UK aid as a lender and investor
An information note examining the UK’s growing use of aid-backed lending and investment.
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We expect to publish this information note in December 2026.
Summary
In 2025, the UK government committed to a shift from being seen primarily as an aid donor towards becoming an “investment partner”. This change was part of its new approach to international development set out in the context of significant aid budget reductions. It followed a series of changes in recent years aimed at making greater use of investment and other forms of development finance, alongside more traditional grants and technical assistance.
This information note will examine the UK’s growing use of aid-backed lending and investment, looking at how the UK’s approach has developed since 2022. It builds on issues highlighted in recent Independent Commission for Aid Impact (ICAI) reviews, including the use of guarantees to support countries such as Ukraine, and the role of different financial instruments in climate investment. It will provide greater transparency on the size and scope of the UK’s portfolio as a lender and investor. It will also examine the governance, management and systems used to monitor risks and impact.
Review questions
- What strategy is guiding the UK’s approach to lending and investment in its development aid programme?
- How does the UK use aid-backed financial instruments?
- How does the UK govern, manage and monitor the selection, prioritisation and use of financial instruments in its aid programme?
Read the terms of reference for more information about the report scope.