, BII received £100 million from the U.K. government to help mobilize private capital. Half of that is funding a new competition working with private asset managers, pension funds, and sovereign wealth funds to determine what’s needed to draw them into investing alongside BII, particularly on climate deals, and how BII’s concessional or grant funds can be used most effectively. “We want to kind of be a laboratory of ideas,” he said. “We’ve been talking amongst ourselves as DFIs and MDBs about crowding in these guys, but you need to bring those guys inside the room so they can actually tell you.”