Investment and development go hand in hand

At IFU, our philosophy is that the best way to help private-sector enterprises is to do it on market terms. That is why we do not provide aid or business subsidies: instead, we invest knowledge and venture capital in private-sector projects in developing countries whose aim is to quickly become self-sustaining. More specifically, we co-invest with Danish businesses in projects based in developing countries, but only if we believe that such projects will have a lasting positive effect on development.

Over the last four decades, we have demonstrated that it very often spells good business for all parties if investment and development go hand in hand.

Good business for developing countries

First of all, our investments are good business for the areas that our project companies invest in, because they help create local jobs and local income. We help to bring a focus on fundamental human rights: we also give local employees the opportunity to unionise, and we generally focus on workers’ rights. We encourage businesses to become socially and financially involved in their local community. Also, our projects are a means of transferring know-how and technology that in many cases would otherwise only benefit the Western world.

Positive effects on Danish business partners

In the vast majority of cases, our investments generate the extra bonus of having very positive effects on our Danish business partners. Danish enterprises that take the step of expanding into poor and less-developed countries require capital and knowledge to safeguard their investment. The IFU provides capital through loans, guarantees and share purchase, but with our global network of local employees and advisers, we also act as a project partner offering to help project companies overcome traditional bureaucratic, cultural and language barriers. In other words, our investments and advisory services help get projects off on the right track and, not least, turn them into healthy business ventures.

With development and investment going hand in hand, IFU investments become a healthy and sustainable supplement to conventional development aid.