Evaluation of Finnish development financier Finnfund
Development financier Finnfund has succeeded in investing more and more in the world’s poorest countries and most difficult sectors, while also maintaining its commercial viability. The most positive development impacts can be seen in the company’s investments in agriculture and forestry. This information comes from an independent assessment of the company’s activities.
Ministry for Foreign Affairs has commissioned an independent assessment of the activities of development financier Finnfund. The assessment focuses on Finnfund's activities in 2008–2017 and how it has observed the policy guidance offered by the Ministry for Foreign Affairs, as well as how likely it is that Finnfund’s strategy for 2018–2025 will materialise. Assessment produces information supporting Finnfund in the guidance and development of its activities.
With its investment portfolio of around EUR 600 million, Finnfund is one of the smallest national development financiers in Europe. Despite this, it is still subject to the same requirements as larger development financing companies: the company’s activities must be profitable, while also serving development policy objectives, such as overcoming electricity shortages or bringing better services, employment opportunities and infrastructure to developing countries.
The investments that produce the most positive development effects are often also the most financially challenging due to their high risks. According to the assessment, Finnfund has managed to exercise a balanced investment policy, that is, it has succeeded in investing more and more in the world’s poorest countries and most difficult sectors, while also maintaining its commercial viability.
However, the evaluation recommends that Finnfund make improvements to its evaluation of development impacts over the entire lifecycle of investment targets.