• BlueOrchard’s Climate Action Mobilisation Fund has reached a $250 million first close, anchored by British International Investment and FinDev Canada.
• The blended finance structure is designed to meet institutional and insurer requirements, including Solvency UK Matching Adjustment criteria.
• Capital will target climate mitigation and adaptation across emerging markets through financial institutions, SMEs and direct corporate lending.

BlueOrchard has reached a $250 million first close for its Climate Action Mobilisation Fund, bringing institutional investors into a blended finance vehicle focused on emerging-market climate investment.

British International Investment (BII) and FinDev Canada anchor the fund. Private-sector commitments have also come from Aviva Investors, Daido Life Insurance Company and Schroders.

The structure tackles a persistent challenge in climate finance: converting institutional demand into investable opportunities in developing economies. It does this by incorporating the regulatory and investment requirements of large asset owners into the fund’s design.

BII initiative targets institutional capital

BII helped create the fund through its mobilisation initiative, launched in 2025. The programme called on private investors to help design financial products capable of increasing climate-related investment in emerging markets.

BII worked with BlueOrchard and prospective investors during the fund’s development. The parties sought to build a structure that could generate climate impact while meeting institutional investment requirements.

A central consideration was the regulatory framework facing life insurers. The fund was designed to accommodate insurers seeking assets eligible for the Matching Adjustment under Solvency UK.

That mechanism allows qualifying insurers to recognise some long-term asset returns when valuing certain liabilities. Building those requirements into the vehicle creates another route for insurers to allocate long-term capital to emerging-market climate finance.

For development finance institutions, the approach also offers a potential model for mobilising private capital beyond their own balance sheets.

Leslie Maasdorp, CEO, British International Investment, said: “This first close is an important proof point for the continued evolution of blended finance as a powerful mobilisation tool. By demonstrating that institutional investor requirements can be met alongside meaningful climate impact, the fund helps create a pathway for greater commercial investment into emerging markets. Each successful vehicle strengthens the market, builds investor confidence and makes it easier to replicate and scale future structures, ultimately mobilising more private capital towards climate action where it is needed most.”

Capital targets businesses and local lenders

The fund will provide senior loans to banks, microfinance providers and other financial institutions. Those lenders will then channel climate finance to small and medium-sized enterprises.

It will also lend directly to businesses across emerging markets.

The strategy is intended to support both climate mitigation and adaptation while targeting attractive risk-adjusted returns. That combination is important for institutional investors that must reconcile climate allocations with fiduciary, regulatory and portfolio requirements.

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Lori Kerr, CEO, FinDev Canada, said: “The scale of the climate challenge demands that we find new ways to mobilize institutional capital for emerging markets. This first-of-its-kind fund demonstrates what is possible when development finance, private investment, and deep market expertise come together with a shared ambition. By creating an investment grade pathway into emerging market climate finance, together, we are supporting climate solutions today while demonstrating a model that can unlock larger flows of capital in the future. That is the promise of blended finance – to turn investor interest into action and expand what the market can achieve.”

Blended finance moves closer to institutional portfolios

For investors, the fund’s significance extends beyond its $250 million first close. Its structure addresses barriers that have historically limited allocations to emerging-market climate assets, including regulatory constraints and investment-grade requirements.

BlueOrchard brings 25 years of emerging-markets private credit experience to the vehicle. Direct corporate lending also expands the channels through which institutional capital can reach climate-related businesses.

Michael Wehrle, CEO, BlueOrchard, said: “The successful first close of BOCAMF demonstrates what can be achieved when institutional investors, development finance institutions and investment managers work together to design solutions around investors’ needs. By combining BlueOrchard’s 25-year track record in emerging markets private credit with an innovative blended finance structure, including direct corporate lending, we have delivered an investment solution that broadens institutional access to climate finance while meeting the investment and regulatory requirements of insurers and other long-term investors.”

The first close adds to efforts by development finance institutions to use blended structures to draw larger pools of commercial capital into climate investment. If similar vehicles can meet institutional risk and regulatory requirements, they could broaden the financing base available for mitigation and adaptation across emerging economies.