EUR 210 million loan to Finnfund for improving the position of women and girls and for climate projects
The Finnish Government will grant Finnfund a loan of EUR 210 million for further investment in climate projects in developing countries and for strengthening the position of women and girls. Minister for Development Cooperation and Foreign Trade Ville Skinnari made the decision about the loan, which is part of the Ministry’s development policy investments.
Finnfund is Finland's national development financier, which promotes sustainable development in developing countries by investing in responsible and profitable businesses operating in them.
Finnfund will invest half of the loan in businesses that strengthen the economic independence of women in developing countries or provide services that are important to girls and women. The other half of the investments will be directed to climate change mitigation and to improving developing countries’ ability to adapt to climate change. Investments will include the production and increased use of renewable energy, energy efficiency, sustainable agriculture and agriculture-enhancing projects that help poor people living in developing countries adapt to climate change.
“Achieving the UN Sustainable Development Goals requires substantial private investments in climate action, equality work, and the creation of jobs with fair working conditions. In this work, too, Finland intends to play a bigger role than its size would suggest. I consider it important that we emphasise the position of women and climate action also when making investments,” says Minister for Development Cooperation and Foreign Trade Ville Skinnari.
“Finnfund is one of the smallest and most agile European development financiers. We have quickly shifted our priorities to Africa and to the poorest countries in general. We were also among the first to join the G7 initiative to strengthen the position of women. The new government loan will enable us to continue implementing our strategy,” says Jaakko Kangasniemi, CEO of Finnfund.
The loan to be granted to Finnfund will contribute to the Government Programme's objective to attract private funding and corporate involvement in sustainable development investments in developing countries. The loan period is 40 years, of which the first 10 years will be instalment-free. After that, the loan will be repaid in equal instalments. The interest rate on the loan will be 0.5%.
Since 2016, the Ministry for Foreign Affairs has used loan-based and investment-based development finance appropriations, so-called development policy investments. They differ from conventional grant-based development cooperation funding in that they have a predetermined amount of anticipated return and reflow. The loan of EUR 210 million to Finnfund will be granted from the 2018 and 2019 appropriation for development policy investments.
Ministry for Foreign Affairs: Max von Bonsdorff, Director, Unit for Development Finance and Private Sector Cooperation, tel. +35850 344 1014 and Tiina Vainio, Special Adviser to Minister for Development Cooperation and Foreign Trade Ville Skinnari, tel. +358 50 524 6559
Finnfund: Pasi Rajala, Communications Director, tel. +358 400 464 393