Investment criteria and process

Three criteria for every investment

Every Finnfund investment must meet three criteria: it must generate positive impact, be sustainable and profitable. We assess each investment against these criteria before making an investment decision, and we continue to monitor its performance throughout our investment period.

Sustainability is a prerequisite for positive impact. Sustainable, responsible business practices add value to investments and contribute to generating a positive impact. They play a key role in the risk management of each project and in ensuring that the “do no harm” principle is respected in our investments.

Simultaneously, responsible and environmentally, socially, and economically sustainable business practices can improve the operational and financial performance of a company, enhance employee wellbeing and commitment, and bring a competitive advantage.

When financing private companies, financial profitability is key to creating an impact. If a company fails to keep its business running, it will not achieve the desired impact.

Finnfund’s investment process

We strive to keep our investment process swift and flexible. Investment decision is usually taken within 3 to 4 months from first contact. The final investment decision is taken by the Finnfund Board of Director based on proposals from the Finnfund management.  The Board usually meets once a month.

Finnfund expects all its investments to be profitable, sustainable, and produce measurable development impact in their target countries.

At the start of the process, we make sure that projects meet Finnfund’s basic environmental, social and governance standards, including those of the World Bank IFC (IFC Performance standards on Environmental and Social Sustainability). Environmental and social responsibility assessments also help set the terms of funding.

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Guidelines for a business plan

There is no standard application form for Finnfund financing. The basis of our appraisal is our client’s project plan. We are very flexible in its format.

Contact us

We encourage prospective clients to contact us early, preferably prior to developing complete project plans.

Current investments

At the end of 2023 the number of investment decisions in portfolio was 198 in 53 countries.

How we invest

We put special emphasis on sectors critical to sustainable development, namely clean energy, sustainable forestry and agriculture, financial institutions, and digital infrastructure and solutions. We can invest in other sectors as well when projects match our investment strategy.