We are not a provider of aid or business grants. We work on a commercial basis, because we believe that business investment is a good way to create lasting economic improvement

    IFU is an independent government-owned fund offering advisory services and risk capital to companies wishing to do business in developing countries and emerging markets. Furthermore, IFU is fund manager of a number of other investment funds, including the Danish SDG Investment Fund.

    We are not a provider of aid or business grants. We work on a commercial basis, because we believe that business investment is a good way to create lasting economic improvement.

    IFU makes risk capital available in the form of equity, loans or guarantees for project companies in one of the 146 countries eligible for IFU investment. In addition, IFU acts as an adviser during the establishment phase and a project company’s first few years in operation, typically pulling out when the company can operate on its own.

    Advisory services are provided by IFU’s investment managers based in Copenhagen or at one of our regional offices in Africa, Asia and Latin America.

    IFU and IFU managed funds have invested in more than 1,280 projects in 100 countries. Investments generally produce positive results and have turned out to be good business for all parties involved; for the host country, for the Danish company and for IFU.

    Good business for developing countries

    Total investments to date amount to DKK 201bn, of which IFU has contributed DKK 22bn. This has helped to create close to one million jobs in the host countries. In addition, IFU’s presence has resulted in a transfer of knowledge and technology, the employees have received training and education, and economic activity and a basis of income have been created for the host countries.

    IFU also helps to highlight a project company’s corporate social responsibilities of ensuring that employees are given proper working conditions and that a project company’s production is socially and environmentally sustainable.

    Positive effects for Danish companies

    IFU has co-invested with more than 900 Danish companies. In the vast majority of cases, the project companies established in developing countries have been a success, making a positive contribution to the overall performance of the co-investing Danish company.

    The Danish companies have gained access to new markets, becoming able to plan and start up international and more efficient production. In many cases, this has also produced higher revenue in Denmark and stronger earnings.

    IFU’s mandate was changed as of 31 December 2016, so that IFU is no longer tied to Danish companies or a Danish interest.

    Profitable return to IFU

    Over the years, IFU has had a fair return on its invested funds. Gross yield on share capital has on average been close to 7 per cent within the last five -year period.  The profit is used to cover IFU’s operating costs and for investing in new project companies.

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    Here you can read the answers to some of the frequently asked questions about IFU

    What is IFU’s objective?

    IFU’s objective is to promote private investment in developing countries in collaboration with investors.

    What can IFU offer?

    IFU provides advisory services and risk capital to companies wishing to do business in developing countries and emerging markets.

    What kind of funding can IFU provide?

    IFU makes investments on commercial terms by committing equity capital or by providing loans or guarantees. Investments are channelled directly to a project company established in the relevant developing country.

    IFU advisory services

    IFU advises on how to prepare for, establish and operate project companies in developing countries. IFU offers advice on how to establish new companies, set up joint ventures with local business partners, acquire already existing companies and in connection with projects with a Danish interest.

    These advisory services are provided in part by IFU representatives serving on the boards of the project companies established in developing countries.

    Advisory services are provided by IFU’s investment managers based in Copenhagen or at IFU’s regional offices in China, India, Singapore, Kenya, Ghana, Egypt, Colombia and Ukraine.

    How much can IFU invest?

    IFU can invest up to a maximum of DKK 100 million per project company. Generally, IFU has a mandate to take up to a 30% stake in an investment project, but up to 49% in small projects.

    Who is eligible for investments by IFU?

    Any enterprise wishing to do business in one of the nearly 150 countries eligible for IFU investments.

    The requirements are:

    The business operation must be deemed to be commercially viable;

    Projects must have a development impact in the host country

    The host country must be on the list of developing countries eligible for IFU investment. Click here to see the list.

    Can IFU provide additional financing?

    Through its close relations with international and local financial institutions, IFU may assist in procuring additional funds for a project.

    How many investments have IFU made?

    Total committed investments by IFU and IFU managed funds amount to DKK 201bn in more than 1,280 companies, of which IFU has contributed DKK 22bn.

    IFU’s annual investment amounts to more than DKK 1bn and involves 30 to 40 companies.

    Where does the money come from?

    At year-end 2018, total capital under management by IFU was DKK 11.4bn. The capital has been contributed by the Danish State as well as private investors.


    Key figures in 2018

    In 2018, IFU and IFU managed funds contracted investments of DKK 1,476m in 37 companies. At the end of 2017, IFU had entered into more than 1,280 investment agreements in 100 developing countries. As per 31 December 2018, the active portfolio consisted of 203 project companies.

    By ultimo 2018, IFU and IFU managed funds had entered into agreements of a total amount of DKK 22bn, of which close to DKK 16bn had been disbursed.

    Financial highlights, IFU:

    Income statement DKKm
    Gross contribution from projects (121)
    Operating income (loss) [*] (155)
    Net income for the year (161)

    Balance sheet at 31 December 2016
    Share capital investment in projects at cost 2,332
    Project loans at cost 1,002
    Total investment in projects at cost 3,334
    Accumulated value adjustments (29)
    Investments in projects, net 3,306
    Cash and bonds 538
    Paid-in capital during the year 306
    Repaid capital (50)
    Total equity capital 3,802
    Total balance 3,970

    Additional data
    New projects contracted (no.) 25
    Portfolio of projects end of year (no.) 178
    Investments contracted 3,070
    Undisbursed contracted investments incl. guarantees 3,645
    Binding commitments not yet contracted 765

    Key ratios
    Gross yield from projects (3.9%)
    Net income for the year/Average total equity capital (4.3%)
    Average number of full-time employees (all three funds) 89

    [*] Operating income = gross contribution from projects less operating expenses


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    IFU is governed by the Act on International Development Cooperation

    IFU was established by law in 1967. IFU is a self-governing institution with the objective of promoting investments that support sustainable development in developing countries and contribute to the realisation of the Sustainable Development Goals.

    IFU is not subject to the Danish Access to Public Administration Files Act, regarding its investments. Information regarding environment may under certain conditions be subject to disclosure according to the Environmental Information Act.

    IFU’s statutes are decided by IFU’s board and approved by the Minister for Development Cooperation.


    Since IFU’s investment profits are reinvested in new projects in developing countries, IFU is exempted from paying corporate income tax in Denmark.

    The companies that IFU invests in must at all times comply with local tax laws and pay taxes in the country where they have their operations.

    IFU may make investments through holding companies domiciled in other countries than Denmark or the country where the project company is domiciled (so-called third countries), when it is commercially motivated and not with the principal purpose of reducing tax on payments from project companies. IFU will not use holding companies in third countries that are on the EU or OECD blacklist (i.e. the EU list of non-cooperative jurisdictions for tax purposes and the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes).

    IFU aims to be open about tax. Total reported corporate taxes from IFU’s project companies – split on continents – are published in IFU’s annual report and on IFU’s website. The website also has information on which of IFU’s investments are made through a holding company, including where the holding company is domiciled. In future, when an investment is made through a holding company in a third country, IFU will explain on its website the reason for this structure and how it complies with IFU’s policy on responsible tax.

    The Tax Dialogue

    The Tax Dialogue is a multi-stakeholder dialogue initiative set up by OXFAM IBIS to understand the challenges and opportunities regarding tax and corporate responsibility in the private sector.

    The aim of the Tax Dialogue is to discuss principles for responsible tax and how responsible tax policies can be an integral part of the business plan.

    IFU has been part of the Tax Dialogue from the beginning. We think it is important to be involved in the discussion and debate concerning some of the major challenges and risks facing international business in today’s globalised world regarding tax planning.


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