NDF - Financing for climate change and development projects

Grant financing for climate projects in the poorest countries

Photo: Juhani Annanpalo
19.05.2009

A new focus for the Nordic Development Fund

The Nordic Development Fund (NDF), the joint development finance institution of the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden), has received a new mandate. The Helsinki-based institution will in the future provide grant financing for climate-related interventions in poor developing countries. The Nordic Cooperation Ministers have approved amendments to NDF’s bylaws permitting this new mandate. In 2005 the Nordic Development Cooperation Ministers recommended a wind-up of NDF since the owner countries did not reach agreement on a further capital replenishment of the Fund.

However, continued analyses and renewed consultations between the owners have shown that there are valid reasons for NDF to continue its operations, but with a new focus - climate-related interventions in poor developing countries. The capital of the Fund mainly consists of repayments from the current loan stock, which amounts to one billion euros over the next 35 years. It is foreseen that the annual repayments will be utilized for grant financing to the poorest developing countries to help tackle the effects of climate change in these countries.

NDF started operations in 1989 as a part of the Nordic development cooperation. The Fund has since provided soft loans to 190 projects of Nordic interest in developing countries. NDF’s operations are financed from the development cooperation budgets of the Nordic countries.

“Through its commitments during the past twenty years, NDF has gained considerable experience in project financing in developing countries, not least in environmental issues. There is a vast demand for financing of climate-related investments in the poorest countries in the world, which face great challenges in this area also,” says Mr. Helge Semb, Managing Director of the Fund.

The Nordic Development Fund (NDF) is the joint development finance organization of the Nordic countries. Over the last 20 years the Fund has provided soft credits to developing countries. Starting in 2009 NDF will provide grant financing for climate-related interventions in the poorest countries in the world.

For further information, please contact
Mr. Helge Semb, Managing Director, telephone: +358 10 618 002