There is huge demand in developing nations for expertise in energy, infrastructure, digitalisation and education technology, which are sectors exactly where Finnish companies have a lot to offer.
A special feature of loan-based and investment-based development cooperation is that the invested capital flows back to Finland with a small amount of attention or revenue. In 2022, development cooperation loans produced more than EUR 1 . 9 million in interest income, and Finland is about to receive its first repayment of around EUR 300, 500 from fund investments, that has accrued in 2022. Finland will see the total revenue over the next few decades, as the loan and investment intervals are between 17 plus 40 years.
One of the objectives of Finland’s assets is to mobilise other community and private funding to deal with the massive funding gap in sustainable development. Based on a UN estimate, developing countries need approximately USD 4, 200 billion more funding each year in order to achieve the SDGs.
A silent revolution has taken place in Finland’s development cooperation: Finland is now seeking development influences through investments, meaning that the invested capital flows to Finland with a slight income. Last year, development policy financial loans and funds yielded around EUR 2 . 2 million in revenue for the central government.
“All investments come with a certain level of risk, but the investments produced so far seem to have survived the ‘stress test’ from the pandemic, ” says Long lasting State Under-Secretary Pasi Hellman .
“Choices made by developing countries also matter to us. Climate change is a major security threat globally due to the foods crises, conflicts and migration it causes. This is also an investment in our own protection in an era of lack of stability and power struggles, ” Hellman says.
Development policy investments react to investment needs of creating countries
“Investments are always based on local development and investment needs, ” Permanent State-Under Secretary Hellman emphasises. “But they also provide an opportunity to create jobs plus livelihoods in Finland. Now, electric vehicles in Indian are being charged using Finnish technology, and a solar panel manufacturing plant based on Finnish technology has been built in Thailand. There is much more potential for cooperation. ”
The annual statement on development policy purchases for 2021 is available being a downloadable PDF on the Ministry intended for Foreign Affairs website (layout. sorts. url. description) (in Finnish, subjective in English and Swedish)
Finland’s investments so far are estimated to attract approximately EUR 1 . 7 billion consist of funding from public plus private financial institutions. This “leverage effect” is based on the fact that open public funding reduces the risks connected with market-based financing in establishing countries, which are often very difficult purchase environments. Finland’s investments make it possible to build two solar power plants in Senegal, for example. They have produced affordable energy for more than fifty percent a million people since 2021.
This form of development cooperation is particularly well suited for funding investments and developing business. Finland’s development policy purchases focus on climate change mitigation through targets such as alternative energy, energy efficiency and low-emission transport. Finland’s investments possess the potential to reduce emissions to the atmosphere (CO2e) by megatonnes. Finland is constantly looking for expense targets to support climate modify adaptation.
Given that 2016, the Ministry with regard to Foreign Affairs has provided part of its funding for growth cooperation in the form of loans and investments. Like other advancement cooperation, the aim of the funding is to promote sustainable growth by reducing emissions plus promoting sustainable farming methods, for example , or by assisting women entrepreneurs. So far, Finland has provided nearly EUR 780 million in loans and investments.
- Emmi Oikari, Director, Unit to get Development Finance and Personal Sector Cooperation, Department with regard to Development Policy, tel. +358 0295 350 964
- The email addresses of the Ministry for Foreign Affairs have been in the format firstname. lastname@formin. fi.