Subsidised loans to infrastructure projects

    As of January 2020, Danida Business Finance (DBF) became Danida Sustainable Infrastructure Finance (DSIF). The change of name reflects the nature of the projects that are financed in accordance with the Danish Government’s commitment to sustainable and climate resilient infrastructure in developing countries.

    Danida Sustainable Infrastructure Finance (DSIF)) can provide access to finance and can leverage finance for sustainable infrastructure projects in developing countries based on the countries’ development strategies, delivering measurable results toward the SDGs that create growth and employment in developing countries. DSIF offers subsidised loans to infrastructure projects in developing countries with income per capita below USD 3,995 (2020) and with a Danish representation (see list of countries). The projects must contribute to sustainable development in the recipient country in line with the UN Sustainable Development Goals (SDG). A typical loan has 10 years’ maturity and is issued in USD or EUR. The DSIF subsidy covers:

    • Interest in the whole duration of the loan
    • Export Credit premium and other financial costs
    • Cash grant to reduce the principal of the loan (in case interest, premium and financial costs do not constitute 35% or 50% subsidy level, a cash grant is included in the subsidy to reach the minimum levels required by the OECD)

    The buyer/borrower repays the loan in equal, semi-annual instalments, normally starting six months after the commissioning of the project. The borrower will pay only a commitment and a management fee. Only projects that are commercially non-viable can be financed; that is projects that do not generate enough profit to service a loan on commercial terms. There are two approaches under DSIF:

    • DSIF Classic: Tender limited to Danish companies where DSIF support has been approved prior to tender
    • DSIF Fast Track: International tender where DSIF can provide support in case a Danish company is the best evaluated bidder (DSIF support approved after tender evaluation).


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    How to apply for support

    The following procedures apply to obtain Danida’s approval of a project

    Some of the most important steps are outlined in the timeline below. The first step is a screening of the project proposal. This will produce a preliminary assessment of eligibility and a positive indication to continue project preparations. In order to screen a project Danida will need a full project description, including:

    • Information about project background
    • Poverty reduction objectives
    • Total project investment incl. detailed budget
    • Type of equipment to be delivered
    • Contract amount to be financed
    • Financial set-up including borrower and guarantor (confirmed by a letter of intent)
    • Organisational set-up
    • Timetable and milestones in the project

    Requirements for support

    Danida Sustainable Infrastructure Finance contributes to sustainable and transformational change in developing countries in line with the Sustainable Development Goals by softening the terms of commercial loans for investments primarily in public infrastructure. The below core principles form the foundation of DSIF project identification and selection.

    Core principles for project selection:

    • DSIF is available in developing countries with GNI per capita below USD 3,995 (2020) and with a Danish representation.
    • Projects must address at least one of the UN Sustainable Development Goals.
    • Projects in sector with Danish core competencies will be prioritized.
    • All projects must be tendered. If there are sufficient Danish suppliers, the bidding will be limited to those.
    • The minimum contract amount to be financed is DKK 100 million.
    • The Ministry of Finance or a solid bank in the recipient country is required to act as borrower/guarantor.
    • Projects will be assessed on sustainability criteria, including IFC performance standards and UN Guiding Principles on Business and Human Rights.
    • Projects should be based on local demands and needs and be reflected in national development strategy and sector plans.
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    Tender announcements

    Request for expressions of interest

    Invitation for Pre-Qualification of Contractors to the Construction of a Wastewater Treatment Plant 200,000 m3/day capacity in Faisalabad, Pakistan

    Invitation for Pre-qualification
    Letter of Application
    Deadline: 29 November 2022

    The Wakiso West Water and Sanitation Project in Uganda will be financed by Danida Sustainable Infrastructure Finance.

    National Water and Sewerage Corporation (NWSC) has issued a Notice for Expression of Interest (EOI) for Provision of Consulting Services including: Detailed design, preparation of tender documents and supervision of construction works. The Project; with Procurement Reference number NWSC-HQ/SRVCS/2020-2021/172344, has been uploaded on the NWSC website.

    Please find it on the TENDERS section on the website:  at https://www.nwsc.co.ug/tenders ( for Consultants)
    Or directly at the link :  https://www.nwsc.co.ug/wp-content/uploads/2021/10/BID-NOTICES-FOR-WAKISO-WEST.pdf
    Deadline: 2 December 2021

    EU tender: Framework Agreement for Technical Assistance in relation to projects for Danida Sustainable Infrastructure Finance
    Deadline: 3 October 2021, 13:00 CET

    Request for expression of interest for consultancy services for conceptual design review, detailed design, tender documentation, ESIA/RAP implementation and construction supervision of Thika Water and Sanitation Project.
    Deadline for expressions of interest: 30 September 2021 at 12:00 East African Time
    Announcement: Ministry of Water, Sanitation and Irrigation/Athi Water Works Development Agency (AWWDA), Kenya

    Request for Expression of Interest (EoI) for consultancy services for Preparation of Preliminary Design, Tender Documents, and Construction Supervision for the project “Construction of Eastern Wastewater Treatment Plant (44 MGD) of Faisalabad City (Phase-I)”, Pakistan.
    Deadline for Expressions of Interest: 17 March 2021, at 14:00, Pakistan Standard Time
    Announcement: Water and Sanitation Agency, Faisalabad


    Kremenchuk DH project Ukraine The project will upgrade and secure supply of heat and hot water to the Rakivca district in Kremenchuk, while minimizing heat and water losses of the 50 year old district heating system. The project is a joint DSIF/NEFCO project, and tender will be carried out under NEFCO rules. Approved DKK 90,000,000
    Zaporizhzhia WTP Ukraine Partial renovation and technical upgrade of a waste water treatment plant with a capacity of 280,000 cubic meters per day. The project is a joint DSIF/NEFCO project, and tender will be carried out under NEFCO rules. Approved DKK 140,000,000
    Assela Wind Farm Ethiopia 100 MW wind farm delivering on average 330 GWh of electricity a year to the national grid avoiding the release of 175,890 ton of CO2 annually. Approved DKK 1,264,740,000
    Saidabad III, Dhaka Bangladesh The project includes a treatment plant for production of drinking water with a design capacity of 450,000 cubic meter per day and a sludge dewatering plant. Approved DKK 1,350,000,000
    Faisalabad Waste Water Treatment Plant Project Pakistan The plant will have a capacity of 200.000 cubic meter per day and will clean wastewater from 765,000 people as well as industrial and commercial units. Approved DKK 1,191,000,000
    Thika and Githunguri Water & Sanitation Improvement Project Kenya Rehabilitation of existing facilities, construction of additional new facilities and new pipelines. Approved DKK 1,126,000,000
    Wakiso West Water Supply and Sanitation Project Uganda Water Treatment Plant (WTP) with primary distribution, reservoirs and a Faecal Sludge Treatment Facility (FSTF) to be located between Entebbe and Kampala Approved DKK 1,362,000,000
    Transmission Line Mali Construction of approx. 320 km 225 kV high voltage power transmission line will provide electricity to around 35,000 households and improve business and employment opportunities in the mining sector. Cleared in principle DKK 1,095,000
    Lviv Waste Water Treatment Plant Ukraine The Wastewater Treatment Plant (WWTP) from the Soviet era has a total wastewater load of 380,000 m3/d. The WWTP is highly inefficient as it only operates at 50% sludge volume capacity due to its deteriorating condition. Approved DKK 197,000,000
    Assela II Wind Farm Ethiopia The project comprises a 150 MW wind farm that annually on average will deliver 450 GWh of clean and affordable electricity to the national grid, the equivalent of estimated 750,000 households consumption. The investment will potentially prevent the release of 265,000 ton of CO2 annually. Cleared in principle DKK 1,000,000,000



    Despite significant challenges in terms of weather and COVID-19, the project was completed on time and within budget in 2021.

    Seven new road bridges and accompanying slip roads have been constructed to improve living conditions and mitigate climate-change-related effects of seasonal flooding.

    The project will substantially lower transport costs, enhance access to markets, and connect the northern regions to neighbouring countries and southern parts of Ghana.

    More can be read here.

    Buyer: Ghana Highway Authority
    Supplier: N/A
    Status: Completed
    Guarantor: Ministry of Finance and Economic Planning
    Contract amount: DKK 377,900,000
    Cash grant: DKK 16,240,000
    Loan amount: DKK 361,660,000
    Total Danida subsidy: DKK 178,690,000

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    The purpose of the project is to reinforce and expand the Mozambican power grid, which is indispensable for private-sector development and for continued pro-poor economic growth.

    It involves rural electrification, installation of high-voltage power lines and transformer stations, including two stations in southern Mozambique and four in the less developed central and northern parts of the country.

    Increasing access to the power grid forms part of EDM’s master plan in support of the government’s efforts to stimulate growth and reduce poverty.

    Buyer: Electricidade de Moçambique (EDM)
    Supplier: Aasleff-Seth Joint Venture
    Status: Implementations
    Guarantor: Ministry of Finance of Mozambique
    Contract amount: DKK 781,020,000
    Cash grant: DKK 202,890,000
    Loan amount: DKK 578,130,000
    Total Danida subsidy: DKK 569,120,000

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    The purpose of the project is to improve water supply in the city of Dhaka. The population in Dhaka is estimated to be 15 million and is expected to reach 29 million by 2035. This projected rise in population will increase the water demand in Dhaka by around three times.

    The estimated output of the project is clean drinking water for 7 million people. The main raw water source for the city is ground water, but unsustainable rates of abstraction are causing ground water levels to decline between 1-2 meters per year.

    Consequently, the Government of Bangladesh has decided to make a gradual shift to use surface water as source for production of clean water. The programme includes the following three project components: 1) construction of water intake at Meghna River and transmission lines (900,000 m3/year), 2) construction of water treatment plant and sludge treatment facilities (450,000 m3/year) and 3) distribution network.

    Danida Sustainable Infrastructure Finance will provide a soft loan for component 2 and component 1 and 3 will be financed by AFD (Agence Française de Développement), EIB (European Investment bank) and KfW (Kreditanstalt für Wiederafbau). The total budget of all three components is estimated to be around DKK 4,3 billion.

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    What does Danida Sustainable Infrastructure Finance offer?
    Danida Sustainable Infrastructure Finance provides subsidised loans – in effect 10-year interest free loans – to developing countries investing in sustainable infrastructure in line with the Sustainable Development Goals.

    What kind of projects do Danida Sustainable Infrastructure Finance support?
    Danida Sustainable Infrastructure Finance finances primarily public infrastructure projects in sectors like transportation, energy, water supply and sanitation. Projects in sectors with Danish core competencies will be prioritized. This means that Danish companies should be internationally competitive – based on total project cost, that is not just purchase price but also operational cost.

    Where does Danida Sustainable Infrastructure Finance operate?
    For more info on our country list, please see What we offer.

    How can I apply for support?
    For info on applications, please see How to apply for support

    What does the Danida Sustainable Infrastructure Finance support cover?
    A Danida Sustainable Infrastructure Finance subsidy consists of three elements:

    • All interest on the loan – both draw down and repayment period
    • Export Credit Premium and other financial costs
    • A cash grant to reduce the principal of the loan, if above does not amount to the subsidy level determined by the ruling OECD agreement. DSIF does not cover management and commitment fee on the loan. This is to be paid by borrower.

    DSIF also provides technical assistance on grant terms for tender procedures, monitoring, etc.

    How much support?
    According to OECD rules, and depending on the developing country in question, the grant will be around 35 percent for middle-income countries and 50 percent for least developed countries.

    Can anyone apply for support?
    Official request for support must come from the public authorities in the recipient countries. However, private companies may also present project proposals to the DSIF team for initial discussions on eligibility.

    How are the project contractors chosen?
    All projects must be tendered. As a point of departure tenders must be limited to Danish suppliers. If there is a lack of Danish tenderers, international bidding may be chosen.

    How can Danida Sustainable Infrastructure Finance finance large projects with relatively small grants?
    Danida Sustainable Infrastructure Finance does not provide the loans directly – this is done by private commercial banks. Private banks consider Danida Sustainable Infrastructure Finance support as equivalent to a sovereign guarantee and therefore practically risk free. Therefore, by providing a guarantee backed by the Danish state and providing a subsidy reducing investment cost for the local buyer, Danida Sustainable Infrastructure Finance can mobilise private financing that would not otherwise be available due to high risk and/or non-commercial viability of the projects.

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    If you have enquiries regarding a specific region or country, please contact our team.

    Tina Kollerup Hansen

    Tina Kollerup Hansen

    Senior Vice President, Danida Sustainable Infrastructure Finance +45 33 44 12 35 +45 41 38 12 35 tkh@ifu.dk
    Lene Mollerup

    Lene Mollerup

    Investment Director, Danida Sustainable Infrastructure Finance +45 33 44 12 32 +45 41 38 12 32 lmo@ifu.dk
    Annelise Boysen

    Annelise Boysen

    Investment Director, Danida Sustainable Infrastructure Finance +45 33 44 12 34 +45 41 38 12 34 abo@ifu.dk
    Annemette Ditlevsen

    Annemette Ditlevsen

    Investment Director, Danida Sustainable Infrastructure Finance +45 33 41 12 41 +45 41 38 12 41 amd@ifu.dk
    Jacob Klingemann

    Jacob Klingemann

    Investment Director, Danida Sustainable Infrastructure Finance +45 33 63 75 28 +45 22 68 75 28 jkl@ifu.dk
    Mikael Tendo Koefoed Bjørnsen

    Mikael Tendo Koefoed Bjørnsen

    Investment Manager +45 33 44 12 52 +45 41 38 12 52 mib@ifu.dk