IFU - Investeringsfonden for Udviklingslande

Danida Sustainable Infrastructure Finance (DSIF) is the primary Danish aid delivery mechanism for large scale infrastructure projects in developing countries. DSIF is a central part of the official development cooperation funded by Denmark’s Ministry of Foreign Affairs (Danida) and is administered by the Investment Fund for Developing Countries (IFU).

Well-functioning infrastructure is crucial for sustainable and inclusive economic and social development. This is also the case in developing countries where project development and capital availability are often constrained. Consequently, an important part of the Danish policy on development cooperation is to promote and support non-commercial infrastructure projects in low- and middle-income countries and fragile states.

Consequently, the purpose of DSIF is to provide access to finance for sustainable public infrastructure projects in emerging markets and developing economies that cannot be financed on market terms. By promoting sustainable infrastructure through the deployment of concessional capital and technical expertise, DSIF supports the UN 2030 Agenda and SDGs as well as Denmark’s strategy for development cooperation, The World We share.

Supporting the Sustainability Development Goals

Poverty reduction and Climate action are at the centre of DSIF’s mission to promote investments in infrastructure which support sustainable development in developing countries and realisation of the SDGs.

Value and impact are created by providing access to concessional finance that will de-risk investments and ease terms of repayments for governments leading to the construction of infrastructure otherwise in risk of not materialising due to limited public budgets or lack of commercial finance.

The infrastructure projects are demand-driven and made in close cooperation with governments and other development partners to ensure that they address local development needs and are long term cost effective as well as environmentally sustainable.

By leveraging Danish green technology, knowhow and other sustainable solutions, DSIF assist in promoting climate smart and best in class technology solutions.

Moreover, across projects there is a strategic focus on creating decent jobs, gender equality, as well as supporting youth employment and the green transition. See DSIF Strategy (DSIF’s mission and value proposition) for more detail.

DSIF supports infrastructure delivery through the entire project lifecycle – from initial project definition, through construction, to final take-over of assets and commencement of operations. A strong emphasis on development impact objectives is maintained throughout implementation and results are monitored until five years after handover.

What we offer

• DSIF financing to projects in the form of concessional debt, including coverage of interest and other financing costs and provision of grant funding where applicable.
• DSIF financing and support to:

• • Project Preparation through technical feasibility assessments and other preliminary design documentation, with a strong focus on environmental sustainability and long-term cost efficiency.
  • Procurement and Contracting of Works through associated technical assistance, design and supervision contracts, including for large and complex projects.
  • O&M Support through technical assistance and capacity development support, often including elements of twinning with Danish utilities.

A strong sector focus
DSIF is focused within three main sectors of core Danish competence that are essential to achieving sustainable development and improving the livelihoods of people while protecting the planet.

Operating in low- and lower-middle income countries
DSIF operates in low-income and lower middle-income countries as defined by GNI per capita (below USD 4,095 in 2023) with a Danish representation. Africa is a priority region and expected to maintain a two-thirds share of total DSIF engagement. DSIF adopts a differentiated approach to each country group depending on specific needs, level of poverty, and wider Danish development cooperation efforts. See DSIF Strategy (DSIF’s mission and value proposition) for more detail.