May 7, 2020
Finnfund made a record number of investment commitments in 2019
In 2019, Finnfund made a record 29 investment decisions with a total value of 237 million euros. Our investment assets grew by 13% to 557 million euros. The investments focused on high-impact projects in low income countries, particularly in Africa, which is fully in line with Finnfund’s strategic goals. At the same time, we were able to improve financial net income and reduce the average risk level of our portfolio. This and more can be found in Finnfund’s Annual Review 2019.
One half in climate projects
Almost one half, 49%, of our new investment commitments targeted projects which mitigate climate change or advance adaptation through, for instance, more efficient food production. We sought highest possible impact by investing 78% in least developed or lower middle-income countries, by OECD/DAC classification.
Our first direct investment in the education sector was a loan to Maarifa Education, which operates affordable, quality higher education institutions in Sub-Saharan Africa. Clean energy, sustainable forestry, financial institutions and sustainable agriculture are still Finnfund’s largest industry sectors.
Impact and gender equality in focus
Finnfund made a special effort to improve its impact management processes and ways to advance gender equality through its investments. We were the first Finnish investor to join the international IFC Operating Principles for Impact Management.
We were also among the first ones to join the international 2X Challenge, which aims double investments in projects advancing gender equality. We also adopted a Finnfund statement on human rights to better
integrate the UN Guiding Principles for Business and Human Rights (UNGP) into investment operations throughout the whole cycle.
We moved to a new office space, which was awarded the WWF’s Green Office certificate as a sign of its reduced ecological footprint.
Stronger funding base
Finnfund’s funding base was reinforced when the Finnish state provided a 40-year loan of 210 million euros and made a capital injection of 10 million euros. Nordic Investment Bank issued a further 40 million US dollar loan.
We pledged to invest one half of the government loan – 105 million euros – in business projects which advance gender equality and the other half in climate change mitigation and adaptation projects. By the end of 2019, we had already met over 40% of that goal.
Another important milestone was reached when Finnfund passed the so-called pillar assessment of the European Commission. It means the commission can entrust Finnfund with the implementation of EU guarantees and other budget tasks.
”Year 2019 was in many ways record strong for Finnfund. Our portfolio expanded in a manner that advances our strategic goal of tripling Finnfund’s impact. At the same time, we were able to reduce the average risk level of our portfolio and grow our net financial income. We are well poised to meet the exceptional times caused by the Covid-19 pandemic”, says Finnfund CEO Jaakko Kangasniemi.
Director of Communications Pasi Rajala, tel. +358 400 464 393, pasi.rajala(a)finnfund.fi