Organisation, administration and operating principles


Finnfund is governed by the Act on a Limited Liability Company named Teollisen yhteistyön rahasto Oy (291/1979, the “Finnfund Act”).

Finnfund’s mission is to promote economic and social development in developing countries by financing responsible private business operations on a self-supporting basis. The purpose of the company is not to generate profit for the shareholders.

Finnfund can finance manufacturing, service, and infrastructure as well as investment and capital markets. It finances already operational projects, or companies to be established which involve a Finnish interest. In addition to commercial profitability, Finnfund emphasises positive development and the environmental impacts in its projects.

Finnfund provides its customers with equity capital, long-term investment loans and expertise on operations in developing countries.

Finnpartnership is a business partnership programme managed by Finnfund and financed by the Ministry for Foreign Affairs of Finland. It provides advisory services and financial support for the Finnish companies and non-governmental organisations in the project planning, implementation and training in developing countries.

At the end of 2016, the State of Finland owned 93.4 per cent of Finnfund’s share capital, Finnvera plc 6.5 per cent and the Confederation of Finnish Industries (EK) 0.1 per cent. Finnfund is an entrusted company with a special assignment by the State and belongs to the administrative sector of the Ministry for Foreign Affairs. The detailed content of the company’s special development policy mission is assigned annually by the Ministry for Foreign Affairs on the basis of the development policy programme currently in force. Finnfund’s principles of corporate governance are described in the 2016 Annual Report under the Corporate Governance section.  

Special mandate and development policy mission of the company

The Ministry for Foreign Affairs defines Finnfund’s special development policy mandate and sets goals for the company in terms of Finnish development policy, financial profitability and cost-efficiency. The Ministry for Foreign Affairs annually monitors the success of these goals.

The goals set by the Ministry for Foreign Affairs and their success are reported to the company’s Board of Directors, which participates in guiding the company’s operations in accordance with the goals set for it.

The company believes that in 2016 it was successful in achieving and largely exceeding the main objectives set for it. This refers to the operations being cost-effective and having positive development impacts, the share of investments in lower and lower-middle income countries among new decisions; and the part of projects that directly benefit the poor among all the decisions made. The company’s own profit on equity remained below the target level set by the ownership steering, however.

Finnfund’s mission is specifically to support the development of the private sector and to improve its operating conditions in developing countries in a manner that promotes economically, socially and environmentally sustainable development.


The values guiding Finnfund’s operations have been determined in cooperation with the entire personnel. These values are:


  • We finance responsible business operations in developing countries.
  • The Finnfund team always does its best.


  • We respect different cultures, their people and their ways of working.
  • We appreciate each other and the work done by others.


  • We have the courage to develop new ways of working under challenging conditions.
  • Finnfund supports and encourages its team in continuous development and learning from experience.


  • Our successful investment projects reduce poverty and inequality.
  • We focus on the essentials and use our resources as effectively as possible.

A set of common ground rules has been derived from the values in order to make them a more tangible part of the daily work of all Finnfund employees. Implementation of these values by the company and in the activities of all employees is assessed annually in development discussions.

Management and resourcing of corporate responsibility

The Managing Director leads environmental and social risk management in cooperation with the Director of Portfolio and Risk Management and the Director of Impact and Communications.

Corporate responsibility management at Finnfund

Corporate responsibility management at Finnfund

Finnfund has four full-time Environmental and Social Advisers and two Development Impact Advisers. The Environmental and Social Advisers work in Portfolio and Risk Management, and the Development Impact Advisers work in Impact and Communications.

The Environmental and Social Advisers ensure that the environmental and social risks and impacts of all the projects financed by Finnfund are assessed and monitored in all project phases. The Development Impact Advisers create a preliminary assessment on the impacts of each funded project and monitor and report on the impacts throughout the project life cycle.

The Environmental and Social Advisers and the Development Impact Advisers continuously develop Finnfund’s methods and working processes in terms of environmental and social responsibility and development impacts. They keep in contact with international expert networks and provide training to the other employees whenever necessary.

Environmental and social policy

Finnfund’s first Environmental Policy was approved by the company's governing bodies in 2005. In 2013, the Environmental Policy was reshaped into an Environmental and Social Policy, which was updated in early 2016. The Policy is available on the Finnfund website.

An internal Environmental and Social Responsibility Manual operationalises the Environmental and Social Policy. It describes the company’s environmental and social risk management process in detail. The manual is continuously being updated. The third version was published in 2016.

Finnfund’s Environmental and Social Policy is based on compliance with international standards and the Finnfund strategy. In 2009, Finnfund endorsed the principles for responsible financing of the Association of European Development Finance Institutions (EDFI) and committed to implementing them in its operations. The EDFI principles are aligned with the ten principles of the UN Global Compact initiative.

In the autumn of 2011, Finnfund and 24 other development finance institutions signed the Corporate Governance Development Framework, including a common set of guidelines on promoting good corporate governance in the investee companies, thus supporting sustainable economic development in developing countries. Finnfund is also committed to the UN Guiding Principles on Business and Human Rights and the fundamental principles of the International Labour Organization (ILO).

Both Finnfund’s and its investee companies must aim at environmental and social sustainability in all of their operations.

Environmental sustainability refers to aiming for a circular economy model, including economical use of raw materials, recycling, protecting the environment against pollution and climate change mitigation, and preventing the loss of biodiversity.

Social sustainability refers to respecting human rights, including the rights of indigenous peoples, promoting the working conditions and labour rights, ensuring health and safety, avoiding involuntary resettlement of local people and protecting cultural heritage.

Stakeholders and stakeholder interaction

The company’s most important external stakeholders include the owners, key development policy operators (including non-governmental organisations), operators in the Finnish business sector (the company’s client organisations in particular), the company’s European sister organisations and co-investors and, on a case-by-case basis, and other parties related to the projects financed by Finnfund, such as local communities, authorities and civil society in the target countries.

Finnfund aims to maintain regular and open interaction with its various stakeholders to identify their expectations and possible concerns and to openly respond to these.

In 2016, the company’s interaction with stakeholders was, as in the previous year, guided by public discussion about the company and a high level of partially negative publicity. The Agua Zarca hydropower project funded in Honduras especially prompted discussion. Berta Cáceres, an internationally well-known environmental and indigenous peoples’ activist who opposed the project, was murdered in March and the murder was linked in public discussion with the company in charge of the power plant project and its financiers. The murder is still being investigated as this report is being prepared. Together with the Netherlands Development Finance Company (FMO), Finnfund already announced in 2015 that it was trying to find a way to withdraw from the project in a responsible manner. Negotiations and arrangements on the withdrawal continued throughout the year.

In cooperation and communication with the stakeholders, Finnfund aimed to increase the level of openness regarding the company’s operations and results, both at a general level and in terms of specific projects. The communication also aimed to support the investment teams in the origination of new projects.

In early 2016, a separate Impact and Communications Team was established in the company. More employees were added to the team during the year. The work involving the stakeholders is managed by the Managing Director with the help of the Director, Impact and Communications and other management.



Finnish Fund for Industrial  
Cooperation Ltd. (FINNFUND)

Uudenmaankatu 16 B
P.O. Box 391 FI-00121 Helsinki, Finland
tel. +358 9 348 434
fax +358 9 3484 3346