Development cooperation is also conducted in cooperation with the private sector. The aim is to harness private capital for the implementation of the Sustainable Development Goals through various funding channels and forms of support. In 2019-2021, this cooperation modality accounted for 6 per cent of Finland's total development cooperation.
Finnfund is a development finance institution primarily owned by the state. Through its investments to the private sector(Link to another website.) of developing countries, Finnfund facilitates risky projects that would be impossible to implement with private funding alone. Finnfund's investment portfolio has grown rapidly and already exceeds EUR 1 billion. Finnfund has also succeeded in allocating an increasing share of its funding to the poorest countries in the world.
Private sector cooperation has successfully met the result targets set by the Ministry for Foreign Affairs. For example, Finnfund's investments and projects funded by Finnpartnership have created jobs, increased tax revenue and improved infrastructure, transferred expertise and changed market structures in developing countries.
In 2019, Finnfund's investment portfolio was found to be net carbon negative, as the first development finance institution in the world. Thus, after this Finnfund's investments have removed more carbon than they have emitted into the atmosphere. In particular, this is due to Finnfund's investments in sustainable forestry.
The first PIF project to support investment in developing countries was launched in 2021, and the first funding decisions for the DevPlat Programme(Link to another website.), which supports innovation, were made in autumn 2021. The funding decisions for both cooperation modes emphasise the anticipated development impacts.
