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The intent is to reduce iBGP mesh size.BGP confederation is a method to use Border Gateway Protocol (BGP) to subdivide a single autonomous system (AS) into multiple internal sub-AS's, yet still advertise as a single AS to external peers.
Based on the idea that an autonomous system (AS) can be split into multiple, more manageable sub-autonomous systems (sub-ASs from now on), each of which has its own AS number, BGP confederation enables you to apply a scalable approach when it comes to BGP deployment and controlling your large autonomous system. Implementing BGP confederation significantly reduces the total number of BGP connections within an autonomous system.