British International Investment (BII), the United Kingdom’s development finance institution, said on Tuesday it would provide a $150 million facility to South Africa’s FirstRand to support companies seeking to cut carbon emissions. The announcement marks BII’s first entry into energy transition financing.
BII said the funding will be deployed through BII FirstRand business banks RMB and FNB. The facility will target high-emission companies that plan to adopt cleaner technologies and reduce their environmental impact.
Focus on transition financing
According to the institutions, the facility is designed as transition finance, which helps heavy emitters modify operations without limiting their access to capital. The approach aims to support industries that face significant barriers in shifting to lower-carbon models.
A 2025 South African Climate Finance Landscape study estimates the country raised an annual average of about 188 billion rand for climate-related projects during 2022-23. The report notes that South Africa may need up to 500 billion rand each year to meet its climate commitments, leaving a gap of more than 300 billion rand.
Current funding trends
The study found that most existing climate finance is directed toward power projects, including wind and solar developments. Only a small portion supports efforts that help communities adjust to climate impacts or transition from coal-dependent livelihoods. Domestic institutions contributed nearly 60% of total funding, with commercial banks serving as the largest private-sector financiers.
Stephen Priestley, BII managing director, said the partnership aims to accelerate emission-reduction efforts. “This investment marks a pivotal step in our strategy to accelerate decarbonisation where it matters most,” Priestley said.
Background and context
The announcement comes as South Africa continues to balance economic needs with climate goals. The country remains one of the world’s most carbon-intensive economies due to its reliance on coal for electricity generation. Policymakers and financial institutions have increased efforts to close funding gaps and support industries seeking to transition to cleaner operations.
BII FirstRand, one of South Africa’s largest financial groups, has expanded its climate-related financing portfolio in recent years. The partnership with BII is expected to strengthen its capacity to support transition-focused projects across various sectors.
The $150 million facility adds to a growing list of international initiatives aimed at mobilizing capital for Africa’s energy transition. As demand for climate finance increases, development institutions and commercial lenders are positioning themselves to meet the needs of high-emission industries undergoing structural change.
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