WHAT WE OFFER
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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