The Swedish government has adopted a new ordinance that enables the use of development assistance funding in conjunction with export credits and export credit guarantees to support socially beneficial development promotion projects in low- and lower middle-income countries. The new financial instrument is designed to make it easier for Swedish companies to contribute to sustainable development in these countries.
The initiative aims to bring development assistance closer to trade, supporting countries seeking to embark on a prosperity journey. Minister for International Development Cooperation and Foreign Trade Benjamin Dousa stated that “no country has been lifted out of poverty through development assistance alone; rather, what is needed is growth and investment.” The new ordinance will enter into force on 1 August 2025 and will run as a five-year pilot project until the end of 2029.
The financing instrument is aimed at supporting socially beneficial projects that would not be possible on commercial grounds. These may include major infrastructure projects, or initiatives in the transport, healthcare, or telecommunications sectors. The Swedish Export Credit Agency will administer funding applications, and the government has previously set aside development assistance funding to commit to future payments of up to SEK 1.2 billion during the period 2026-2041.
The new ordinance is part of a broader effort to promote sustainable development in low- and lower middle-income countries. The Swedish government believes that by combining development assistance with export credits and guarantees, it can support projects that benefit both economic growth and social welfare. This approach aims to create a more balanced and sustainable approach to international development.
Key Features of the New Financing Instrument
- Combines development assistance funding with export credits and export credit guarantees.
- Supports socially beneficial projects that would not be possible on commercial grounds, including major infrastructure projects and initiatives in transport, healthcare, or telecommunications sectors.
- Administered by the Swedish Export Credit Agency.
- Five-year pilot project running until the end of 2029.
Conclusion
The new ordinance marks a significant step forward in Sweden’s efforts to promote sustainable development and support economic growth in low- and lower middle-income countries. By combining development assistance with export credits and guarantees, the government aims to create a more balanced approach to international development that benefits both economic growth and social welfare.