In numerous low-income countries, companies suffer from a shortage of long-term funding that is reasonably priced and risk-tolerant. Finnfund’s mission is to fill this gap when there is a responsible company that promotes the development of its country of operation.
We offer direct investment in the form of long-term investment loans, equity-rated investments and subordinated loans or other mezzanine financing.
Most of the Finnfund’s investments are made directly to the companies operating in a developing country. Direct investments are long-term investment loans, equity investments or equity-rated financing or other mezzanine financing.
Nineteen new direct investment decisions were made during the year totaling EUR 114.9 million. At the end of 2017, direct investments were 63.7 percent of all investments. Loans were 52.8 percent of direct investments, equity-rated financing was 35.5 percent and mezzanine financing 11.7 percent. Projects were located in 31 countries.
Of all Finnfund’s investments, the share of direct investments was 76.8 percent (including financial institutions) at the end of 2017.
Some of our investments are for expanding existing activities, others for establishing entirely new operations. Finnfund is always a minority investor and does not seek a dominant position in the companies it finances.
Finnfund finances only companies operating in developing countries but aims at catalyzing cooperation of Finnish companies in the developing countries. In 2017 six new financing decisions were made on projects with a Finnish shareholder or a technology provider. This means that 32 percent of new investments involved a Finnish company.
Finnfund concentrates on working with Finnish companies that have solutions to pressing problems of the developing world and therefore good opportunities in growth markets. The opportunities are often related to clean technology.