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 countriest). 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 for 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

    Selection of consultants for the construction supervision of the Assela Wind Farm Project

    Request for expressions of interest (REoI) - Reference No. EEP/PP/EOI/01/2019

    1. The Federal Democratic Republic of Ethiopia has received Finance from Danida Business Finance for a soft loan for the construction of a 100 MW Wind Farm in Assela. The construction of the Wind Farm is presently in the process of tendering (two Danish companies have prequalified for the tender).
    2. The primary role of the Construction Supervision Consultant (SC) is as engineering consultants to support the client, Ethiopian Electric Power (EEP) in the supervision of the construction of the Assela Wind Farm as The Engineer/Employer’s Representative ER under the FIDIC Yellow Book contract.
    3. The tasks to be carried out by the Consultants can be grouped(but not limited to) under the following Activities:
    • Support the EEP Assela Project Management Unit (PMU) on overall management of the contract with the Design and Build Contractor (DBC) for the Assela Wind Farm and liaison with Danida Business Finance (DBF).
    • Support to EEP PMU for the implementation of the Environmental & Social Management Plan, including a land acquisition and resettlement plan, including livelihood restoration, according to IFC Performance Standard 5.
    • Reporting to the EEP PMU on project progress and Environmental & Social Management Plan implementation,
    • Construction supervision as The Engineer/Employer’s Representative ER for the construction (FIDIC Yellow Book);

    The above list is a preliminary general description of the work to assist potential bidders in understanding the general scope of work and is not a detailed or final specification of the work.

    1. EEP hereby invites consultants to show their interest in delivering the services described above. Consultants may submit their applications:
    • As a single company
    • As a single company supported by sub-consultancy company/companies
    • As a Joint Venture
    • As a Joint Venture supported by sub-consultancy company/companies

    Participation is restricted to independent firms of consultants or joint ventures or associations[1] comprising independent firms of consultants. The single company (with or without sub-consultants) or the lead company in the case of a Joint Venture (JV) (with or without sub-consultants) shall be a Danish firm of consultants. All members of joint ventures or associations shall be from countries that are eligible to trade with Ethiopia. The joint venture must satisfy collectively the prequalification criteria. Any sub-consultants in an association will not be included in the assessment. The Danish lead firm of consultants in a JV or an association shall undertake a minimum 60 % of the value of the assignment. Confirmation hereof shall appear in a letter of intention to form a JV (or an association) to be signed by all JV/association members and included in the prequalification application. There are no requirements to the nationality of joint venture/association partners apart from the requirement that countries are able to trade with Ethiopia. If expressing interest as a JV or an association, the EoI must nominate one firm as the lead firm who will interact directly with the Project Management Unit (PMU) as the appointed representative of the JV or association.  A single company or the consultant companies in any JV shall not participate in more than 01 (one) EoI. A sub-consultant may participate in more than one EoI. Note that the expertise of a sub-consultant that is not a JV partner will not form part of the EoI evaluation. The lead firm in case of a JV or association must be a registered company in Denmark and must have executed at least one DBF project[2]. Interested consultants must provide information evidencing that they are qualified and experienced to perform those services. For that purpose, consultants shall submit an EoI as per the format in Appendix 3.

    Consultants are invited to provide up to a maximum 15 project/assignment references from the last 10 years that between them demonstrate expertise across the areas of expertise listed in Appendix 1. Ongoing projects will only be considered if the project is more than 50% complete as indicated by the start and end dates on the reference.

    1. The full REoI notice is available at EEP website eep.gov.et.

    [1] “Association” means either a single consultancy company with sub consultant(s) or a Joint Venture with sub consultant(s). “Joint Venture ”means a legal entity with both parties jointly and severally liable under the contract.

    [2] Note that Danida grant funded projects do not qualify


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    Tender announcement

    Request for Expressions of Interest for the design, tendering and supervision of Saidabad III water treatment and sludge treatment plants, Dhaka, Bangladesh

    Deadline for Expressions of Interest: 5th March 2019, at 16:00, Bangladesh time.

    Announcement: Dhaka Water Supply and Sewerage Authority

    Clarification Notice regarding CVs



    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
    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. Cleared in principle DKK 197,000,000
    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. Under preparation DKK 1,095,000
    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. Under preparation 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. Under preparation DKK 140,000,000



    The purpose of the project is to improve and strengthen transport infrastructure in northern Ghana, thereby contributing to economic growth and poverty reduction.

    This includes the construction of six bridges, as well as the construction and upgrading of approach roads and rehabilitation roads between major towns.

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

    Furthermore, the project will significantly improve road safety and mitigate the effects of climate-change-related seasonal flooding.

    Buyer: Ghana Highway Authority
    Supplier: N/A
    Status: Under construction
    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?
    Danida Sustainable Infrastructure Finance is available in developing countries with a GNI per capita of maximum USD 3,995 (2020), and where at the same time Denmark has a representation. The current country list (2016) includes the following countries: Afghanistan, Bangladesh, Burkina Faso, Egypt, Ethiopia, Ghana, India, Indonesia, Kenya, Mali, Morocco, Mozambique, Myanmar, Niger, Nigeria, Pakistan, Palestine, Philippines, Somalia, Tanzania, Uganda, Ukraine and Vietnam.

    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

    Investment Director, 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
    Rina Stender Sapru

    Rina Stender Sapru

    Investment Director, Danida Sustainable Infrastructure Finance +45 33 44 12 40 +45 41 38 12 40 rss@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
    Shahid Abdullah

    Shahid Abdullah

    Investment Director, Danida Sustainable Infrastructure Finance +45 33 44 12 20 +45 42 22 48 76 sha@ifu.dk