Finland to invest EUR 120 million in new finance program being prepared to mobilise private financing in emerging markets

Finland’s Ministry for Foreign Affairs will invest EUR 120 million in the Finland-IFC Blended Finance Program for private-sector investments. The program is being prepared in partnership with the International Finance Corporation (IFC), a member of the World Bank Group. This will be the largest development policy investment ever made by the Ministry for Foreign Affairs. The appropriations will be allocated from the Ministry’s financial investment item.

The program is due to be launched in 2027. It aims to increase the adoption of new technologies and business models in emerging markets and to boost private-sector financing to promote sustainable developments.

The program is estimated to mobilize around USD 600 million in additional financing for projects it finances, of which at least USD 120 million is expected to come from the private sector. The positive example set by the projects financed under the program is expected to attract broader private investments in sustainable development in developing countries.

The investment in the program is part of Finland’s investment-based development cooperation. The funds invested under these programs are expected to return to Finland, potentially with returns that correspond the interest rate on Finnish government benchmark bonds.

“By using development aid funding to leverage private capital, we can also boost trade opportunities for Finnish businesses. The new Finland-IFC Blended Finance Program aims to boost investment in places where access to finance is limited but development impacts and growth potential are high,” says Minister for Foreign Trade and Development Ville Tavio.

In line with the Report on International Economic Relations and Development Cooperation adopted in 2024, the investment will help mobilise private capital, particularly for investment needs of businesses that contribute to sustainable development. The program follows blended finance principles and will finance only investments that would not be realised through commercial financing.

In line with the Development Policy Investment Strategy of the Ministry for Foreign Affairs, the program will invest in sectors in which Finland and Finnish businesses can offer expertise and technology. The program may also finance projects in other sectors in which Finland has an interest or that are flagship projects under the EU Global Gateway strategy.

The program will be able to invest in businesses and projects across several sectors in countries eligible for development assistance. Efforts will also be made to identify investment opportunities in Ukraine. Eligible sectors include digital infrastructure, energy networks and transmission, critical minerals, sustainable agriculture and forestry, and municipal infrastructure. The circular economy will be considered a cross-cutting theme of the program.

IFC plays an important role in enabling private investments in emerging markets. For example, in 2025 Finnvera provided guarantees for Finnish exports worth EUR 970 million for an investment in sustainable pulp production in Brazil, for which IFC had led the work to arrange the financing package.