Finnfund in brief ENG net

Finnfund in brief Finnfund in brief • Finnish Fund for Industrial Cooperation Ltd (Finnfund) – development finance institution • State of Finland 93,4%, Finnvera Plc 6.5%, Confederation of Finnish Industries EK 0.1% • Founded in 1980 • Office in Helsinki, staff of 58 persons • Member of European Development Finance Institutions (EDFI) • Risk capital for projects in developing countries and Russia • Investment criteria include: - profitability - social and environmental responsibility - development impacts 30.6.2016 Finnfund in numbers 31 December 2015 Shareholders’ capital EUR 251 million Portfolio EUR 369 million Portfolio and undisbursed commitments (at original value) EUR 602 million Total assets EUR 377 million Number of investments 160 Number of investment countries 33 30.6.2016 Finnfund’s target countries by income level 30.6.2016 What does Finnfund finance? • Profitable private projects - establishment or additional investments - from small and medium-sized companies to large companies - in different sectors • Positive development and environmental impacts • Finnish interest • In developing countries and Russia 30.6.2016 Finnish interest • Finnish partner • Long-term partnership – e.g subcontractor, raw material producer, long-term customer • Transfer of Finnish technology • Significant positive environmental impacts – e.g renewable energy and energy efficiency • In low-income countries also cofinancing with other development finance institutions 30.6.2016 What is Finnfund’s role? • • • • • • Financial investor with minority stake, EUR - 10 million Long-term investor Sharing country risks Sharing political risks Expert of development financing Partner of the project sponsor with industry knowledge 30.6.2016 Financial instruments • Equity - risk-sharing as a minority shareholder • Mezzanine - subordinated and convertible loans • Loans - medium to long-term investment loans • Guarantees to local financiers 30.6.2016 Environmental and social policy Key issues when assessing potential investments Benefits of environmental and social sustainability • Economic, environmental and social sustainability • Creation of positive environmental and social impacts • Respect and promotion of human rights • Improved operational and financial performance • Guard against unforeseen risks and impacts • Competitive advantage • Enhanced community support 30.6.2016 Assessing E&S impacts and risks Tools Client to commit to – – – – – – – – – Finnfund’s E&S expertise National legislation International standards (IFC Performance Standards and the related Environmental, Health & Safety Guidelines) Other relevant sector specific standards (e.g ISO, FSC) Common guidance developed by European DFIs E&S site visit (due diligence) Information and materials provided by the client Support during implementation 30.6.2016 – – – Developing adequate E&S assessments Implementation of an E&S Action Plan, when necessary Providing adequate E&S information Obtaining a good understanding of the applicable international E&S standards, as well as national and local legislation The aim is to develop the project in line with international standards and guidance 10 Environmental and social sustainability in the financing process Familiarisation with the project • Finnfund introduces its environmental and social principles to the project company • The project company provides the initial information used in the assessment of the project • Finnfund plans the environmental and social due diligence taking into account the anticipated impacts and risks 30.6.2016 Preparing the investment proposal • Obtaining additional information (e.g with questionnaires) and site visits • Finnfund’s advisers analyse the information, compare the project to the requirements of international guidelines and standards, and identify possible areas of improvement • Finnfund’s advisers discuss the results of their assessment and, where necessary, draft a corrective action plan together with the project company A review is prepared to support the investment proposal Legal agreements and disbursement • Environmental and social covenants and undertakings are agreed upon (including conditions precedent for disbursement) • Environmental and Social Action Plans as well as reporting formats are annexed to the legal agreements Monitoring • Annual reporting, including a description of the implementation of the action plan • Notification requirement of unusual events, incidents and accidents • Monitoring visits • If needed, discussions on possible corrective actions and improvements 11 IFC Performance Standards Assessment and management of environmental and social risks and impacts Underscores the importance of identifying E&S risks and impacts, and managing E&S performance throughout the life of a project Land acquisition and involuntary resettlement Applies to physical or economic displacement resulting from land transactions such as expropriation or negotiated settlements Labor and working conditions Recognizes that the pursuit of economic growth through employment creation and income generation should be balanced with protection of basic rights for workers Biodiversity management and sustainable management of living natural resources Promotes the protection of biodiversity and the sustainable management and use of natural resources Resource efficiency and pollution prevention Recognizes that increased industrial activity and urbanization often generate higher levels of air, water and land pollution, and that there are efficiency opportunities Indigenous peoples Aims to ensure that the development process fosters full respect for Indigenous Peoples Community health, safety, and security Recognizes that projects can bring benefits to communities, but can also increase potential exposure to risks and impacts from incidents, structural failures, and hazardous materials Cultural heritage Aims to protect cultural heritage from adverse impacts of project activities and support its preservation What are the benefits of the Performance Standards Guard against unforeseen risks and impacts Implementing the Performance Standards helps companies identify and guard against interruptions in project execution, legal claims, brand protection, and accessing international markets Improve financial and operational performance Meeting the Performance Standards can help clients improve their bottom line Implementation of the Standards can help optimize the management of inputs such as water and energy, and minimize emissions, effluents, and waste, leading to a more efficient and cost-effective operation 30.6.2016 Social license to operate The Standards help clients find ways to maximize local development benefits and encourage the practice of good corporate citizenship This often results in greater acceptance of the project by local communities and governments, allowing companies to acquire a social license to operate Enhanced brand value and reputation may also be attractive to new investors or financiers Gain an international stamp of approval The ”Equator Principles”, which have been adopted by more than 70 of the world’s leading investment banks in developed and developing countries, are based on IFC’s Performance Standards 12 Finnpartnership - Finnish Business Partnership Programme • Financed by the Ministry for Foreign Affairs, operated by Finnfund • Goal to increase business cooperation between companies in Finland and developing countries • New business opportunities and partners (Matchmaking) • Advisory services and Business Partnership Support Facility (grant) for Finnish companies www.finnpartnership.fi 30.6.2016 13 European Development Finance Institutions United Kingdom Belgium Norway the Netherlands France Denmark Spain Switzerland Sweden Germany Italy Austria Finland Portugal Belgium European Financing Partners • Co-financing for large projects in Africa, the Caribbean and the Pacific • Way for an EDFI member to arrange financing for its clients • Financiers other development finance institutions and EIB • 1€→4€ • Loans, equity, mezzanine financing or guarantees 30.6.2016 15 Portfolio and commitments - geographical distribution (at original value, total EUR 602 million) 31 December 2015 Africa Asia Latin America International Eastern Europe & Central Asia The Mediterranean 30.6.2016 50 100 150 200 250 (total number of commitments 160) 300 16 Portfolio and commitments by sector (at original value, total EUR 602 million) 31 December 2015 Energy and environment Funds Forestry Financial Resource based industries Other infrastructure Manufacturing Hotels Telecommunications Health services 30.6.2016 25 50 75 100 125 150 (total number of commitments 160) 175 17 Investment portfolio (EUR million) 350 300 250 200 150 100 50 2009 2010 2011 Equity 30.6.2016 2012 Funds (book value) 2013 2014 2015 Loans 18 Portfolio and undisbursed investment decisions (EUR million) 600 500 400 300 200 100 2009 2010 2011 Portfolio, EUR million 30.6.2016 2012 2013 2014 2015 Undisbursed investment decisions 19 Contacts • www.finnfund.fi • firstname.lastname@finnfund.fi • tel +358 348 434 address Uudenmaankatu 16B, Helsinki @Finnfund http://team.finland.fi/en/frontpage 30.6.2016 20 [...]... social sustainability in the financing process Familiarisation with the project • Finnfund introduces its environmental and social principles to the project company • The project company provides the initial information used in the assessment of the project • Finnfund plans the environmental and social due diligence taking into account the anticipated impacts and risks 30.6.2016 Preparing the investment... ”Equator Principles”, which have been adopted by more than 70 of the world’s leading investment banks in developed and developing countries, are based on IFC’s Performance Standards 12 Finnpartnership - Finnish Business Partnership Programme • Financed by the Ministry for Foreign Affairs, operated by Finnfund • Goal to increase business cooperation between companies in Finland and developing countries... New business opportunities and partners (Matchmaking) • Advisory services and Business Partnership Support Facility (grant) for Finnish companies www.finnpartnership.fi 30.6.2016 13 European Development Finance Institutions United Kingdom Belgium Norway the Netherlands France Denmark Spain Switzerland Sweden Germany Italy Austria Finland Portugal Belgium European Financing Partners • Co-financing for... large projects in Africa, the Caribbean and the Pacific • Way for an EDFI member to arrange financing for its clients • Financiers other development finance institutions and EIB • 1€→4€ • Loans, equity, mezzanine financing or guarantees 30.6.2016 15 Portfolio and commitments - geographical distribution (at original value, total EUR 602 million) 31 December 2015 Africa Asia Latin America International... anticipated impacts and risks 30.6.2016 Preparing the investment proposal • Obtaining additional information (e.g with questionnaires) and site visits • Finnfund s advisers analyse the information, compare the project to the requirements of international guidelines and standards, and identify possible areas of improvement • Finnfund s advisers discuss the results of their assessment and, where necessary,... 2013 2014 2015 Loans 18 Portfolio and undisbursed investment decisions (EUR million) 600 500 400 300 200 100 0 2009 2010 2011 Portfolio, EUR million 30.6.2016 2012 2013 2014 2015 Undisbursed investment decisions 19 Contacts • www .finnfund. fi • firstname.lastname @finnfund. fi • tel +358 9 348 434 address Uudenmaankatu 16B, Helsinki @Finnfund http://team.finland.fi/en/frontpage 30.6.2016 20 ... company A review is prepared to support the investment proposal Legal agreements and disbursement • Environmental and social covenants and undertakings are agreed upon (including conditions precedent for disbursement) • Environmental and Social Action Plans as well as reporting formats are annexed to the legal agreements Monitoring • Annual reporting, including a description of the implementation of... execution, legal claims, brand protection, and accessing international markets Improve financial and operational performance Meeting the Performance Standards can help clients improve their bottom line Implementation of the Standards can help optimize the management of inputs such as water and energy, and minimize emissions, effluents, and waste, leading to a more efficient and cost-effective operation... Standards help clients find ways to maximize local development benefits and encourage the practice of good corporate citizenship This often results in greater acceptance of the project by local communities and governments, allowing companies to acquire a social license to operate Enhanced brand value and reputation may also be attractive to new investors or financiers Gain an international stamp of... resulting from land transactions such as expropriation or negotiated settlements 2 Labor and working conditions Recognizes that the pursuit of economic growth through employment creation and income generation should be balanced with protection of basic rights for workers 6 Biodiversity management and sustainable management of living natural resources Promotes the protection of biodiversity and the sustainable