Finnfund is a Finnish development finance company that provides long-term risk capital for private projects in developing countries. Apart from co-investing with Finnish companies we can finance ventures that use Finnish technology, cooperate with Finnish partners on a long-term basis or generate major environmental or social benefits.
Market terms and minority stake
The terms of our financing are market-related. We do not extend soft loans but are ready to share risks by providing long-term financing for promising projects in challenging markets, where the availability of such financing from commercial sources is often highly restricted.
Our funding can be in the form of equity capital, mezzanine financing or long-term investment loans. Whatever the form, we seek to be a financial investor with a minority funding share in a project managed by the industrial sponsor, typically a Finnish parent company.
Experience of developing markets
Apart from our risk capital, we bring in links to our network of development finance institutions and other potential co-financiers as well as our experience from financing and joint venture arrangements in the target country. Especially for clients making their first investment in a given country, our knowledge of the business environment in that country may be of considerable value.
We can finance projects in developing countries and Russia. In recent years, the most important countries for our activities have been India and China.
While most of our past investments have been in manufacturing, we can also finance projects in other sectors ranging from agribusiness and power generation to telecommunications and services.
Apart from direct investments with Finnish companies or their partners, Finnfund also selectively finances the local private sector through intermediaries such as private equity funds. These intermediaries along with the local offices of other development finance institutions, form a network through which we can access experience and contacts relevant for our direct investments. This network can be particularly useful in countries such as Vietnam, where the investment interest of Finnish companies is growing from a very small basis.
Shareholders
Finnfund is owned by the State of Finland 87,1 %, Finnvera 12,8 % and Confederation of Finnish Industries EK 0,1 %.