Guidelines for investments

IFU's operational guidelines

1.  COUNTRY LIMITATIONS 
Technically eligible host countries of IFU investments must be on the OECD's DAC list of development aid recipients, and their GNI per capita income must not exceed 50% of the upper limit for the UMIC (Upper Middle Income Countries) according to the World Bank’s classification. In 2012 the limit is USD 6,138.

If a country's GNI per capita exceeds the stated limit for two consecutive years, it will no longer be eligible for new IFU investments.

Additionally, at least 50% of IFU's investments in a year must be made in host countries with a GNI per capita income below 80% of the upper limit for LMIC (Lower Middle Income Countries), according to the World Bank's classification. In 2012 this limit is USD 3,180.

A general exception for the income ceiling is given for Botswana, Namibia and South Africa.

A complete list of countries IFU can operate in, can be seen here.

IFU’s country exposure is constantly gauged, and a warning signal is flagged when IFU’s project portfolio in a given country exceeds 30% of IFU’s total project portfolio. For China the country exposure must not exceed 20%.

2.  PARTNER LIMIT
The indicative partner limit is 20% of the Funds’ total project portfolio.

3.  PROJECT LIMIT - ABSOLUTE
The indicative limit for the Funds’ maximum investment in a single project is DKK 100m for IFU and DKK 50m for IØ.

4.  PROJECT LIMIT - RELATIVE
The Funds’ indicative general limit of engagement (loans and share capital) in a single project is 50% of the balance in projects with a total investment of up to DKK 7.5m, and gradually decreasing to 30% in projects with a balance of more than DKK 12.5m. For projects in Low Income Countries (LICs), the indicative limit for IFU is 49% of the balance.

5.  PROJECT EQUITY LIMIT
The Funds’ equity exposure in any project must not exceed neither that of the Danish partner nor 49% of the total project equity.

Last updated 3 January 2012.