Finnfund (Finnish Fund for Industrial Cooperation Ltd.) is a development financier and impact investor. It aims to build a sustainable future and generate lasting impact by investing in businesses that solve global development challenges. Finnfund provides businesses operating in Africa, Asia and Latin America with risk capital, long-term investment loans, mezzanine financing and expertise on how to invest in the developing markets. It invests only in developing countries as defined by OECD/DAC.
Finnfund expects its projects to be profitable, socially and environmentally responsible and produce measurable development impact in their target countries. The fund puts special emphasis on sectors that are critical to sustainable development: renewable energy, sustainable forestry, sustainable agriculture, financial institutions and digital infrastructure and solutions. It also invests in other sectors when they match the fund’s investment strategy and meet its requirements. Finnfund invests in businesses that drive sustainable development, whether they are companies that are already operational or in the process of being set up.
Sustainable forestry has long been one of Finnfund’s focus areas. At the end of 2021, Finnfund’s investments in forestry (portfolio, commitments and decisions) were worth 174 million euros, representing 15% of the total portfolio and commitments. This is higher than any other development finance institution, making Finnfund a leading global investor in forestry. Finnfund invests in commercial plantations and related industries, such as sawmills and plywood mills.
Finnfund gets its funding from the State of Finland and the private capital markets, as well as retained earnings from its investments. All profits get recycled into new projects that drive sustainable development.
Financing Instrument: Equity, Mezzanine Financing, Debt
Project scale: Each year, Finnfund invests 200–250 million euros in 20-30 projects. Ticket size varies from one million to 25 million euros.
Recipient countries/regions/country groups: Global
Recipient categories: Businesses
Finnfund invests only in developing countries as defined by OECD/DAC. In order to be eligible for Finnfund investment, the project has to be implemented responsibly, target a developing country as defined by the OECD, generate measurable development impacts and be financially profitable. Finnfund is always a minority shareholder and the terms of exit will be set in advance.
Typically exit is implemented so that the project sponsor acquires Finnfund’s share in the company within 5 to 7 years. Loans typically have long maturities varying from 5 to 10 years. Guarantees are defined based on the risk, amount of financing and other factors. Finnfund expects all its investments to be profitable, environmentally and socially responsible and produce measurable development impact in their target countries. They only invest in privately owned businesses.
You can seek financing by sending Finnfund an informal application. For project appraisal, Finnfund will need a project plan developed by the client. There is no standard application form for Finnfund financing. The basis of their appraisal is the client’s project plan.
The investment process has five stages:
- Contact Finnfund’s investment team. The appropriate contact can be found here: https://www.finnfund.fi/en/investing/looking-for-an-investor/
- Send your project plan to Finnfund
- Sustainability assessment
- Development impact assessment
- Investment decision usually within 3 to 4 months from first contact
Last updated: 14 September 2023