Mission
Finnfund promotes economic and social development in developing countries by financing responsible and profitable private projects.
Vision
By 2013, Finnfund will be at the forefront in Finland’s economic relations with developing countries, particularly in the area of facilitating links between Finnish business and developing countries:
We will focus on projects, target countries and types of financing that will offer us the most effective way of promoting sustainable development in our mandate countries.
We will build bridges between Finnish know-how and the needs of developing countries. In particular, we will share risks in projects implemented by medium-sized companies.
We will devote further efforts in increasing the development impacts that we catalyse. We will double our investments in 2009-2013.
Key elements of the strategy
Prioritising development impacts. Finnfund focuses its funding and risk-sharing capacity on countries, sectors and projects, in which it is able to achieve the greatest development impact. Most of our funding is allocated to low-income and lower middle income countries. The impact on development will be assessed by examining the significance of the project to the company receiving the funding and evaluating its relevance to stakeholders, the environment and the surrounding society. The added value of Finnfund’s participation to the progress and quality of the project will also be taken into account, including the responsible management of environmental and social issues and good governance practices within the project company. In the next few years, Finnfund will be introducing more systematic assessment, monitoring and appraisal tools for evaluating development impacts.
Finnish know-how for development. As a Finnish development finance institution, Finnfund is best placed to add value to projects that involve Finnish participants. Forestry, clean technology (including renewable energy and energy conservation) and telecommunication are among the sectors in which Finnish companies can provide globally competitive solutions to answer the needs of developing countries. Over the next few years, Finnfund seeks to catalyze even more Finnish know-how for the benefit of developing countries. Apart from investing with Finnish companies, Finnfund also finances projects undertaken by local companies with Finnish involvement in the areas of supplying technology, long-term collaboration and market access. Finnfund favours medium-sized projects which generally benefit the most from Finnfund’s involvement.
Not a replacement but a catalyst. Finnfund does not compete with commercial financiers. Instead, Finnfund complements the financing structure of its clients and shares risk, for example by strengthening their capital structure, with the aim of catalysing additional financing for profitable projects. Apart from providing risk finance, Finnfund may also assist its customers in developing bankable projects and sourcing finance. Like other development finance institutions, Finnfund aims to increase its funding where and when the availability of commercial finance is limited. Finnfund also participates in arrangements that go beyond individual projects and have as ultimate objective to increase Finnish financing for viable projects in developing countries.
In low-income countries indirectly and together with others. Finnfund promotes private sector development by investing in microfinance, by indirectly financing small and medium-sized enterprises, and by participating in the financing of infrastructure projects, even when there are no Finnish companies involved. Participation in such financing is selective: it mainly takes place in countries where Finland has a long tradition of development cooperation and where Finnish companies are currently not investing to any great extent, such as in Africa. Finnfund generally co-finances such projects together with other development finance institutions, emphasizes projects with significant positive development or environmental impacts, and prioritizes projects that can benefit from Finnfund’s links to Finnish businesses.
In cooperation with the Ministry for Foreign Affairs., Finnfund develops new models for promoting development objectives with the private sector in collaboration with the Ministry for Foreign Affairs. Apart from expanding the business partnership programme Finnpartnership, this cooperation may comprise special risk finance for pilot projects that entail significant development impacts. It can also include forms of cooperation in which Finnfund supports the private investments by companies and the Ministry for Foreign Affairs supports related public sector operations or investments.
Against climate change. As part of the global climate policy, Finland and other industrialised countries are committed to promoting the transfer of clean technology to developing countries. This is a sector, in which Finnish companies have a wealth of expertise, where Finnfund has long-term and active involvement, and where the market of emission reductions has created new business opportunities. Over the next few years, Finnfund will increase investments in this sector, cooperate with parties that design and implement the climate policy, and contribute with its knowledge on the needs of the private sector and its expertise in the business sector of developing countries.
Increasing operational efficiency. Finnfund will increase operational efficiency and improve effectiveness by enhancing its internal processes and procedures in project preparation and monitoring. Additionally, support functions, such as information management, will be improved. Finnfund seeks to collaborate with other European development finance institutions and, where appropriate, introduce practices and tools developed by sister organisations. Harmonised practices and an effective division of labour will be of particular importance in projects that involve several development finance institutions.
Transparent reporting and communication. Finnfund systematically monitors the achievement of its strategic goals, and provides transparent progress reports which form an integral part of its management system. Finnfund informs the public on its operations as actively and openly as the regulatory framework allows and without disclosing the business secrets of its customers. Finnfund similarly expects its customers to communicate the impacts of their projects as openly as possible. In its external communications, Finnfund highlights the importance of the private sector’s role in development and profiles itself as an expert in the business sector of developing countries and in economic relations with developing countries.
Increasing investment. The extent of our success in promoting the economic and social development of developing countries depends largely on the volume of our activities. In 2002–2007, Finnfund grew substantially, shifting its emphasis to low-income countries, creating a systematic approach regarding environmental aspects, while improving profitability. Finnfund’s goal is to double the total amount of its financing by 2013, while maintaining its profitability and strengthening its focus on the development impacts of its operations.
