Partners in Finland's development policy

In order to achieve its development policy goals, Finland works together with many different partners. These include states, organisations and companies.

Support Syrians 2017: Light art at Merikasarmi, Helsinki.
Support Syrians 2017: Light art at Merikasarmi, Helsinki. Photo: Vesa Häkkinen / UM

Bilateral development cooperation

Finland conducts bilateral development cooperation activities to support many countries. Bilateral development cooperation is conducted between Finland and individual developing countries. It is based on the partner countries' own development plans and on dialogue with them. The responsibility for effecting change lies with the partner countries. Finland supports their development.

Read more: Finland’s partner countries for bilateral development cooperation

Regional development cooperation

In regional cooperation activities, Finland designs programmes for areas larger than individual countries.The aim is to support the resolution of cross-border problems and to strengthen regional integration. Regional cooperation complements other forms of support.

Finland provides funding to and engages in regional cooperation in many areas in which it has special expertise, including in innovation, peace-building, taxation and development, rights of persons with disabilities, promotion of equality, energy, and sustainable use of natural resources. Approaches may vary in different geographical regions.

Funding is often channelled via international organisations, regional economic and cooperation organisations, and international non-governmental organisations (INGOs).

Multilateral cooperation

Active participation in multilateral cooperation makes Finland a more influential player in international development policy than its size may suggest. Examples of multilateral cooperation include work through UN development finance institutions (DFIs) and the European Union. Strengthening multilateral cooperation is a long-term and central objective of Finland's foreign and development policy.

Finland supports multilateral actors financially and is actively engaged in advocacy work among them. Financing consists of membership fees, general grants, contributions from development banks and environmental and climate funds, and of thematic, regional or country-specific support. Approximately a third of the exclusive ODA budget item administered by the Ministry for Foreign Affairs is channelled through multilateral cooperation partners.Together with other EU Member States, Finland also influences decisions on how the funds are used and how the Sustainable Development Goals (SDGs) are promoted globally. Through multilateral cooperation, Finland can promote its key foreign policy objectives, such as defending the international rules-based order and respecting international law.

Multilateral development cooperation has several strengths. It can be conducted efficiently and effectively in wide geographical areas and multilateral operations cover a large number of themes. Additionally, multilateral development cooperation has a wide funding base and high effectiveness.

The most important international organisations engaged in multilateral cooperation are the United Nations together with its specialised agencies and the Organisation for Economic Co-operation and Development (OECD)(Link to another website.). Important development finance institutions include the World Bank, the Asian Development Bank (AsDB) and the African Development Bank (AfDB). International cooperation in taxation and in environmental and climate issues is also within the scope of multilateral cooperation.

EU development policy

The EU and its Member States are the world’s largest provider of official development assistance (ODA) and humanitarian aid. The EU seeks to move forward from the traditional donor-recipient roles, towards equal partnerships with developing countries The aim is to achieve equal partnerships with developing countries. A key element in achieving this is the Global Gateway strategy.

As an EU Member State, Finland supports development in different parts of the world. By actively participating in decision-making on development policy in the EU, Finland can contribute to shaping the future of international development policy and influence the implementation of development cooperation in different parts of the globe.

Civil society

One of the key objectives of Finnish development policy is to strengthen civil societies’ role in developing countries and to support civil society’s contribution to reaching the development objectives. Sustainable development, democracy and the fulfilment of human rights are not possible without a diverse and independent civil society.

Finland supports civil society organisations, associations and foundations that promote the UN Sustainable Development Goals (SDGs), the eradication of extreme poverty, and the reduction of inequalities. The work of the organisations also supports the achievement of Finland’s other development policy objectives.

According to several international reports, civic space has narrowed globally in recent years, and strengthening it is very important in the current situation.

Each year, the Ministry for Foreign Affairs provides support to 70–80 Finnish civil society organisations and foundations engaged in development cooperation, which each have at least one local or international organisational partner in development cooperation.

Public administration, higher education institutions and research

Finnish ministries and government bodies and agencies cooperate with their public sector counterparts in developing countries. The objective is to build up the competence of public officials and support the operations of organisations in developing countries.

The Foreign Ministry funds cooperation carried out by central government bodies through the so-called Institutional Cooperation Instrument (ICI). ICI funding may be used for projects that build up different sets of skills and competence. It can also be used to promote opportunities for young Finnish professionals to participate in development cooperation activities.

The instrument is a good example of how development cooperation builds up competencies of both the Finnish parties and the partners in the developing countries.

Finland also supports partnerships between universities and universities of applied sciences in Finland and higher education institutions in developing countries and research to support sustainable development in Finland and abroad.

Private sector

The UN has estimated that developing countries should invest approximately USD 3,300–4,500 billion per year to be able to reach the SDGs by 2030. Here companies play a central role as partners and as funders.

Jobs create prosperity and wellbeing in developing countries. Finland supports the development of business activities in developing countries and at the same time makes use of the skills and expertise of Finnish companies.

In addition, the Ministry for Foreign Affairs supports Finnish companies’ partnerships and business opportunities in developing countries. The activities always aim to promote the economic, social or environmental development in the target countries.

Read more: Development funding

Development policy loans and investments

Since 2016, Finland has provided part of its funding for development cooperation in the form of loans and investments. They differ from grant-based support in that the invested capital will return to the investor. 

The Ministry for Foreign Affairs makes investments in and provides loans for projects that promote the Sustainable Development Goals and leverage other funding. Funding is allocated especially to private sector investments with the aim to attract private capital.

Development policy investments promote the objectives of development policy and support the allocation of capital to investments and business activities that are important for developing countries.

One objective of development policy investments and loans is to bring about financial leverage, that is, to stimulate the flow of other public or private money to the same target of investments. Finland’s input may enable other financiers to contribute, for example, by offering longer periods of payment or by seeking a more moderate return, to make the investment project profitable as a whole. Investment activities also increase Finland’s influence in development banks.    

By 2022, Finland’s development policy loans and investments had leveraged an estimated EUR 1.7 billion of other funding for sustainable development projects.

Development policy loans and investments can be divided into loans and fund-based investments. Investments can be divided into larger blended finance funds (Finland–IFC Blended Finance for Climate Program, Finland-IDB-Invest Climate Fund, EBRD High Impact Partnership for Climate Action (HIPCA)) and into funds focusing on growth and SME finance (Asian Development Bank Ventures 1 and 2, Finn Church Aid Investment). Larger blended finance funds typically invest in large renewable energy and infrastructure projects. Investments in growth and SMEs can target a wide range of projects from agricultural projects to introducing various technologies to the market.  

Development policy loans and investments call for extensive preparation. The Ministry for Foreign Affairs conducts thorough consultations with the parties representing the investment target before making any investment decision in order to ensure that the required criteria are met. The Foreign Ministry’s internal working group on investments discusses all loans and investments. The Ministry requests an estimate of all its investments from Statistics Finland. 

The performance of loans and investments is reported as part of the Development Policy Results Report. 

Read more: Finland–IFC Blended Finance for Climate Program